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After SpaceX: How Employers Can Preserve Constitutional Objections and What Might Cure the Constitutional Defect
The Fifth Circuit’s recent decision in SpaceX v. NLRB (2025) struck at the heart of the National Labor Relations Board’s structure, holding that the statutory removal protections for Board members and administrative law judges are likely to violate the Constitution’s separation of powers. This has raised an immediate practical question for employers: how should they preserve constitutional objections during unfair labor practice (ULP) investigations or proceedings, particularly while still complying with the Board’s processes?
Participation vs. Waiver of Structural Challenges
Companies may fear that cooperating with the NLRB — producing documents, attending hearings, or filing position statements — could inadvertently waive constitutional objections. Both precedent and commentary, however, suggest otherwise.
Supreme Court decisions across agencies, such as the Federal Trade Commission, Securities Exchange Commission, and Consumer Financial Protection Bureau, confirm that structural separation-of-powers challenges are not waived merely by engaging with an agency:
- Axon Enterprise, Inc. v. Federal Trade Commission, 598 U.S. 175 (2023): The Court held that parties could raise constitutional challenges to agency structure directly in federal district court without exhausting administrative remedies, rejecting the idea that participation in agency processes undermines such challenges.
- Collins v. Yellen, 594 U.S. 220 (2021): The Court held that challenges to removal restrictions survived even though the plaintiffs had engaged with the agency.
- Seila Law LLC v. Consumer Financial Protection Bureau, 591 U.S. 197 (2020): A private party was permitted to challenge an agency’s structure in the course of resisting enforcement, even though the company had refused to comply with the CFPB’s demand.
These cases establish that courts distinguish waiver (an intentional relinquishment of rights) from forfeiture (a failure to assert them). Courts are reluctant to find waiver of structural claims absent explicit abandonment. The greater risk is forfeiture if a party never raises the issue. Accordingly, companies should take care to preserve objections consistently in writing, even while cooperating with investigations and hearings.
Practical Guidance for Employers
In light of SpaceX, employers confronted with NLRB investigations or complaints should consider the following:
- Cooperate with process but reserve rights. Employers should not refuse to participate in investigations or hearings, which risks default or sanctions. Instead, they should comply “under protest.”
- Raise objections early and often. Constitutional objections should appear in position statements, motions, and briefs, and be reiterated in hearings.
- Use explicit reservation language.
- For example: “Respondent complies with the NLRB’s investigative and procedural requirements under protest and without waiver of its constitutional objections. Respondent expressly reserves its position that the Board’s structure and the removal protections applicable to its members and administrative law judges are unconstitutional, as recognized in SpaceX v. NLRB (5th Cir. 2025), Axon Enterprise v. FTC (2023), and related authorities.”
This dual track — cooperate to avoid sanctions, but object to preserve rights — is one way to safeguard structural claims for later appeal or settlement leverage while maintaining good faith participation in NLRB proceedings.
How to “Cure” the Constitutional Defect
The SpaceX decision also raises the question of what Congress or the courts could do to cure the constitutional infirmity. One straightforward solution would be to sever the offending removal restrictions under the NLRA’s severability clause, leaving the remainder of the statute intact.
Conclusion
The SpaceX decision is part of a growing line of cases questioning the constitutional design of federal agencies. Employers should assume that these challenges will continue to surface and be prepared to preserve objections at every stage of a NLRB proceeding. At the same time, Congress and the courts will be pressed to consider how best to cure the constitutional defect — whether through simple severance of removal protections or more sweeping structural reform.
Footnotes
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This article was primarily researched and drafted by Anthony Pimentel, Associate, with co-authorship and editorial contributions from Jerry Morales, Of Counsel.
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