On Wednesday, the National Labor Relations Board filed suit against Elon Musk’s company SpaceX, alleging that he illegally dismissed eight employees for calling Musk “a source of embarrassment” in an 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 overcome 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 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.
“Finally we get to use Elongate as a scandal name.”
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 were 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 harassment 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.
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