Major US corporations threaten to return labor to ‘law of the jungle’

Upset by the surge in union drives, several of the best-known corporations in the US are seeking to cripple the country’s top labor watchdog, the National Labor Relations Board (NLRB), by having it declared unconstitutional. Some labor experts warn that if those efforts succeed, US labor relations might return to “the law of the jungle”.

In recent weeks, Elon Musk’s SpaceX as well as Amazon, Starbucks and Trader Joe’s have filed legal papers that advance novel arguments aimed at hobbling and perhaps shutting down the NLRB – the federal agency that enforces labor rights and oversees unionization efforts. Those companies are eager to thwart the NLRB after it accused Amazon, Starbucks and Trader Joe’s of breaking the law in battling against unionization and accused SpaceX of illegally firing eight workers for criticizing Musk.

Roger King, a longtime management-side lawyer who is senior labor counsel for the HR Policy Association, said “it will be a lose-lose” if the federal courts overturn the 89-year-old National Labor Relations Act, which has governed labor relations since Franklin Roosevelt was president. “We’ll have the law of the jungle, the law of the streets,” King said. “It will be who has the most power. It’s potential for chaos.”

Kate Andrias, a Columbia University law professor, said workers would be hurt if the courts issue a sweeping decision that declares both the NLRB and the National Labor Relations Act unconstitutional. “Without them, workers will be even worse off,” she said. “It’s critical that they continue to exist to protect the basic right to organize and engage in collective bargaining. This is an assault on rights we have considered fundamental since the New Deal.”

Some worker advocates have voiced surprise that these companies are seeking to hobble the NLRB when, in their view, the labor board is already too weak, its penalties toothless. The NLRB can’t fine companies even one dollar for breaking the law – for instance, by illegally firing workers for supporting a union.

SpaceX, Starbucks, Amazon and Trader Joe’s have put forward three main arguments for holding the NLRB unconstitutional: it penalizes companies without a jury trial, exercises executive powers without the president being free to remove board officials, and violates the separation of powers by exercising executive, legislative and judicial functions. This corporate attack is part of a wave of lawsuits challenging the constitutionality of various federal agencies that regulate business.

Andrias said one factor spurring the challenges to the NLRB is that “the supreme court over the last decade, but especially in the last couple of years, has signaled a hostility to the administrative state and has radically remade administrative law in a way that would curb the government’s ability to protect workers and consumers. Companies are now trying to capitalize on the court’s conservative majority.”

Another reason for these anti-NLRB efforts is that many companies believe that President Biden’s NLRB has swung too far to the left. The board is usually pro-business under Republican presidents and pro-labor under Democratic ones. King said that SpaceX and the other companies hope the courts will provide a “firewall” against the NLRB’s leftward shift.

William B Gould IV, who was chair of the NLRB under President Clinton, said anti-union “tech billionaires” like Musk and Jeff Bezos “have fueled these efforts”. “Elon Musk says he doesn’t like unions because they create a lords-versus-peasants mentality,” Gould said. “It certainly seems that Musk is trying to hold down the peasants here.”

Benjamin Sachs, a labor law professor at Harvard, said it’s troubling that Trader Joe’s and Starbucks, which hold themselves out as progressive, “are willing to sign on to legal theories that threaten not only labor rights, but our ability to have clean air, regulate food safety and assure safe and healthy workplaces”.

SpaceX led the way in challenging the NLRB, calling it an “unconstitutionally structured agency”. In a lawsuit filed in Texas, SpaceX asserted: “The NLRB’s current way of functioning is miles away from the traditional understanding of the separation of powers.” SpaceX quoted James Madison in The Federalist Papers: “The accumulation of all powers legislative, executive and judiciary in the same hands” is “the very definition of tyranny”. (SpaceX and the NLRB are fighting over whether a federal judge in Texas or California should hear the case.)

The NLRB declined the Guardian’s request for comment. It has yet to file a legal response defending its constitutionality.

Andrias defended the NLRB, noting that ever since the New Deal, the supreme court has allowed federal agencies to exercise various functions. “What we’re seeing is part of a broad attack on Congress being able to design agencies in the way it deems most effective,” she said.

The corporations maintain that the NLRB’s administrative law judges should be deemed unconstitutional because, they argue, those judges exercise many executive functions and the president can’t readily remove them. The NLRB’s defenders say the judges exercise judicial, not executive, powers. The board’s defenders further argue that the cases NLRB judges hear don’t require a jury trial because the judges can’t assess any financial penalties, except back pay to workers who were illegally fired or demoted.

SpaceX and the other corporations might someday appeal these cases to the supreme court. Legal experts say it’s hard to predict whether the courts will uphold the NLRB’s constitutionality, rule that parts of its structure are unconstitutional, or wholly void the NLRB and National Labor Relations Act.

The HR Policy Association’s King said that if NLRB judges are declared unconstitutional, that would essentially halt those judges hearing hundreds of cases each year in which board officials first accused companies and unions of violating labor laws. The NLRB has, for instance, filed 128 complaints against Starbucks, alleging more than 1,000 instances of illegality, including that the company unlawfully fired dozens of baristas for backing unionization. (Starbucks denies any wrongdoing.) Under this scenario, King said, the NLRB could still oversee unionization elections.

Steven Swirsky, a management-side employment lawyer with Epstein Becker Green, said, “It would be pretty problematic for employers and unions if there isn’t some structure in place to administer the functions now done by the NLRB.” He said that federal judges won’t want to handle all the cases now litigated before the NLRB. If the labor board is ruled unconstitutional, workers who feel they were illegally fired or otherwise disciplined for backing a union might file a flood of lawsuits in federal courts.

Harvard’s Sachs said that in seeking to have the NLRB ruled unconstitutional, “corporations should be careful what they wish for”. “If you eliminate the National Labor Relations Act, then you’ll have 50 states empowered to enact their own labor laws,” he said. The result: California and other blue states might enact laws that make it far easier to unionize than current federal law does.

Legal scholars said if the NLRB is ruled unconstitutional in whole or in part, that might require congressional action to fix it, but with Congress so dysfunctional, that might be hard to do.

“For most workers and unions, the NLRB is the only game in town,” said Gould, the board’s former chairman. “Most employers won’t recognize and bargain with unions without the NLRB requiring them to.”