U.S. Labor Board Drops SpaceX Wrongful-Termination Case, Citing Lack of Jurisdiction

Two-Year Legal Battle Comes to an End
Trump Presidency Solidifies Musk's Advantage

Reuters Yonhap News

The U.S. labor authorities have dropped the wrongful-termination lawsuit they had been pursuing against Elon Musk's SpaceX. Observers say this significantly eases the legal burden on Chief Executive Officer (CEO) Elon Musk, who had been locked in the legal battle for two years.

According to Bloomberg News on the 9th (local time), the National Labor Relations Board (NLRB) announced that it was dismissing the wrongful-termination case it had been pursuing against SpaceX since January 2024 and that it would not bring any additional cases in the future. In a letter to the attorney representing the terminated employees, the NLRB said, "The National Mediation Board (NMB) has expressed the view that SpaceX engineers fall under the jurisdiction of the NMB, not the NLRB," adding, "The NLRB is dismissing the charge because it lacks jurisdiction over SpaceX as an employer."

Back in January 2024, the NLRB had filed a complaint alleging that SpaceX had wrongfully terminated eight employees. These employees were fired after sending an open letter to SpaceX management in June 2022 criticizing CEO Musk's words and actions. At the time, the NLRB accused SpaceX not only of wrongful termination, but also of illegal surveillance, interrogation, and retaliation.

SpaceX rejected these claims and, in turn, filed a constitutional lawsuit against the NLRB, prolonging the legal battle. SpaceX argued that it falls under the jurisdiction of the NMB and that the NLRB has no authority over it. In the United States, most manufacturers are overseen by the NLRB, while railroad and airline companies are overseen by the NMB.

Jennifer Abruzzo, who served as general counsel of the NLRB under former President Joe Biden, had rejected the argument that SpaceX was under NMB jurisdiction, but President Donald Trump, who took office in January last year, fired Abruzzo. Afterward, when SpaceX requested a review, the NLRB sought the NMB's opinion in April last year to resolve the dispute.

The NMB then ruled on the 14th of last month that "space transportation includes air travel to get to space" and concluded that SpaceX falls under its jurisdiction. It also cited as grounds the fact that anyone can attempt to purchase space travel via email through the company's website. As a result, since President Trump took office, the outcome has tilted in favor of SpaceX.

The terminated employees are now expected to find it difficult to continue the legal fight. Paige Holland-Thielen, one of the fired engineers, told Bloomberg News, "It feels like the legal system is not functioning properly and is failing to protect workers," criticizing the decision as "a sign of worse things to come that will further weaken the NLRB."