Elon Musk’s tweets have once again come under fire from federal regulators.
The National Labor Relations Board says that Tesla and its CEO engaged in illegal actions against US employees trying to organize a union. One of those actions was a tweet, now three years old, in which Musk appeared to threaten to revoke employees’ valuable stock options if they voted for a union.
“Nothing stopping Tesla team at our car plant from voting union. Could do so tmrw if they wanted,” the tweet reads. “But why pay union dues & give up stock options for nothing? Our safety record is 2X better than when plant was UAW & everybody already gets healthcare.”
The US labor law regulator ordered Musk to delete the tweet, and it ordered Tesla to rehire a union supporter who’d been fired. Other illegal anti-union actions by Tesla cited by the labor board include interrogating employees about their union activities, and disciplining or otherwise discriminating against employees because they support the union.
As of Friday morning, the tweet had not been deleted.
The board’s decision, which included no financial penalties, amounts to a slap on the wrist for Musk and Tesla.
Tesla stock has made Musk one of the world’s richest people. It has also given stock options to virtually all of its employees since it went public. And even with a recent decline in Tesla shares, the price of the stock is up nearly $600 a share, or more than 1000%, since the time of tweet, making the options that had been granted to Tesla employees extremely valuable.
Tesla did not respond to a request for comment Thursday or early Friday about the labor board’s action. The company did defend the tweet in 2018 when objections to it were first raised.
“Elon’s tweet was simply a recognition of the fact that unlike Tesla, we’re not aware of a single UAW-represented automaker that provides stock options or restricted stock units to their production employees, and UAW organizers have consistently dismissed the value of Tesla equity as part of our compensation package,” a spokesperson said at that time.
The board’s decision suggests the tweet could be seen as a threat to take away options that were already granted to employees, regardless of Musk’s intent.
If employees voted to be represented by a union, it’s clear that the valuable stock options that they had already been granted could not be revoked, said Jeffrey Hirsch, a labor law professor at University of North Carolina.
What’s far less clear, Hirsch added, is whether hourly workers could lose the access to future stock options if they were to vote to be represented by a union.
The United Auto Workers union has been trying to organize the Tesla plant without success. It once represented workers at the plant when it was operated as a joint venture by General Motors and Toyota. The plant closed soon after GM’s bankruptcy in 2010. Tesla bought the plant soon not long afterwards
The union has not yet won enough support among employees to have a union representation vote held at the plant. It hailed the NLRB decision on Thursday, though it acknowledged that Tesla avoided any financial penalty for its conduct.
“This is a great victory for workers who have the courage to stand up and organize in a system that is currently stacked heavily in favor of employers like Tesla who have no qualms about violating the law,” said Cindy Estrada, a UAW vice president and director of its organizing department. “While we celebrate the justice in today’s ruling, it nevertheless highlights the substantial flaws in US labor law. Here is a company that clearly broke the law and yet it is three years down the road before these workers achieved a modicum of justice.”
Musk has a history of tweeting himself into trouble. He caused another stir later in 2018 when he announced he had “funding secured” to take the company private. It turned out that he had talked to investors about such a move, but no funding had been secured.
The Securities and Exchange Commission initially tried to use that tweet as cause to remove him a CEO, but instead reached a settlement with Musk in which he gave up the chairman post, paid a $20 million fine and had to have his future tweets overseen by others at the company before posting them.
He has also been sued for defamation for one of his tweets, though he won that case.