By Nate Raymond
(Reuters) - A divided U.S. appeals court on Friday ruled that the National Labor Relations Board went too far by ordering Tesla (NASDAQ:TSLA) CEO Elon Musk to delete a 2018 tweet stating employees of the electric vehicle maker would lose stock options if they unionized.
The New Orleans-based 5th U.S. Circuit Court of Appeals on a 9-8 vote threw out an NLRB order from 2021 that had concluded the tweet amounted to an unlawful threat after the court concluded the tweet amounted to free speech protected by the U.S. Constitution's First Amendment.
"Deleting the speech of private citizens on topics of public concern is not a remedy traditionally countenanced by American law," the court held in an unsigned opinion joined by eight of the nine judges in the majority.
That finding was enough to warrant overturning the NLRB's 2021 decision, according to those judges, who were all appointed by Republican presidents. As a result meant, it did not decide whether the tweet itself violated the National Labor Relations Act.
The court also directed the NLRB to reconsider its decision ordering Tesla to reinstate a pro-union employee who was fired. U.S. Circuit Judge James Dennis, in a dissenting opinion joined by seven other judges, including all of the court's Democratic appointees, called the ruling "light on law and facts."
Representatives for Tesla and the NLRB did not respond to requests for comment.
The case predated Musk's purchase of Twitter, now known as X, in 2022 for $44 billion, a platform the world's richest man has long prolifically used.
Amid an organizing campaign at Tesla's Fremont, California, plant by the United Auto Workers union, Musk tweeted: "Nothing stopping Tesla team at our car plant from voting union... But why pay union dues & give up stock options for nothing?"
Tesla argued the tweet was not a threat and merely reflected the fact that union workers at other auto companies did not receive stock options. A three-judge 5th Circuit panel disagreed in March 2023, but the full appeals court elected to rehear the case.
Musk's rocket company SpaceX is separately suing the NLRB, claiming its in-house enforcement proceedings are unconstitutional.