Musk violated labour law by tweeting Tesla workers would lose stock options if they joined union: Court

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Elon Musk broke federal labour law by tweeting that Tesla workers would lose stock options if they joined a union, ruled a US appeals court. The 5th US Circuit Court of Appeals judges in New Orleans over Musk’s 2018 tweet said that it constituted an unlawful threat that would deter unionisation and ordered Musk to remove it.

The appeals court while backing the findings of US National Labor Relations Board’s (NLRB) gave the ruling. This came after an organising campaign by the United Auto Workers (UAW) union at Tesla’s Fremont automobile plant in California.

Musk tweeted, “Nothing stopping Tesla team at our car plant from voting union … But why pay union dues & give up stock options for nothing?”

The UAW president, Shawn Fain, welcomed the ruling but also said it exposed “our broken US labour law”. “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,” Fain said.

Earlier, Tesla won in a lawsuit filed by investors in February related to a Tweet by Musk from 2018 that suggested funding was available for the company to go private. Musk claimed in a tweet that he has “funding secured” to take the electric vehicle manufacturer private at a price of $420 per share. Investors contended that the tweets caused stocks to soar over a 10-day period.

After winning the lawsuit, Musk had tweeted, “Thank goodness, the wisdom of the people has prevailed!” “I am deeply appreciative of the jury’s unanimous finding of innocence in the Tesla 420 take-private case.”

In addition, Musk won in a defamation case brought by a British caver. The Tesla founder was sued by Vernon Unsworth for $190 million in damages, but Elon Musk won. Musk argued in court that the term “pedo man” was prevalent in South Africa, where he was raised.

Musk acquired Twitter in 2022 for $44 billion. In the argument on Friday, Tesla had contended that the tweet about organising wasn’t a threat and was instead just a reflection of the reality that union employees at other automakers weren’t given stock options. 

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“Substantial evidence supports the NLRB’s conclusion that the tweet is an implied threat to end stock options as retaliation for unionization,” the panel wrote.

In another case, the labour board concluded in 2022 that Tesla had infringed the law by preventing workers at the Fremont factory from wearing shirts that backed the union movement. The company is contesting that decision.

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