A US appeals court ruled that Elon Musk violated federal labor law by tweeting that Tesla employees would lose stock options if they joined a union.
The New Orleans-based US Court of Appeals for the Fifth Circuit upheld a decision by the US National Labor Relations Board that said the 2018 tweet amounted to an unlawful threat that could discourage unionization and ordered Musk to remove it.
In the midst of an organizing drive at the Tesla plant in Fremont, California, by the United Auto Workers (UAW) union, Musk tweeted: “Nothing is stopping the Tesla team at our auto plant from voting union…But, Why pay union dues and give up stock options for nothing? ”
UAW President Shawn Fain applauded the decision, but said it also highlights “our broken American labor law.”
“Here is a company that clearly broke the law, and yet it takes several years before these workers have achieved a modicum of justice,” Fain said.
In February, Tesla defeated an investor lawsuit over another Musk tweet from 2018 that said funding was secured to take the company private; and a British cave explorer unsuccessfully sued Musk for calling him a “fart boy” on Twitter.
Musk bought Twitter in 2022 for $44 billion.
In Friday’s case, Tesla argued that the unionization tweet was not a threat and simply reflected the fact that unionized workers at other auto companies were not given stock options.
But a three-judge panel disagreed.
“Substantial evidence supports the NLRB’s conclusion that the tweet is an implied threat to terminate stock options in retaliation for unionization,” the panel wrote.
The labor board in a separate case in 2022 said Tesla violated labor law by barring workers at the Fremont plant from wearing T-shirts supporting the union campaign. The company is appealing against that decision.
Tesla did not immediately respond to a request for comment.