In Tesla, Inc.[1], the National Labor Relations Board addressed the issue of when and under what circumstances an employer can restrict an employee’s right to display union insignia on clothing in the workplace. Specifically, the Board considered “the standard to be applied to evaluate the lawfulness of workplace rules or policies that restrict the display of union insignia by requiring employees to wear uniforms or other designated clothing, implicitly prohibiting employees from substituting union attire for the required uniform or clothing.”[2]

Fact Summary

Tesla manufactures electric vehicles at its plant in Fremont, California where production associates assemble the vehicles in the General Assembly area. The company has a “team-wear” policy for production associates that specifies the clothing that they must wear in the General Assembly area. The team-wear policy states:

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 supervisor.
• Alternative clothing must be mutilation free, work appropriate and pose no safety risks (no zippers, yoga pants, hoodies with hood up, etc.).[3]

Assigned team-wear for production associates “consists of black cotton shirts with Tesla’s logo and black cotton pants with no buttons, rivets, or exposed zippers.” Production leads and supervisors wear red shirts with the Tesla logo imprinted and line inspectors wear white shirts with the imprinted Tesla logo. Production leads, supervisors and line inspectors wear the same black cotton pants as the production associates.

In the spring of 2017 during a union campaign, production associates began wearing black cotton shirts that had a small union logo on the front and a larger union logo and “UAW” on the back. Prior to August 2017, production associates regularly wore shirts that were not black with non-Tesla emblems and logos. Beginning in August 2017, Tesla started strictly enforcing the team-wear policy, although supervisors and managers sometimes allowed production associates to wear plain black cotton shirts and cover non-Tesla emblems and logos with black tape. Several production associates who wore black shirts with union emblems and logos were told that per the team-wear policy they were not to wear black shirts with non-company logos and emblems and that they would be sent home if they showed up wearing non-team-wear shirts.

The purpose of the team-wear policy is “to aid in the ‘visual management’ of the General Assembly area and to lower the risk of employees’ clothing causing mutilations to the vehicles.”[4] One of Tesla's production managers “described visual management as the ability to easily determine that employees are in their assigned work areas and to distinguish among the different categories of employees in the General Assembly area based on shirt color” although another manager admitted that “he could still visually manage the General Assembly area production associates wore plain black shirts.”[5] Three managers testified that they were not aware of a mutilation to a vehicle caused by a production associate wearing a non-team-wear cotton shirt.

Tesla's team-wear policy was challenged as being in violation of the National Labor Relations Act. The administrative law judge who presided over the unfair labor practice hearing found that the team-wear policy violated Section 8(a)(1) of the act, that “special circumstances” did not justify the policy, and also rejected the argument that the team- wear policy “does not interfere with employees’ Section 7 rights because employees can wear union stickers on their team-wear.”[6] An appealed followed to the Board.

NLRB’s Opinion[7]

The Board began its analysis by reviewing the protections afforded to employees under Section 7 of the Act as well as Section 8(a)(1) which makes “it an unfair labor practice for an employer ‘to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in [S]ection 7.’”[8] The Board noted that the freedom of employees to communicate has been recognized since “the earliest days of the Act” as fundamental to the effective exercise of Section 7 rights.[9] For instance, “[i]n Republic Aviation Corp. v. NLRB, the Supreme Court affirmed that ‘the right of employees to wear union insignia at work has long been recognized as a reasonable and legitimate form of union activity, and the [employer’s] curtailment of that right is clearly violative of the Act.’”[10] However, the court in Republic Aviation Corp., also recognized that the Board was required to “balance ‘the undisputed right of self-organization assured to employees under the act and the equally undisputed right of employers to maintain discipline in their establishments.’”[11] Following the court’s directive in Republic Aviation, the Board noted that it engaged in a balancing of rights: “a presumption that any employer limitation on the display of union insignia is invalid, with the burden on the employer to establish special circumstances to justify its action.”[12] Cases where the Board found special circumstances “that justify employer restrictions on union insignia and apparel … [include] situations, such as ‘when their display may jeopardize employee safety, damage machinery or products, exacerbate employee dissension, or unreasonably interfere with a public image that the employer has established, or when necessary to maintain decorum and discipline among employees.’”[13] The Board explained that it “has treated clothes displaying union insignia the same as union insignia that employees attach to their clothing, such as buttons and pins” and that this “extends to prounion T-shirts.”[14] The Board further explained that an employer cannot avoid application of the "special circumstances" test “by requiring its employees to wear uniforms or other designated clothing, thereby precluding the wearing of clothing bearing union insignia."[15]

Turning to the case before it, the Board found that Tesla’s team-wear policy was “presumptively invalid” since it “interferes with production associates’ Section 7 rights to display union insignia” and as a consequence, Telsa must “establish special circumstances that justify its interference with production associates’ protected right to display union insignia.”[16] The Board then turned to examine the question of whether the company met its burden of establishing special circumstances and found that it had not. While under Board precedent, “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 Board found the company failed to show “that cotton shirts with non-Tesla logos, such as union logos, pose a mutilation risk to the unfinished vehicles in the General Assembly area.”[17] The Board reasoned that the one incident cited by the company where a “raised metal emblem on a shirt once caused a mutilation to a vehicle” did not justify the team-wear policy which went “far beyond simply prohibiting employees from wearing shirts with metal emblems.”[18] Moreover, the team-wear policy was not “narrowly tailored to address Tesla’s claimed interest in maintaining visual management in the General Assembly area,” since testimony from management witnesses indicated the company “could maintain visual management in the General Assembly area as long as production associates are wearing black shirts.” In short, the Board found Tesla “failed to establish special circumstances that justify the team-wear policy’s implicit prohibition on employees wearing black union shirts” and adopted the ALJ’s finding that the company “violated Section 8(a)(1) by maintaining the team-wear policy in its ‘General Assembly Expectations."[19] 

In the course of reaching its decision, the Board overruled its earlier decision in Wal-Mart Stores, Inc.,[20] where the Board held “'[w]here ... the [e]mployer maintains a facially neutral rule that limits the size and/or appearance of union buttons and insignia that employees can wear but does not prohibit them,’ the Board should apply the Boeing standard rather than the Republic Aviation special circumstances test.”[21]

Take Aways

The Board’s decision in Tesla will make it more difficult for employers to prohibit/limit union clothing/insignia in the workplace under the guise of a facially neutral clothing/insignia policy/rule as such policies/rules are now presumptively invalid. To justify the policy/rule and avoid an unfair labor practice finding, employers have the burden of establishing “special circumstances” such as when the display of union insignia “may jeopardize employee safety, damage machinery or products, exacerbate employee dissension, or unreasonably interfere with a public image that the employer has established, or when necessary to maintain decorum and discipline among employees” and must show the policy/rule is narrowly tailored. However, the Board clearly signaled that it will engage in a rigorous, fact-specific inquiry to determine whether the employer actually established the presence of special circumstances in the context of its workplace where employers contend that special circumstances exist for such a policy. Moving forward under the Biden controlled Board, employers can expect that many neutral rules and policies will be looked at with suspicion to see if they could in any way impair an employee’s Section 7 rights.

Rick Bennett is a partner with Farris Bobango Branan PLC. Bennett’s primary areas of practice include labor & employment law, construction law, and general civil and business litigation. He received his undergraduate degree from the University of Tennessee, Martin, and his law degree from the Cecil C. Humphreys School of Law at the University of Memphis. He may be reached at (901) 259-7100 or rbennett@farris-law.com.