US Labor Board Abandons One of Its Cases Against Musk’s SpaceX

The U.S. labor board is abandoning a complaint over SpaceX’s severance and arbitration policies, resolving one front of a sprawling legal battle between the agency and Elon Musk’s aerospace company.

In a Dec. 18 joint motion, attorneys for both SpaceX and the National Labor Relations Board asked a federal judge in Texas to dismiss one of two lawsuits filed by SpaceX that argued the NLRB’s structure was unconstitutional, since the agency had decided to withdraw its complaint against the company.

The case had centered around a complaint issued by the NLRB’s Seattle office in March 2024. The agency alleged that terms in the company’s severance and arbitration agreements, including confidentiality rules, were illegally coercive. SpaceX sued the next month to challenge the NLRB’s constitutionality, its second such challenge after another it filed in response to a complaint from an NLRB office in Los Angeles.

The reversal by the NLRB — the US agency responsible for enforcing most private sector employees’ rights to organize or take collective action about working conditions — is a victory for SpaceX. The NLRB has also been backtracking on the complaint it had issued in California, telling a court in April that it was exploring whether it lacked jurisdiction to pursue that case in the first place. That complaint alleged that the firm illegally retaliated against workers who criticized Musk.

Since SpaceX filed its first lawsuit last year, other companies including Amazon.com Inc. have filed similar cases, several of which are now pending in U.S. courts.

While the labor board is facing similar challenges from other firms, the NLRB’s acting general counsel, William Cowen, said the agency concluded that the dispute over the SpaceX confidentiality complaint wasn’t the best one to reach the US Supreme Court. After considering “Is this the horse we want to ride on this issue?”, he said, “It was determined that that was really not the path to follow, which is why we backed off.”

SpaceX didn’t respond to requests for comment.

Musk was the largest single financial contributor in the 2024 election, with almost all of his spending supporting Trump, and his Department of Government Efficiency played a key role in Trump’s first year in office. The two men had a fierce split earlier this year, but those tensions have thawed since, with Musk attending a November gala dinner at the White House to honor Saudi Crown Prince Mohammed bin Salman.

In May, a three-judge panel granted a request from the government and the company to pause proceedings in SpaceX’s other lawsuit against the labor board while the NLRB seeks input from the National Mediation Board, which oversees railways and airlines, about whether that agency has jurisdiction over SpaceX rather than the NLRB.

President Donald Trump tapped Cowen as the agency’s acting top prosecutor in February.

Under Cowen, the agency has pulled back from several of his predecessor’s more attention-grabbing cases, including moving to dismiss a complaint about private prison company GEO Group Inc.’s treatment of immigrant detainees. The NLRB also withdrew a complaint regarding an email Sean Penn sent excoriating those complaining about working conditions at his nonprofit.

The U.S. Senate voted this month to confirm Trump’s pick for permanent NLRB general counsel, Crystal Carey, who had been a partner at Morgan, Lewis & Bockius LLP, a law firm that represented companies including Tesla Inc. and SpaceX. She will likely be sworn in soon.