This week, the National Labor Relations Board (“NLRB” or “Board”) ruled that employers may not stop employees from wearing union insignia in the workplace without good reason. This decision, involving Tesla, Inc.’s dress code policy, is the first of what is sure to be a number of precedent-shifting decisions from Biden’s NLRB.

In a 3-2 decision, the Board reaffirmed longstanding U.S. Supreme Court precedent that employees have the right to display union insignia in the workplace, and held that when an employer interferes in any way with that right, it must prove special circumstances that justify the interference. By so ruling, the Board reversed its 2019 decision in Wal-Mart Stores, Inc., 368 NLRB No. 146, where a then-Republican majority refused to apply the “special circumstances test” to evaluate the lawfulness of a dress code policy that partially restricted the display of union insignia. In the Tesla decision, the Board’s Democratic majority said the Wal-Mart ruling “upset the proper balance struck by the Supreme Court and ignored decades of precedent.”

The case, Tesla, Inc., 370 NLRB No. 131 (Aug. 29, 2022), involved Tesla’s facially neutral dress code policy, which required employees to wear shirts with the company logo or all black clothing. At the time, Tesla employees were in the midst of an organizing campaign with the United Auto Workers Union (UAW) and wanted to wear black shirts with the UAW logo at work. Tesla’s policy effectively prevented employees from wearing shirts with a union logo. The Board held that because Tesla’s policy interfered with employees’ protected right to display union insignia at work, it was required to show special circumstances justifying the policy, which it could not do. Tesla claimed, among other reasons, that the policy was intended to lower the risk of employees’ clothing causing mutilations to unfinished vehicles, but the Board concluded that Tesla did not demonstrate that shirts without the company logo, such as shirts with the union logo, created a mutilation risk. By contrast, the Board has approved of employer restrictions on union insignia and apparel where their display may affect employee safety, damage machinery and products, exacerbate employee dissension, or unreasonably interfere with the public image that the employer has established.

The Board also rejected Tesla’s argument that its policy was lawful because employees could still wear union stickers on their shirts, even though they could not wear shirts with union logos. The Board deemed this fact irrelevant, explaining that an employer’s “willingness to tolerate the display of some union insignia by its employees” does not give it the right to restrict other protected displays of union insignia.

The two dissenting Trump appointees – who were in the Wal-Mart majority – criticized the decision, arguing that the Board’s ruling renders all uniform and dress code policies presumptively unlawful. However, the majority dismissed this criticism and clarified that employers may maintain facially neutral, nondiscriminatory dress codes and uniform policies that implicitly limit or restrict the display of union insignia, so long as they are narrowly tailored to serve a particular, legitimate interest that outweighs the adverse effect on employees’ Section 7 rights.

The Board’s holding in Tesla applies retroactively to all pending cases. Employers are encouraged to review their dress code and uniform policies to ensure that they do not explicitly or implicitly prohibit employees from wearing union buttons, t-shirts, stickers or other insignia in the workplace, absent special circumstances justifying a prohibition.

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