By Nate Raymond
(Reuters) – A divided U.S. appeals court ruled on Friday that the National Labor Relations Board went too far in ordering Tesla CEO Elon Musk to delete a 2018 tweet that claimed employees of the car maker EVs would lose stock options if they unionized.
The New Orleans-based 5th U.S. Circuit Court of Appeals, in a 9-8 vote, threw out a 2021 NLRB order that had concluded the tweet amounted to an unlawful threat after the court concluded that the tweet amounted to free speech protected by the First Amendment of the US Constitution.
“Suppressing speech by private citizens on issues of public concern is not a remedy traditionally tolerated under American law,” the court said in an unsigned opinion joined by eight of the nine justices in the majority.
That finding was enough to justify overturning the NLRB’s 2021 decision, according to those judges, all appointed by Republican presidents. As a result, it did not decide whether the tweet itself violated the National Labor Relations Act.
The court also ordered the NLRB to reconsider its decision ordering Tesla to reinstate a pro-union employee who was fired. U.S. Circuit Judge James Dennis, in a dissenting opinion joined by seven other judges, including all of the court’s Democratic appointees, called the ruling “light on the law and the facts.”
Representatives for Tesla and the NLRB did not respond to requests for comment.
The case predates Musk’s $44 billion purchase of Twitter, now known as X, in 2022, a platform the world’s richest man has long used prolifically.
Amid an organizing drive at Tesla’s Fremont, California, plant by the United Auto Workers union, Musk tweeted: “Nothing stopping the Tesla team at our auto plant from voting for the union… But “Why pay union dues and give up stock options for nothing?”
Tesla argued that the tweet was not a threat and simply reflected the fact that unionized workers at other auto companies were not given stock options. A three-judge panel of the Fifth Circuit disagreed in March 2023, but the full appeals court decided to rehear the case.
Musk’s rocket company, SpaceX, is separately suing the NLRB, alleging its internal enforcement procedures are unconstitutional.
(Reporting by Nate Raymond in Boston; Editing by William Mallard)