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On Wednesday, the National Labor Relations Board filed suit against Elon Musk's company SpaceX, alleging that it illegally dismissed eight employees for calling Musk "a source of embarrassment" in a open letter to their colleagues. The day after the NLRB filed its suit, Musk returned fire with a lawsuit that questions the procedures and legitimacy of the NLRB itself.
Whatever the result of either suit, Musk--as he so often has lately--is providing a perfect lesson in how not to lead. He's allowed his ego and love of the limelight to supercede the welfare of his employees and his company, not to mention basic common sense. It's a lesson in the dark side of being a super-successful founder, and every entrepreneur and business leader should take note.
To properly understand this saga, you have to go all the way back to 2016 when Musk was traveling on a SpaceX corporate jet. According to reports, a contract flight attendant on the flight had been been encouraged by her superiors to become licensed as a massage therapist so she could give Musk massages while in flight. She did, and during one massage, she alleged in a subsequent complaint, he exposed his erect penis to her, rubbed her leg without permission, and offered to buy her a horse if she would "do more." She refused--and soon found her hours cut back.
Almost no one knew about any of this at the time. The flight attendant hired a lawyer and filed a complaint with SpaceX's HR department. They wound up in a mediation session which Musk also attended, and the flight attendant was paid a settlement of $250,000 in return for her agreement not to sue and her signature on a non-disclosure agreement.
That might have been the end of the story, but in 2022, Insider learned about and reported on the agreement. Musk's response was to deny it ever happened (leaving open the question of why his company would pay to silence a baseless claim). He joked about it on Twitter, crowing that "Finally we get to use Elongate as a scandal name. It's kinda perfect."
His responses didn't sit well with at least some SpaceX employees, particularly in light of reports from multiple women who interned at the company that sexual harassment was widespread and that reporting it to HR accomplished nothing. One wrote in an essay that in her two years as an intern, "countless men made sexual advances toward me."
At the time, SpaceX COO Gwynne Shotwell appeared to take the complaints very seriously, encouraging anyone who'd been harrassed to speak up. "We can't fix what we don't know," she reportedly wrote in an email to employees, adding that all reports of misconduct would be thoroughly investigated, with "appropriate action" taken if the company's harrassment policies were violated. Musk's public mocking of the harrassment claims against him sent the opposite message, many employees felt.
So they drafted an open letter to the company. "Elon's behavior in the public sphere is a frequent source of distraction and embarrassment for us, particularly in recent weeks," they wrote. And they called for the company to "publicly address and condemn Elon's harmful Twitter behavior."
SpaceX's reaction to the letter was swift and harsh. Five of the letter's authors were fired immediately, and three more shortly thereafter. SpaceX VP Jon Edwards reportedly called a meeting of engineers in which he told them that Musk, as CEO, could do whatever he wanted. Someone asked if that included sexually harrassing employees, and Edwards apparently did not respond.
Once again, that might have been the end of the story. But on Wednesday, the NLRB filed suit against SpaceX, alleging that the firings violated employees' rights to push for better conditions under the National Labor Relations Act. SpaceX's countersuit claims that the NLRB's procedures, which include holding hearings before its own administrative law judges, are unconstitutional and amount to a conflict of interest.
While it will be entertaining for the rest of us to watch these twin lawsuits play out, none of this is good for SpaceX. A company that should be justly famous for its groundbreaking spaceflight accomplishments instead now bears a reputation for unfettered sexual harrassment and for firing employees who speak their minds.
It's a classic--if extreme--case of a founder pumped up on his own success putting ego and petulance ahead of the interests of his company. Musk, one of the richest people in the world, can afford to pay pretty much any fine, so even if the NLRB wins its suit, it may not bother him very much. More disturbing, he doesn't seem to care about the welfare or morale of his company's employees. That's something few business leaders can get away with. Whatever you do, don't make the same mistake.
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Elon Musk Fired 8 Employees Who Said He Caused "Embarrassment." It's a Masterclass in What Not to Do
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06.01.2024
Valentine's Day Off, Gender-Affirming Care, and a Free Lunch: The Top Benefits Employees Want in 2024
5 Documentaries for Business Owners at the 2024 Sundance Film Festival
15 Founders Share Their 2024 New Year's Resolutions
Don't Count on a Venture Funding Rebound in 2024
How to Make Your Hybrid Workplace More Efficient in 2024
5 Ways New Tax Changes Could Affect Small-Business Owners in 2024
The Most Important Business Book of the Year: 'How Big Things Get Done'
On Wednesday, the National Labor Relations Board filed suit against Elon Musk's company SpaceX, alleging that it illegally dismissed eight employees for calling Musk "a source of embarrassment" in a open letter to their colleagues. The day after the NLRB filed its suit, Musk returned fire with a lawsuit that questions the procedures and legitimacy of the NLRB itself.
Whatever the result of either suit, Musk--as he so often has lately--is providing a perfect lesson in how not to lead. He's allowed his ego and love of the limelight to supercede the welfare of his employees and his company, not to mention basic common sense. It's a lesson in the dark side of being a super-successful founder, and every entrepreneur and business leader should take note.
To properly........
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