Miraculously, the NLRB’s constitutional deficiencies went unnoticed by the courts for 89 years. They warrant attention now because the NLRB is inconveniencing Musk and his various companies.
If these arguments sound familiar, that’s because they’re part of Donald Trump’s war on the administrative state, which Trump’s then-chief strategist, Steve Bannon, pledged to “deconstruct” in 2017. In 2018 Trump issued an executive order giving the executive branch greater latitude in the hiring and firing of the federal government’s roughly 2000 ALJs (though not at the NLRB, where ALJs enjoy statutory protection). This was denounced by the ALJs’ professional organization, the Association of Administrative Law Judges, essentially as a return to the corrupt 19th-century spoils system. It will, the group said, “politicize our courts, lead to cronyism and replace independent and impartial adjudicators with those who do the bidding of political appointees.” On Trump’s way out the door in late November 2020, his administration also moved to bust a federal employees union for immigration ALJs, initiating a proceeding that remains unresolved.
The arguments in Musk’s lawsuit parrot those made in SEC v. Jarkesy, a case before the Supreme Court this term. The plaintiffs, led by a hedge fund manager and sometime Fox News blowhard named George Jarkesy, got busted by the SEC for securities fraud and fined $300,000; in addition, the SEC barred Jarkesy from the securities industry. Like the NLRB, the SEC is barred statutorily from ALJs serving at the pleasure of the president. ALJs can be fired only for cause. The Fifth Circuit, the most conservative appeals court in the United States, ruled that this arrangement is unconstitutional, and the SEC appealed to the Supreme Court. The Fifth Circuit also held that the SEC can’t perform both prosecutorial and judicial functions and that Congress lacks the power to delegate judicial adjudication to the SEC.