Amazon primal: Retailer calls NLRB unconstitutional

Amazon has joined the growing chorus of businesses declaring that the National Labor Relations Board (NLRB) may be unconstitutional. Along with SpaceX and Trader Joe’s, the online retailer has argued the board’s very structure violates the Constitution’s separation of powers doctrine.

The NLRB has accused Amazon of retaliating against its employees in Staten Island. The company has denied any wrongdoing. In a recent filing, the company also upped the ante by raising the constitutionality issue. Specifically, it argued the board lacked legal authority because it’s legal structure “imped[ed] the executive power provided for in Article II of the United States Constitution.”

Article II of the Constitution outlines what is known as the “separation of powers” doctrine. This grants different authorities and powers to the three branches of government – the White House, the Congress and the Supreme Court – and says none of the three branches may encroach on another’s responsibilities.

SpaceX and Trader Joe’s have made essentially the same argument in NLRB cases earlier this month. It may seem odd for businesses to suddenly start challenging the standing of a federal agency that has existed for 90 years, but the status of federal agencies like the NLRB is an issue that the Supreme Court may soon weigh in on thanks to a court case called SEC v. Jarkesy.

The Fifth Circuit Court of Appeals found in Jarksey that a federal agency which adjudicated fraud claims in its own administrative hearings violated at least two constitutional principles: the Seventh Amendment’s guarantee of a jury trial and the additional constitutional requirement that only Congress may exercise legislative powers. The Supreme Court will likely deliver its own opinion on Jarkesy sometime this summer.

Federal agencies, including the NLRB, are executive branch agencies but also wield prosecutorial and judicial powers thanks to their administrative law courts (ALCs). The agencies can issue legal complaints which are then heard by courts that the agency itself runs.

This isn’t a minor technical issue. “Thirty-four federal agencies possess ALCs, and these courts decide hundreds of thousands of cases per year,” CEI’s own Ryan Young and Stone Washington explain. The system is unfair because the agencies control their courts, they note. “Since ALCs are not part of the independent judicial branch outlined in Article III of the United States Constitution, ALC defendants are often denied some constitutionally-guaranteed protections, including the right to request a jury trial in civil affairs.”

Despite being part of the executive branch, the agencies are often outside the control of the White House. The president appoints the officials and Congress confirms them, but beyond that they act independently and cannot be fired, serving until their term runs out.

Amazon raising the issue increases the odds that the Roberts Court will try to address the issue in some concrete way. Yet it’s hard to predict what the court will do. While the constitutional problems with ALCs is obvious, declaring them unconstitutional would be highly disruptive of the federal regulatory system. The justice could prove reluctant to go that far, or they could damn the torpedoes.