US appeals court to reconsider ruling on Elon Musk’s union tweet

By Jonathan Stempel

(Reuters) – A federal appeals court said on Friday it would reconsider its recent ruling that Tesla chief executive Elon Musk violated federal labor laws by tweeting that employees would lose stock options if they joined a union.

The 5th U.S. Circuit Court of Appeals in New Orleans has granted Tesla’s request to reconsider the case “en banc,” meaning its 16 active judges will participate.

A three-judge panel from the same court in March upheld a National Labor Relations Board ruling that Musk’s May 20, 2018 tweet was an illegal threat that could discourage unionization at his electric car company and should be removed.

Musk posted the tweet as the United Auto Workers sought to organize employees at the Tesla factory in Fremont, California.

“Nothing’s stopping the Tesla team at our auto plant from voting union. Could do it tmrw if they wanted to,” he wrote. “But why pay union dues and give up stock options for nothing?”

The appeals court panel found “substantial evidence” that the tweet was “an implied threat to end stock options in retaliation for unionization.”

In asking for a reconsideration, Tesla cited free speech concerns and said the NLRB was unaware that no employee had claimed Musk was threatening them, that Musk had no intention of threatening anyone, and that Musk later clarified that his tweet was not a threat.

The NLRB did not immediately respond to requests for comment. Tesla and his attorneys did not immediately respond to similar requests.

A decision is unlikely before 2024.

Twelve of the 16 active appeals court judges have been appointed by Republican presidents.

Musk’s use of Twitter has gotten him in trouble before, including when he tweeted in August 2018 about “secure funding” to take Tesla private.

Musk did not, and he and Tesla each paid civil fines of $20 million to settle a subsequent US Securities and Exchange Commission lawsuit.

Musk’s $236.4 billion fortune makes him the second richest person in the world, according to Forbes magazine. He bought Twitter in October for $44 billion.

(Reporting by Jonathan Stempel in New York; editing by Jonathan Oatis and Deepa Babington)

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