Tesla Wins Challenge to NLRB Decision on Musk Union Tweet (1)

Tesla Inc. prevailed in its second bid to overturn an NLRB decision that company CEO Elon Musk’s tweet saying workers would lose stock options if they unionized was an illegal threat under federal labor law.

The 9-8 decision Friday from an en banc panel of US Court of Appeals for the Fifth Circuit delivers a blow to the National Labor Relations Board’s authority to enforce labor law’s prohibitions on employers’ coercive anti-union statements, particularly when they appear on social media.

A three-judge Fifth Circuit panel last year upheld the NLRB’s decision finding that the offending tweet violated the National Labor Relations Act and ordering Tesla to make Musk delete it. But a majority of active-status judges granted the company’s request for an en banc rehearing a few months later.

The majority held in an unsigned opinion that Musk’s tweet was protected by the First Amendment.

“The NLRB erred in ordering the deletion of Musk’s speech as a remedy for unfair labor practices,” the majority said. “That alone is enough to vacate its order, so we do not reach the merits of whether the tweet constituted an NLRA violation.”

The nine-member majority was composed of all Republican-appointed judges.

Fifth Circuit Judge Cory Wilson, a Trump appointee, was on the three-judge panel that ruled in favor of the NLRB. Wilson switched sides to provide the deciding vote in the en banc ruling.

The Fifth Circuit en banc ruling follows a 2022 decision by an all-GOP panel of the Third Circuit that overturned the NLRB’s finding that a conservative online magazine publisher violated federal labor law via tweet.

The eight dissenting judges included two Republican appointees.

Judge James Dennis, a Clinton appointee who was on the original three-judge panel, penned a dissenting opinion more than twice as long as the majority opinion.

Dennis called the majority’s ruling “light on law and facts” and its legal approach “inconsistent with established First Amendment principles and with this court’s role as a court of review.”

Tesla was represented by Morgan, Lewis & Bockius, LLP. Agency lawyers represented the NLRB.

The case is Tesla, Inc. v. NLRB, 5th Cir., No. 21-60285, 10/25/24.