In August 2022 the National Labor Relations Board issued its decision in Tesla, Inc.,holding that an employer bears the burden of proving “special circumstances” if it “interferes in any way with its employees’ right to display union insignia.” (Emphasis in original.)

Last month, the U.S. Court of Appeals for the Fifth Circuit held that the Board exceeded its authority in Tesla and refused to enforce its order. However, because the Board normally acquiesces only to decisions from the U.S. Supreme Court, it is likely to continue to apply its Tesla holding in all future cases.

Even if employers in the Fifth Circuit states of Louisiana, Mississippi, and Texas were to have a reprieve on uniform policies, the rest of you do not.

Tesla’s neutral policy on employee uniforms

Pursuant to its Team Wear Policy, Tesla requires all production employees working on the assembly of vehicles to wear company-issued black cotton shirts and pants bearing the Tesla name and logo. Production leads and inspectors are required to wear otherwise identical red and white cotton shirts.

According to Tesla, its Team Wear Policy serves two legitimate, non-discriminatory business interests. It protects against “mutilations” (their word, not mine) of the paint on new vehicles and facilitates “visual management” of employees, since it allows leads to ensure that employees are in their proper work areas based on the color of their shirts.

During a United Auto Workers campaign to unionize Tesla’s employees, the company allowed production associates to affix any number or size of union stickers to their black, company-issued shirts. But it refused to allow employees to wear union shirts, including black cotton ones.

Despite their ability to wear as many union stickers on their Tesla-issued shirts as they wanted, some production associates refused to comply with the Team Wear Policy and insisted on wearing black cotton shirts bearing the message “Driving for a Fair Future at Tesla” on the front, and “UAW” on the back. (What a surprise.) Those employees were told that if they wore the union shirts again, they would be sent home. (Not a surprise.)

Charges were filed, a trial was held, and the newly reconstituted Biden Board (with three Democrat and two Republican members) swung the labor law pendulum to the left.

The “special circumstances” and “balancing of interest” tests. The difference is significant.

In Wal-Mart Stores, Inc., the Trump-era Board held that a facially neutral dress code policy, which limited the size or appearance of union insignia but did not prohibit it, was not presumptively unlawful. As a result, an employer did not need to prove special circumstances to justify such a policy. Instead, the facially neutral policy and any restrictions on the display of union insignia were evaluated by balancing the legitimate interests of the employer with those of the employees.

Trust me. Although that may sound like a distinction without much significance, there is a big difference between being the bearer of a burden and a contributor to a balancing act.

In Tesla the Board overruled Walmart and declared that all employer uniform and dress code policies are presumptively unlawful because they inherently “interfere” with an employee’s ability to wear union apparel and insignia, even if they do not prohibit it.

The fact that Tesla’s Team Wear policy was facially neutral, non-discriminatory, and consistently applied – and permitted the wearing of union stickers – was deemed irrelevant to the Board’s analysis. As the Board saw it, (1) an employer is not free to interfere with one statutorily protected means of communication, like wearing a T-shirt, because some alternate means, like stickers, remains unrestricted; and (2) “it does not lie in the mouth of the employer” to tell a union or the employees how to exercise their rights. (Ouch!)

What are “special circumstances”?

In Tesla, the Board recognized the following as special circumstances that could justify an employer’s restrictions on the wearing of union insignia and apparel: “when their display may jeopardize employee safety, damage machinery or products, exacerbate employee dissension, unreasonably interfere with a public image that the employer has established or when necessary to maintain decorum and discipline among employees.”

As for the public image circumstance, the Board cited to a case that yours truly tried and won more than 20 years ago. (Back then, I was a traditional labor lawyer, had yet to morph into an employment litigator, and had a lot more hair on my head.) That case took several weeks to prepare for trial, nearly a week to try, and was no slam dunk even though the employer had spent millions of dollars for uniforms and training designed to project a specific corporate image.

The lesson of that story is that claiming special circumstances is not the same as proving them.

It’s not just about unions

For those of you whose employees are not represented by a union, or who are not embroiled in a union campaign, you should not think that your dress code or uniform policy is immune from the reach of Tesla.

The National Labor Relations Act also protects against employer interference with an employee’s right to engage in protected concerted activities. Those activities include complaints about wages, hours, and working conditions.

If several of your employees show up for work one day wearing T-shirts containing snarky comments about the lack of heat in the shop, low wages, or any other term or condition of their employment, and you terminate them for failure to comply with your uniform policy, you could find yourself needing to prove special circumstances or being required to reinstate them with back pay.

Even if your business is in Louisiana, Mississippi, or Texas, you probably should stop, listen, and look both ways before letting that discipline train leave the station.


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