NLRB Rules Tesla Violated Workers' Rights During Union Campaign

Author: Robert S. Teachout, XpertHR Legal Editor

March 31, 2021

In a March 25 ruling, the National Labor Relations Board (NLRB) held that Tesla engaged in unlawful union-busting activity during a 2017 union-organizing campaign at its flagship manufacturing plant in Fremont, California. The ruling upheld the findings of an administrative law judge (ALJ) that the electric car manufacturer had illegally and systematically threatened and retaliated against employees who supported the union.

The high-profile defeat for the electric car company marks the latest sign of a reinvigorated labor movement. Union membership has been declining steadily for years. But the labor movement has been showing signs of renewed life recently, with a closely watched vote at an Amazon facility in Alabama, the Biden administration's focus on union rights, the US House's recent passage of union-friendly legislation and, now, the Tesla ruling.

Prohibited Activities

In June 2017, employees submitted a petition to Tesla's CEO Elon Musk and a senior HR director raising concerns about lack of safety at the Fremont plant and notifying them of their intent to form a union.

The National Labor Relations Act (NLRA) guarantees employees the right to organize and form unions in order to bargain collectively over wages and working conditions, and to engage in other concerted protected activities for their mutual aid or protection. The NLRA also prohibits certain employer activities that could interfere, restrain or coerce employees in exercising their rights under the law.

The NLRB ruled that, in its response to the union organizing campaign, Tesla violated the NLRA by:

  • Coercively interrogating several employees about their protected activities;
  • Disciplining and discharging employees for their protected activities;
  • Issuing a rule restricting employees' use of the Workday HR platform;
  • Maintaining an overly broad media contact provision in its confidentiality agreement; and
  • Threatening employees with loss of their stock options if they unionized.

Media Contact Rule

In late 2016, Tesla issued and instructed all employees to sign a statement reaffirming their confidentiality agreements. The agreement defined "everything that you work on, learn about or observe in your work about Tesla" as confidential information, provided that it is not already public information. The 2016 confidentiality statement further included a media contact rule stating:

"Additionally, regardless of whether information has already been made public, it is never OK to communicate with the media or someone closely related to the media about Tesla, unless you have been specifically authorized in writing to do so."

The NLRB held that the media contact provision was unlawful because it was too broad and "employees would reasonably interpret that language to require that they receive authorization before communicating with the media about any matter regarding [Tesla], including working conditions, labor disputes, or other terms and conditions of employment."

Musk's Twitter Statement

During the organizing effort, Tesla engaged in a vigorous anti-union campaign, stating that the company did not need a union. Its activities included interviewing some of the employees involved in the union drive and firing the lead organizer.

During that time, Musk posted a message on his Twitter account that appeared to threaten employees with loss of their stock options if they unionized:

"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? Our safety record is 2X better than when plant was UAW & everybody already gets healthcare."

The Board upheld the ALJ's 2019 finding that the tweet was not a statement of what could occur as a result of good-faith bargaining, but instead was "a threat of unilateral discontinuation of existing benefits if the employees unionized." In its financial filings, Tesla has stated that it considers Elon Musk's tweets to be official company communications.

NLRB Order

The NLRB issued an extensive order to Tesla to address the company's violations. Among other things, Tesla was ordered to:

  • Cease and desist from unlawful interrogations of union-supporting employees and from restricting them from handing out union leaflets and information during their off-duty hours;
  • Cease and desist from discharging, disciplining or otherwise discriminating against employees because they support the union or engage in protected, concerted activities;
  • Rehire the employee fired for leading the union-organizing effort and make him whole for all lost earnings and benefits;
  • Rescind the portion of the confidentiality agreement that prohibits employees from communicating with the media without the company's authorization or revise it to remove any language that prohibits or may be read to prohibit protected conduct;
  • Rescind the rule restricting use of the Workday platform; and
  • Post an NLRB-authored notice at all Tesla facilities nationally describing the company's violations and the NLRB's order.

In addition, the Board ordered Tesla to require Musk to delete his Twitter statement regarding the loss of stock options if employees unionized (at the time this story was published, Musk had not yet deleted the tweet).

This is only the third time that the NLRB has required a tweet to be deleted. In January 2020, Barstool Sports agreed to delete two anti-union tweets in order to settle unfair labor practice charges by the NLRB. In April of the same year, the Board ordered The Federalist to remove a tweet by its publisher stating that he would send any employee that tried to unionize "back to the salt mine."