“Reining-In the NLRB” – Fifth Circuit Invalidates Dual For-Cause Removal Protections and Affirms District Courts’ Power to Enjoin Agency Proceedings

1. Introduction

In Space Exploration Technologies Corp. v. National Labor Relations Board, consolidated with Energy Transfer, L.P. and Aunt Bertha d/b/a Findhelp, the United States Court of Appeals for the Fifth Circuit confronted two core questions:

May federal district courts exercise jurisdiction to halt ongoing National Labor Relations Board (NLRB) administrative proceedings while constitutional challenges to the agency’s structure are litigated?
Are the dual layers of “for-cause” removal protection enjoyed by NLRB Administrative Law Judges (ALJs) and the single for-cause protection enjoyed by NLRB Board Members compatible with Article II’s Vesting and Take-Care Clauses?

Answering yes to the first and no to the second, Judge Don R. Willett—writing for himself and Judge Duncan, with Judge Wiener concurring in part and dissenting in part—upheld three district-court preliminary injunctions that froze NLRB adjudications against SpaceX, Energy Transfer, and Findhelp. The majority characterised the asserted separation-of-powers violation as an immediate, irremediable injury warranting interlocutory relief. Judge Wiener dissented solely on irreparable-harm grounds with respect to Board Members.

2. Summary of the Judgment

Jurisdiction. Neither the National Labor Relations Act (NLRA) nor the older Norris-LaGuardia Act strips district courts of power to entertain constitutional challenges to the NLRB’s structure. Applying Thunder Basin factors, the court held that forcing employers through the agency process before judicial review would foreclose meaningful relief.
Merits – ALJs. Echoing its 2022 decision in Jarkesy, the court ruled that NLRB ALJs—protected by two layers of for-cause tenure (ALJ → Merit Systems Protection Board → President)—violate Article II because they exercise significant executive power yet are insufficiently accountable to the President.
Merits – Board Members. Although a closer question, the panel concluded the NLRB’s single-layer for-cause protection fails to fit within the narrow Humphrey’s Executor exception for “multi-member expert boards.” The Board wields “substantial executive power” without statutorily mandated partisan balance and thus is too insulated from presidential control.
Preliminary-Injunction Factors. The majority found (i) a substantial likelihood of success, (ii) irreparable harm inherent in being subjected to an unconstitutional proceeding (Axon), (iii) equities favouring the employers, and (iv) public interest in constitutional governance.

3. Detailed Analysis

A. Precedents Cited and Their Influence

Axon Enterprise, Inc. v. FTC, 598 U.S. 175 (2023) – Confirmed district-court jurisdiction over structural constitutional claims notwithstanding bespoke administrative review schemes. The Fifth Circuit borrowed Axon’s “here-and-now injury” language to support irreparable harm.
Free Enterprise Fund v. PCAOB, 561 U.S. 477 (2010) – Struck two-layer tenure protection in the Sarbanes-Oxley context; provided the template for the ALJ analysis.
Jarkesy v. SEC, 34 F.4th 446 (5th Cir. 2022); aff’d 603 U.S. 109 (2024) – Fifth Circuit (and later Supreme Court) condemned identical ALJ tenure at the SEC; deemed controlling here.
Humphrey’s Executor v. United States, 295 U.S. 602 (1935) – Upheld for-cause removal for FTC commissioners. The panel parsed its limits, stressing modern expansions of agency power and absence of partisan-balance safeguards at the NLRB.
Seila Law LLC v. CFPB, 591 U.S. 197 (2020) & Collins v. Yellen, 594 U.S. 220 (2021) – Distinguished on remedial grounds; majority reasoned that Collins’ stricter causal requirement applies only to retrospective relief.
Trump v. Wilcox, 145 S. Ct. 1415 (2025) (stay order) – Signalled Supreme Court scepticism of NLRB tenure scheme.

