Tesla is taking up a fight to defend Elon Musk’s tweet that threatened to remove employee stock options if they decide to unionize all the way to the Fifth Circuit court of appeal.

This is coming out of an old fight dating back to the UAW’s last unsuccessful push to unionize workers at Tesla’s Fremont factory and other locations.

Amid that push in 2017-2019, Tesla fought back the effort with what the union considered to be illegal tactics.

They filed a complaint with the National Labor Relation Board (NLRB), which eventually sided with the union and found that Tesla violated labor laws.

The violations included preventing the distribution of union materials, terminating employees due to union support, and, finally, a specific tweet posted by Tesla CEO Elon Musk.

The tweet in question stated that Musk is fine with Tesla workers unionizing, but he believes that they wouldn’t because they would have to “pay union dues and give stock options for nothing”:

This has been perceived as a threat that Tesla would remove employee stock options if employees unionize.

The NLRB doesn’t have any authority to impose punitive damages on Tesla or executives, but it ordered a cease and desist of those activities, which included the removal of that tweet.

The ruling was upheld by the court, but now the Fifth Circuit court has granted a reconsideration and will be hearing from both sides.

Bloomberg Law summarized Tesla’s case, which seems to rely on the fact that Musk wasn’t directly threatening Tesla employees and only responding to a non-employee on Twitter.

The company also appears to argue that the ruling was “politically motivated”:

“It would be backwards, under the Constitution’s separation of powers, to afford more deference to the findings of politically motivated executive branch officials than courts afford to findings by judges and juries,”

Going all the way to the Fifth Circuit Court of Appeals seems like a lot to defend a single tweet, but some see the issue as much bigger.

Kara Rollins, an attorney with the New Civil Liberties Alliance, which is backing Tesla, said this about the case:

“This is really about fundamental First Amendment interests in relation to the National Labor Relations Act, which has some limited speech controls. This case looks at that provision of the NLRA and the First Amendment through the lens of social media.”

The case is currently being considered by the court, but it could be a while before we get a ruling.

The new look at the case comes amid Tesla’s preparation to fight back against another unionization effort from UAW after their big win against the Big Three in Michigan. UAW has made it clear that it is now setting its sights on non-unionized automakers in the US and there’s none bigger than Tesla.

Electrek’s Take

At the fear of stating the obvious: I am not a First Amendment lawyer. So, take my comments with a grain of salt.

But to me, the tweet is more than Elon exercising his right to comment on unions. He is stating that employees would forfeit their stock options if they decide to unionize. He is saying that as if it’s obvious that it’s either union or stock options, while there’s no reason why it couldn’t be both.

It does sound like a threat, which could affect how Tesla employees approach the possibility of unionizing.

I don’t know if unionization is the right path for Tesla. I think the right of workers to bargain collectively is of the utmost importance, but I also think that employers have the capacity to treat their employees fairly in the first place, which wouldn’t require unionization.

Comments like that from Elon don’t seem to contribute to a positive outcome either way though.

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MuskWire TLDR:

Tesla is appealing a ruling by the National Labor Relations Board (NLRB) that found the company violated labor laws by preventing unionization efforts and posting a tweet by CEO Elon Musk that was deemed threatening. The tweet stated that Musk is fine with Tesla workers unionizing but believes they would not because they would have to “pay union dues and give up stock options for nothing.” The NLRB ordered Tesla to cease and desist these activities, including the removal of the tweet. The ruling was upheld by the court, but the Fifth Circuit court has granted a reconsideration and will hear from both sides. Tesla argues that Musk’s tweet was not a direct threat to employees and that the ruling was politically motivated. The case is being seen as a significant test of First Amendment rights and the National Labor Relations Act. Tesla’s fight against unionization efforts comes as the United Auto Workers (UAW) union sets its sights on non-unionized automakers, with Tesla being a major target. Some see Musk’s tweet as a threat that could impact how Tesla employees approach unionization.