Tesla Inc CEO Elon Musk attends the World Artificial Intelligence Conference (WAIC) in Shanghai, China August 29, 2019.
Aly Song | Reuters
Tesla and SpaceX CEO Elon Musk, the world’s wealthiest person on paper, is buying Twitter, the social media platform he has relied on for years to promote his interests and shape his public image.
“Free speech is the bedrock of a functioning democracy, and Twitter is the digital town square where matters vital to the future of humanity are debated,” said Mr. Musk in a statement when the deal was announced Monday.
Musk has characterized himself as a First Amendment and free speech advocate for years, for example, in defending himself in a defamation lawsuit after calling a critic a “pedo guy” (Musk won), and to argue that the SEC infringed on his rights in a settlement agreement they struck and revised after the agency charged him with securities fraud in 2018.
But as The Atlantic, Bloomberg and others have pointed out, Musk’s free speech advocacy seems to apply mostly to his own speech or that of his fans and promoters. TechDirt argues that Musk lacks a serious understanding of free speech and even less about content moderation.
When it comes to his employees’ free speech, Musk demonstrates little tolerance.
Under his leadership, when Tesla has laid off employees, it’s asked them to sign separation agreements including a strong non-disparagement clause with no end-date. These kinds of agreements are not uncommon in the industry, but Musk is far from a free-speech absolutist here.
A copy of one such agreement from Tesla, shared with CNBC by a former employee laid off in 2018 (who did not sign the agreement) said:
“You agree not to disparage Tesla, the Company’s products, or the Company’s officers, directors, employees, shareholders and agents, affiliates and subsidiaries in any manner likely to be harmful to them or their business, business reputation or personal reputation.”
In the same document, Tesla required laid off employees to keep details about the separation agreement itself hidden, other than from their own lawyer, accountant or immediate family– not even other workers.
“The provisions of this Agreement will be held in strictest confidence by you and will not be publicized or disclosed in any manner whatsoever,” the agreement said. “In particular, and without limitation, you agree not to disclose the terms of this Agreement to any current or former Company employee or contractor.”
Like most large companies, Tesla also requires workers to sign an arbitration agreement upon employment. That means to speak freely in court, where their speech will become part of a public record, workers need to get an exemption from the arbitration agreement from a judge first.
Under Musk’s leadership, Tesla scores of workers have alleged racist, sexist and other types of harassment, discrimination and unsafe working conditions. Many have also alleged retaliation after they spoke out about problems.
These allegations have been in the spotlight recently because of a newly revealed probe by the EEOC, and a lawsuit by the California civil rights agency, but the company has a long track record.
In August 2018, a former Tesla security employee, Karl Hansen, filed a complaint with the U.S. Securities and Exchange Commission saying he was wrongfully terminated from his job as an investigator at the company’s battery plant in Sparks, Nevada, after sounding the alarm about the theft of tens of millions of dollars’ worth of raw materials there. Tesla hid the theft from shareholders, he alleged, even though it represented a material amount of money to the automaker at the time.
In November 2020, former Tesla employee Stephen Henkes said he was fired from his job at Tesla on Aug. 3, 2020, after raising safety concerns internally then filing formal complaints with government offices, when the company failed to fix and communicate accurately with customers over what he said were unacceptable fire risks in the company’s solar installations. Both the CPSC and SEC are considering Henkes’ complaints as evidence.
Musk has repeatedly sought control over what journalists, bloggers, analysts and other researchers say about his businesses, their products, and himself.
Memorably, the Tesla CEO berated and cut off an analyst on an earnings call in 2018. “Excuse me, next, next. Boring, bonehead questions are not cool,” the CEO said after a question about his company’s capital requirements. The automaker had just posted its worst quarterly loss in its history. Musk later apologized for this, and now sometimes skips speaking on Tesla earnings calls.
Musk and Tesla have also asked reporters to sign NDAs or show story drafts to the company to obtain approvals before publishing.
