In today’s News & Commentary, a Tennessee district court rules against a challenge to the NLRB’s constitutionality, New York caps damage awards under a state labor law, and the stakes of SpaceX’s pursuit of NMB jurisdiction.

On Tuesday, a District Court in Tennessee ruled against a medical school that challenged the constitutionality of NLRB proceedings. Meharry Medical College had challenged the agency’s constitutionality in a suit to block an unfair labor practice case from going forward. Echoing the Amazon case recently dismissed at the 5^th Circuit, Meharry argued that for-cause removal protections for Board members and Administrative Law Judges are unconstitutional, and that it has a right to a jury trial under the 7^th Amendment. The court upheld the removal protections under Humphrey’s Executor (1935) and rejected the 7^th Amendment argument under Jones & Laughlin Steel (1937); however, it noted that the 6^th Circuit is currently considering an appeal that involves similar issues in Yapp USA Automotive Systems. The court briefly discussed Board member Gwynne Wilcox’s recent removal, saying it “takes notice” of the removal and efforts to reinstate Wilcox, but that it wasn’t clear how Meharry would be harmed if Wilcox is reinstated.

Bloomberg reports that a law passed in New York State’s budget limits the damage awards that workers suing employers for paying them late can recover. In Vega (2019), a New York state appellate court reinvigorated a nearly 130-year-old law that says “manual workers” must be paid weekly, finding the workers had a private right of action to bring suit themselves, rather than waiting for state enforcement. Hundreds of “Pay-Delay” suits were filed in the intervening years. However, last year a split emerged among state appellate courts, as a different appellate division found no private right of action. The budget change does not resolve the split, but it limits recovery to “lost interest,” which “dramatically cuts the available damages” under the statute, per an attorney quoted in the article. The article cites the example of a hypothetical worker with a $1,000 paycheck that is 10 days late. Before the change, the worker might have recovered $1,000 in liquidated damages; under the new law, “they’re looking at just $4.38 in interest.”

As Luke noted a couple of weeks ago, the NLRB is seeking an opinion from the National Mediation Board as to which agency has jurisdiction over SpaceX, reflecting a change from the Biden NLRB’s rejection of SpaceX’s argument the company should be under NMB jurisdiction. An article last week from Law360 explores some of the stakes of the issue. NMB jurisdiction would mean that SpaceX employees are covered by the Railway Labor Act, a pre-NLRA statute that currently applies to railroads and airlines. The RLA mandates an extensive mediation process that “all but forbids strikes,” reflecting a statutory goal of preventing disruptions in the railroad industry. The NLRA gives workers more protection to go on strike. The RLA also creates a challenging path for organizing, requiring that elections be held across a nationwide “craft,” rather than at a single location. Finally, NLRB jurisdiction ensures that issues are overseen by ALJ’s and the Board, whereas claims under the RLA must be enforced in court. An attorney quoted in the article argues that SpaceX may have difficulty convincing the NMB it falls under its jurisdiction, since NMB jurisdiction typically applies to providers of commercial transport that are open to the general public. In 2024, the NMB stopped taking jurisdiction over airline subcontractors. The NMB continues to have a 2-1 Democratic majority (and, unlike the NLRB, a quorum).