Labor Board Relinquishes Control Over Musk’s SpaceX Operations

The US labor board is stepping back from a prolonged legal dispute with Elon Musk’s SpaceX, indicating a shift in its approach to future cases involving the company.

After two years of legal proceedings, the National Labor Relations Board (NLRB) has decided to dismiss a complaint that accused SpaceX of terminating eight engineers due to their participation in an open letter criticizing Musk. This decision comes after the NLRB referenced a recent opinion from the National Mediation Board (NMB), which asserted that the engineers fell under its jurisdiction rather than that of the NLRB.

“Accordingly, the National Labor Relations Board lacks jurisdiction over the employer and, therefore, I am dismissing your charge,” wrote Danielle Pierce, a regional director of the NLRB, in a letter obtained by Bloomberg.

The NMB is responsible for overseeing railroad and airline companies, such as American Airlines Group Inc., while the NLRB governs most other private sector employers, including manufacturers like Boeing Co. This retreat by the NLRB represents a significant victory for SpaceX, as it limits the legal avenues available for former and current employees alleging retaliation.

Under federal law, workers protected by the NLRB have the right to engage in various collective actions aimed at improving their working conditions, regardless of union affiliation. Conversely, workers under NMB jurisdiction are governed by a different set of laws that do not offer equivalent protections.

“The legal system doesn’t feel like it’s working like it’s supposed to, and it doesn’t feel like it’s protecting workers the way it’s supposed to,” expressed Paige Holland-Thielen, one of the terminated engineers. “I think that this is a sign of worse things to come in declawing the NLRB.”

An NLRB spokesperson declined to comment on the matter, while SpaceX, which has consistently denied any wrongdoing, did not respond to inquiries.

In response to the NLRB’s 2024 complaint, SpaceX had filed a lawsuit against the agency, claiming its structure was unconstitutional. This legal action resulted in an injunction from the 5th Circuit Court of Appeals, halting the labor board’s case against the company.

Jennifer Abruzzo, the NLRB general counsel under former President Joe Biden, had previously dismissed SpaceX’s argument that the allegations should fall under the NMB’s jurisdiction. Following Abruzzo’s dismissal by President Donald Trump in January last year, SpaceX sought a reconsideration from the labor board.

In April, the NLRB general counsel’s office indicated it would seek the NMB’s perspective “in the interests of potentially settling” the disputes with SpaceX.

The terminated engineers contended that SpaceX should not be under NMB jurisdiction, arguing that Congress never granted the agency authority over commercial space transportation. They noted that unlike airlines serving the general public, SpaceX only provides rides to select customers. However, in a January 14 opinion, the NMB sided with SpaceX, asserting that “space transport includes air travel” and that the company’s website allows anyone to inquire about purchasing a trip.

In December, the NLRB also abandoned another case from the Biden era against SpaceX, which alleged that certain terms in the company’s severance and arbitration agreements, including confidentiality clauses, were illegally coercive.

While the NLRB’s latest decision may resolve SpaceX’s ongoing lawsuit against the agency, the labor board continues to face challenges regarding its constitutionality. Since SpaceX initiated its lawsuit in 2024, other companies, including Amazon.com Inc., have filed similar cases, many of which are currently pending in US courts.

Additionally, the terminated engineers have filed a lawsuit against SpaceX and Musk for sexual harassment and retaliation under California law. This lawsuit includes allegations that some plaintiffs faced harassing comments from coworkers that “mimicked Musk’s posts” on social media, creating a hostile work environment.

In December, SpaceX requested a federal appeals court to compel arbitration in this case after a lower court denied the request.

Photo: Elon Musk during the World Economic Forum in Davos, Switzerland, on Jan. 22. Photographer: Krisztian Bocsi/Bloomberg

Copyright 2026 Bloomberg.

Topics
Aerospace

The US labor board is stepping back from a prolonged legal dispute with Elon Musk’s SpaceX, indicating a shift in its approach to future cases involving the company.

After two years of legal proceedings, the National Labor Relations Board (NLRB) has decided to dismiss a complaint that accused SpaceX of terminating eight engineers due to their participation in an open letter criticizing Musk. This decision comes after the NLRB referenced a recent opinion from the National Mediation Board (NMB), which asserted that the engineers fell under its jurisdiction rather than that of the NLRB.

“Accordingly, the National Labor Relations Board lacks jurisdiction over the employer and, therefore, I am dismissing your charge,” wrote Danielle Pierce, a regional director of the NLRB, in a letter obtained by Bloomberg.

The NMB is responsible for overseeing railroad and airline companies, such as American Airlines Group Inc., while the NLRB governs most other private sector employers, including manufacturers like Boeing Co. This retreat by the NLRB represents a significant victory for SpaceX, as it limits the legal avenues available for former and current employees alleging retaliation.

Under federal law, workers protected by the NLRB have the right to engage in various collective actions aimed at improving their working conditions, regardless of union affiliation. Conversely, workers under NMB jurisdiction are governed by a different set of laws that do not offer equivalent protections.

“The legal system doesn’t feel like it’s working like it’s supposed to, and it doesn’t feel like it’s protecting workers the way it’s supposed to,” expressed Paige Holland-Thielen, one of the terminated engineers. “I think that this is a sign of worse things to come in declawing the NLRB.”

An NLRB spokesperson declined to comment on the matter, while SpaceX, which has consistently denied any wrongdoing, did not respond to inquiries.

In response to the NLRB’s 2024 complaint, SpaceX had filed a lawsuit against the agency, claiming its structure was unconstitutional. This legal action resulted in an injunction from the 5th Circuit Court of Appeals, halting the labor board’s case against the company.

Jennifer Abruzzo, the NLRB general counsel under former President Joe Biden, had previously dismissed SpaceX’s argument that the allegations should fall under the NMB’s jurisdiction. Following Abruzzo’s dismissal by President Donald Trump in January last year, SpaceX sought a reconsideration from the labor board.

In April, the NLRB general counsel’s office indicated it would seek the NMB’s perspective “in the interests of potentially settling” the disputes with SpaceX.

The terminated engineers contended that SpaceX should not be under NMB jurisdiction, arguing that Congress never granted the agency authority over commercial space transportation. They noted that unlike airlines serving the general public, SpaceX only provides rides to select customers. However, in a January 14 opinion, the NMB sided with SpaceX, asserting that “space transport includes air travel” and that the company’s website allows anyone to inquire about purchasing a trip.

In December, the NLRB also abandoned another case from the Biden era against SpaceX, which alleged that certain terms in the company’s severance and arbitration agreements, including confidentiality clauses, were illegally coercive.

While the NLRB’s latest decision may resolve SpaceX’s ongoing lawsuit against the agency, the labor board continues to face challenges regarding its constitutionality. Since SpaceX initiated its lawsuit in 2024, other companies, including Amazon.com Inc., have filed similar cases, many of which are currently pending in US courts.

Additionally, the terminated engineers have filed a lawsuit against SpaceX and Musk for sexual harassment and retaliation under California law. This lawsuit includes allegations that some plaintiffs faced harassing comments from coworkers that “mimicked Musk’s posts” on social media, creating a hostile work environment.

In December, SpaceX requested a federal appeals court to compel arbitration in this case after a lower court denied the request.

Photo: Elon Musk during the World Economic Forum in Davos, Switzerland, on Jan. 22. Photographer: Krisztian Bocsi/Bloomberg

Copyright 2026 Bloomberg.

Topics
Aerospace