He has brazenly called on followers to edit his biography on Wikipedia. “Just looked at my wiki for 1st time in years. It’s insane!” Musk tweeted. “Btw, can someone please delete ‘investor.’ I do basically zero investing,” he said. His legions of followers obliged, editing the page to de-emphasize his investments.
Musk even takes umbrage with fan blogs when they write about Tesla’s shortcomings.
At his direction, Tesla stopped inviting some Electrek staff to company events after the site — which has evolved into more of an electric vehicle blog in recent years — published a story with this headline, Tesla is charging owners $1,500 for hardware they already paid for. The story was accurate if humiliating to Musk because it addresses his company’s failure in the race to deliver autonomous vehicle tech to long-waiting customers.
Musk and Tesla have also sought — not always successfully — to silence customers. For example, Tesla used to compel customers to sign agreements containing non-disclosure clauses as a prerequisite to have their vehicles repaired.
In 2021, Tesla asked customers to agree not to post critically to social media about FSD Beta, an experimental driver assistance software package that some Tesla owners could test out using their own cars and unpaid time to do so.
In an agreement that Tesla sent to drivers earlier this year for FSD Beta access, the company asked them to “keep your experiences in the program confidential” and not to “share any information about this program with the public” including by taking screenshots, creating blog posts, or posting to social media sites.
Tesla named Facebook, Instagram, Reddit, TikTok, Snapchat and YouTube as sites where owners should not share info about their use of FSD Beta, according to a copy of the full agreement obtained by CNBC.
Musk later lifted Tesla’s terms for access to FSD Beta saying nobody was obeying the agreement anyway. But the practice caused a probe by the federal vehicle safety authority, NHTSA.
“Given that NHTSA relies on reports from consumers as an important source of information in evaluating potential safety defects, any agreement that may prevent or dissuade participants in the early access beta release program from reporting safety concerns to NHTSA is unacceptable,” NHSA wrote in a letter to Tesla in October 2021.
Meanwhile, in China, Tesla has sued customers who complained about safety issues with their cars, and sued a social media influencer there for defamation. The influencer, Xiaogang Xuezhang, posted a video demonstrating issues with Tesla’s and another automakers’ automated emergency braking systems.
Tesla and Musk attorneys have also consistently filed confidential treatment requests for legal and business filings in the US.
Among other things, Tesla sought to hide from the public view: vehicle safety information that federal auto regulators sought from the company as a routine investigative practice, and business information Tesla used to apply for tax subsidies from the California Alternative Energy and Advanced Transportation Financing Authority.
Attorneys on behalf of Tesla and Musk have also tried to keep transcripts and videos of employee and executive testimony hidden in cases before the Delaware Chancery court and other courts.
Free speech for me
Musk has certainly exercised free speech rights for himself and his companies.
Recently, he said SpaceX satellite internet service Starlink would keep Russian news sources online, despite what Musk said were calls to block these by un-named governments amid Putin’s brutal invasion of Ukraine.
“Starlink has been told by some governments (not Ukraine) to block Russian news sources. We will not do so unless at gunpoint,” Musk wrote. “Sorry to be a free speech absolutist.”
On the labor front, Musk is also fighting an administrative court ruling which said he must remove a tweet from his feed because it violates workers’ rights. The tweet, posted in 2018, said: “Nothing stopping Tesla team at our car plant from voting union. Could do so tmrw if they wanted. But why pay union dues & give up stock options for nothing?”
At Tesla, Musk has shirked the requirement to have a securities law expert pre-approve some of his tweets before posting them, despite the settlement agreement he struck with the SEC after it charged him with civil securities fraud.
Musk told Lesley Stahl in a 2018 interview that generally his tweets are not supervised, even though a court had ordered him to have some of them pre-approved by securities law compliance experts at Tesla if they contained information likely to impact Tesla’s stock price. During that interview he said, “Hello First Amendment. Free speech is fundamental…”
Assuming he truly believes that, then Musk’s free speech absolutism is only aspirational.
But by controlling the social network, Musk can protect his ability to keep using Twitter to promote his companies, investments and himself, as he wants to be seen.