The administrative state is the alphabet soup of agencies that make up most of the United States government, and it has one main job: to police the powerful.
The role of the Federal Trade Commission (FTC) is to break up illegal monopolies and enforce consumer protections. The Occupational Health and Safety Administration (OSHA) enforces workplace safety laws, and the Wage and Hour Division enforces minimum wage and overtime laws. The Environmental Protection Agency (EPA) stops companies from polluting the environment. The Securities and Exchange Commission (SEC) protects investors from unscrupulous banks and hedge funds. The Food and Drug Administration (FDA) stops companies from selling unsafe foods and quack medicines. The National Labor Relations Board (NLRB) enforces most private labor law, protecting workers’ right to organize. These agencies are not perfect, but they do help keep the powerful in check.
The bosses don’t like this. They want the freedom to use their wealth however they choose with no interference from anybody else telling them what to do. The problem bosses have with democratic government is that everyone has the same number of votes. Bosses aren’t special. They love the “free market” because that’s where they have as many votes as they have dollars, and they have all the dollars.
The bosses have always attacked the administrative state, but as the courts have shifted to the right in the last few years, bosses are starting to see success. Companies like SpaceX, Amazon, Starbucks, and Trader Joe’s are even all arguing that the NLRB is unconstitutional and needs to be closed down.
Constitutional Rulings
Bosses use many tactics to argue some law or program is unconstitutional and illegal for the government to enforce. In an infamous Supreme Court case from the progressive era, Lochner v. New York, the court ruled that any law that interfered with the right to contract, such as a minimum wage law or an overtime law, was unconstitutional. This decision and others like it eventually led President Roosevelt to threaten to pack the court, at which point the court backed off and started declaring more and more laws and programs constitutional.
Bosses will also argue that agencies, such as the NLRB, are unconstitutionally constructed. They want the courts to believe, and many right-wing courts are happy to oblige, that the agency in question is free to do whatever it wants, free from the control of the president — a violation of Section II separation of powers. If the president can’t control the decision-makers at the agency, the argument goes, the agency is an unconstitutional administrative body and needs to be shut down. Shutting down the NLRB would leave most employees effectively unprotected, as the National Labor Relations Act does not provide employees with a private right to sue when their bosses violate their rights.
Targeting the FTC
The Supreme Court first denied this attack in the 1935 case of Humphrey’s Executor v. United States. This case concerned the FTC, the agency tasked with breaking up illegal monopolies and enforcing consumer protections. The plaintiffs argued the FTC was unconstitutional because the president could not fire members of the commission at will but only for “inefficiency, neglect of duty, or malfeasance in office.”
The court disagreed. It made a distinction between officers who were helping the president do his job and officers who were helping Congress and the courts do theirs. It decided that if the officers in question are tasked with legislative and or judicial duties, as they were in this case, Congress has the right to limit the ability of the president to fire those officers.
This set the battle lines going forward. Bosses will argue officers have executive duties and the restrictions on the president’s ability to fire has been unconstitutionally curtailed. Agencies will argue officers have legislative and judicial duties and the restrictions on the president are reasonable.
The Return of an Old Argument
This line of attack did not find much success for many decades, but as the courts have shifted more radically to the right, the argument has found willing ears. This began when the Supreme Court in 2010 found unconstitutional the structure of the Public Company Accounting Oversight Board (PCAOB), which oversees the audits of public companies.
There they held the board was unconstitutional because the members could only be fired for cause by the officers of the SEC, who could only be fired by the president for “inefficiency, neglect of duty, or malfeasance in office.” They held this “dual layer” of protection unconstitutional and severed the “for-cause” clause, meaning the PCAOB could stay in place, but its members could now be fired at will.
Targeting the CFPB
The Supreme Court again ruled in the bosses favor in a case in 2020. There they found the structure of the CFPB, the agency formed after the Great Recession to prevent the financial abuses that led to the crash, was unconstitutional. Their holding did three things.
First, the court ruled the only agencies protected are those that look like the FTC, the agency in question in the Humphrey’s Executor case. Second, it said that Congress could limit the power of the president to fire “limited officers,” but only if they have limited duties and no policymaking roles. Third, it said this flaw in the structure of the CFPB was “severable,” which means the CFPB can stay in place and continue to operate, but the director can be fired at will by the president.
Targeting the NLRB
These cases have inspired many employers to argue the NLRB is also unconstitutionally constructed. They hope the court will not find the error severable and instead shut the whole thing down, leaving them free to violate the NLRA at will. Most of these attacks, such as the one from Starbucks, have been filed during proceedings inside the NLRB, which will not hear challenges to its own authority. This does preserve the question, though, allowing them to argue it again when they eventually appeal the case to a federal court.
What’s more immediately worrying are the cases bosses are filing directly in federal court while they have a case in the NLRB, arguing the NLRB is unconstitutional and should be stopped from illegally persecuting them. Two of them have succeeded, one from SpaceX and one from Energy Transfer, LP. These are only preliminary injunctions, meaning nothing has been officially determined, but the district courts expect the bosses to eventually win on their claims.
District Courts Weigh in
These district courts think the NLRB is unconstitutional for two reasons. First, the members of the NLRB are only dismissable for “neglect of duty or malfeasance in office,” while the members of the FTC were dismissable for “inefficiency, neglect of duty, or malfeasance in office.” The members of the NLRB cannot be fired for inefficiency, but the FTC members can, a difference they find relevant. They also think administrative law judges have an illegal “dual layer” of protection.
Bosses could make other arguments if they wanted to weaken the NLRB. A company that makes Hallmark movies has appealed its NLRB case with many other arguments, including by saying it has the right to a jury trial and that the NLRB cannot award compensatory damages.
The goal of these actions is not only to shut down the NLRB. They also give the bosses more ways to delay the case, slowing any organizing momentum that may be building.
The Fight Continues
None of this is to say the courts will shut down the NLRB any time soon, but it is becoming more and more of a possibility. The Supreme Court is actively fighting the administrative state, helping the bosses avoid responsibility to the public. Just this term they made it easier for bosses to attack a law by extending the statute of limitations, made it easier for courts to tell agencies what to think and what to do, made it harder for agencies to punish the powerful when they violate the law, and made it harder for the NLRB to quickly stop companies who are violating workers rights. Justice Thomas has made it clear he would shut down many of the agencies the government uses to police the powerful.
The bosses have spent many years and many dollars trying to convince us that the big corrupt government is the source of all our problems, and things would get better if we just made it smaller. They are lying. The government is not our oppressor. The government is our weapon. The government is a tool we use to fight against the bosses. They are fighting to disarm us and take the weapon for themselves. None of us can take on the bosses alone. Our best defense as workers is to get organized. An organized working class has the strength to fight back against the bosses who want to rewrite the laws to their advantage and kill the agencies we use to level the playing field.
