Sept 6 (Reuters) - A federal judge in Chicago on Friday

seemed skeptical of a medical center's claim that National Labor

Relations Board members and administrative judges are improperly

insulated from removal by the president, an argument that has

been raised in a series of cases filed this year claiming that

the NLRB's structure is unconstitutional.

U.S. District Judge Jeffrey Cummings held a two-hour-long

hearing on a motion by Alivio Medical Center, a nonprofit that

serves Chicago's Hispanic community, to block an NLRB

administrative case against the company from proceeding pending

the outcome of its lawsuit challenging the agency's structure.

Alivio is accused in the board case of failing to bargain

with a union before firing workers who allegedly provided false

information to establish their legal authorization to work in

the United States. The company, which faces a hearing before an

administrative judge scheduled for later this month, says that

federal immigration law required it to terminate the workers.

Alivio in its motion cited separate July rulings by federal

judges in Texas temporarily blocking NLRB cases against rocket

maker SpaceX and pipeline operator Energy Transfer ( ET ). The judge in

the SpaceX case said that removal protections for administrative

judges and NLRB members were likely invalid, while the other

decision addressed only administrative judges.

Cummings on Friday noted that the Texas judges said they

were bound by a 2022 5th U.S. Circuit Court of Appeals decision

in Jarkesy v. U.S. Securities and Exchange Commission, which

said administrative judges at the SEC were not properly

appointed.

But there are important distinctions between SEC and NLRB

judges, Cummings said, and the Jarkesy ruling does not bind

courts outside of the 5th Circuit, which covers Texas,

Louisiana, and Mississippi.

"If I were sitting in San Antonio or Austin or Lubbock, I

might feel the same way. But I'm here and I can disagree with

the 5th Circuit," said Cummings, an appointee of Democratic

President Joe Biden.

Cummings also said that the Denver-based 10th Circuit had

recently rejected the conclusions in Jarkesy in a case involving

the U.S. Consumer Product Safety Commission, and that split

among appeals courts suggested that Alivio could not show the

likelihood of success necessary to win a temporary injunction.

The U.S. Supreme Court in June 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.

Cummings said he planned to issue a ruling next week.

Alivio's lawsuit is one of more than a dozen making similar

claims about the board's structure. The challenges grew out of a

broader attack by conservative groups on the powers of federal

administrative agencies, including the in-house proceedings that

the NLRB and many other agencies rely on to enforce federal

laws.

Scott Cruz, a lawyer for Alivio, maintained on Friday that

NLRB judges and board members wield significant executive

powers, and so the U.S. Constitution requires that they be held

accountable to the president.

NLRB lawyer David Boehm countered that decades of U.S.

Supreme Court precedent have upheld in-house agency proceedings,

and said blocking the board case against Alivio would set

dangerous precedent that would likely spur more challenges to

the board's authority.

"Under their theory, any person with a case before the board

can stop a proceeding from going forward and [unions and

workers] wouldn't have any forum to adjudicate their rights,"

Boehm said.

The case is Alivio Medical Center v. NLRB, U.S. District

Court for the Northern District of Illinois, No. 1:24-cv-07217.

For Alivio: Grant Pecor of Barnes & Thornburg; Scott Cruz of

UB Greensfelder

For the NLRB: David Boehm

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