Elon Musk Tweet Broke Federal Labor Laws, US Court Rules

A federal appeals court has ruled(Opens in a new window) Elon Musk broke US labor laws by tweeting that Tesla workers would lose stock trading options if they joined a union.

The ruling, by the Fifth Circuit US Court of Appeals, centered around a 2018 tweet(Opens in a new window) Musk wrote after a Twitter user pressed him on what he thought of unions amid an organizing campaign by the United Auto Workers at Tesla’s Fremont, California plant. In 2021, The National Labor Relations Board (NLRB) found Musk had violated federal labor laws because of the tweet, which the appeals court upheld on Friday.

The offending tweet, which is still online despite the court ordering(Opens in a new window) for its removal, reads: “Nothing stopping Tesla team at our car plant from voting union. Could do so tmrw if they wanted. But why pay union dues & give up stock options for nothing? Our safety is 2X better than when plant was UAW & everybody already gets healthcare.”

Tweet(Opens in a new window)

In court, Tesla had attempted to counter the NLRB’s ruling by arguing that the tweet could not be seen as a threat since Musk had said Tesla workers could join a union if they wanted. 

In its concluding judgment, the Fifth Circuit court wrote that “because stock options are part of Tesla’s employees’ compensation and nothing in the tweet suggested that Tesla would be forced to end stock options or that the UAW would be the cause of giving up stock options, substantial evidence supports the NLRB’s conclusion that the tweet is an implied threat to end stock options as retaliation for unionization.” 

As Business Insider notes(Opens in a new window), the court also upheld an order that Tesla should re-hire Richard Ortiz who had been fired for organizing the union drive at Tesla’s Fremont, California factory. Owing to his unlawful dismissal, he will receive back pay, the court ruled. In a statement(Opens in a new window) published by UAW, Ortiz said: “This is a happy day where my rights were finally vindicated. I look forward to returning to work at Tesla and working with my co-workers to finish the job of forming a Union.”

Meanwhile, in the same statement responding to the Fifth Circuit court ruling, UAW’s President Shawn Fain criticized the circumstances of the ruling while applauding it. “While we celebrate the justice in today’s ruling, it also highlights our broken US labor law. Here is a company that clearly broke the law and yet it is several years down the road before these workers have achieved a modicum of justice,” he said.

Tesla did not immediately respond to PCMag’s request for comment on the ruling.