On August 29, 2022, the National Labor Relations Board (“NLRB”) reversed Trump-era case law and significantly limited when employers may restrict union insignia on clothing in the workplace.

The case, Tesla, Inc. 370 NLRB No. 131 (2022), arose after Tesla prohibited employees at a manufacturing facility from wearing clothing bearing union insignia during a union organizing campaign.

Tesla maintained a “team-wear policy” that required production associates to wear black clothing imprinted with Tesla’s logo.  Tesla asserted that its dress code protected vehicles by eliminating zippers, buttons, and other damage-causing features.  It also asserted that its dress code aided in “visual management” of employees by having each classification of employee wear a different color.  Production associates were prohibited from wearing clothing with any other logo or emblem, although they were occasionally permitted to substitute the assigned Tesla apparel with all-black clothing with no zippers or other damage-causing features.

During a union organizing campaign in 2017, some employees instead wore black shirts with union logos or slogans.  The substitute clothing did not have zippers or other damage-causing features.  When Tesla began enforcing its team-wear policy and prohibited the union-insignia apparel, the union and some employees filed a charge with the NLRB, claiming that Tesla had interfered with the employees’ rights to express support for a union.

In its decision, the NLRB revived its pre-2019 “special circumstances” analysis for assessing employer dress codes.  Under that analysis, employers presumptively violate the National Labor Relations Act (“NLRA”) when they limit the display of union insignia on employee clothing without establishing “special circumstances” to warrant such a restriction.  The NLRB had previously replaced this analysis with a less stringent standard in its 2019 Wal-Mart Stores, Inc. ruling, but in the new Tesla decision the NLRB expressly and retroactively overruled Wal-Mart Stores.

The NLRB held that this “special circumstances” test must be met even where, as here, the employer has a facially neutral policy requiring its employees to wear uniforms or other designated clothing.  The NLRB noted that special circumstances have been established by employers in prior cases where the display of union insignia would jeopardize employee safety, damage machinery or products, exacerbate employee dissension, or unreasonably interfere with the employer’s public image.

In this case, the NLRB concluded that Tesla’s stated reasons for its team-wear policy—avoiding damage to vehicles and facilitating visual management—did not constitute special circumstances.  With respect to the first reason, the NLRB noted that Tesla’s managers had admitted that the union-insignia clothing had not damaged any vehicles.  With respect to the second reason, the NLRB pointed out that the union-insignia apparel did not interfere with visual management so long as the employees wore the correct color of clothing.

Although the facts of this case are somewhat unique, the NLRB clearly intended its ruling to have wide applicability to employers.  This is evidenced in its discussion of Tesla’s defenses.

  • Tesla argued that it did not prohibit all union insignia, just insignia sewn onto clothing, because employees were permitted to wear union stickers on their clothing. The NLRB dismissed this fact as irrelevant.  It stated that the NLRA entitles employees to use a variety of means of communication to show their support for a union, and that an employer is not allowed to choose which means of communication are available to employees—even if both means are equally effective.
  • Tesla also argued that its team-wear policy was nondiscriminatory because it prohibited all non-company clothing, not just union insignia. The NLRB rejected this argument, finding that a dress code would violate the NLRA if it prevents employees from displaying union insignia, even if the policy was neutrally applied to all nonconforming clothing and did not target union insignia specifically.

The Tesla ruling therefore provides multiple cautionary takeaways for employers:

  • A facially neutral dress code is not necessarily foolproof. An employer will still need to determine whether “special circumstances” exist to justify any restriction on union insignia.
  • The NLRB is ready and willing to assert a broad interpretation of employees’ NLRA rights to communicate support for a union. Employers should be cautious about taking action to limit such communication even in situations unrelated to clothing.
  • An employer should not start enforcing a dress code only after a union organizing campaign has begun. Although this factor was not a focus of the NLRB’s analysis, the timing of Tesla’s decision to ramp up enforcement could be seen as suspect.

In light of this ruling, employers should take care in creating and implementing any uniform or dress code policies.  Employers should consult with counsel prior to taking any disciplinary action in response to perceived violations of such policies, particularly where employee clothing bears reference to labor organizations, unionizing, or other terms or conditions of employment.