The US National Labor Relations Board (NLRB) has officially dropped its labor complaint against SpaceX after determining that the agency does not have the authority to regulate the company. Instead, federal regulators concluded that SpaceX falls under the Railway Labor Act (RLA), a law traditionally used to oversee labor relations in the railroad and airline industries.
This ruling transfers responsibility for SpaceX’s labor matters to the National Mediation Board (NMB), a separate federal agency that administers the RLA. The decision significantly alters the legal landscape for a group of former SpaceX employees who had accused the company of unlawful termination after they circulated an letter critical of CEO Elon Musk.
How the Railway Labor Act Changes the Case
The Railway Labor Act operates under a different legal framework than the National Labor Relations Act, which is enforced by the NLRB. The RLA was designed to prevent disruptions in essential transportation services and includes a lengthy mediation and arbitration process. As a result, employees covered by the RLA face more complex procedures when attempting to strike or resolve disputes with employers.
Companies that fall under the RLA are exempt from NLRB jurisdiction. This distinction became central to the SpaceX dispute, which began in January 2024 when an NLRB regional director issued a complaint alleging that the company illegally fired eight workers. The employees had signed an open letter criticizing Musk’s leadership and workplace conduct. The complaint sought remedies that included reinstating the employees and awarding back pay.
In response, SpaceX filed a lawsuit challenging the structure of the NLRB and later argued that it should be treated as a common carrier similar to an airline. That classification would place the company under the RLA rather than the NLRB’s authority.
Regulators Classify SpaceX as a Common Carrier
To resolve the jurisdictional question, the NLRB referred the matter to the National Mediation Board. In January 2026, the NMB determined that SpaceX qualifies as a common carrier by air engaged in interstate or international commerce. The board also found that the company operates as a carrier transporting mail under contract with the US government.
Based on the NMB’s findings, the NLRB concluded it lacked jurisdiction and dismissed the case. The decision was reported by major news organizations, including Bloomberg and The New York Times, and marks a rare instance in which a commercial space company has been placed under a legal framework historically reserved for airlines and railroads.
Attorneys representing the former employees have criticized the ruling and indicated they believe the Railway Labor Act was not intended to cover spaceflight activities. They argue that expanding the law to include private space companies raises unresolved legal and policy questions that Congress has not directly addressed.
Leadership Changes and a Prolonged Jurisdiction Battle
The dispute over which agency should oversee SpaceX has stretched on for more than a year and intensified following leadership changes at the NLRB. Jennifer Abruzzo, who served as the agency’s general counsel under former President Joe Biden, had previously rejected SpaceX’s attempt to move the case under the NMB’s authority.
After Abruzzo was dismissed by President Donald Trump in early 2025, SpaceX renewed its request for the NLRB to reconsider the jurisdiction issue. In April 2025, both SpaceX and the NLRB informed a federal appeals court that they would seek a formal opinion from the NMB. The joint filing indicated that clarifying jurisdiction could help resolve ongoing legal disputes between the company and the labor board.
Former Employees Dispute the “Common Carrier” Status
Lawyers for the terminated employees submitted filings to the NMB arguing that SpaceX does not meet the traditional definition of a common carrier. They contend that the company does not offer transportation services to the general public on standardized terms. Instead, its flights are arranged through individually negotiated contracts.
The employees’ legal team pointed to SpaceX’s limited number of private human spaceflight missions, which have involved government astronaut transport and a small group of wealthy private customers. According to their argument, serving a narrow and selective customer base does not align with how common carriers typically operate.
They also raised concerns about SpaceX’s marketing practices, noting that some materials presented as evidence had pricing information removed. The attorneys argued that this suggests the company does not openly advertise uniform services to the public in the way a conventional transportation provider would.
Questions Over Commerce and Government Mail
Another key issue in the dispute is whether SpaceX’s launches qualify as interstate or international commerce under the Railway Labor Act. The former employees’ attorneys maintain that missions traveling from US launch sites into outer space do not fit the statute’s traditional understanding of transportation between states or nations.
They also challenged SpaceX’s assertion that it functions as a government mail carrier. According to their filings, the evidence primarily shows that the company has transported internal correspondence and cargo related to government space missions, rather than operating as a formal mail carrier under a dedicated contract.
The attorneys argue that SpaceX’s position relies heavily on its future plans and ambitions rather than its current operations. In their view, any decision to explicitly include commercial spaceflight under the Railway Labor Act should come from Congress rather than through administrative interpretation.
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