Musk stock-option tweet violates labor law, UAW alleges

Josh Eidelson
Bloomberg News

The United Auto Workers is asking the federal labor board to investigate Tesla Inc. over a tweet by Elon Musk.

In a complaint filed Wednesday, the union alleges that the electric-car maker violated the National Labor Relations Act by threatening to take away employee stock options in retaliation for engaging in protected union activity.

The union’s filing cites a statement that Tesla’s Chief Executive Officer Musk made this week on Twitter: “Nothing stopping Tesla team at our car plant from voting union. Could do so tmrw if they wanted. But why pay union dues & give up stock options for nothing?”

The UAW, which is actively trying to organize Tesla’s Fremont, California, assembly plant, notes in its complaint that Musk has 21.8 million Twitter followers, that the tweet was widely shared and covered in the media and that it remains online.

Musk’s tweet was “a threat to the workers and a direct violation of the Labor Act,” UAW President Dennis Williams told reporters Thursday in Detroit. “I don’t know what the hell Musk is up to – sometimes I scratch my head. He’s a very bright man, no doubt about it. He’s very creative, no doubt about it. But the comments that he made were so ridiculous the other day. I mean you’ve got to be kidding me.”

A Tesla spokesman said Musk’s tweet was meant to reflect that UAW members working for other automakers don’t get stock options or restricted stock units. Tesla’s compensation is the highest in the industry because of the options, but UAW organizers dismiss the value of the equity, according to the company.

Former NLRB Chairwoman Wilma Liebman, who has done legal work in the past for the UAW, told Bloomberg News on Tuesday that Musk’s tweet could be grounds for an NLRB complaint. “The employee is going to hear it as, If I vote to unionize, stock options will no longer be an option,’” she said.

Federal labor law prohibits employers from threatening to retaliate against employees for organizing.

If the NLRB’s investigation and prosecution unit were to find merit in the UAW’s allegations and fail to reach a settlement on them with Tesla, it could issue a complaint against the company, leading to a hearing before an administrative law judge. Such a hearing is currently scheduled for June 11 in Oakland, California, on other allegations brought by the UAW, including that Tesla retaliated against union supporters. Tesla has denied wrongdoing.

NLRB settlements can include remedies like a requirement that a company post a notice in the workplace highlighting employees’ rights or commit to not do whatever it was alleged to have done wrong.

Musk’s tweet appears to fall “somewhere in the middle” between clearly legal or illegal conduct, said University of Wyoming law professor Michael Duff.

In isolation, the tweet might not be enough for the regional NLRB office to find a violation of the law, said Duff, a former NLRB attorney. But it might be seen differently by the agency when viewed in context with other allegations of union-busting. “The union’s strategy is to get the NLRB office to see the tweet as part of an ongoing pattern of coercive conduct,” he said.