A Federal Appeals Court in New Orleans ruled Tesla Inc. and Elon Musk broke the law in a long-running fight over the dismissal of a worker, who actively campaigned for the EV maker’s employees to join the United Auto Workers.
Richard Ortiz, the fired employee, said he is planning to return to work at Tesla factory in Fremont, California, following a decision by the U.S. Court of Appeals for the Fifth Circuit upholding an order by the National Labor Relations Board.
The National Labor Relations Board previously ruled Tesla violated federal law when it fired Ortiz in 2017 during a UAW organizing drive. Asking for union representation inside any workplace is considered protected activity under the National Labor Relations Act.
The court upheld earlier determinations by the NLRB that Tesla unlawfully fired Ortiz for exercising his rights to organize a union, and that Musk’s tweets were unlawful threats, rejecting Tesla’s First Amendment arguments, the UAW noted in a statement.
“This is a happy day where my rights were finally vindicated. I look forward to returning to work at Tesla and working with my co-workers to finish the job of forming a union,” Ortiz said in a statement released by the union.
“This a great victory for workers who have the courage to stand up and organize in a system that is currently stacked heavily in favor of employers like Tesla who have no qualms about violating the law,” said UAW Region 6 Director, Mike Miller.
The UAW and Ortiz’s filed the case nearly six years ago immediately after Tesla dismissed Ortiz. But it expanded to encompass Musk’s use of Twitter in 2018 to make disparaging remarks. Musk purchased Twitter in 2022.
Social media impact
Musk’s 2018 tweet suggested employees who chose to join a union would give up company-paid stock options. The tweet was coercive and was among violations of federal labor law, an administrative law judge ruled in 2020.
The administrative law judge also imposed a series of remedies that included allowing union supporters to wear the UAW insignia and posting notices throughout the company’s factories stating employees have the right to discuss joining a union.
While there are limits on the NLRB’s ability to punish companies found to have violated federal labor laws, in the Tesla case the judge took the additional step of requiring the company to hold a plant-wide meeting for all employees which Musk must attend. The law judge also said Tesla could not stop any employees in Fremont, or the Tesla plant in Sparks, Nevada from wearing shirts, supporting the union.
Tesla, though, appealed the administrative law judge’s findings and ruling to the full NLRB, which in 2021 upheld the administrative law judge’s decision on the original complaint.
Appeal moved from California to conservative court
Following the NLRB ruling, Tesla exercised its right to appeal again. Since it is now technically a Texas company, Tesla took the case the case to the Fifth U.S. Circuit in New Orleans, which is considered one of the most conservative appeals courts in the federal system. Tesla attorneys clearly expected a favorable ruling from the Fifth Circuit’s conservative judges.
The ruling by a three-judge panel sided with the NLRB, ordered Musk’s unlawful tweet be deleted, and Tesla to reinstate and provide back pay to Ortiz.
In its decision, the circuit ruled that “because stock options are part of Tesla’s employees’ compensation, and nothing in the tweet suggested that Tesla would be forced to end stock options or that the UAW would be the cause of giving up stock options, substantial evidence supports the NLRB’s conclusion that the tweet is as an implied threat to end stock options as retaliation for unionization.”
Tesla has not yet said how it plans to respond to the new ruling, but it is likely to file an appeal to the full circuit, giving every Fifth Circuit Judge a chance to vote on the case.
The ruling came on the heels of U.S. Senate hearing chaired by Sen. Bernie Sanders in which he highlighted how major U.S. companies, starting with Starbucks, openly defy federal law to prevent employees from joining unions.
Shawn Fain, the UAW’s new president, said, “While we celebrate the justice in today’s ruling, it also highlights our broken U.S. labor law. “Here is a company that clearly broke the law and yet it is several years down the road before these workers have achieved a modicum of justice. For the workers who make these companies run, it’s not about electric vehicles or internal combustion vehicles. It’s about justice on and off the job.”