How Elon Musk And Amazon Could Deal A Blow To Workers' Rights

Last week, attorneys for SpaceX and Amazon began arguing cases in federal appeals court that could upend the U.S. collective bargaining system that’s been in place since the New Deal.

The aerospace company, owned by billionaire Elon Musk, and the world’s largest online retailer have both been accused of violating their workers’ rights. To defend themselves, they now claim that the structure of the agency enforcing the law, the National Labor Relations Board, is unconstitutional.

Powerful employers mounted similar — and ultimately unsuccessful — legal challenges against the NLRB after its founding 89 years ago during the Great Depression. But there is one crucial difference today: a right-wing judiciary shaped by President-elect Donald Trump that’s steadily chipping away at the regulatory state.

The repercussions could be immense.

The NLRB oversees private-sector union elections and investigates thousands of allegations of illegal union-busting every year. Although it barely has enough funding to enforce a highly imperfect law, the labor board is often all that employees have to turn to when companies violate their rights to form unions or speak up about working conditions.

Other employers accused of breaking labor law have adopted the arguments of SpaceX and Amazon, and a slew of similar cases are working their way through the federal court system. The question could eventually end up before the Supreme Court, where a conservative supermajority could all but gut the agency with an aggressive ruling in corporations’ favor.

The litigation falls against the backdrop of a new Trump administration that may fire the board’s Democratic members before their terms are up, or decline to defend the agency’s constitutionality in court. Though workers and unions are accustomed to a corporate-friendly takeover of the board following a GOP presidential victory, they now face the prospect of the board falling into dysfunction.

Legal experts said a Supreme Court ruling against the agency on constitutional grounds could require Congress to step in and fix things — a bleak prospect for a legislative body that can barely avoid government shutdowns and will fall under complete GOP control in January.

“It’s quite up in the air what the future holds here,” said Wilma Liebman, a former Democratic member of the NLRB. “These cases are going to make their way up through the court. It’s an open question of how far the Supreme Court will go.”

‘A Perilous Place’

The constitutional challenges worry not just unions and their attorneys but many of the workers who’ve turned to the board for help. The NLRB has no ability to fine employers or seek damages for workers who’ve been illegally fired or retaliated against, and its cases often drag on for years due to appeals. But it still can serve as a check against companies’ worst behavior and deliver some justice to employees who’ve been wronged.

Erin Zapcic, who helped lead a union organizing effort at Medieval Times, said her blood “ran cold” when she learned about the SpaceX case.

Zapcic and her co-workers accused the dinner-theater chain of trying repeatedly to break their nascent union. The general counsel found merit in many allegations and filed complaints against the company, but the union fell apart before much of the litigation was resolved. Medieval Times, which denied the charges, settled one case and agreed to read a notice on employees’ rights at its California castle — hardly a great concession, but to Zapcic a victory on principle.

She views the SpaceX and Amazon lawsuits as a remarkable show of corporate arrogance. Musk is the richest person in the world, and Amazon founder Jeff Bezos is the second-richest.

“You’ve got these billionaires who know that any kind of punishment enacted by the NLRB is going to take forever and amounts to a slap on the wrist,” she said. “And yet any time they’re being held accountable for their own illegal activity, their answer is to turn around and say this board shouldn’t exist in the first place.”

Congress passed the law establishing the labor board in 1935, to create order around collective bargaining at a time of economic and social upheaval. The independent NLRB has a bipartisan five-member board in Washington that reviews decisions handed down by administrative law judges. It also has a prosecutorial arm led by a general counsel. The president gets to nominate the general counsel and new board members as their staggered terms end, reshaping the agency’s agenda when the White House changes hands.

The cases brought by SpaceX, Amazon and other employers attack the board on several grounds. They claim that the board members and administrative law judges are unconstitutionally protected from removal by the president, and that the way the NLRB handles unfair labor practices violates the employers’ right to a jury trial.

SpaceX also challenges the constitutionality of how the board seeks court injunctions against employers accused of breaking the law — an argument that could have serious ramifications for other federal regulators as well.

SpaceX is represented by Morgan Lewis, a management-side law firm best known for helping employers avoid unions. Two of the firm’s partners, Harry Johnson and John Ring, are themselves former NLRB members, a fact that’s outraged supporters of the agency as it’s come under attack.

Liebman, the former board member, called it “particularly galling.”

“Are they going to disgorge the salaries that they made?” she wondered.

Johnson and Ring didn’t respond when asked via email if they had such plans.

Jennifer Abruzzo, the board’s current general counsel appointed by President Joe Biden, has called the lawsuits a distraction from the companies’ own alleged lawbreaking. Her office has accused SpaceX of illegally firing several workers because they had criticized Musk, and Amazon of refusing to bargain with the Amazon Labor Union after its groundbreaking 2022 election victory at a New York warehouse.

“We are the only federal agency that enforces the only federal labor law in this country. It would be chaos if the agency was not allowed to perform its functions and do it properly,’” she said last month.

The agency could probably deal with an adverse ruling on the jury-trial question, perhaps by narrowing the remedies workers can receive when their rights have been violated, said Sharon Block, a former Democratic NLRB member who’s now a professor at Harvard Law School. “Which would be terrible,” Block added, but wouldn’t torpedo the agency.

