Tesla has been battling the business shortcomings of Elon Musk’s personality on several fronts over the last few months, but now it seems like the company may have crossed the line separating unsavory activity and illegal activity. According to unfair labor practice charges against the company filed to the National Labor Relations Board (NLRB) by the United Steel Workers’ Union, Tesla allegedly engaged in coercive actions such as surveillance and illegal firing at its Gigafactory plants in New York and California.

The United Steel Workers aren’t the only ones involved, either. The USW is acting in concert with the International Brotherhood of Electrical Workers to organize the Tesla facility’s employees and bargain for improved benefits and working conditions. If successful, the efforts to unionize the Gigafactory could directly benefit up to 300 production and maintenance employees at the New York facility, alone.

Tesla, for its part, refuses the allegations completely. “Tesla greatly values our employees at our Buffalo facility, and respects their right to organize,” a Tesla spokesperson said in a statement, before offering that, “the ULP allegation is without merit and we will be responding as part of the NLRB process.”

Bloomberg Law observes allegations come six months after Tesla announced a series of layoffs and bizarre contract terminations that impacted some 3,000 employees. According to Tesla’s own filings, those moves helped to save the company $43.5 million in the first quarter of 2019– but this all seems to go back to a May 2018 memo by Musk himself. That memo read, “Please send a note to HR before Monday justifying the excellence, necessity and trustworthiness by individual (not just the contractor company as a whole) of every non-Tesla person who has badge access to our buildings or network access to our systems … By default, anyone who does not have a Tesla employee putting their reputation on the line for them will be denied access to our facilities and networks on Monday morning. This applies worldwide.”

I’m not sure you can force employees to personally vouch for each other or risk terminations for “untrustworthiness”. But, hey– I don’t actually know anything about labor laws and their application to companies that employ thousands of people. What I do know, however, is that Tesla’s New York Gigafactory isn’t a financially viable factory. I say that because of the following paragraphs in Tesla’s own statement regarding the firings in question, which reads:

Tesla greatly values its employees and the direct relationship it has with them at our Buffalo facility. We offer wages and benefits that exceed those of other comparable manufacturing jobs in the region, and we recently increased our base pay even further. In addition, unlike other manufacturers, every single employee is an owner of Tesla, as everyone receives stock upon hire and for good performance, which results in significantly more compensation beyond our already high wages.

Other factories are shutting down in the US and we still have a long way to go to make Gigafactory 2 financially sustainable. Nevertheless, we continue to do everything we can to keep exceeding our commitments to jobs and business in Buffalo.

So, yeah– that’s news that’s sure to keep TSLA bulls tossing and turning tonight, isn’t it? Maybe I’m reading too much into it, though. What do you guys think? Is this latest round of legal troubles more evidence that Elon Musk is in way over his head, or is this just a cynical and clumsy union cash-grab aimed at a company that’s about to make it big? Let us know what you think in the comments section at bottom of the article.


Sources: NLRB, via Electrek, Bloomberg Law.