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Tesla, Musk broke labor laws by blocking workers' union activities, judge rules

A judge on Sept. 27 ruled that Tesla Inc. committed a series of violations against the National Labor Relations Act when it prohibited union activities in 2017 and "threatened" employees with a loss of stock options in 2018.

Administrative Law Judge Amita Baman Tracy said Tesla committed "unfair labor practices" by discouraging employees from participating in union activities and in terminating Richard Ortiz on Oct. 18, 2017, and disciplining Jose Moran on Oct. 19, 2017, for their pro-union efforts.

Tesla's violations also included a May 21, 2018, tweet from CEO Elon Musk that said workers could lose their stock options if they supported the union, according to a National Labor Relations Board, or NLRB, filing.

Musk tweeted: "Nothing stopping Tesla team at our car plant from voting union. Could do so [tomorrow] if they wanted. But why pay union dues & give up stock options for nothing? Our safety record is 2x better than when [the] plant was UAW & everybody already gets healthcare."

The judge said the tweet "threatened" employees with reprisals as Musk implied that "Tesla would act on its own initiative to remove stock options if the employees chose to unionize."

The judge ordered the electric-car maker to hold a meeting at its facility in Fremont, Calif., where either Musk or his agent will read a notice to employees informing them of the NLRB's ruling that Tesla broke the law.

The company was ordered to cease and desist from terminating and disciplining employees for participating in union-related activities and reinstate and recompensate Ortiz. Tesla was also ordered to stop threatening employees with loss of benefits if they vote in favor of a union.

The judge also ordered the company to stop the following policies: maintaining and implementing a rule that prohibits off-duty employees from distributing union literature; threatening and interrogating employees about union activities; and discouraging employees from participating in union activities.

Tesla did not immediately respond to S&P Market Intelligence's request for comment.