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SpaceX accused of illegally dismissing employees: they had criticised Musk

A US government agency said the rocket company unfairly dismissed the authors of a letter against the contractor

5 January 2024

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SpaceX has been accused by a US federal agency of illegally firing eight employees for circulating a letter criticising Elon Musk, founder and CEO of the leading rocket and satellite company.

According to a complaint issued by a regional office of the National Labor Relations Board, the company fired employees in 2022 for asking SpaceX to distance itself from Musk's tweets, including one in which he mocked allegations of sexual harassment against him. The letter circulated by the employees also asked SpaceX, which has more than 13,000 employees, to clarify what the company's policies on harassment were and to "apply them consistently".

The complaint alleges that the company's president and chief operating officer, Gwynne Shotwell, illegally prevented employees from circulating the letter and identifies similar infractions committed by other executives and managers. The case will go before an administrative judge in early March, unless SpaceX agrees to a settlement before then. A spokeswoman for the government agency said the company is seeking compensatory remedies, such as rehiring the workers and paying them back wages (what is called 'reinstatement with back-pay' in the US).

In the 2022 letter, SpaceX employees wrote that Musk's "behaviour in the public sphere is a frequent source of distraction and embarrassment for us", adding that Musk's "alleged sexual misconduct" goes against SpaceX's "zero tolerance" policies.

The letter had been published internally at SpaceX after Business Insider reported that Musk had stripped naked in front of a flight attendant on one of the company's private jets in 2016. The incident had been reported and according to media reports, SpaceX had settled the dispute in 2018 by paying $250,000 to the flight attendant.

Musk denied the allegations of sexual misconduct, calling them 'wild accusations'. After the Business Insider report, SpaceX CEO and President Gwynne Shotwell also defended Musk.

According to the National Labor Relations Board's complaint, SpaceX management "interrogated" the authors of the letter and "made coercive statements", including inviting employees to "quit if they disagreed with CEO Elon Musk's behaviour". In the end, according to the agency's complaint, SpaceX illegally dismissed eight authors. The agency claims the dismissals were retaliatory.

The complaint also alleges that a senior human resources officer had illegally given the impression that employees were being watched by showing the employees involved in the drafting of the letter screenshots of their chat on a messaging app.

Musk has sometimes taken a hard line on the employees of his companies, such as when he fired about half of the workforce of Twitter, now known as X, shortly after he bought the company in 2022. He later fired more than 20 internal critics at Twitter, which lost about 80% of the 7,500 employees who worked there when the billionaire took it over.

Tesla, of which Musk is CEO, has been in litigation for years after the National Labor Relations Board accused it of firing an employee for participating in union activities. In 2021, the government agency ruled that the dismissal was illegal and ordered Tesla to rehire the worker while also paying back wages. The decision was later upheld by a federal court. The company is currently appealing the decision.

In addition, the Justice Department sued SpaceX in August, accusing it of discriminating against asylum seekers and refugees in hiring. However, a judge issued an injunction blocking the case from moving forward.

The regional office of the National Labor Relations Board will now try to reach an agreement between SpaceX and the former employees who were laid off. If no agreement is reached, there will be a hearing starting on 5 March in Los Angeles.