Elon Musk's scheme to gut worker protections nationally

For a guy who claims to want to save humanity, he's got some strange ideas.

Musk at the NYT Dealbook Summit in November 2023. (Slaven Vlasic/Getty)

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“This is a battle for the future of civilization,” Elon Musk tweeted in 2022. “If free speech is lost even in America, tyranny is all that lies ahead.” 

But now it’s 2024, and the world’s richest man has decided that punishing his critics in court is way more fun than waxing lyrical about the First Amendment. So he’s taken to suing people who say mean, true things about his companies, forcing them to undergo punishing litigation for their impudence.

And as of this week, he’s moved on to trying to blow up the federal agency which protects workers so he can take revenge on a handful of SpaceX employees who dared to criticize him. 

Turns out Mr. Free Speech wasn’t so absolute after all.

The “No Asshole” policy

The trouble started back in May 2022 when Business Insider reported that Musk exposed himself to a SpaceX flight attendant and offered to buy her a horse if she would engage in a sex act with him during a flight to London. According to the story, SpaceX had paid the woman $250,000 to keep quiet about the harassment and subsequent workplace retaliation.

Musk denied the allegations, but the next day he tweeted, “Fine, if you touch my wiener, you can have a horse,” in response to a joke by Chad Hurley, a founder of YouTube. 

Since his purchase of the platform formerly known as Twitter (which Musk calls X, but we refer to as twitter), Musk has said too many outrageous things to count. But in 2022, his transformation into billionaire edgelord was not complete, and his crude public remarks were still news. 

Souce: twitter

In June 2022, five SpaceX employees drafted an open letter which went out to more than 2,600 employees via SpaceX’s internal Microsoft Teams channel and was later published by The Verge. The drafters castigated the company for its failure to promote “diversity, equity, and inclusion with equal priority across the company, resulting in a workplace culture that remains firmly rooted in the status quo.”

“In light of recent allegations against our CEO and his public disparagement of the situation, we would like to deliver feedback on how these events affect our company’s reputation, and through it, our mission,” they began. The writers complained that the company’s “No Asshole” policy was unevenly enforced, particularly when it came to the CEO.

“Elon’s behavior in the public sphere is a frequent source of distraction and embarrassment for us, particularly in recent weeks,” they went on. “As our CEO and most prominent spokesperson, Elon is seen as the face of SpaceX — every Tweet that Elon sends is a de facto public statement by the company.”

The letter ended with a request that SpaceX publicly condemn Musk’s behavior, make changes to its handling of discrimination and harassment complaints, and “define and uniformly respond to all forms of unacceptable behavior.”

Instead the company summarily fired the letter writers, as well as other employees who had signed on or expressed support for the campaign.

The NLRB

In November of 2022, eight former SpaceX employees filed a complaint, called a charge, with the National Labor Relations Board (NLRB) alleging that the company had interfered with their right to organization under the National Labor Relations Act.

In 1935, Congress established the NLRB to remediate unfair labor practices. Upon receiving a charge, Board agents investigate and seek to facilitate a settlement between the employee and the employer. If the case is meritorious and no settlement can be reached, the NLRB issues a complaint and schedules a hearing before an NLRB Administrative Law Judge (ALJ). 

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Importantly, the NLRB does not assess penalties. In the main, the ALJs issue what the agency’s website refers to as “make-whole remedies, such as reinstatement and backpay for discharged workers, and informational remedies, such as the posting of a notice by the employer promising to not violate the law.”

And indeed that’s exactly what it did here, asking for SpaceX to post notices in the workplace, implement remedial training, and apologize to the wrongly terminated employees. The matter was set for a hearing before an ALJ on March 5 of this year in California. But instead of taking its (tiny) lumps for illegally retaliating against employees who dared to criticize the Dear Leader, the company went nuclear and challenged the very existence of the NLRB itself.

And they did it in Texas.

The lawsuit

Texas has lately become ground zero for conservative litigants, thanks to the high percentage of bonkers judges at both the district and circuit level.

