Fifth Circuit Panel Finds Unconstitutional Removal Protections Favoring NLRB Members And ALJs

On August 19, 2025, a three-judge panel of the Fifth Circuit Court of Appeals ruled in a long-anticipated opinion that the NLRA’s protections for Board Members and Administrative Law Judges from presidential removal are unconstitutional. Consequently, the NLRB is now preliminarily blocked from prosecuting unfair labor practice charges against three petitioning employers. This decision is an earth shaker in labor law circles and creates another obstacle for an agency already hampered by the lack of a Board member quorum to make decisions. Space Exploration Technologies Corp. v. NLRB.

Siding with lower court decisions, the Circuit Court rejected removal protections that have been in place since the NLRA’s dawn in 1935. Specifically, the provisions that NLRB members may be removed by the President only “for neglect of duty or malfeasance in office” and that ALJs may be removed only “for good cause,” as determined by a separate agency, the Merit Systems Protection Board, improperly stymies the President from exercising authority and ensuring that the laws are faithfully executed.

Regarding the ALJs, the panel cited its own 2022 decision in Jarkesy v. SEC, in which SEC removal protections for its ALJs were deemed unconstitutional. SEC ALJs were characterized as inferior officers unduly protected from removal by their superior officers, and by extension protected doubly from removal by the President. This double insulation violated the separation of powers in the Constitution. In like manner, because NLRB ALJs are inferior officers insulated by two layers of for cause protection, the removal restrictions are unconstitutional. This ruling on ALJ protections is consistent with a decision of a D.C. District Court in VHS Acquisition Subsidiary No. 7 v. NLRB.

As to the Board members, the panel rejected the NLRB’s position that Humphrey’s Executor v. U.S., a 1935 Supreme Court decision, requires enforcing the NLRA’s protection. In Humphrey’s Executor, the Supreme Court upheld removal restrictions for the FTC’s balanced political body of experts -- for “inefficiency, neglect of duty, or malfeasance in office” -- on the grounds that its commissioners exercised only “quasi-legislative and quasi-judicial” functions and not “executive power.” The Fifth Circuit panel stated that courts have been reluctant to extend Humphrey’s Executor beyond its facts. According to the panel, in contrast to the FTC judges, NLRB Board Members “wield substantial executive power,” because they determine bargaining units, direct representation elections, adjudicate unfair-labor-practice charges, and pursue injunctions. In short, Board Members execute the NLRA through “administrative, policymaking, and prosecutorial authority.” That they are removable only “for neglect of duty or malfeasance in office, but for no other cause” renders the removal provision constitutionally suspect under modern separation-of-powers doctrine.

The court further emphasized that NLRB decisions on key areas of labor law change drastically depending on the party in office. This lack of objectivity, based on the court’s reasoning, undermines the “independence” rationale of Humphrey’s Executor. Finally, as to the employers’ claim of harm from the improper structure, the court agreed: “When an agency’s structure violates the separation of powers, the harm is immediate—and the remedy must be, too.”

The panel’s ruling is not the final word. For now, it means that the specific employers in the case are likely to succeed on the merits of their argument. The decision covers only the Fifth Circuit; cases in other circuits are heading towards split opinions on the issue. An appeal to the full circuit is now likely, as well as an eventual appeal to the Supreme Court to address the viability of Humphrey’s Executor.

Should you have any questions, please contact Partners Edward J. Bonett, Jr., Esq. at 908.546.6991 or via email here, Patrick W. McGovern, Esq. at 973.535.7129 or via email here, or any Partner in our firm’s Labor Law Practice Group.