Tesla fights feds’ union-busting accusations at Fifth Circuit

(CN) — Tesla told the Fifth Circuit on Thursday its leader Elon Musk should not have to delete a tweet a federal labor rights watchdog deemed threatening to pro-union workers.

Musk, the world’s wealthiest person, has 170 million followers on his social media platform X, formerly Twitter. And his posts on the site sometimes aggrieve federal regulators.

In May 2018, amid a push by the United Auto Workers and a group of Tesla employees to unionize the workforce at the electric car maker’s biggest plant in Fremont, California, Musk weighed in on the movement in response to a random user’s question about unions.

“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?” Musk wrote. (He did not own X at the time but had 22 million followers on the platform.)

Three days later, the United Auto Workers lodged a complaint with the National Labor Relations Board, contending the tweet was a threat to eliminate Tesla employees’ stock options if they unionized.

An administrative law judge of the federal agency reviewed that charge and several other complaints UAW and Tesla employees had made against the company regarding its response to union activities.

The judge, in early 2021, found Tesla had committed most of the National Labor Relations Act violations of which it was accused. Affirming the judge’s findings, the board ordered Musk to delete the tweet.

Tesla filed a petition for review with the Fifth Circuit in April 2021 challenging the tweet takedown order and an order for it to reinstate Richard Ortiz, whom Tesla fired for an incident involving his advocacy as a member of a voluntary UAW organizing committee at Tesla’s Fremont plant.

A three-judge panel of the New Orleans-based appellate court sided with the National Labor Relations Board in a March 2023 ruling. But Tesla convinced the court to hold a rehearing before all its active judges and the panel opinion was vacated.

At Thursday’s rehearing, Tesla’s lawyer, Michael Kenneally, argued the board had distorted the meaning of Musk’s tweet and trampled the billionaire’s First Amendment rights.

“No Tesla employee, as far as the record shows, construed the tweet the way the board did as a threat that Tesla would punish employees if they dared to vote union,” Kenneally argued.

Kenneally said the board’s interpretation of Musk’s tweet is nonsensical because before Musk posted the tweet he had expressed pride in Tesla’s employee equity offerings, writing in a companywide email, “This is your company. That is why, unlike other car companies, everyone is awarded shares and you get to buy stock at a discount compared to the public.”

The focus of the Fifth Circuit’s judges in the hour-long hearing was whether the fact Musk had made his statement in a public forum on his personal account should insulate him from the delete directive.

 U.S. Circuit Judge Stephen Higginson, a Barack Obama appointee, asked Kenneally if he believes that the labor board should only be able to act on statements employers make internally to their staff.

“We’re not making a categorical claim that you can’t possibly have a threat outside the context of the workplace,” conceded Kenneally, a partner in the Washington office of Morgan, Lewis & Bockius.

“Our point is just that it should be a little harder to reach the conclusion that a statement is threatening when you aren’t talking directly to employees,” he added.

Micah Jost, a National Labor Relations Board attorney, said Tesla is trying to upend longstanding precedent from the U.S. Supreme Court’s 1969 ruling in NLRB v. Gissel Packing Co.

“The Supreme Court said in Gissel that the courts must defer to the board’s judgment as to the impact of utterances in the context of the employer-employee relationship,” Jost said.

U.S. Circuit Judge Andrew Oldham, a Donald Trump appointee, questioned the reach of the board’s interpretation. He asked Jost if Musk had written his statement in a book would the agency force him to round up all copies and destroy them.

Jost replied that the board has never required an employer to get rid of all physical copies of something that exists.

“This tweet, for example, has been republished in the media all over the place,” Jost said. “The board is not ordering Musk to go hunt down every copy. It is simply attempting to remedy the unfair labor practices to the best of its ability by taking down the most prominent display.”

Challenging’s Jost’s precedent argument, U.S. Circuit Judge Jennifer Walker Elrod, a George W. Bush appointee, said that since Musk did not make the statement in the context of an employer-employee relationship, Gissel does not seem to apply.

Jost countered that Musk uses his X account to post about Tesla’s official business decisions and employment practices, and that its human resources chief had testified that “she understood that when Elon Musk tweets about Tesla he is speaking for the company.”

On rebuttal, Kenneally argued it was “offensive to the First Amendment” for the National Labor Relations Board to order Musk to delete the tweet because it was posted on a “digital public square” and involved “not just employees but predominantly, in fact, public figures and members of the public.”

But U.S. Circuit Judge Leslie Southwick, a George W. Bush appointee who sat on the panel that upheld the board’s directives to Tesla, warned about the implications of putting such statements beyond the board’s reach.

“It seems to me,” Southwick said, “if we uphold a categorical barrier where the NLRB cannot consider what’s on Twitter it just creates a potential Wild West of unfair labor practices, threats and whatever else that could never be addressed.”

Daniel Perry, an attorney for the UAW, which intervened in the appeal, backed the federal government’s contentions in a five-minute argument during Thursday’s hearing.

The judges gave no timeline for a ruling.

Follow @cam_langford

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