Tesla broke law with Musk’s tweet threat, labor regulator rules

Tesla Inc. repeatedly violated U.S. labor law, including by firing a union activist, and must make Chief Executive Elon Musk delete a threatening tweet from his account, the National Labor Relations Board ruled Thursday.

The ruling, issued by two Republican and one Democratic member of the agency, states that the electric-car maker must offer to reinstate the fired employee. The board members also ruled that Tesla broke the law by retaliating against another union activist, “coercively interrogating” union supporters and restricting employees from talking to reporters.

Tesla, which didn’t immediately respond to a request for comment, has denied wrongdoing and has argued that Musk’s tweet was protected by the 1st Amendment guarantee of free speech.

Musk’s 2018 tweet stated, “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?” In Thursday’s ruling, the board members wrote that the message “unlawfully threatened” Tesla’s employees by stating that they “would lose their stock options if they chose the Union” to represent them.

U.S. labor law allows companies to make negative predictions about the consequences if workers unionize, but prohibits them from threatening to punish employees for doing so. Musk has run afoul of U.S. agencies before: The Securities and Exchange Commission sued him in 2018 over a tweet claiming he had “funding secured” to take Tesla private, eventually leading to a settlement that requires a lawyer to preapprove Musk’s tweets on some topics.

NLRB rulings can be appealed to federal court. The agency has no legal authority to levy punitive damages and generally can’t hold executives personally liable for violations of the law.

The labor board case began with allegations filed in 2017 by the United Auto Workers union, which has been trying to organize the company’s employees. An agency judge ruled against the company in 2019, following a 2018 trial which began with an attorney for Tesla, Mark Ross, calling the proceedings “an infomercial in an effort to place Mr. Musk and the company in a negative light.”

The administrative law judge ruled that Musk should be required to attend a meeting at which either he or a labor board representative would read employees a notice about their rights, but in Thursday’s decision the agency rejected that remedy and said instead that posting a written notice would be sufficient.

NLRB Chairperson Lauren McFerran, currently the board’s sole Democratic member, supported having the notice read aloud but was outvoted on that point by her Republican colleagues. McFerran’s reasoning was that Tesla committed “numerous” violations of the law, according to the ruling, several of them perpetrated by top company officials.

The labor board has five members, serving staggered terms; Republicans are slated to retain a majority there until August.