John Paul M. Joaquin Tech 04.02.2023 23:Apr PM EDT

Elon Musk Broke Federal Labor Law in 2018, Court Rules

The verdict is in for Elon Musk's Tesla unionization tweets in 2018.

An appeals court found that Musk made unlawful threats toward Tesla employees should they unionize; Musk previously said employees would lose stock options if they did.

The court also upheld an order that Tesla should rehire and reinstate the worker it illegally terminated for attempting to organize his fellow employees to form a union.

Elon Musk Tweet Details

The Fifth Circuit Court of Appeals in New Orleans found Musk in violation of federal labor laws after it decided to uphold a National Labor Relations Board (NLRB) ruling that found Musk making unlawful threats around employee compensation.

According to Engadget, the Musk tweet in question was a reply to a Twitter user's question about the Tesla CEO's stance on unions. Musk replied that nothing is stopping Tesla employees at its Freemont car plant from organizing and forming unions. However, he said, "But why pay union dues & give up stock options for nothing? Our safety record is 2X better than when [the] plant was [United Auto workers (UAW)] & everybody already gets healthcare."

While Tesla argued that Musk said nothing about stopping Tesla working joining a union for it to be considered a threat, the appeals court sided with the NLRB's initial ruling.

The court's three-judge panel explained that the NLRB's conclusion that the tweet is an implied threat to end stock options as retaliation for unionization because Tesla's employees are compensated with stock options and that Musk's tweet didn't suggest that Tesls would be forced to end stock options or that the UAW would be the cause for giving up stock options, per a court document.

The NLRB decision the appeals court was referring to was the one it made when it investigated the same tweet when the NLRB responded to a complaint from the UAW. At that time, Tesla argued that the tweet was Musk's way of pointing out that workers at other automakers don't receive stock options.

However, NLRB chair Wilma Liebman said that Tesla employees could also interpret Musk's tweet as "if I vote to unionize, stock options will no longer be an option," in an interview with Bloomberg in 2018.

The Appeals Court's Other Orders To Musk

In addition to the appeals court's ruling, the court required Musk to delete the tweet in question, though it is still up and running as of press time. Tesla, on the other hand, has yet to respond to inquiries about the appeals court's ruling on the matter.

Moreover, the court also upheld an order that Tesla should reinstate Richard Ortiz, a worker who Tesla unlawfully terminated after he organized a union drive at Tesla's factory in Fremont, California, per Business Insider.

Shaw Fain, the UAW's president, applauded the appeals court's ruling but also said that the decision highlights a flaw in US labor 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.