GALVESTON – A federal judge has granted a preliminary injunction against the National Labor Relations Board and in favor of pipeline company Energy Transfer, which will allow the company to continue pursuing claims that the setup of the NLRB is unconstitutional.
U.S. District Court for the Southern District of Texas Judge Jeffrey V. Brown handed down a ruling to that effect on July 29, in Energy Transfer LP and La Grange Acquisition, L.P.’s case against the NLRB, its General Counsel Jennifer Abruzzo, its Chairman Lauren M. McFerran, its Board Members Marvin E. Kaplan, Gwynne A. Wilcox and David M. Prouty, an unnamed Administrative Law Judge from the NLRB and Coalition for a Democratic Workplace.
It all began when an individual who had previously worked for Energy Transfer and its subsidiary, La Grange, filed a complaint with NLRB, saying they were fired for raising issues related to health and safety in the workplace – whereas the company maintained they were fired for insubordination.
Energy Transfer brought suit against the NLRB in June, alleging its judges and members are improperly shielded from removal and that its administrative proceedings are in violation of the U.S. Constitution, by not allowing it a jury trial and permitting the NLRB to hold executive, legislative and judicial power.
The plaintiffs maintain that NLRB Administrative Law Judges are protected from removal by the President of the United States, which violates the Appointments Clause of the U.S. Constitution.
In his memorandum opinion, Brown pointed to a U.S. Court of Appeals for the Fifth Circuit ruling from 2022 in Jarkesy v. U.S. Securities and Exchange Commission, which found that the SEC’s Administrative Law Judges were not properly appointed.
“The same holds true here. The removal provisions that protect NLRB ALJs are indistinguishable from those that protect SEC ALJs. Indeed, the NLRB has offered no distinction between the removal protections at issue and those held to be unconstitutional in Jarkesy. In light of this precedent, La Grange will likely show that the removal protections afforded to NLRB ALJs are unconstitutional. So La Grange will likely succeed on the merits,” Brown said.
In this and in other cases lodged against the NLRB with similar claims, it argued those claims are deficient and ignore nine decades of U.S. Supreme Court precedent which have affirmed the structure of the NLRB and other agencies like it which conduct their own proceedings.
Furthermore, the NLRB had argued that the plaintiffs could not show irreparable harm necessary to win an injunction – but on this point too, Brown disagreed.
“The NLRB repeatedly insists that because Axon Enter., Inc. v. FTC did not address injunctive relief directly, it ‘does not bear on the question of irreparable harm.’ The NLRB is correct that Axon examined injury for jurisdictional purposes and not in the injunction context, but the Court’s conclusion stands. The harm of ‘being subjected to’ ‘a proceeding by an unaccountable ALJ’ is an injury that ‘cannot be undone.’ La Grange faces irreparable harm absent an injunction,” Brown said.
If this case and others like it which are also currently lodged against the NLRB by are successful, they made impede the agency from being able to administer federal labor laws – while business-rights groups say the cases are being fought to prevent overreach on the part of government agencies.
U.S. District Court for the Southern District of Texas case 3:24-cv-00198
From the Southeast Texas Record: Reach Courts Reporter Nicholas Malfitano at nick.malfitano@therecordinc.com