A new Ninth Circuit Court of Appeal decision, NLRB v. North Mountain Foothills Apartments, LLC (Oct. 28, 2025), highlights the deepening split between federal appellate courts over the National Labor Relation Board’s (NLRB) constitutional structure – and what that means for employers facing unfair labor practice (ULP) charges.
The Case: North Mountain Foothills
In North Mountain Foothills, the Ninth Circuit enforced an NLRB order finding that the employer unlawfully interrogated, threatened, and discharged an employee who discussed pay and working conditions with coworkers. Beyond the labor-law merits, the employer raised constitutional challenges to the NLRB’s structure – arguing, in part, that the Board’s administrative law judges (ALJs) and members enjoy removal protections that violate Constitutionally protected separation-of-powers principles.
The Ninth Circuit rejected that challenge, holding that so long as an agency officer was validly appointed, retrospective relief based on an unconstitutional provision is only available where the provision inflicts compensable harm. The Court reasoned that, assuming the NLRB’s for-cause protections were invalid, the employer failed to show harm. To do this, the Court noted that a “party must demonstrate that the challenged action or decision was taken by an officer the President sought to but could not remove, or that the removal provision otherwise affected or influenced the challenged action or decision.”
The Contrast: Fifth Circuit’s SpaceX Decision
This ruling stands in sharp contrast to the Fifth Circuit’s recent preliminary decision when ruling on the employer’s request for an injunction in SpaceX v. NLRB, which allowed SpaceX, and two other employers, to freeze their ULP proceedings while they litigate constitutional challenges against the NLRB.
In SpaceX, a Fifth Circuit panel led by Judge Don Wilett held that being forced to appear before an “unconstitutional administrative tribunal” constitutes irreparable harm. The court reasoned that employers “should not have to choose between compliance and constitutionality.”
Key Distinctions:
- The Fifth Circuit found both NLRB ALJ and possibly Board-member removal protections unconstitutional under separation-of-powers principles.
- It held employers do not need to show a specific injury – the structural defect itself is sufficient harm.
In contrast, the Ninth Circuit’s North Mountain Foothills decision:
- Requires a separate independent showing of harm, echoing the Supreme Court’s reasoning in Collins v. Yelen, 594 U.S. 220 (2021).
- Upholds the status quo – that the NLRB remains constitutionally valid and can continue adjudicating ULP charges.
Why California Employers Should Care
California employers fall within the Ninth Circuit, where the North Mountain Foothills ruling currently governs. This means that constitutional challenges likely will not pause NLRB cases here and ULPs will proceed (when the Board becomes operational again) unless and until the Supreme Court rules otherwise.
The Road Ahead
The growing circuit split – between the Fifth Circuit’s willingness to halt NLRB proceedings and the Ninth Circuit’s refusal – makes Supreme Court review increasingly likely. A High-Court ruling could clarify whether ALJ and member removal protections impermissibly insulate the NLRB from presidential control and, if so, how the agency must be restructured.
For now, California employers should stay focused on compliance, but watch closely: a structural overhaul of the NLRB could reshape how unfair labor practice cases are prosecuted and reviewed nationwide. In addition, employers should continue to analyze whether asserting constitutional defenses are necessary to preserve their arguments, notwithstanding the Ninth Circuit ruling in North Mountain Foothills.
Employers can find more information about CDF’s Traditional Labor Practice Group by clicking here or by contacting the author.
