Elon Musk broke law with threat to Tesla workers’ stock options, court rules

A US appeals court has ruled that Elon Musk violated federal labour law by tweeting that employees of Tesla would lose stock options if they joined a union.

The New Orleans-based 5th US circuit court of appeals upheld a decision by the US National Labor Relations Board that said the 2018 tweet amounted to an unlawful threat that could discourage unionising and ordered Musk to delete it.

Amid an organising campaign at Tesla’s Fremont, California, plant by the United Auto Workers (UAW) union, 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, applauded the decision but said it also highlights “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.

Tesla in February defeated a lawsuit from investors over another Musk tweet from 2018 saying funding was secured to take the company private; and a British cave explorer unsuccessfully sued Musk for calling him a “pedo guy” on Twitter.

Musk bought Twitter in 2022 for $44bn.

In Friday’s case, Tesla had argued that the tweet about unionising was not a threat and merely reflected the fact that union workers at other auto companies did not receive stock options.

“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.

The labour board in a separate case in 2022 said Tesla violated labour law by prohibiting workers at the Fremont plant from wearing shirts supporting the union campaign. The company is appealing against that decision.

Tesla did not immediately respond to a request for comment.