U.S. Corporations Are Openly Trying to Destroy Core Public Institutions. We Should All Be Worried.

Trader Joe’s has become the second company in a month to argue in court that the National Labor Relations Board is “unconstitutional,” following the lead of Elon Musk’s SpaceX, as both companies face board charges for firing employees. These two major corporations aren’t alone in attempting to protect their interests by undermining public institutions; Meta is also arguing in an ongoing lawsuit that the Federal Trade Commission is unconstitutional. 

A legal expert told Motherboard that these companies are attempting to take advantage of what they believe is a friendly Supreme Court—judges currently lean right by a six-to-three margin—while they can.

SpaceX, accused of illegally firing eight workers who were critical of Musk, filed its lawsuit one day after the Board brought charges against it, arguing that the agency lacked presidential oversight and violated the “separation of powers” provision outlined in the U.S. Constitution. Trader Joe’s, accused of union-busting, stated in a hearing that the Board was unconstitutional, and that it would “preserve the issue for further briefing and argument,” according to a transcript of the hearing shared by the Huffington Post.

These companies are not the first to bring charges of unconstitutionality against core government agencies. In November, Meta sued the Federal Trade Commission for unconstitutionality in a bid to prevent the FTC from preventing the social media giant from profiting off of data collected from minors. 

“Meta respectfully requests that this Court declare that certain fundamental aspects of the Commission’s structure violate the U.S. Constitution,” the company’s complaint stated. It argued that the FTC violated the constitution because it served as both prosecutor and judge, its commissioner could not be removed by the U.S. president, and it denied the company’s right to a trial by jury.

“My sense is that the trend is increasing both because the corporations believe they have a sympathetic audience with this Supreme Court, and because workers' efforts to organize unions are increasing,” said Kate Andrias, a legal scholar at Columbia University who studies constitutional law and labor law. “So corporations feel more need to use all possible tools to resist.” 

In April, the Supreme Court unanimously ruled in favor of a company challenging the FTC’s constitutional authority. Axon Enterprise, a company that makes TASERs and police body cameras, acquired competitor and police camera maker Vievu in 2018. The FTC challenged the acquisition two years later. Axon sued the agency for exercising unconstitutional authority, and after losing an appeals court decision in 2021, argued the case before the Supreme Court. 

The Court ruled that the FTC Act, which established the agency and its administrative procedures in 1914, did not “displace a district court’s federal-question jurisdiction over claims challenging as unconstitutional the structure or existence” of the commission. The FTC abandoned its challenge. This means that lawsuits about the FTC’s constitutionality, such as that posed by Meta in November, are legally possible.

Laura Phillips-Sawyer, a professor of law at the University of Georgia who studies antitrust, told Motherboard that the Supreme Court’s new “major questions” doctrine made it easier for companies to challenge agencies’ authority.

“The Chevron doctrine, which everyone is talking about right now, resulted from a challenge to the EPA’s administrative authority in 1984—the EPA was not enforcing a rule critical to the Clean Air Act,” Phillips-Sawyer said in an email. “The Court said that non-enforcement was within the agency’s purview as it was empowered by Congress and the statute. It was a doctrine of deference to admin[istrative] agencies.”

“Of course now the Supreme Court has created the ‘major questions doctrine,’ which asserts that the Court can/will evaluate administrative rulemaking by agencies and determine if the promulgated rule falls within the authorities granted by Congress and the statute,” she continued. “Now, the Court seems to suggest that if deference is gone, all rulemaking might be challenged.” 

Experts say that the same principle extends to challenges of the NLRB, which was established as part of the New Deal in 1935. Catherine Fisk, a law professor at the University of California, Berkeley, told Bloomberg News last week that the board had “been on the books for almost 90 years. The only thing that has changed is the membership of the Supreme Court.”

The Supreme Court has given itself authority over agencies’ decisions in the past. Phillips-Sawyer pointed to FTC v. Gratz, a 1920 case which challenged the commission’s authority to determine “unfair methods of competition.” The Court gave itself the final power to determine whether a company had committed an antitrust violation.

In a recent publication in the Northwestern University Law Review, Andrias wrote that companies commonly appeal to the judiciary. “Business focuses its claims on courts, including the Supreme Court,” she wrote. “The Supreme Court’s conservative majority has embraced much of business’s constitutional agenda, along with a robust form of judicial supremacy that posits the Court as the sole and final authority over the Constitution.”

“The nation’s largest corporations and trade associations, along with conservative legal advocacy groups, are spending vast sums lobbying against proposed labor law reform while mobilizing anti-union consultants and new forms of surveillance to defeat the recent unionization campaigns,” Andrias wrote. “At the same time, business is also working to reinvigorate and extend a set of constitutional and quasiconstitutional doctrines to weaken the power of workers, lock in the power of capital, and ultimately stymie core principles of egalitarian democracy and free labor embedded in the worker vision.” 

Motherboard has previously reported on the efforts of massive U.S. companies, like Amazon, to prevent unionization by hiring anti-union consultants. Some companies, like Starbucks and Trader Joe’s, have sued their worker unions for trademark infringement. 

“Contemporary fights about labor are also inherently fights about constitutional law—about the rights to which citizens and residents are entitled, about governmental powers and structure, and ultimately about how we constitute ourselves as a nation,” Andrias wrote.

Correction: An earlier version of this article stated that Trader Joe’s is suing the NLRB. Rather, the company argued in a court that the NLRB is unconstitutional while facing labor charges, but did not file a lawsuit. Motherboard regrets the error.