On August 29, 2022, the National Labor Relations Board (the Board) issued a major decision in Tesla Inc. that reversed a previous standard set by the Board in 2019. Previously, employers enjoyed substantial discretion to limit alterations to work uniforms or other designated clothing in the workplace. The Board in Tesla Inc. flipped this standard on its head by holding that any limitation on the display of union insignia in the workplace is presumptively unlawful absent a showing of special circumstances that make the limitation necessary to maintain production or discipline in the workplace.
The Board returned to the standard set forth in Republic Aviation by overruling the 2019 decision in Wal-Mart Stores Inc., 368 NLRB No. 146 (2019). In 2019, the Board’s decision in Wal-Mart Stores Inc. created a distinction between rules that completely prohibit the display of union insignia and rules that partially restrict the display of union insignia. Under Wal-Mart Stores Inc., only rules that completely prohibited the display of union insignia were required to prove special circumstances for the necessity of the workplace limitation. A less stringent standard originally set forth in Boeing Co., 365 NLRB No. 154 (2017), applied to the rules that partially restricted the display of union insignia. Under Boeing Co., the Board must balance the following two factors: (1) the nature and extent of the potential impact on rights protected by the National Labor Relations Act and (2) the legitimate justifications of the employer associated with the rule.
The Board’s Wal-Mart Stores Inc. decision, in essence, required resolution of several threshold questions before determining the standard to apply in union insignia cases: Did an employer’s policy prohibit the display of all union insignia, or did it only partially restrict the display of union insignia? If it only partially restricted the display of union insignia, did the case present a facial challenge or an as-applied challenge?
The Board’s decision in Tesla Inc., on the other hand, provides that once any limitation on the employee’s right to display union insignia is established, the relevant inquiry is only whether the employer can establish special circumstances for the limitation. Additionally, the Board held that the limitation on the display of union insignia must be narrowly tailored to address those special circumstances.
In Tesla Inc., the employer’s policy provided for production employees to wear assigned teamwear. With their supervisor’s approval, production employees could substitute teamwear for all-black clothing that was “mutilation free,” was “work appropriate,” and posed no safety risks. The employer’s teamwear policy prohibited production employees from substituting a teamwear shirt with any shirt with a logo or an emblem, including a union insignia. The Board found that the employer’s interference was presumptively unlawful because the teamwear policy restricted the production employees’ ability to display union insignia. Thus, the employer had the burden to establish special circumstances warranting the policy.
In Tesla Inc., the employer attempted to establish special circumstances by showing that it intended to lower the risk of clothing causing mutilations or damage to the employer’s unfinished vehicles. However, the employer did not provide evidence that shirts with nonemployer logos, such as union logos, posed a mutilation risk or a risk to the unfinished vehicles. Second, the employer attempted to establish special circumstances by alleging that the teamwear policy was justified by special circumstances in maintaining visual management of its employees. However, the employer did not provide any evidence that demonstrated special circumstances that justify prohibiting production employees from wearing black union shirts. Therefore, the employer’s teamwear policy was not narrowly tailored to the special circumstances justifying the creation of the rule.
In summary, the Board’s decision in Tesla Inc. will significantly limit employer’s previous abilities to mandate uniforms or other designated clothing in the workplace. Moving forward, the currently constituted Board will require an employer to establish special circumstances to justify restrictions on its employees’ right to display union insignia. The real-world implication of the Tesla Inc. decision is that it provides labor unions with a greater ability to display union insignia on workplace uniforms and attire without the employer having the right to limit such display in the work area. This departs from the more employer-friendly decisions of the previous Board, which attempted to balance employee rights with employer interests in the workplace.
For additional information on Tesla Inc. or other labor and employment issues, please feel free to contact our experienced Labor and employment team at Steptoe & Johnson PLLC.