SpaceX Made Workers Sign Illegal Severance Agreements, Labor Officials Allege

Officials at the National Labor Relations Board filed a complaint against Elon Musk’s SpaceX on Wednesday, accusing the company of making workers sign illegal confidentiality and non-disparagement clauses as a condition of getting severance pay. 

The complaint also alleges the aerospace company ran afoul of the law by requiring workers to sign certain arbitration agreements and class-action waivers as a condition of getting their jobs, according to an agency spokesperson. 

The NLRB’s general counsel argues that “overly broad” employment contracts can be coercive and prevent workers from speaking out to improve their working conditions.

SpaceX did not immediately respond to a request for comment.

The new complaint escalates a battle between labor officials and Musk, who has mounted a legal challenge to the board’s very existence. SpaceX has argued in federal court that the structure of the NLRB is unconstitutional and therefore the agency shouldn’t be able to pursue a case against the company. (Trader Joe’s and Amazon have aired essentially the same argument in labor board proceedings.)

Musk's SpaceX has challenged the constitutionality of the National Labor Relations Board.
Musk's SpaceX has challenged the constitutionality of the National Labor Relations Board. Omar Marques via Getty Images

The NLRB has both a prosecutorial arm and a five-member board that serves as a high court interpreting collective bargaining law. The agency oversees private-sector union elections and prosecutes both employers and unions for violating workers’ rights. It can win backpay for workers who were wrongfully fired, but does not have the power to levy fines. 

In its challenge to the NLRB’s constitutionality, SpaceX called the agency’s structure “the very definition of tyranny.”

The new NLRB complaint against SpaceX was based on charges filed on behalf of two former employees who say they were illegally fired for exercising their rights.

In the complaint, the general counsel asked that SpaceX be required to notify former employees that it won’t enforce the allegedly unlawful provisions of the severance agreement, and that the company drop the arbitration agreements and class-action waivers from its hiring paperwork.

If SpaceX doesn’t agree to settle the case, it will go before an administrative law judge at the NLRB.  

In the case that led to SpaceX challenging the NLRB’s existence, the agency’s prosecutors allege that SpaceX illegally fired eight workers who wrote an open letter laying out their concerns with the company’s management and culture. The workers specifically cited Musk’s behavior on social media as a problem.

An NLRB complaint alleged that SpaceX interrogated employees about the open letter and pressured them not to distribute it.