Tesla, Musk lose decision on factory union issues
A federal appeals court on Friday upheld a finding that Tesla unlawfully terminated an employee involved in labor organizing and that the company’s chief executive, Elon Musk, unlawfully threatened employees’ stock options. workers if they chose to unionize.
The opinion, issued by three judges of the United States Court of Appeals for the Fifth Circuit, allows the National Labor Relations Board to enforce a 2021 order requiring Tesla to reinstate, with back pay, the employee, Richard Ortiz, and Mr. Musk to remove a Posting on Twitter suggesting that workers could lose stock options if they unionized.
“I look forward to returning to work at Tesla and working with my colleagues to complete the work of forming a union,” Ortiz said in a statement.
Tesla did not immediately respond to a request for comment on the decision.
The finding comes as other companies run by Mr Musk have told workers about concerns about labor rights violations. Eight former employees of SpaceX, the rocket maker run by Mr Musk, sued for unfair labor practices last year, claiming the company retaliated against them for helping draft a letter asking for a better enforcement of its stated sexual harassment policies. The cases are pending.
In February, Tesla laid off at least 18 employees following an organizing drive at a Buffalo factory. The union seeking to represent the workers called the firings a retaliation and filed a complaint with the labor board. Tesla said in a statement that the layoffs were the result of a semi-annual performance review and that the layoff decisions were made before the union campaign was made public.
The case at issue on Friday dates back to 2017. At the time, Mr. Ortiz was known to be involved in an effort to unionize the company’s factory in Fremont, California, which included distributing union materials and the push for pro-union legislation, when he posted screenshots of his anti-union colleagues on a private Facebook page.
When a company investigator asked Mr. Ortiz where the screenshots came from, Mr. Ortiz replied that he could not remember, although a colleague sent him the photos afterwards. having retrieved them from an internal human resources site. Mr Ortiz later admitted his response was a lie and the company claimed it fired him for misrepresentation.
The labor board found that Mr. Ortiz was fired because he participated in union activities and not because he lied. The circuit court agreed that “substantial evidence” pointed to the conclusion that “union animosity motivated the complaint, the investigation and the decision to fire Ortiz.”
Mr. Musk’s May 2018 message on stock options said there was nothing stopping Tesla employees at the factory from voting for a union, adding: “But why pay union dues and give up stock options for Nothing ?”
Tesla argued that the statement was a simple prediction based on Mr. Musk’s understanding that other members of the United Automobile Workers union had not received stock options and that his benevolent intent had become clear in subsequent posts in the same thread.
But the labor board concluded that the post would have been interpreted by employees as a threat to eliminate their stock options if they chose to unionize and ordered Mr. Musk to remove it. The circuit court agreed and said the board could enforce its order.
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