The US National Labor Relations Board has held Tesla’s dress code, which has the effect of preventing certain workers from wearing clothing supporting their union, is not lawful. The ruling confirms employers must show ‘special circumstances’ for dress codes that directly or indirectly outlaw union insignias.
On 29 August 2022, in a 3-2 decision, the US National Labor Relations Board (NLRB or Board) reaffirmed 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 reaching this decision, which concerned dress rules imposed on Tesla employees, the Board overruled a 2019 decision in which it held that the ‘special circumstances’ standard only applied to employer policies that prohibited rather than restricted an employee from displaying union insignia.
Tesla’s dress code required certain employees to wear black shirts with Tesla’s logo. Although these employees were not allowed to wear black union shirts in lieu of the required uniform, the employees were allowed to wear union stickers on their uniforms.
Tesla supported this dress code on two grounds. First, as these employees helped assemble electric vehicles, Tesla maintained that the uniforms would lower the risk of employees’ clothing causing damage to the vehicles. Second, Tesla claimed that the required uniforms assisted in the visual management of the workplace by allowing managers to easily determine that employees were in their assigned work areas and to help distinguish among the different types of employees based on their shirt colour.
Previous decisions on union insignia
In analysing the lawfulness of Tesla’s dress code, which restricted the display of union insignia by requiring employees to wear specific shirts (thereby implicitly precluding employees from wearing union shirts), the Board focused on three previous decisions involving union insignia.
First, the Board addressed the 1945 decision by the Supreme Court of the United States in Republic Aviation Corp. v. NLRB, 324 U.S. 793 (1945), which affirmed that employees have a protected right to display union insignia under the National Labor Relations Act (NLRA). This case established the principle that any employer limitation on the display of union insignia is presumed to be invalid. The burden is on the employer to show that special circumstances exist to justify its interference with the employees’ statutorily protected rights.
Second, the Board looked to its 2010 decision in Stabilus, Inc., 355 NLRB 836 (2010), which involved an employer’s uniform policy that required employees to wear shirts with the employer’s name. Although the Board invalidated the employer’s policy in Stabilus on other grounds, the Board noted that employers cannot avoid the ‘special circumstances’ test by requiring employees to wear uniforms that preclude them from wearing clothes with union insignia.
Third, the Board reviewed its 2019 decision that applied a more employer-friendly standard than the ‘special circumstances’ test when addressing an employer’s facially neutral policy that limited the size and appearance of union insignia on employee clothing but did not prohibit it.
The Board’s decision in Tesla
The Board recognised that Tesla’s policy that implicitly prohibited employees from wearing union shirts in place of the required shirts interfered with employees’ protected right to display union insignia. The Board found that, under Republic Aviation and Stabilus, Tesla’s policy was presumptively invalid and that Tesla had the burden to establish that special circumstances were present to justify this.
When applying the ‘special circumstances’ requirement to Tesla’s dress code, the Board found that Tesla failed to establish that either of its justifications for its dress code warranted its implicit prohibition on employees wearing union shirts.
First, Tesla introduced insufficient evidence to show that union shirts posed a risk of damage to the vehicles. Second, there was no evidence that the black shirts required under the dress code helped Tesla to maintain visual management in the workplace any more so than black union shirts. Thus, the Board concluded that Tesla’s dress code violated the NLRA.
In reaching its decision to apply the ‘special circumstances’ test in Tesla, the NLRB made two significant determinations. First, the Board rejected the argument that a facially neutral, non-discriminatory dress code that requires employees to wear specific clothing should be lawful as long as it provides employees with a ‘meaningful opportunity’ to display some union insignia. In rejecting this position, the Board found Tesla cannot restrict one form of protected communication simply because it allowed its employees to wear other union insignia, such as stickers, on their uniforms. The Board felt this was irrelevant to whether the Board should apply the ‘special circumstances’ test to a policy that implicitly prohibited employees from wearing union shirts.
Second, the Board overruled its 2019 decision that distinguished between workplace rules that completely prohibit the display of union insignia and rules that only partially restrict the display of union insignia. In the 2019 case, the NLRB found that the ‘special circumstances’ test does not apply to rules that partially restrict, as opposed to completely prohibit, the display of union insignia. In Tesla, however, the Board reasoned that the distinction made in the 2019 case was contrary to Republic Aviation and decades of Board and court precedent.
Employers‘ bottom line
The Board’s decision in Tesla makes it clear that the Board will not distinguish between workplace rules that completely prohibit the display of union insignia and rules such as Tesla’s that merely partially restrict the display of union insignia.
This means an employer’s dress code that requires its employees to wear uniforms, which implicitly prohibits employees from wearing union clothes, but allows for employees to wear other union insignia such as pins, buttons, and stickers on their uniforms, will be subject to the same standard as outright bans on wearing union insignia. In each instance, the employer will be required to justify its dress code by special circumstances.
Employers should ensure that any dress codes that are currently in effect and any dress codes that employers may consider issuing satisfy the ‘special circumstances’ requirement. Establishing whether special circumstances exist to support the employer’s policy is based upon the specific circumstances existing in the employer’s workplace.
Tesla, Inc., 32-CA-197020, 371 NLRB 131 (2022)