Trader Joe’s Follows SpaceX in Arguing US Labor Board Is Unconstitutional

Grocery chain Trader Joe’s is joining Elon Musk’s SpaceX in arguing that the US labor board, which is prosecuting cases against both companies, is unconstitutional.

At a Jan. 16 National Labor Relations Board hearing in Connecticut, an attorney for Trader Joe’s told the judge considering union-busting allegations against it that the company wished to introduce a new argument in its defense.

“The structure and organization of the National Labor Relations Board and the agency’s administrative law judges is unconstitutional,” the company’s attorney Christopher Murphy said, according to a transcript of the proceeding that Bloomberg News obtained through a Freedom of Information Act request.

Trader Joe’s argument echoes that of Musk’s aerospace company, which filed a lawsuit Jan. 4 arguing that an NLRB case against it should be put on hold because the agency’s structure violates the “separation of powers” established in the US Constitution. SpaceX filed its suit the day after the NLRB issued a complaint accusing it of illegally firing eight employees over an internal letter sharply criticizing Musk. Trader Joe’s embrace of the argument suggests it could soon become widespread in corporate America.

Trader Joe’s, which has denied wrongdoing in the case, didn’t immediately respond to an inquiry. An NLRB spokesperson declined to comment. An attorney for the agency, which is accusing the grocer of illegally threatening and retaliating against workers, said at the hearing, “We believe that the NLRB and its administrative law judges are constitutional.”

US labor law protects the right of employees to organize and communicate about their working conditions, with or without a union. The same law tasks the NLRB with enforcing those protections. The agency includes regional officials who investigate and prosecute cases, administrative law judges who hold hearings and rule on allegations, and labor-board members in Washington who consider appeals of those judges’ rulings.

Spreading Attacks

Attacks on the NLRB’s constitutionality are likely to become more widespread, because the rightward shift of the federal judiciary makes such arguments more viable, said Catherine Fisk, a law professor at the University of California at Berkeley. After Congress created the NLRB in 1935, many companies refused to recognize its legitimacy, until the US Supreme Court ruled 5-4 in favor of the agency in 1937.

“Now it’s been on the books for almost 90 years,” Fisk said. “The only thing that has changed is the membership of the Supreme Court.”

The union Trader Joe’s United, which has organized four of the company’s locations over the past two years, said the company’s new argument could hurt its progressive branding. “Customers of Trader Joe’s would have serious problems with a company that has rejected the New Deal,” the union’s attorney Seth Goldstein said.

While SpaceX has asked a federal judge to prevent an NLRB trial against it from taking place, Trader Joe’s attorney said he understands the case against the grocer will proceed for now. He said he’s raising the issue of the agency’s constitutionality “for future briefing and argument.”

The agency judge hearing the case, Charles Muhl, suggested the matter could be for NLRB members or federal judges to decide, after he issues a ruling on the other aspects of the case and it gets appealed. “I’m certainly not going to be ruling on my own constitutionality anytime soon,” Muhl said.

Photo: A Trader Joe’s grocery store in New York. Photographer: Jeenah Moon/Bloomberg