July 29 (Reuters) - A federal judge in Texas on Monday

temporarily blocked a National Labor Relations Board case

against pipeline operator Energy Transfer ( ET ) to allow the company

to pursue its lawsuit claiming the agency's structure violates

the U.S. Constitution.

U.S. District Judge Jeffrey Brown in Galveston, Texas, said

Energy Transfer ( ET ) was likely to succeed on its claim that NLRB

administrative law judges are insulated from removal by the

president in violation of the Appointments Clause of the U.S.

Constitution.

The ruling marks the second time that a judge has paused an

NLRB administrative case from moving forward in a series of

lawsuits challenging the agency's structure on various grounds,

after SpaceX earlier this month won a block on a pending board

case.

In Monday's decision, Brown, an appointee of Republican

former President Donald Trump, cited a 2022 5th U.S. Circuit

Court of Appeals ruling in Jarkesy v. U.S. Securities and

Exchange Commission that said in-house judges at the SEC were

not properly appointed. The Supreme Court last month affirmed a

different part of the Jarkesy ruling that said SEC

administrative proceedings violate defendants' right to a jury

trial, but did not take up arguments involving the agency's

administrative judges.

Brown paused an administrative case accusing Energy Transfer ( ET )

and subsidiary La Grange Acquisition of illegally firing a

worker for raising concerns about workplace health and safety

and filing a prior complaint with the NLRB.

Dallas-based Energy Transfer ( ET ) has denied wrongdoing and says

the employee was fired for insubordination.

The company and an NLRB spokeswoman did not immediately

respond to requests for comment.

Energy Transfer ( ET ) had sued the NLRB in June alleging the

board's administrative judges and five presidentially appointed

members are improperly shielded from removal. The company also

says the administrative proceedings violate the Constitution by

depriving it of a jury trial and allowing the NLRB to wield

executive, legislative and judicial power.

The board is facing similar claims in lawsuits by Elon

Musk's SpaceX, a Michigan hospital operator, and Starbucks ( SBUX )

baristas who oppose unionizing at the stores where they work.

Starbucks ( SBUX ), Amazon.com ( AMZN ), and Trader Joe's have raised similar

claims about the NLRB's structure in pending administrative

cases.

The cases are part of a broader attack by conservative and

business groups on the powers of administrative agencies and, if

successful, could hobble the NLRB's ability to enforce federal

labor law.

U.S. District Judge Alan Albright in Waco, Texas, earlier

this month issued an injunction blocking an NLRB case from

moving forward that accuses SpaceX of forcing ex-employees to

sign illegal severance agreements. Albright, a Trump appointee,

said in a subsequent written opinion that NLRB members should be

subject to at-will removal by the president, and did not address

SpaceX's separate arguments about administrative judges.

In a second lawsuit by SpaceX, the New Orleans-based 5th

U.S. Circuit Court of Appeals is considering the company's claim

that a judge effectively denied its motion for an injunction by

delaying in ruling on it.

The board has argued that the claims lack merit for various

reasons, including that the U.S. Supreme Court in a line of

cases dating back to the 1930s has upheld the structure of the

NLRB and other agencies with in-house proceedings.

And even if Energy Transfer ( ET ) were likely to win its case, it

could not show the irreparable harm necessary to obtain a

preliminary injunction, the NLRB said in court filings.

Brown on Monday disagreed, saying the company would be

harmed by having to defend itself against an unconstitutional

proceeding.

"La Grange's alleged injury is having to participate in a

constitutionally defective administrative process," the judge

wrote.

The case is Energy Transfer LP ( ET ) v. National Labor Relations

Board, U.S. District Court for the Southern District of Texas,

No. 3:24-cv-0198.

For Energy Transfer ( ET ): Amber Rogers of Hunton Andrews Kurth

For the NLRB: Michael Dale, Dalford Owens and Tyler Wiese

Read more:

SpaceX wins block on US labor board case over severance

agreements

NLRB judge says courts must decide Starbucks' ( SBUX ) challenge to

agency's structure

NLRB's Abruzzo hits back at 'low-road' companies challenging

agency's structure

Amazon ( AMZN ) joins companies arguing US labor board is

unconstitutional

Anti-union Starbucks ( SBUX ) worker challenges structure of US labor

board

SpaceX wins temporary block on NLRB case over fired

engineers

US Supreme Court faults SEC's use of in-house judges in

latest curbs on agency powers

SEC in-house judges violate right to jury trial, appeals

court rules

(Reporting by Daniel Wiessner in Albany, New York)