The 5th Circuit Court of Appeals has vacated the National Labor Relations Board’s (NLRB) 2022 ruling in Tesla, Inc. that held that the electric vehicle manufacturer violated the National Labor Relations Act (NLRA) by prohibiting employees from replacing their company-issued uniform shirts with pro-union t-shirts. In a Nov. 14, 2023 decision, the unanimous 5th Circuit panel ruled Tesla’s uniform policy lawful and reaffirmed the NLRB’s longstanding position that employees must be permitted to display union insignia at work subject to limits if justified by special circumstances. The court went on to admonish the NLRB’s Tesla, Inc. decision for overstepping the agency’s authority and going “well beyond the scope of the NLRA . . . to declare all uniforms and dress codes presumptively unlawful.”
The 5th Circuit’s ruling represents a brief reprieve for employers that have spent much of the last three years scrambling to interpret, digest and comply with a barrage of union-friendly federal labor policy rulings.
Tesla’s uniform policy required its production associates — who work on cars susceptible to abrasions and scratches due to their uncured paint — to wear Tesla-issued all-black clothing known as “Team Wear” while working. The Team Wear policy was intended to minimize vehicle damage and to ease identification of production associates as distinct from production leads and inspectors, who wore different-colored shirts.
In spring 2017, in support of the United Auto Workers’ (UAW) campaign to unionize Tesla employees, some workers replaced the required Team Wear shirts with black t-shirts bearing the UAW logo and campaign slogan. The company permitted the UAW shirts until August 2017, when it began more strictly enforcing the uniform requirement after discovering vehicle damage the company believed may have been caused by the UAW apparel. Employees were required to wear company-issued shirts but allowed to affix union stickers to their Team Wear. The UAW challenged Tesla’s enforcement of the dress code, and the NLRB ruled that Tesla’ uniform policy violated the NLRA by prohibiting workers from wearing union t-shirts without special circumstances justifying the restriction.
The 5th Circuit rejected the NLRB’s conclusion that the Team Wear policy necessarily limited employees’ right to display union insignia, because Tesla permitted employees to affix stickers and other forms of insignia on their uniforms. It elaborated in a footnote to the opinion:
[E]mployees could stencil union designs onto their Team Wear or could put as large a sticker, and as many stickers, on the shirts as they wanted. In other words, whatever insignia employees wanted to add to their Team Wear attire, they could; they just had to wear Team Wear . . . We may have concluded differently had Tesla prohibited union insignia, but merely requiring certain attire and permitting the addition of insignia do not run afoul of Section 7.
The court criticized the NLRB for ignoring decades of federal labor law precedent directing the agency to balance employees’ right of self-organization with employers’ right to maintain order in the workplace: “The [NLRB] has not ‘balanc[ed] the conflicting legitimate interests’ – instead, it has elevated employee interests at the expense of legitimate employer interests.” The panel further rebuked the NLRB’s Tesla, Inc. rule that all employer uniform or dress codes are presumptively unlawful as “irrational” and an impermissible overstep of the agency’s authority, writing, “[C]ongress likely would not have intended to permit such a major decision without clearer statutory indication.”
The appeals court decision is binding only in the 5th Circuit, but could complicate court enforcement of other NLRB decisions ruling unlawful employer restrictions on employee display of union insignia.
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