Volkswagen Opens Door to Challenging NLRB Regional Directors

Volkswagen Group of America Inc. expanded the courtroom attack on the National Labor Relations Board’s constitutionality, newly targeting officials who are critical to the agency’s administration and enforcement of workers’ organizing rights.

The NLRB has been sued for alleged constitutional violations nearly 50 times since 2023, but the carmaker’s recent lawsuit included for the first time claims of violations related to the agency’s regional directors, according to a Bloomberg Law review of cases.

Although Volkswagen subsequently dismissed its claims, it paved the way for similar challenges. A Wisconsin-based healthcare provider contested regional directors’ constitutionality just a few days after Volkswagen sued.

A ruling against NLRB regional directors—who play key roles in both unfair labor practice cases and union elections—on constitutional grounds would be “very disruptive,” said Mori Rubin, a former regional director in Los Angeles.

“Every complaint issued and every election directed could be called into question,” Rubin said.

Volkswagen’s lawsuit marked an escalation of the legal war against the NLRB, in which employers are attempting to halt the agency from moving forward with administrative cases over alleged constitutional defects in its structure.

Litigation has primarily focused on removal protections for NLRB members and administrative law judges, Seventh Amendment issues with board remedies, and separation of powers concerns with how the board wields its authority.

The agency was hit with 25 lawsuits in 2024. Four cases drew preliminary injunctions—all from Trump-appointed judges in Texas—and one netted a win on summary judgment from a Trump appointee in Washington, DC.

Legal challenges slowed in 2025, when President Donald Trump’s termination of a sitting board member robbed the agency of the quorum it needed to act for most of the year.

Employers sued the NLRB just three times in the first seven months of Trump’s second term. But an appeals court decision in August reignited the campaign to hobble the agency.

Companies have filed 16 constitutional lawsuits against the NLRB in the eight months since the US Court of Appeals for the Fifth Circuit affirmed injunctions in cases involving SpaceX and two other companies.

The Fifth Circuit is the outlier. The Second, Third, and Ninth circuits have rejected similar employer attempts to block NLRB cases. And an automotive fuel systems company failed in its bid to get the US Supreme Court to block an unfair labor practice case via an emergency appeal after the Sixth Circuit refused.

Removal Protections

Volkswagen sued the NLRB in a Texas federal court April 17 to stop an unfair labor practice case involving a failed unionization bid at a facility in New Jersey.

The company’s lawyer, Frank Davis of Ogletree Deakins, didn’t respond to requests for comment. The NLRB declined to comment.

Volkswagen alleged the board members and administrative law judges have unconstitutional removal protections, claims that could have likely garnered a preliminary injunction in light of the Fifth Circuit’s decision in NLRB v. SpaceX.

But the company broke new ground by arguing that regional directors are unconstitutionally shielded from removal in a way that’s similar to the multilayer insulation given to the agency’s judges. Regional directors can only be fired for cause by board members, who themselves are protected from at-will termination by the president.

The Supreme Court said such job protections for inferior officers—a type of midlevel official that sits between Senate confirmed principal officers and the rest of the civil service—violate the Constitution in its 2010 decision in Free Enterprise Fund v. PCAOB.

A court could have probably found that restrictions on removing regional directors are unconstitutional, provided they qualify as inferior officers, said Linda Jellum, a law professor at the University of Idaho who’s written about removal shields.

Regional directors lead the agency’s field operations across 26 regions. They issue unfair labor practice complaints against companies and unions when they find allegations have merit. Regional directors also adjudicate disputes in union representation cases, such as which workers can vote or should be included in a bargaining unit, and authorize elections.

The constitutional defect with multilayered shields could disappear, however, depending on how the Supreme Court rules in its pending case on job protections for principal officers, Jellum said. A broad enough ruling would invalidate at-will safeguards for principal officers across all agencies—meaning that inferior officers like administrative law judges and regional directors would have only one layer of firing protection.

‘Potential for Mischief’

Volkswagen’s second claim against regional directors alleged they have no authority to act because the NLRB has no power to delegate to them.

The company basically argued that any constitutional problem with the board members, such as their removal protections, voids regional directors’ actions they took based on delegated power, said Michael Duff, a labor law professor at Saint Louis University.

Targeting regional directors creates the “potential for mischief” in the agency’s handling of representation cases, Duff said. The National Labor Relations Act specifically barred courts from directly reviewing union elections.

But lawsuits alleging constitutional flaws with regional directors provide an opportunity for courts to stop the processing of election cases, Duff said.

Rogers Memorial Hospital Inc.'s lawsuit challenging the constitutionality of regional directors’ removal protections is trying to stop representation proceedings at two of its Wisconsin locations. A judge denied the company’s request for a temporary restraining order and called for briefing on its bid for a preliminary injunction.

The claims against regional directors could have legs in federal court, Duff said.

“If we went back four years and thought about the kinds of arguments against the board we’ve seen the last two years, we wouldn’t believe it,” he said. “It’s absolutely unbelievable that there are so many live constitutional arguments questioning the validity of the board.”