Labor Law Fault Lines: Emerging Divide Over the Constitutionality of NLRB Authority

At a Glance

• Because the Fifth and Ninth Circuits reached opposite conclusions, an employer’s ability to challenge the NLRB’s structure or authority now depends on geography. Employers in states under the Fifth Circuit’s jurisdiction (like Texas, Louisiana and Mississippi) may have stronger grounds to contest NLRB proceedings than those in the Ninth Circuit (which covers much of the West Coast).
• A clear circuit split on a constitutional question often sets the stage for Supreme Court intervention. Businesses and counsel should monitor this issue closely; a future ruling could reshape how independent agencies like the NLRB operate.

On October 28, 2025, the Ninth Circuit, in NLRB v. North Mountain Foothills Apartments LLC, weighed in on the growing debate over the National Labor Relations Board’s (NLRB or Board) constitutional authority making its own waves and setting up a critical circuit split. In a unanimous ruling, breaking with the Fifth Circuit’s August 2025 decision on the issue, Space Exploration Technologies Corp. v. NLRB, the court rejected challenges claiming the Board’s structure and authority are unconstitutional.

This decision sharply contrasts with the recent Fifth Circuit opinion, which reached the opposite conclusion, creating a clear split between the two appellate courts. Now, employers in different parts of the country may face very different rules when challenging NLRB decisions. The divide also sets the stage for what could become a major showdown before the U.S. Supreme Court.

Article II: President’s Removal Power

The employer in the Ninth Circuit case argued that the statute protecting administrative law judges (ALJs) from being fired except for “good cause” was unconstitutional because it unlawfully limits the president’s power to remove government officials.

The Ninth Circuit noted that the question of whether the president can remove a sitting NLRB member is pending before the U.S. Supreme Court (see our coverage here). The court also pointed out that the NLRB had actually dropped its opposition to the employer’s argument that the “good cause” rule was unconstitutional.

Because of this, the court didn’t dive into the constitutional debate. Instead, it focused on a simpler issue: whether the employer showed that this rule caused it any real harm. The court concluded that the employer failed to argue that it was harmed at all. As a result, the court ruled that the employer’s claims failed.

Contrast this with the Fifth Circuit, which recently held that the “good cause” provision was likely unconstitutional because too many layers of for-cause protection insulates these powerful officials and impedes the president’s authority to remove them. Further, the Fifth Circuit had no trouble identifying the employer’s injury, diverging from the Ninth Circuit’s holding. The Fifth Circuit reasoned that being subjected to unconstitutional agency authority was an injury in and of itself.

Other Constitutional Arguments

The Ninth Circuit also considered two constitutional arguments not presented to the Fifth Circuit.

First, the employer claimed that the NLRB’s process for deciding labor disputes violates the Seventh Amendment, which guarantees the right to a jury trial. The Ninth Circuit disagreed, holding that this protection was inapplicable to this specialized type of administrative hearing.

Second, the employer argued that the NLRB’s combined role in investigating and deciding claims violated separation-of-powers principles and denied the employer due process. Again, the Ninth Circuit disagreed, noting that the Board kept its decision-making and investigative roles separate and that the employer showed no actual or potential bias.

While the Ninth Circuit firmly rejected each of the employer’s constitutional challenges, its decision may not be the final word on the issue. The Fifth Circuit’s August decision suggests a growing judicial willingness to question long-standing assumptions about agency independence and authority. As challenges continue to surface, other courts may well reach different conclusions, especially on questions involving the limits of executive power and the fairness of agency adjudication. The widening divide signals that the constitutional debate over the NLRB’s legitimacy is far from settled and that further appellate review, or even U.S. Supreme Court intervention, may be on the horizon.

Implications for Employers

This circuit split presents new challenges and considerations for employers:

• Because the Fifth and Ninth Circuits reached opposite conclusions, an employer’s ability to challenge the NLRB’s structure or authority now depends on geography. Employers in states under the Fifth Circuit’s jurisdiction (like Texas, Louisiana and Mississippi) may have stronger grounds to contest NLRB proceedings than those in the Ninth Circuit (which covers much of the West Coast).
• Following the Fifth Circuit’s reasoning, employers facing NLRB complaints might assert constitutional objections early, arguing that the agency’s structure violates separation of powers or other constitutional principles. Even if those arguments don’t prevail everywhere, preserving them on the record could be important for appeals.
• A clear circuit split on a constitutional question often sets the stage for Supreme Court intervention. Businesses and counsel should monitor this issue closely; a future ruling could reshape how independent agencies like the NLRB operate.