Tesla violated US labor law by implicitly banning employees from wearing shirts with union insignias, the National Labor Relations Board ruled yesterday. In addition to ruling that Tesla broke the law, the NLRB overturned a Trump-era decision in a similar case involving Walmart.

The NLRB's 3-2 decision went along party lines, with Republicans dissenting. The Democratic majority said it "found that it was unlawful for Tesla to maintain a policy requiring employees to wear a plain black T-shirt or one imprinted with the employer's logo, thus prohibiting employees from substituting a shirt bearing union insignia." Tesla's strict enforcement of the policy began in 2017, shortly after employees started wearing union shirts in a Fremont, California, factory.

Such "interference is presumptively unlawful, and the employer has the burden to establish special circumstances that make the rule necessary to maintain production or discipline," the NLRB said. The majority further ruled "that Tesla failed to establish special circumstances in this case."

The NLRB ordered Tesla to rescind its team-wear policy or revise it "to make clear that it does not prohibit production associates from wearing black union shirts." Tesla must also notify all current employees of the change and post copies of an NLRB notice at its Fremont facility. The required notice to employees says the NLRB found that Tesla violated federal labor law and advises employees of their rights.

NLRB Chairman Lauren McFerran issued a statement:

Wearing union insignia, whether a button or a T-shirt, is a critical form of protected communication. For many decades, employees have used insignia to advocate for their workplace interests—from supporting organizing campaigns, to protesting unfair conditions in the workplace—and the law has always protected them. With today's decision, the Board reaffirms that any attempt to restrict the wearing of union clothing or insignia is presumptively unlawful and—consistent with Supreme Court precedent—an employer has a heightened burden to justify attempts to limit this important right.

Advertisement

Trump-era ruling “ignored decades” of precedent

The new ruling said the board's 2019 decision, which found that Walmart's dress code for the selling floor was legal, "upset the proper balance struck by the Supreme Court in Republic Aviation, ignored decades of Board precedent holding that any limitation on the display of union insignia is presumptively unlawful regardless of whether an employer permits other related Section 7 [of the National Labor Relations Act] activity, and created uncertainty in this previously well-settled area of the law."

The NLRB said it thus overruled the Walmart decision and reaffirmed that "when an employer interferes in any way with its employees' right to display union insignia, the employer must prove special circumstances that justify its interference." Applying that standard here, the NLRB decided that "Respondent [Tesla] violated Section 8(a)(1) of the Act by maintaining its team-wear policy, which requires employees to wear shirts imprinted with the Respondent's logo and implicitly prohibits employees from substituting any shirt with a logo or emblem, including a shirt bearing union insignia, for the required team wear."

The now-reversed 2019 ruling on Walmart "held that the 'special-circumstances' test applies only when an employer completely prohibits union insignia, and that lesser size-and-appearance restrictions on union insignia could be deemed lawful based on less compelling employer interests," the NLRB said. The earlier decision said Walmart violated the law by enforcing its policy in areas other than the selling floor, but that it had legitimate justifications for maintaining the policy in customer-facing areas.

We contacted Tesla about yesterday's NLRB ruling and will update this article if we get a response.