The 5th U.S. Circuit Court of Appeals has decided to reexamine its recent ruling on Tesla CEO Elon Musk’s alleged violation of federal labor law through a tweet about stock options and unionization. The court’s decision to conduct an “en banc” review follows a request from Tesla, and it will involve all 16 active judges of the court.
The controversy stems from a tweet posted by Musk on May 20, 2018, during an attempt by the United Auto Workers (UAW) to organize Tesla’s California-based employees. In the tweet, Musk appeared to insinuate that Tesla might revoke stock options from employees who joined a union, which the National Labor Relations Board (NLRB) later deemed an illegal threat discouraging unionization. The NLRB ruling, upheld by a three-judge panel in March, asserted that the tweet should be removed from the record.
Tesla, however, is not willing to accept the ruling without a fight. The company has requested a reconsideration of the matter, raising concerns about free speech and emphasizing that no employees have claimed that Musk’s tweet actually threatened them. Tesla’s defense also hinges on the contention that Musk did not intend for the tweet to be perceived as a threat and that he subsequently clarified his statement to remove any ambiguity regarding its intent.
The “en banc” review is expected to prolong the resolution of the case, with the matter not anticipated to be settled until 2024. With twelve of the sixteen active judges on the 5th U.S. Circuit Court of Appeals appointed by Republican presidents, the outcome of the review could carry significant implications for the broader issue of labor rights and free speech within corporate communications.
Elon Musk’s use of Twitter has previously entangled him in legal troubles, most notably in August 2018 when he tweeted about securing funding to take Tesla private. This particular tweet led to a $20 million civil sanction imposed on both Musk and Tesla by the U.S. Securities and Exchange Commission.