The religious zealots trying to get medication abortion banned went so far as to set up shop in Amarillo with the express purpose of getting in front of Judge Matthew Kacsmaryk, himself a former anti-abortion activist, who could be counted on to draft an opinion so insane that his buddies on the Fifth Circuit could pare it back to merely outrageous and style themselves as cerebral conservatives. And so of course Musk made a beeline for Texas in November when twitter sued Media Matters For America for pointing out that ads for major national brands were showing up next to explicitly Nazi content.

In the MMFA case, twitter claimed that Fort Worth was the appropriate venue because lots of people with twitter accounts live in Texas, and you can read MMFA articles there, too. This is ridiculous — by that logic, the company could drag any journalist into court in Alaska. But Musk wanted to stay out of California (where twitter is located) and DC (where MMFA is located), and he wanted to get in front of Judge Reed O’Connor, one of the Trumpiest Trump judges in the country. Which he did.

The argument for venue in the NLRB case is only marginally less silly. SpaceX does indeed have employees in Texas who read the open letter in 2022. But the fired employees are in California (one works remotely from Washington, but is supervised in California) and that’s where SpaceX is headquartered. There’s also the minor matter that the NLRB decision being challenged is coming out of the agency’s Los Angeles office.

But the venue is perhaps the least alarming thing about this case.

The Fifth Circuit sucks. A lot.

The reason Musk wants to be in Texas is because of a Fifth Circuit decision in a 2022 case called Jarkesy v. SEC in which a three-judge panel ruled that ALJs are unconstitutional.

The court reasoned that: (1) it’s illegal for Congress to delegate too much power to civil servants, unanswerable to the voters; and (2) that agencies’ use of ALJs violates the Seventh Amendment right to a jury trial. This position would have been unthinkable 15 years ago, but now that Republicans have a vise grip on the Supreme Court, they’ve decided that the judiciary needs to grab all the power it can. Just this week, the Court heard oral arguments in Loper Bright Enterprises v. Raimondo, a case which threatens to hamstring the executive branch and allow courts to substitute their own judgment for that of federal agencies at will. 

The Jarkesy decision was appealed to the Supreme Court and argued in November, but as of now, it’s the law in the Fifth Circuit. And so it forms the basis of SpaceX’s complaint alleging that the NLRB’s enforcement action is unconstitutional. Essentially, SpaceX says that because the ALJs enjoy civil service protections and can’t be fired by the president as political appointees, and because the NLRB’s procedures don’t allow for a jury trial, the enforcement action against SpaceX is illegal under Jarkesy.

And in case it’s not clear, if Musk succeeds, the NLRB will have no way to enforce labor laws that guarantee citizens the right to collective action.

Ughhhhh

Yeah, ughhhh. A billionaire’s feelings are hurt because his employees noticed that he’s disgusting, and now he’s trying to gut worker protections which have been in place for 90 years. Maybe our government shouldn’t be wholly reliant on a petulant manchild for our entire space program. Particularly when that manchild appears to be rapidly decompensating into a racist memelord.

Is there a bright side here?

There is! SpaceX sued the NLRB in Brownsville. Presumably this was because SpaceX actually has a launch site there, so claiming Texas as the appropriate venue was marginally less preposterous. But there are two federal judges in the Brownsville division, and SpaceX got the one who wasn’t appointed by Donald Trump.

The NLRB immediately asked Judge Rolando Olvera to transfer the case to California, arguing that “this case has virtually zero nexus to this venue and represents an apparent effort to preempt anticipated litigation and forum-shop various legal theories to a venue SpaceX perceives as more favorable.” And then, after SpaceX upped the ante by asking for a preliminary injunction barring the NLRB from conducting the March 5 hearing, the agency moved to expedite the transfer to “preserve both the parties’ and this Court’s resources” by allowing the judge to boot the case on the simple issue of venue before wading into “novel, complex constitutional challenges to an agency whose constitutionality was affirmed many decades ago.”

And if the case gets kicked to California, Jarkesy won’t matter. Unless the Supreme Court does something completely crazy … which it might, because the “no asshole” rule is definitely not in effect in our nation’s highest Court.

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That’s it for this week

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We’ll be back with more Monday. Have a great weekend.

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