In a blow to the Labor Board, the court sides with Elon Musk via tweet

A 17-judge panel of the U.S. Court of Appeals for the Fifth Circuit has overturned a ruling that found Tesla and CEO Elon Musk engaged in unfair labor practices in violation of the National Labor Relations Act.

The court ruled by a 9-8 vote to vacate the National Labor Relations Board’s order and remand the case to the NLRB.

The ruling ends an NLRB order that said a tweet from Musk threatening employees with the loss of stock options if they formed a union was unlawful.

The appeals court ruled that an NLRB order directing Musk to delete the tweet about stock options and unionization violated his First Amendment rights.

The court also overturned the NLRB’s finding that the firing of pro-union Tesla employee Richard Ortiz was unlawful. The court ordered the NLRB to reconsider its finding in light of a statement by the regulator who ordered the dismissal that he harbored no anti-union animus, a detail the NLRB had declined to consider.

The dispute between Tesla and the NLRB occurred amid efforts by the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America to unionize the Tesla car factory in Fremont, California, beginning in 2017.

In May 2018, Musk posted on Twitter that Tesla employees would lose their stock options if they unionized. He wrote that union members at other automakers did not receive stock options, and he said this was because of union policy. The union filed an unfair labor practice complaint and the NLRB agreed.

Around the same time, Ortiz wrote in a pro-union Facebook group criticizing three Tesla workers who had testified before the state legislature to criticize legislation the union supported. The message was accompanied by photos of the three employees, which were taken from an internal Tesla website.

One of the three employees filed a harassment complaint with Tesla’s human resources department, and the company conducted an internal investigation. Ortiz said he did not know where the employee photos came from.

The findings were reported to Stephen Graminger, who made the decision to fire Ortiz after determining that Tesla had previously fired an employee who had lied to the company.

The NLRB’s sole authority for its order to remove Musk’s tweet was a previous NLRB opinion on speech on Twitter, a 2020 case called FDRLST Media. But that decision was later overturned by the U.S. Court of Appeals for the Third Circuit, the court said.

“We believe that Musk’s tweets are constitutionally protected speech and do not fall into the categories of unprotected communications such as obscenity and perjury. And the administration does not dispute the general rule that it (like every other part of the government) has no power to remove protected messages. speech,” the appeals court said.

The court, discussing Ortiz’s dismissal, said in a 1951 Supreme Court ruling: Universal Camera Corp. against NLRBallowed it to set aside a ruling that was not supported by “substantial” evidence when viewed in light of the record as a whole, including evidence contrary to the board’s opinion. To meet the “substantial” standard, the court must consider “contradictory evidence or evidence from which conflicting inferences may be drawn,” the court said.

But the NLRB failed to consider the fact that Graminger, the supervisor who authorized Ortiz’s firing, had no anti-union animus, and the record showed that Graminger was a member of another union and harbored pro-union sentiments, the NLRB said. court.

“The board failed to consider these facts, which affect its conclusion, and therefore the order should be vacated,” the appeals court said.

But the dissent, written by Justice James L. Dennis and joined by seven other justices, said the majority weighed in with ” a brief opinion that is light on law and fact” and that it “reaches only two of the four issues on appeal and dismisses the remainder.”

The dissenters said the majority finding that the NLRB order to remove Musk’s tweet about stock options violates the First Amendment “flies the weight of four Supreme Court authorities,” citing NLRB v. Va. Elec. & Power Co.(1941); Thomas to Collins(1945); NLRB v. Gissel Packing Co.(1969); And Room of Kom. v. Brown(2008).

Regarding Ortiz’s firing, the dissenters said the National Labor Relations Act gives employees the right to keep union activities confidential, even if that means giving evasive or untruthful answers to questions the employee believes are inquiries into protected trade union activities.

If an employee has a reasonable basis to believe that his employer is trying to expose protected union activity, and has no legitimate reason to do so, an untruthful or evasive answer is not a legal basis for firing the employee, the dissenters said.

Applying that standard, Ortiz’s response of “I don’t know” when asked where the photos came from is “inextricably linked” to his protected conduct, the dissent said.

Tesla and Musk were represented by David Bruce Salmons, David Broderdorf II and Michael E. Kenneally of Morgan Lewis in Washington. The union was represented by Margo Feinberg and Daniel Curry of Schwartz, Steinsapir, Dohrmann & Sommers in Los Angeles. Ruth E. Burdick, Micah Prieb Stoltzfus Jost, Kira Dellinger Vol and Timothy L. Watson of the NLRB represented the agency.

The NLRB did not respond to a request for comment. Tesla and the union also did not respond to requests for comment.