SpaceX snaps back at US labor board's complaint, calling it 'unconstitutional'

It's the second time in a month a Musk firm has said that about a US regulator

SpaceX has sued America's National Labor Relations Board (NLRB), an independent federal agency responsible for protecting private sector employees' rights, just 24 hours after the body accused Elon Musk's company of treating employees unfairly.

In a complaint [PDF] filed yesterday, SpaceX claimed the NLRB was "regulated by administrative officials who are shielded by unconstitutional removal protections."

Musk's company claims the agency has inherent structural flaws that make it unsuited to oversee its work holding private employers to account when they break labor laws.

Among other things, SpaceX claims that because the NLRB's president can't freely remove members of the board nor agency judges, its "constitutionally required degree of control is lacking."

The board, if you cast your mind, filed a complaint against SpaceX on Wednesday that alleged the rocket company had unlawfully dismissed workers for being critical of Elon Musk, when they penned an open letter denouncing the free speech advocate. The authors said the billionaire's behavior was an embarrassment for SpaceX, and were calling for a separation of the rocket company from the man's personal brand. Just three of the eight staffers who claim SpaceX retaliated against them dared to go public in the complaint.

It's the second time in under a month that a Musk company has accused an American regulator of violating the country's constitution in its attempts to, well, regulate. In December last year, Musk's electric car brand, Tesla, accused California's Department of Motor Vehicles (DMV), a state agency, of violating its free speech rights. The DMV had alleged Tesla overstated Autopilot's autonomy, marketing it less as an advanced driver assist system, and more as a full self-driving platform. The car company's lawyers said that by doing so, the DMV was trying to "impermissibly restrict Tesla's truthful and non-misleading speech about its vehicles and their features."

The lawyers of Musk in his personal capacity are also using a constitutional argument against market regulator the Securities and Exchange Commission (SEC). His legal team are currently arguing against a consent decree with the agency that states the man can't write tweets about the electric carmaker without lawyers looking over them first.

The decree was issued after the billionaire famously wrote several market-moving tweets – among them the throwaway line "Tesla stock price is too high imo," which sent its share price into a deep dive in 2020. The judge previously said Musk had waived his own First Amendment rights when he agreed to the consent decree. His lawyers have said this shouldn't count as he was found not guilty of securities fraud by a California jury in the case.

Who is watching the watchers of the watchers?

SpaceX and Tesla are not the only tech giants that have used the tactic of pushing back on the fine print testing the actual validity of legal watchdogs and their right to regulate private companies' activities.

In late November, Facebook parent Meta sued the FTC claiming it used "unconstitutional authority" in a child privacy case against Mark Zuckerberg's social media empire.

Democratic lawmakers snapped back with a letter [PDF] to the Facebook giant last month claiming that "seeking to declare the FTC unconstitutional shows that the company would prefer to take the cops off the beat and destroy America's bedrock consumer protection agency so that they do not lose a dime rather than protect children online."

And who could forget Microsoft's move against the FTC's lawsuit intended to stop it from buying Activision? In December 2022, it responded [PDF] to the market regulator's actions arguing the "complaint reflects improper selective enforcement of the antitrust laws."

The software maker said at the time that the "proceedings are invalid because the structure of the Commission as an independent agency that wields significant executive power, and the associated constraints on removal of the Commissioners and other Commission officials, violates Article II of the US Constitution and the separation of powers."

By January last year, however, Microsoft had walked its move back, filing a revised response [PDF] that omitted these arguments. To Microsoft's credit, public affairs spokesperson David Cuddy told Axios:

The FTC has an important mission to protect competition and consumers, and we quickly updated our response to omit language suggesting otherwise based on the constitution ... We initially put all potential arguments on the table internally and should have dropped these defenses before we filed.

The NLRB declined to comment on the SpaceX lawsuit. ®

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