Elon Musk in court fight over whether he threatened to take stock options from Tesla workers who unionize

February 3, 2022, 10:17 AM UTC

One of Elon Musk’s freewheeling tweets from the past came back to haunt him as a three-judge panel questioned whether the Tesla Inc. chief threatened workers with the loss of stock options if they formed a union.

Tesla in March appealed an order by the National Labor Relations Board that Musk delete his May 2018 tweet that said: “Nothing stopping Tesla team at our car plant from voting union. Could do so tmrw if they wanted. But why pay union dues and give up stock options for nothing?”

It’s not Musk’s first court fight over whether he crossed a line on social media. A showdown with the U.S. Securities and Exchange Commission following other controversial tweets in 2018 got him and Tesla socked with $40 million in fines and led to an agreement that Musk wouldn’t communicate about specific topics without advance approval from a Tesla lawyer.

One judge said during a hearing Wednesday in a New Orleans-based federal appeals court that the Labor board wasn’t “completely out of line,” as Musk’s tweet could be interpreted as a message that “the price you will have to pay if you unionize, is you’ll give up your stock options.” 

Tesla attorney David Salmons argued that the constitutional right to free speech under the First Amendment “protects an employer’s robust speech about the downsides to unionization.” Taken in context, the tweet is really a “statement about what the union, not the company, will or will not do,” Salmons said. 

There was also debate about Musk’s response on May 22, 2018, two days after his original post, when a Twitter user asked if he was threatening to take away stock options. 

Salmons said Musk’s follow-up tweet “disclaimed any unilateral company actions that could constitute a threat.”

But another judge suggested that Musk’s later tweet may have been too slow to walk back his original message. “That one tweet is out there on its own, it went out instantly, right?” 

Musk’s tweet was “a threat of retaliation, not a lawful expression of opinion,” Daniel Curry, a lawyer representing United Auto Workers, argued to the panel. The CEO’s subsequent message only sowed further confusion, Curry said. “The idea they’re putting out there that a union could take away an employee’s stock options just doesn’t fit with reality,” he said.

Micah Jost, who represents the NLRB, said the board “reasonably found” Musk’s tweet was unlawful. Tesla “tries to get around that by conflating all the statements together,” he told the judges.

The board’s ruling, issued by two Republican members and one Democratic member of the agency, addressed more than just Musk’s tweet. 

The agency also ordered the company to offer to reinstate a union activist who was fired, and concluded Tesla broke the law by retaliating against another union activist, “coercively interrogating” union supporters and restricting employees from talking to reporters. 

Tesla has denied wrongdoing and is also appealing those decisions. 

The judges didn’t say when they’ll issue a ruling. Two of the three judges were appointed by Republican presidents.

The case is Tesla v. NLRB, 21-60285, Fifth U.S. Circuit Court of Appeals (New Orleans).

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