By Alexandra Conn
@ElonMusk “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 tweet that launched a thousand questions; no, for once we are not talking about Trump. In May 2018, Tesla’s CEO, Elon Musk tweeted the above indicating that if there were a Tesla employee vote to unionize, they would lose their stock options.
On September 28, 2019 a California labor judge ruled that Tesla had violated the National Labor Relations Act multiple times in 2017 and 2018 and that the tweet, specifically, was a violation of labor laws. The judge decided the tweet was seen as a threat to any Tesla employees that seek to unionize. In her decision she states, “Musk’s tweet can only be read by a reasonable employee to indicate that if the employees vote to unionize that they would give up stock options… Musk threatened to take away a benefit enjoyed by the employees consequently for voting to unionize.”
The judge ruled that other practices Tesla was also involved in were of the same violation including, prohibiting employees from distributing leaflets in their off-hours in the employee parking lot, discouraging employees from voting for the union and interrogating employees about their union activities. The Judge ruled for Tesla to “cease and desist” this type of activity. She also ordered Tesla fully reinstate and compensate an employee who had been unlawfully fired for involving themselves in union activities. Lastly, the ruling also called for Tesla to hold a meeting at the assembly plant in Fremont, California, and declaring that Musk must attend. She stated that either he or an agent with the labor board must read a notice to employees informing them that the National Labor Relations Board concluded that the company broke the law.
The initial union banter began when there had been an influx of complaints filed by the United Auto Workers (“UAW”) union that Tesla was taking part in unfair labor practices. An employee alleged in 2017 that Tesla fired him for being an advocate of a union at Tesla. Tesla responded by claiming this employee was let go due to poor performance reviews. The employee states, “I worked hard for this company for five years, sometimes 72 hours a week — and never had any performance-related complaints. I did, however, wear a union shirt,” he said. “And I had union stickers on my water bottle. And I believed that a union would make us safer, and would make the company more organized and more efficient.”
As Tesla seeks to expand their economic footprint in California, the strife between Musk and the UAW intensifies. Musk has claimed that Tesla is being targeted by the state of California and that they are the only large-scale car manufacturer in the state because others have been dissuaded by proposed rules and regulations that will make it all that more difficult to operate a business. One of the proposed rules by two state agencies required Tesla to be certified as a “fair and responsible workplace” in order for their customers to be eligible for taxpayer-backed state electric vehicle rebates. The rebates were a very enticing incentive to taxpayers everywhere and backed Governor Jerry Brown’s plan to put 5 million electric vehicles on California roads by 2030. However, Musk claims the rules would hold Tesla to an “unfair standard” and place them under extreme scrutiny by the Labor and Workforce Development Agency and the California Air Resources Board.
As electronic vehicles are becoming more widely accepted, it is hard to ignore the potential Tesla has to monopolize the entire sector, especially considering they are already said to hold a “micro-monopoly.” “Sales of new electric vehicles in California shot up 63.7% in the first half of the year, to 51,750 units, largely on the strength of the Tesla Model 3.” Given that Tesla is at the forefront of this new auto industry generation, one can only hope they are being held to a standard of fair and safe workplace practices.
However, it is seeming as though Tesla and Musk can do no wrong and may have the “you can’t stop us” mentality, similar to our current political leaders. “Tesla, of course, is exercising pricing power with its mini-monopoly. It can charge a pretty penny for its sexy all-electric cars because they’re both Teslas — the brand has mega-cachet — and because customers who have demanded its cars are willing to pay up. Years of easy credit have also helped.” Tesla understands their customers are willing to pay, which could be the driving force behind the “fight the union” rhetoric that is now commonly seen on Musk’s twitter feed.
Student Bio: Alexandra Conn is the current Editor-in-Chief of the Journal of High Technology Law. She is currently a 3L pursuing her JD/MBA at Suffolk University Law School and holds a B.A. in Graphic Design Communications with a minor in Marine Biology from Roger Williams University.
Disclaimer: The views expressed in this blog are the views of the author alone and do not represent the views of JHTL or Suffolk University Law School.