Mar 31, 2023
Musk Must Erase Threatening Tweet in Labor Fight, Court Says
(Bloomberg) -- Elon Musk is in tweeting purgatory again.
A federal appeals court ruled Friday that the billionaire must delete his 2018 Twitter post suggesting that Tesla Inc. workers could lose stock options if they formed a union, as it violated labor law.
The decision is a victory for the National Labor Relations Board and a blow to Tesla, which has vehemently opposed the United Auto Workers’ years-long effort to unionize the electric-vehicle maker’s workers.
It also puts Musk in the awkward spot of having to retract one of his many incendiary tweets after he’s become the owner of Twitter Inc. His tweet on May 20, 2018 to his millions of followers got 2,673 likes.
The labor board had ruled that Tesla repeatedly broke US law, including by firing a union activist, and directed the company to ensure that its chief executive officer’s threatening tweet is erased from his feed. Tesla has argued that Musk’s tweet was protected by the First Amendment guarantee of free speech.
“Tesla’s history of labor violations supports the NLRB’s finding that employees would understand Musk’s tweet as a threat to commit another violation by rescinding stock options as retaliation,” a three-judge panel of the 5th US Circuit Court of Appeals in New Orleans said in Friday’s unanimous opinion.
Read More: Tesla Fires Dozens After Workers Launch Union, Filing Says
The panel comprised of judges appointed by former President Donald Trump, George W. Bush and Bill Clinton also ordered Tesla to reinstate union advocate Richard Ortiz with back pay. The company had argued that he was terminated for lying in an investigation about his misconduct.
“This is a happy day where my rights were finally vindicated,” Ortiz said in a statement issued by the UAW. “I look forward to returning to work at Tesla and working with my co-workers to finish the job of forming a union.”
Tesla’s opposition to unions has been a source of friction with the Biden administration. Musk accused President Joe Biden, a Democrat, in 2021 of being controlled by unions and has aligned himself with Republicans in a war over polarizing cultural issues.
Musk’s dispute with the labor board isn’t his first court fight over whether he crossed a line on social media.
A showdown with the US Securities and Exchange Commission following his controversial 2018 tweets about taking Tesla private got him and the company 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.
A judge in April 2022 rejected Musk’s request to be freed from that oversight, which has become known as his “Twitter Sitter.” He has asked a federal appeals court to throw out the deal he made with the SEC.
In a separate case over the August 2018 tweets, Musk prevailed this year at a jury trial over claims by Tesla shareholders that he misled and defrauded them.
Read More: ‘Teflon’ Elon Wins Again as Jury Rejects Tweet Fraud Claims
Musk also won a 2019 jury trial over defamation claims by a British cave diver whom the billionaire called “pedo guy” when the two traded insults on Twitter.
US labor law lets companies express negative predictions on the consequences of unionizing, but bars them from threatening to punish employees for doing so. The NLRB lacks the authority to make companies pay punitive damages for violations, or to hold executives personally liable.
The Labor Board case began with allegations filed in 2017 by the UAW. Tesla argued in court that “reasonable” workers wouldn’t read Musk’s tweet as a retaliatory threat.
An NLRB spokesperson declined to comment. Tesla and its lawyers didn’t immediately respond to requests for comment.
“While we celebrate the justice in today’s ruling, it also highlights our broken US labor law,” UAW President Shawn Fain said in the union’s statement. “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.”
The case is Tesla v. NLRB, 21-60285, Fifth U.S. Circuit Court of Appeals (New Orleans).
--With assistance from Dana Hull and Josh Eidelson.
(Updates with UAW statement)
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