In a recent 3-2 decision titled Tesla, Inc., the National Labor Relations Board (NLRB) ruled that workplace policies restricting the wearing of union insignia or apparel are presumptively unlawful, even if those policies are neutral on their face—absent "special circumstances." In so doing, the NLRB expressly overruled its prior decision in Wal-Mart Stores, Inc., which held that the so-called special circumstances test applied only when an employer completely prohibited any display of union insignia and permitted employers to impose certain size and appearance restrictions on union insignia based on less compelling employer interests. The NLRB's majority's opinion in Tesla concluded that Wal-Mart was not only inconsistent with the Supreme Court's holding[1] that employees have a protected right to display union insignia under Section 7 of the National Labor Relations Act ,[2] but also that Wal-Mart ignored decades of NLRB precedent finding that any limit on the display of union insignia is presumptively unlawful. Accordingly, the Tesla majority proclaimed that it was "reaffirming" that "when an employer interferes in any way with its employees' right to display union insignia, the employer must prove special circumstances that justify its interference." In light of the NLRB's new guidance, it is imperative that employers review their workplace dress code policy to ensure it remains lawful under the special circumstances test detailed in Tesla.

Background on the Tesla Decision

Tesla maintained the following team wear policy for its production associates working at the General Assembly facility at its Freemont, California manufacturing plant:

Team Wear: It is mandatory that all Production Associates and Leads wear the assigned team wear.

  • On occasion, team wear may be substituted with all black clothing if approved by the supervisor.
  • Alternative clothing must be mutilation free, work appropriate and pose no safety risks (no zippers, yoga pants, hoodies with hood up, etc.)

For production associates, the team wear consisted of black cotton shirts with Tesla's logo and black cotton pants with no buttons, rivets, or exposed zippers. During a United Auto Workers (UAW) organizing campaign at the General Assembly facility, employees, including production associates, began wearing black cotton shirts that had a small logo with the UAW's campaign slogan—"Driving a Fair Future at Tesla"—on the front and a larger logo with that slogan and "UAW" on the back.

Concurrently with the UAW's organizing drive, Tesla began to strictly enforce its team-wear policy by having supervisors and managers audit production associates during startup meetings and "walk the line" to ensure compliance with the team-wear policy. The UAW filed an unfair labor practice charge, which claimed the policy interfered with the production associates' exercise of their Section 7 rights to organize, among other alleged violations of the National Labor Relations Act.

The Tesla majority found that the specific apparel requirements of the team-wear policy prohibited production associates from substituting any shirt with a logo or emblem, including a shirt bearing union insignia, for a team-wear shirt. Thus, the majority concluded that the team-wear policy restricted production associates' ability to display union insignia and thus imposed on the employer the burden to establish special circumstances.

"Special Circumstances" Under Tesla

Tesla sought to establish that the team-wear policy was justified by special circumstances because it was intended to lower the risk of employees' clothing causing mutilations to the unfinished vehicles and to aid its supervisors in the visual management of the production associates working in General Assembly. While the majority opinion acknowledged that an employer can establish special circumstances that justify restrictions on the display of union insignia if their display may cause damage to the employer's products, the majority was unpersuaded that Tesla had established that cotton shirts with non-company logos, such as union logos, posed a mutilation risk to the unfinished vehicles on which the production assistants worked. The only evidence Tesla produced of any shirt being involved in a mutilation was testimony of a production manager that a raised metal emblem on a shirt once caused a mutilation to a vehicle.

The NLRB majority thus concluded that, at most, Tesla had shown that it has a legitimate interest in preventing raised metal emblems on shirts from causing mutilations to vehicles. That was deemed insufficient justification, however, based on the majority's finding that the team-wear policy went far beyond simply prohibiting employees from wearing shirts with metal emblems and thus was not narrowly tailored to address that concern as required under the special circumstances test. Similarly, the majority found that the team-wear policy was not narrowly tailored to address the Tesla's claimed interest in maintaining visual management of production associates working in General Assembly, even assuming special circumstances could be established on that basis. Noting that Tesla's production manager testified that it could maintain visual management of the workers in General Assembly as long as production associates are wearing black shirts, the majority determined that although Tesla may have a legitimate interest in requiring production associates to wear black shirts, it had not demonstrated special circumstances that would justify prohibiting production associates from wearing black union shirts.

Although the NLRB acknowledged broad categories of cases in which employers have established special circumstances that justify restrictions on the display of union insignia,[3] it put employers squarely on notice that, in all future cases involving limits on displaying union insignia, the NLRB would engage in a rigorous, fact-specific inquiry to determine whether the employer actually established special circumstances in the context of its particular workplace.

Reviewing Your Company Dress Code Policy After Tesla

Following the NLRB's decision in Tesla, employers that maintain strict workplace dress code policies should review such policies to determine whether they can be interpreted to implicitly prohibit employees from displaying union insignia or wearing union attire or other adornments (pins, buttons, placards, etc.). If so, an employer that intends to keep such a policy in force (and intends to rely upon that policy to ban the wearing of union insignia or attire) is well advised to promptly identify the particular factually based justifications it would assert to establish "special circumstances" under the NLRB's guidance. Employers seeking to maintain such a policy should also consider obtaining a thorough comparative legal analysis of the applicable "special circumstances" justifications and prospects for success before attempting to enforce the policy and risking an unfair labor practice charge.[4]

Beyond its importance for those employers that choose to maintain workplace dress code policies, the NLRB's Tesla decision serves as a timely reminder to non-union employers during the current significant increase in union organizing activity across the country that imposing any restrictions on the display of pro-union insignia, pro-union t-shirts, "Vote Yes!" buttons, etc. and similar attire and adornments is presumptively unlawful in the absence of "special circumstances" and the non-discriminatory application of such restrictions.

Moreover, the Tesla decision further reminds and instructs both unionized and non-union employers alike that Section 7's protection also extends to attire and adornments that are unrelated to labor organization activity but nevertheless implicate the right of employees "to engage in other concerted activities for the purpose of … other mutual aid or protection." As an example, the NLRB referenced its decision upholding employees' right to wear a "Fight for $15" pin that supported a campaign to raise the minimum wage to $15 per hour. Indeed, an equally valid example with particular current resonance for many employers would be presented by employees wearing t-shirts or buttons protesting their employer's post-pandemic return to in-person work policies and directives.

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The bottom line: The NLRB's Tesla decision is one that all employer labor relations and human resource personnel will want to familiarize themselves with.