SpaceX Forced Workers to Sign Illegal Severance Agreements, Claims NLRB

Elon Musk’s SpaceX has been accused by a U.S. labor agency of requiring employees who were laid off or fired from the rocket and satellite maker to sign unlawful agreements barring them from disparaging the company and joining class-action lawsuits against it.

The complaint, filed late Wednesday by a National Labor Relations Board (NLRB) regional official in Seattle, comes as SpaceX is already facing a separate case before the NLRB and has in turn filed a lawsuit claiming the agency’s structure violates the U.S. Constitution.

SpaceX, based in Hawthorne, California, is accused in the new complaint of requiring separated employees to sign severance agreements with confidentiality and non-disparagement clauses that restrict them from exercising their rights under U.S. labor law, the labor board said in a release on Thursday.

Those provisions are common in severance pacts signed by workers, but the NLRB has said such agreements must make clear that workers cannot waive their rights to advocate for better working conditions or file complaints with the NLRB.

The NLRB said the complaint, which was not immediately available, also alleges that agreements signed by SpaceX employees to bring legal disputes in arbitration rather than court and forego participation in class actions against the company were illegal.

SpaceX did not immediately respond to a request for comment.

An initial hearing in the case is scheduled for October before an administrative judge, whose decision can be reviewed by the NLRB’S five-member labor board appointed by the U.S. president. Board rulings can be appealed in federal court.

The complaint seeks to force SpaceX to rescind the agreements and block it from enforcing agreements already signed by workers.

The company’s lawsuit against the labor board, which is pending in a Texas federal court, stems from a separate case in which the agency claims SpaceX illegally fired eight engineers who circulated a letter that criticized Musk, the company’s CEO and founder, and accused him of sexist conduct.

SpaceX has denied wrongdoing in that case and has argued that the NLRB’s in-house enforcement proceedings violate its constitutional right to a jury trial. The company also says that limits on the removal of board members and administrative judges violate the U.S. Constitution.

Amazon.com, Starbucks, Trader Joe’s and three Starbucks baristas who oppose unions at the stores where they work are making similar claims in pending lawsuits and board cases.

SpaceX has asked a New Orleans-based U.S. appeals court to reconsider its recent decision rejecting the company’s bid to keep its lawsuit in Texas. A judge had transferred the case to California, where SpaceX is based, and the administrative case involving the fired engineers is proceeding there.