“Here-and-Now Harm” & Dual-Layer Tenure:
The Fifth Circuit’s Seal of Unconstitutionality on NLRB Removal Protections

1. Introduction

In Space Exploration Technologies Corp. v. National Labor Relations Board, a consolidated appeal involving SpaceX, Energy Transfer, and Findhelp, the United States Court of Appeals for the Fifth Circuit confronted a direct, frontal attack on the structural constitutionality of the National Labor Relations Board (NLRB). The employers, each facing unfair-labor-practice complaints, sought to stop the agency’s proceedings before they began, alleging that:

• NLRB Administrative Law Judges (ALJs) are inferior officers shielded by two layers of “for-cause” removal protection, and
• NLRB Board Members are principal officers protected from presidential removal except for “neglect of duty or malfeasance.”

Three district courts in Texas granted preliminary injunctions. On appeal, the NLRB argued lack of jurisdiction under the Norris-LaGuardia Act and the absence of irreparable harm. Judge Don R. Willett, writing for a panel that included Judges Wiener and Duncan, rejected those arguments and affirmed all three injunctions.

2. Summary of the Judgment

1. Jurisdiction – The Norris-LaGuardia Act does not strip federal courts of authority to enjoin unconstitutional agency proceedings that do not “grow out of” a traditional labor dispute.
2. Likelihood of Success –
   • ALJ dual-layer protection is unconstitutional under Free Enterprise Fund and the Fifth Circuit’s own decision in Jarkesy.
   • Board-member protection, while a closer question, likely violates Article II and falls outside the narrow Humphrey’s Executor exception.
3. Irreparable Harm – Being subjected to an unconstitutional proceeding is itself a “here-and-now injury” that cannot be remedied after the fact (Axon).
4. Balance of Equities & Public Interest – No cognizable public injury results from halting unconstitutional action; the public is served when the law is followed.
5. Result – The panel AFFIRMED the preliminary injunctions; Judge Wiener partially dissented on the Board-member aspect (irreparable harm).

3. Detailed Analysis

3.1 Precedents Cited and Their Influence

• Humphrey’s Executor v. United States (1935) – Established that Congress can give “for-cause” protection to members of a purely quasi-legislative / quasi-judicial multi-member board (FTC). The Fifth Circuit held the NLRB is not a mirror image of the 1935 FTC because it wields substantial executive power and lacks a party-balancing requirement.
• Free Enterprise Fund v. PCAOB (2010) – Two-layer tenure for inferior officers violates Article II. Served as the template for striking ALJ protections.
• Seila Law LLC v. CFPB (2020) & Collins v. Yellen (2021) – Clarified the narrowness of the Humphrey’s Executor exception and distinguished between appointment and removal defects.
• Axon Enterprise Inc. v. FTC (2023) – Held that parties need not await the end of an agency proceeding to bring structural constitutional challenges in district court; key to “here-and-now” harm analysis.
• Jarkesy v. SEC (5th Cir. 2022; aff’d 2024) – Found SEC ALJs’ dual-layer protection unconstitutional; used as binding circuit precedent for NLRB ALJs.
• Thunder Basin Coal Co. v. Reich (1994) – Three-factor test for channeling claims through agency review; applied to show district-court jurisdiction survives.
• Consumers’ Research v. CPSC (5th Cir. 2024) – Upheld CPSC structure but emphasized the need for a “mirror-image” FTC analogue, which the NLRB lacks.

3.2 Court’s Legal Reasoning

1. Statutory Jurisdiction – The Norris-LaGuardia Act’s bar on labor-injunctions targets disputes between employees and employers (e.g., strikes, picketing). A pure separation-of-powers controversy between private employers and a federal agency is outside that scope.
2. Thunder Basin Factors
   • Meaningful judicial review – Waiting for final Board orders would not cure the harm of undergoing an unconstitutional process.
   • Wholly collateral – The removal challenge attacks the NLRB’s structure, not the merits of any labor-law charge.
   • Agency expertise – Article II questions are beyond the NLRB’s competence.
3. Article II Analysis
   • ALJs: Dual-layer protection (President → Board → MSPB → ALJ) violates the unitary-executive principle.
   • Board Members: Single-layer protection, though once tolerated, now fails because the Board exercises core executive functions (issuing injunctions, appointing officers, directing litigation) and lacks partisan balance; thus no safe harbor under Humphrey’s Executor.
4. Irreparable Harm – Citing Axon, the injury is submission to an illegitimate tribunal; relief afterwards would be meaningless because the unconstitutional process cannot be unwound.
5. Severability Argument Rejected (at Preliminary Stage) – Whether unconstitutional clauses can be severed is a merits question for final judgment, not a bar to interim relief.

3.3 Impact of the Judgment

• Agency Adjudication Nationwide – Heightens constitutional scrutiny of removal protection for all ALJs federally, extending the logic of Jarkesy beyond financial-regulatory agencies.
• NLRB Operations – Creates immediate uncertainty: injunctions halt certain cases; the Board may need to concede the invalidity of its tenure features or seek congressional amendment.
• Separation-of-Powers Litigation – Endorses an expansive concept of irreparable harm, lowering the threshold for preliminary relief in structural challenges and rejecting the “causal-link” requirement some other circuits apply—setting up a potential Supreme Court review to resolve the split.
• Presidential Control over Independent Agencies – Adds momentum to a jurisprudential drift limiting Humphrey’s Executor to its narrow factual footprint.

4. Complex Concepts Simplified

• Removal Protection (“for-cause” tenure) – A statutory rule that an officer can be fired only for specific misconduct (e.g., “neglect of duty”), not at the President’s pleasure. More layers = less presidential control.
• Dual-Layer Protection – Officer A (ALJ) can be removed only for cause by Officer B (Board Member) who himself can be removed only for cause by the President. Each layer insulates the ALJ further from presidential oversight.
• Unitary Executive Principle – The Constitution vests all executive power in one President; subordinates must remain sufficiently controllable (usually by at-will removal) so that the President can “take care” the laws are faithfully executed.
• “Here-and-Now” Injury – The harm of being dragged through an invalid process, even before any final order issues; once endured, that harm cannot be undone—hence irreparable.
• Thunder Basin Channeling – A doctrine deciding whether Congress meant litigants to raise challenges first inside an agency; courts look at meaningful review, whether claims are collateral, and agency expertise.

5. Conclusion

The Fifth Circuit’s decision in SpaceX v. NLRB does four critical things:

1. Reaffirms that district courts may enjoin unconstitutional administrative proceedings despite the Norris-LaGuardia Act.
2. Extends Jarkesy to strike down dual-layer tenure for NLRB ALJs.
3. Signals grave constitutional doubt about single-layer protection for multimember boards that exercise robust executive power, thus narrowing Humphrey’s Executor even further.
4. Adopts a broad “here-and-now-harm” test for irreparable injury, deepening a circuit split and inviting eventual Supreme Court clarification.

Practitioners should anticipate structural challenges becoming a stock defense tactic in agency enforcement cases. Congress may ultimately need to revisit tenure statutes if it wishes many independent agencies to survive intact. For now, the Fifth Circuit has made clear: constitutional structure is not optional, and relief must be immediate when that structure is breached.