President Can Fire Labor Relations Board Judges, Court Rules

National Labor Relations Board administrative law judges’ protections against being fired by the president violate the US Constitution, a federal judge ruled.

Judge Trevor McFadden, a Trump appointee for the District Court for the District of Columbia, said in his Tuesday ruling that the in-house judges’ layered removal protections amounts to a “byzantine process” that “eviscerates the President’s ability to control NLRB ALJs.”

The decision marks the first time one of the many companies raising constitutional challenges to the NLRB’s structure scored a win from a court other than the US Court of Appeals for the Fifth Circuit or the district courts under that circuit’s jurisdiction.

The other district court judges that have ruled in favor of plaintiffs were, like McFadden, appointed by President-elect Donald Trump during his first administration.

While those other Trump appointees granted preliminary injunctions halting the NLRB from proceeding with administrative cases against the plaintiffs, McFadden denied in September a Massachusetts hospital’s bid for a court order freezing its NLRB case.

McFadden dealt another loss to VHS Acquisition Subsidiary Number 7, Inc., which does business Saint Vincent Hospital, when he dismissed last month a pair of its constitutional claims for lack of jurisdiction.

But he said he had the authority to decide the challenge to the ALJ removal restrictions, promising to do it in another ruling.

Siding with the Fifth Circuit

In Tuesday’s decision, McFadden relied on the US Supreme Court’s 2010 decision in Free Enterprise Fund v. Public Company Accounting Oversight Board, which held that the layered protections for PCAOB board members were unconstitutional.

McFadden associated himself with the Fifth Circuit’s view of the ALJ removal issue, which held that Securities and Exchange Commission in-house judges have unconstitutional firing shields. That interpretation stands in contrast to the Sixth, Ninth, and Tenth circuit’s holdings approved of job safeguards for other agency ALJs’ firing shields are constitutional.

The Ninth and Tenth circuit put too much weight on the administrative law judges performing adjudicatory functions, ignoring their use of executive power that triggers Free Enterprise Fund’s bar against removal shields, McFadden said.

The Sixth Circuit’s decision was reversed by the Supreme Court, and even though it was for other grounds, the circuit’s ruling is “a tenuous reed to sustain the NLRB’s position,” the judge said

NLRB spokesperson Kayla Blado declined to comment. Saint Vincent Hospital’s lawyer, Jacquelyn Thompson of FordHarrison LLP, didn’t immediately respond to requests for comment.

The case is VHS Acquisition Subsidiary Number 7, Inc. v. NLRB, Dist. Ct. D.C., No. 24-02577, 12/10/24.