A office of computers and workers in front of a factory floor, which is akin to the conditions in the Tesla collision center

Tough Times at Tesla

Tesla is in trouble after the NLRB (National Labor Relations Board) found that Tesla violated its employees’ rights. Continue reading to learn what rights were at stake and what the NLRB decided.

At Gardner Employment Law, we value keeping our clients informed, and we pride ourselves on keeping up to date on the latest employment law news. If you would like to know more about this ruling against Tesla or the rights that were at stake, contact us.

What Employee Rights Did Tesla Violate?

Section 8(a)(1) of the NLRA (National Labor Relations Act) protects employees’ rights to discuss their wages. Section 7, also violated by Tesla, makes it an “unfair labor practice” for an employer to discipline employees because they discussed their work conditions. Any time employees talk amongst themselves, even online, about the terms and conditions of their work, this is called “concerted action.”

These are just two of the rights, out of many, protected by the NLRA. The NLRB is the federal agency that enforces the NLRA. The NLRA protects not only union employees, but all employees. The Tesla collision center in question employed all non-union employees.

How a Labor Violation Occurred at the Tesla Collision Center

In late 2021, the Tesla collision center, located in Orlando, Florida, hired several new technicians. While the new technicians were on-boarding, some of the longer tenured employees, including technician Eyman, discovered that the new hires had been promised higher wages than the longer tenured technicians were paid.

This information about the pay discrepancy quickly spread through the plant. The team leader, Serrano, confirmed to other employees that the new hires were being paid more. All of the discussion caused the new hires concern, and they shared their worries with Serrano. Following this, Serrano passed on the concerns to the plant manager, Ayala, who then called an all-hands-on-deck meeting. At the meeting, Ayala instructed all the employees to stop discussing their wages and suggested that they shouldn’t go up the chain of command to express any of their concerns.

What proceeded after this is a perfect example of how poor transparency can lead to major problems. After the meeting, Persson, a service writer at the center, approached Eyman, one of the long-time technicians, about an unrelated HR issue and asked Eyman to go with him to HR. Word of an “HR dispute” quickly spread, and Manager Ayala heard about it. He called employees into his office to find out what was going on, but since no one knew, he could not get any answers. Paranoia set in. Eyman went above Ayala’s head to email Jones, Vice President of Sales who was several levels up the chain of command. Eyman did not specify what he wanted to talk with Jones about, only that he had “specific concerns”.

Whether it was coincidence or not is unknown, but Ayala called Eyman into his office the next morning after Eyman reached out to Jones. The meeting was became heated. Accusations were levied, suspicions were hurled, and sarcastic remarks were taken as threats. When paranoia clouds judgment, things can quickly go sideways.

Ayala placed Eyman on suspension. Word of the suspension quickly got around, and Ayala again prohibited employees from discussing Eyman’s suspension. Within two weeks of being put on suspension, Eyman was terminated. Eyman filed a claim of unfair labor practice with the NLRB against Tesla charging that Tesla impermissibly infringed on rights protected under the NLRA.

What Did the NLRB Rule?

The NLRB held that Tesla violated employees’ rights under Section 8(a)(1) of the NLRA by prohibiting discussion of their wages and Eyman’s disciplinary action. These discussions were “concerted activities” which were for the employee’s “mutual aid and protection,” rights protected under Section 7 of the NLRA.

The ability of employees to discuss their wages freely amongst themselves is one of the most important rights the NLRA gives to employees. Considering how direct plant manager Ayala was at the all-hand-on-deck meeting, it is easy to see how his instructions violated this right. Barring employees from discussing their wages is not permissible, and even the mere suggestion of it can land a company in hot water. The NLRB considers wage discussions “inherently concerted” activity which is protected, whether or not the discussion has the goal of inducing collective action. Even a supervisor instructing you to not inform coworkers about your raise or change in wages can potentially violate the NLRA.

With regards to Section 7’s protections for employees to discuss disciplinary actions amongst themselves, the NLRB also found a clear violation. By explicitly barring all employees from discussing technician Eyman’s suspension and subsequent termination, Ayala also violated the protected rights. Companies can silence discussion of these matters only if there is a “substantial and legitimate business justification” that “outweighs the rule’s infringement on employees rights.” The NLRB states that there are certain circumstances, such as protecting witnesses’ safety and ensuring the veracity of testimony, which may justify prohibiting any such discussion. In the Tesla case, however, none of these circumstances existed. Tesla had no valid justification in silencing the discussions and thus violated the employees’ Section 7 rights of concerted activity.

Tesla is no stranger to the NLRB. In 2021, Elon Musk was required by the NLRB to delete anti-union tweets. In 2022, the NLRB held that Tesla could not prohibit employees from wearing clothes with union insignias. Despite repeatedly running afoul of employees’ rights, the NLRB only gave Tesla a “slap on the wrist.” The NLRB ordered Tesla to cease and desist from this sort of prohibited behavior and to post a notice alerting employees of their rights under the NLRA.

Key Takeaways

It is easy to point the finger at Tesla as the bad guys here. However, Tesla does have explicit policies in place to discourage this sort of anti-employee behavior. The plant manager failed to follow Tesla’s stated policies. Companies need to be certain that their policies are being enforced and valued at all levels. Managers and executives must make sure that everyone is treated in accord with the NLRA.

If you want to know more about this case or have concerns about any concerted activity, reach out to us today.

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