B. The Court’s Legal Reasoning

Textual Reading of Jurisdictional Bars. The Norris-LaGuardia Act addresses injunctions in “labor disputes” between employers and employees. Because the plaintiffs sued the government, over structural (not bargaining) issues, the Act’s bar was inapplicable.
Thunder Basin Factors. All three factors (meaningful review, collateral nature, agency expertise) pointed to Article III courts, mirroring Axon and Free Enterprise Fund.
Article II Analysis – ALJs. The opinion declared the two-layer insulation “squarely foreclosed” by Jarkesy. ALJs are inferior officers exercising substantial discretion yet their immediate superiors (Board Members) cannot fire them without MSPB concurrence.
Article II Analysis – Board Members. The majority emphasised modern executive powers of the Board—issuing remedial orders, seeking federal injunctions, appointing officers. Lack of mandated partisan balance, combined with removal restriction, “excessively insulate[s]” the Board, exceeding Humphrey’s Executor.
Irreparable Harm. Being dragged before an unconstitutional tribunal constitutes a non-compensable, present injury. The majority rejected the government’s reliance on Collins for additional causation proof.
Equities & Public Interest. “The public is served when the law is followed.” The government suffers no legitimate harm when prevented from acting unconstitutionally.

C. Impact of the Decision

This ruling, unless stayed or reversed by the Supreme Court, will have immediate and far-reaching effects:

NLRB Proceedings Nationwide. Respondents in pending or future unfair-labor-practice cases within the Fifth Circuit—or citing its reasoning elsewhere—may seek injunctions halting agency hearings until Congress revises the tenure provisions or the Supreme Court resolves the conflict.
Agency Structure Doctrine. The decision deepens a growing circuit split (Fifth vs. Tenth, Sixth, Second) on whether removal-provision challenges require proof of “causal harm” for injunctive relief. Supreme Court intervention is likely.
Legislative Pressure. Congress may face renewed calls to reenact the NLRA’s severability clause with different wording, remove the contested tenure language, or add partisan-balance safeguards.
Broader Administrative Law. Agencies with analogous dual-layer protections (e.g., Social Security ALJs) could become fresh targets. The opinion signals that Humphrey’s Executor immunity is shrinking.
Labor-Management Relations. Short-term uncertainty about NLRB enforcement may embolden employers during union campaigns and bargaining, while unions may seek judicial or legislative fixes to restore agency clout.

4. Complex Concepts Simplified

For-Cause Removal Protection. Instead of “at-will” firing, an officer may be removed only for specific misconduct (“neglect of duty,” “malfeasance”). This insulates the official from political control.
Dual-Layer Protection. When two statutory levels separate the President from an officer (e.g., President → Board → MSPB → ALJ), presidential control is doubly diluted.
Inferior vs. Principal Officer. “Principal” officers (cabinet secretaries) report directly to the President; “inferior” officers are below them. The distinction affects permissible tenure protections.
Thunder Basin Factors. A Supreme-Court test asking: (1) Will postponing review deny meaningful relief? (2) Is the claim collateral to the statute’s merits? (3) Does it lie outside agency expertise?
Humphrey’s Executor Exception. A narrow 1935 precedent allowing limited insulation only for multi-member, bipartisan, quasi-adjudicatory boards that do not wield core executive power.
Irreparable Harm. An injury money cannot fix—here, the constitutional violation is the process itself, not just its outcome.

5. Conclusion

The Fifth Circuit’s consolidated decision stakes out an aggressive vision of Article II supremacy over independent agencies. By deeming both NLRB ALJs’ and Board Members’ tenure protections unconstitutional, and by green-lighting immediate injunctive relief, the court has:

extended Free Enterprise Fund and Jarkesy beyond ALJs to the NLRB’s highest officers;
narrowed the safe harbour of Humphrey’s Executor to agencies that truly mirror the 1935 FTC;
endorsed a robust concept of “here-and-now” structural injury for preliminary-injunction purposes; and
invited Supreme Court review to resolve inter-circuit disagreement over the necessity of showing causal harm in removal-provision challenges.

Whether upheld or reversed, SpaceX / Energy Transfer / Findhelp will shape the next chapter of administrative-state jurisprudence and the balance of power between elected and independent actors in American labor law.