SpaceX wins legal reprieve as U.S. labor board drops key complaint

Elon Musk’s SpaceX picked up a legal win after the US labor board stepped away from a key complaint tied to severance and arbitration rules. The decision shuts down one part of a broader court fight that has dragged federal labor regulators into a direct clash with the rocket company over how worker agreements are written and enforced.

The shift became official on December 18, when lawyers for SpaceX and the National Labor Relations Board jointly asked a federal judge in Texas to dismiss one of two lawsuits filed by the company.

That case focused on claims that the agency itself was unconstitutional. The request came after the labor board decided to withdraw its complaint, making the court battle unnecessary on that front.

Labor board drops Seattle complaint and narrows the fight

The dispute started with a complaint issued in March 2024 by the NLRB’s Seattle office. Regulators claimed language in severance and arbitration agreements used by SpaceX went too far.

The focus sat on confidentiality clauses that the agency said could pressure workers and block them from exercising protected rights.

The company responded a month later by suing the board in federal court. That lawsuit argued the NLRB’s structure violated the Constitution. It was not the first time the company used that strategy.

A separate lawsuit had already been filed after another complaint came out of the agency’s Los Angeles office.

That California case accused SpaceX of retaliating against employees who criticized Elon Musk. By April, the labor board told a court it was reconsidering whether it even had authority to pursue that matter.

Officials said they were reviewing whether the National Mediation Board, which oversees rail and airline labor disputes, should have jurisdiction instead.

In May, a three-judge panel approved a joint request from the government and the company to pause proceedings in that second lawsuit. The pause allowed time for the NLRB to seek formal input from the National Mediation Board on who should control the case.

Political pressure, court strategy, and leadership changes collide

The agency’s retreat goes beyond one company. Since SpaceX filed its first constitutional lawsuit last year, other firms have followed the same path. Amazon.com Inc. is among the companies now challenging the labor board in federal court. Several of those cases remain active.

William Cowen, the NLRB’s acting general counsel, said the agency made a strategic call. He explained that the confidentiality dispute involving SpaceX was not the right vehicle to take to the Supreme Court. “Is this the horse we want to ride on this issue?” Cowen said. “It was determined that that was really not the path to follow, which is why we backed off.”

Cowen took the role in February after President Donald Trump named him acting top prosecutor at the agency. Under his leadership, the NLRB has pulled away from several high-profile actions launched by his predecessor.

One involved allegations against private prison operator GEO Group Inc. over treatment of immigrant detainees. Another focused on an email sent by actor Sean Penn criticizing staff complaints at his nonprofit.

Politics continues to sit close to the story. Musk was the largest single donor in the 2024 election cycle, with most of his spending backing Trump. His Department of Government Efficiency played a central role during Trump’s first year back in office.

After a public split earlier this year, tensions eased. Elon attended a November White House dinner honoring Saudi Crown Prince Mohammed bin Salman, as Cryptopolitan reported live.

The leadership picture at the labor board is also changing. This month, the US Senate confirmed Trump’s nominee for permanent NLRB general counsel, Crystal Carey. She previously worked as a partner at Morgan, Lewis & Bockius LLP, a company that represented companies including Tesla Inc. and SpaceX. Her swearing-in is expected soon.

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