Federal appeals court upholds finding that Musk, Tesla violated labor laws

A federal appeals court on Friday upheld a previous finding that Tesla and CEO Elon Musk violated labor laws by firing an employee involved in union organizing and making an apparent threat to rescind stock options if employees unionized.

The Fifth Circuit Court of Appeals affirmed the National Labor Relations Board’s (NLRB) determinations in Friday’s ruling, allowing the board to enforce its 2021 order that required Tesla to reinstate former employee Richard Ortiz with backpay and directed Musk to delete a tweet.

“This is a happy day where my rights were finally vindicated. I look forward to returning to work at Tesla and working with my co-workers to finish the job of forming a Union,” Ortiz said in a statement.

Ortiz was involved in unionizing efforts at Tesla’s manufacturing plant in Fremont, Calif. After three Tesla employees testified before the California state legislature in opposition to pro-union legislation at the behest of the company, Ortiz shared information about those employees in a private union Facebook group.

He ultimately took the post down, but one of his fellow employees filed a complaint with the company. Ortiz was fired in October 2017 for lying about where he obtained the employees’ information to protect a fellow union organizer, which Ortiz admitted he had done to a Tesla investigator.

The appeals court upheld the NLRB’s finding that Tesla violated labor laws in firing Ortiz, noting that Tesla did not provide “a sufficient basis for displacing” the board’s determination that Ortiz’s “union activity was a motivating factor” in his termination.

It also affirmed that a May 2018 tweet from Musk could be understood as “a threat to unilaterally rescind stock options if employees unionized.”

“Nothing stopping Tesla team at our car plant from voting union,” Musk said in the tweet. “Could do so tmrw if they wanted. 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.”

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