On Monday, August 29, 2022, a five member panel of the National Labor Relations Board (the “Board”) reversed course on prior precedent and held that Tesla, Inc. (“Tesla”) violated Section 8(a)(1) of the National Labor Relations Act (“NLRA”) by maintaining a “team-wear” policy that, under the Board’s opinion, was unjustified under Supreme Court precedent. The opinion, Tesla, Inc., 370 NLRB No. 88 (2021) reversed course on a 2019 Board decision, Wal-Mart Stores, Inc., 368 NLRB No. 146 (2019), to come to this conclusion.
The Board relied on the precedent set forth in Republic Aviation Corp. v. NLRB, 324 U.S. 793 (1945), to hold that Tesla’s dress policy violated Section 7 of the NLRA. In Republic Aviation Corp. the United States Supreme Court held that an employer caries the burden to establish that “special circumstances” must exist for an employer “to justify … any restriction on the important Section 7 right to display union insignia.”
The policy in question was implemented by Tesla in 2017. The new policy required employees to wear specific assigned work wear, consisting of “black cotton shirts with the Respondent’s logo and black cotton pants with no buttons, rivets, or exposed zippers.” Prior to implementation of the policy, the Board found that employees “regularly wore shirts that were not black or had logos and emblems unrelated to [Tesla].” However, in 2017, during a United Automobile Workers organization campaign, certain employees began substituting their company issued black t-shirt with one containing a small logo on the front with the union’s campaign slogan on the back. Tesla required employees who violated the new policy to change or face discipline.
In its decision, the Board held 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.” “[A]ny attempt to restrict the wearing of union clothing or insignia is presumptively unlawful and – consistent with Supreme Court precedent – an employer has a heightened burden to justify attempts to limit this important right.” This reversal departs from the Wal-Mart precedent, established in 2019, that held the “special-circumstances” test applies only when an employer completely prohibits union insignia, and that lesser size-and-appearance restrictions on union insignia could be deemed lawful based on less compelling employer interests.
Under Section 7 of the NLRA, employees have a right to communicate with each other regarding self-organization. This right, under Board law, extends to the ability to display union insignia. However, employers have a right to enforce reasonable, nondiscriminatory apparel rules. Under Tesla, Inc. and the Supreme Court precedent in Republic Aviation, those rights must be balanced through a “special circumstances” analysis. In any case, to avoid extra scrutiny, an employer should avoid making wholesale dress code policy changes while in the midst of a union campaign.