A ruling aimed at the system of administrative law judges could be more problematic, she said.

“My concern would be if you got a decision where it wasn’t clear what the path was to remedy whatever the court found to be the constitutional infirmity, and if it would take legislation to fix,” Block explained. “Then we’re in a pretty perilous place.”

Any dysfunction inflicted by the Supreme Court or the Trump administration could benefit employers by slowing down or stopping altogether the charges against them. Individual workers or fledgling unions seeking the board’s help would probably pay the highest price, since they’re waging battles without much legal or political firepower.

Workers at Trader Joe’s have gone to the board again and again as they’ve tried to get a new, independent union, Trader Joe’s United, its first contracts at a handful of unionized stores. An administrative law judge recently ruled that Trader Joe’s broke the law by withholding 401(k) increases from union stores and telling workers to remove union pins, charges the company denies.

Sara Beth Ryther, a Trader Joe’s employee in Minneapolis and vice president of the union, said it can be frustrating how long such a case takes to litigate. But she said it’s validating to know that government officials investigated their claims and found in their favor, and that “justice is at least being served.” Ryther has testified in board proceedings, given affidavits and enjoyed seeing the arguments of high-priced corporate attorneys fall flat.

“The prospect of not having that, I would say it’s disheartening,” she said.

Trader Joe’s, which is also represented by Morgan Lewis, has defended itself in board proceedings by arguing in part that the NLRB’s structure is unconstitutional. It hasn’t yet made that claim in federal court.

Ryther said an incapacitated board would deal a major blow to employees’ spirits.

“It feels as if, right now, that little shred of governmental safeguard is integral to our morale,” she said.

‘A Pandora’s Box’

Despite his glaring conflicts of interest as SpaceX’s owner, Trump ally Musk now has the president-elect’s ear and could end up advising him on NLRB matters. That includes whether to fire board members, who to replace them with and whether the Justice Department should defend the agency against Musk’s lawsuit.

Trump’s only labor pick so far is surprisingly moderate: For labor secretary he has tapped outgoing Rep. Lori Chavez-DeRemer, an Oregon Republican who has supported pro-union legislation. But his approach to the NLRB may be far less gentle, especially given Musk’s history with the agency. SpaceX has called the labor board’s structure “the very definition of tyranny.”

Jeff Hauser, director of the Revolving Door Project, a nonprofit that tracks corporate influence on the executive branch, said he finds Musk’s cost-cutting advisory role to Trump particularly concerning, since it won’t have the same kind of oversight as a Senate-confirmed Cabinet position. He doesn’t believe Musk’s influence bodes well for workers or the NLRB.

“He hates unions almost as much as he hates trans people,” Hauser said. (Musk has a long history of making derogatory comments about transgender people, including his own child.)

Even before it faced an existential legal threat, the labor board was struggling to fulfill its mission due to insufficient funding from Congress. Caseloads have risen dramatically amid a post-pandemic organizing wave, as more workers file union election petitions and unfair labor practice charges. When the agency faced a comparable caseload 13 years ago, it had 62% more field staff, according to the general counsel.

Mike Bilik, executive vice president of the union representing NLRB employees, said the agency’s attorneys and examiners are swamped with cases and barely have time to return calls. The backlog has made it hard to ponder how the challenges to the board’s constitutionality might shake out. Given Musk’s promise of broad government cuts — and a GOP trifecta that will shape federal spending — many employees are asking if they will have jobs at all.

“The board is going into this already so unbelievably kneecapped. We’re hobbling into this era,” Bilik said. “Every time you look, there’s more cases than you’ve ever had.”

In the meantime, more employers are adopting the NLRB-is-unconstitutional line in their defense against union-busting charges. That includes the company that owns the Pittsburgh Post-Gazette, which is accused of illegally cutting employees’ health care and other benefits.

U.S. District Judge Cathy Bissoon, of the Western District of Pennsylvania, recently took a swipe at the broader constitutionality challenge when the newspaper tried to wield it. She wrote that while the argument might not be “outlandish by contemporary standards,” she would rather not “ignore nearly a century’s worth of settled jurisprudence.”

“Although respect for stare decisis appears less ‘in vogue’ as of late, there is something to be said for tradition,” the Obama appointee wrote.

The employers looking to undercut the labor board might want to be careful what they wish for. After all, the status quo has worked quite well for companies that resist unions. The labor movement has been shrinking for decades, with union density recently hitting a historic low. Organizing unions through the NLRB process has grown so difficult that labor groups have spent years trying to develop alternate routes.

Meanwhile, a breakdown in the law could cut both ways. Unions that no longer felt protected might pursue illegal strikes or boycotts that the NLRB helps guard against.

“It would be a Pandora’s box that, once open, it’s unclear what would happen,” said Joseph McCartin, a labor historian at Georgetown University.

McCartin noted that working-class disaffection helped propel Trump to his victory over Vice President Kamala Harris. And though Trump has promised to gut the federal government, McCartin has a hard time seeing how neutering an agency that protects workers wouldn’t lead to even more instability and discontent.

“I would say rip down labor law at your peril,” he said. “Let’s see what happens.”