SpaceX hit with new NLRB complaint over severance agreements, dispute resolution rules

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SpaceX hit with new NLRB complaint over severance agreements, dispute resolution rules

The SpaceX logo is shown on a Falcon 9 rocket as it is prepared for launch to carry NASA’s SpaceX Crew-8 astronauts Matthew Dominick, Michael Barratt, and Jeanette Epps, and Roscosmos cosmonaut Alexander Grebenkin to the International Space Station at the Kennedy Space Center, in Cape Canaveral, Florida, U.S., March 2, 2024.

Joe Skipper | Reuters

The National Labor Relations Board accused SpaceX in a new complaint of entering into unlawful severance agreements with terminated employees nationwide.

The unfair labor practices complaint comes two months after SpaceX filed a federal lawsuit challenging the legality of the NLRB’s oversight authority, and after the federal agency in a separate complaint accused the company of illegally firing eight workers who had criticized its CEO Elon Musk in an open letter.

The new NLRB complaint claims that SpaceX included unlawful confidentiality and non-disparagement clauses in severance agreements and that it unlawfully limited the terminated workers’ ability to participate in other claims against the company.

It also alleges that the rocket maker and satellite internet company maintained an unlawful rule that required workers — as a condition of their employment — to sign an agreement for arbitration and dispute resolution, and to waive their right to receive money in class-action lawsuits against the company.

One section of the severance agreement says, “You agree not to provide assistance to any current, former, or future SpaceX employee with respect to any complaints, concerns, claims, or litigation of any kind against the Company, whether individual or class or collective action, unless compelled to do so by a valid subpoena or court order,” the complaint noted.

Elon Musk, chief executive officer of Tesla Inc and X (formerly Twitter) Ceo speaks at the Atreju political convention organized by Fratelli d’Italia (Brothers of Italy), on December 15, 2023 in Rome, Italy. 

Antonio Masiello | Getty Images

The action, filed Wednesday by NLRB’s Region 19-Seattle Regional Director, alleges that, “these unlawful employment agreement provisions have been interfering with, restraining, and coercing employees in the exercise of the rights guaranteed in the National Labor Relations Act,” the agency said in an email.

If SpaceX does not settle the case, the complaint will be heard by an NLRB administrative law judge in Seattle on Oct. 29.

Any final decision in the case can be appealed to federal court.

As part of the complaint, the agency’s general counsel is seeking an order from the hearing judge requiring SpaceX to rescind the severance agreements and class-action waivers, and to broadly notify workers of a notice of employee rights.

SpaceX did not immediately respond to a request for comment from CNBC about the complaint. The company is required to file a response to the NLRB by April 3.

The action is the latest in a series of battles between Musk’s companies and the NLRB.

In a prior complaint against SpaceX filed Jan. 3, the NLRB alleged that the company had violated workers’ rights by firing eight employees for sending a letter in June 2022 to company executives, calling Musk a “distraction and embarrassment.”

The letter focused on a series of tweets that Musk had made since 2020, many of which were sexually suggestive.

All but one of the fired people had worked at SpaceX’s headquarters in Hawthorne, California.

A day after that NLRB complaint was filed, SpaceX sued the NLRB in federal court in Texas. The company claimed that the NLRB’s structure violates the U.S. Constitution.

Both the Trader Joe’s grocery store chain and online retail giant Amazon have challenged the legality of the the NLRB’s structure on those grounds in separate actions.

In October, the NLRB accused the Musk-owned social media company X of violating the law by firing an employee who criticized the firm’s return-to-work policy. The complaint says that the worker, Yao Yue, was terminated after trying to organize other workers at the company over those concerns.

X was known as Twitter before Musk bought it.

The NLRB’s home page lists eight open cases against Tesla, the electric car maker of which Musk is CEO.

Musk scored a win against the NLRB last year with the U.S. Court of Appeals for the 5th Circuit vacated a decision against Tesla by an NLRB administrative law judge.

That NLRB judge had declared that Tesla’s uniform policy had violated the rights of workers to wear clothes adorned with pro-union logos and slogans.

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