Elon Musk may have violated labor laws with a tweet


Tesla tweet 'highly problematic,' says former SEC boss

Tesla CEO Elon Musk is already in trouble for tweeting about plans to take the company private.

Now he could be in trouble for a tweet about a union organizing effort at the company.

The United Auto Workers union has been trying to organize workers at the company’s main factory in Fremont, California, for years.

It’s filed numerous complaints about Tesla’s tactics to fend off its efforts. Some of UAW’s concerns have been echoed in complaints filed by the National Labor Relations Board, the federal agency that enforces labor laws.

The NLRB filed a new complaint last week accusing Musk of violating labor laws with a tweet on May 20 that threatened to strip employees of their stock options should they vote for the union. It said the tweet could be seen as interfering with employees’ rights to freely decide whether to join a union.

“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,” said Musk’s tweet.

The complaint is slated to be considered by the full board of the NLRB. If it finds against Tesla, the company could be forced to expunge employee disciplinary records and reinstate employees who were wrongfully terminated. Tesla could appeal the decision to federal courts, and if necessary all the way to the Supreme Court.

The new complaint by the NLRB was first reported by auto site Jalopnik.

Tesla defended the comment that Musk made in the tweet, in a statement to CNN.

“Elon’s tweet was simply a recognition of the fact that unlike Tesla, we’re not aware of a single UAW-represented automaker that provides stock options or restricted stock units to their production employees, and UAW organizers have consistently dismissed the value of Tesla (TSLA) equity as part of our compensation package,” said spokesperson Gina Antonini.

“We fundamentally believe it’s critical that all employees be owners of Tesla so that everyone is on the same team, with all sharing in the company’s success. This has been highly successful and led to Tesla compensation being the highest in the auto industry,” she said.

The UAW did not have an immediate comment, but said it would let the complaint speak for itself.

It’s not the only Twitter problem for Tesla.

The company also faces shareholder lawsuits about his tweet from August 7 that said he was thinking about taking Tesla private at $420 a share, and that he already had “funding secured” for such a buyout.

The price of Tesla stock shot higher on that tweet, and the shareholders argue in their suits that the promise of financing was false and that it was done to manipulate the price of the stock.

Numerous reports say that the SEC has subpoenaed documents as part its own reported investigation into the tweet. The SEC has declined to comment on the reports and Tesla has declined to comment on the shareholder suits or the reports of the SEC investigation.

Musk announced Friday that he was dropping his plans to take Tesla private. But that does not end the lawsuits or any action by the SEC.

CNNMoney (New York) First published August 29, 2018: 2:30 PM ET



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