NLRB Reaffirms Employees' Rights to Wear Union Clothing, Buttons, and Insignia Absent Special Circumstances, Overrules Recent Contrary Precedent | Practical Law

NLRB Reaffirms Employees' Rights to Wear Union Clothing, Buttons, and Insignia Absent Special Circumstances, Overrules Recent Contrary Precedent | Practical Law

In Tesla, Inc., the National Labor Relations Board (NLRB) held that the Republic Aviation Section 7 rights-legitimate business interest balancing test and its special circumstances exception must be applied to analyze the lawfulness of dress codes or uniform policies, even when those are content neutral and do not wholly prohibit the wearing of pro-union clothing, buttons, stickers, or insignia.

NLRB Reaffirms Employees' Rights to Wear Union Clothing, Buttons, and Insignia Absent Special Circumstances, Overrules Recent Contrary Precedent

by Practical Law Labor & Employment
Law stated as of 17 Nov 2023 • USA (National/Federal)
In Tesla, Inc., the National Labor Relations Board (NLRB) held that the Republic Aviation Section 7 rights-legitimate business interest balancing test and its special circumstances exception must be applied to analyze the lawfulness of dress codes or uniform policies, even when those are content neutral and do not wholly prohibit the wearing of pro-union clothing, buttons, stickers, or insignia.
On August 29, 2022, in Tesla, Inc., the panel (Board) heading the NLRB's judicial functions considered the proper standard for evaluating the lawfulness of workplace rules or policies that restrict employees' right under Section 7 of the NLRA to display union insignia, including facially neutral, nondiscriminatory uniform rules or other dress code requirements that implicitly prohibit certain types of union attire. In a 3-2 decision, the majority (Chairman McFerran and Members Wilcox and Prouty):
  • Reaffirmed the long-standing principle established by the US Supreme Court's decision in Republic Aviation Corp. v. NLRB and its progeny that any restriction on the display of union insignia in the workplace is presumptively unlawful absent the employer's demonstration of special circumstances justifying the restriction (324 U.S. 793, 801 (1945)). The special circumstances test applies even where the restriction results from the application of a nondiscriminatory, consistently enforced uniform policy or dress code, rather than an express prohibition on union insignia or apparel (see Stabilus, Inc., 355 N.L.R.B. 836, 838 (2010)).
  • Rejected the argument advanced by the dissent that an employer with a facially neutral, nondiscriminatory dress code that limits the display of certain types of buttons, stickers, or insignia, such as based on their size, may not violate Section 8(a)(1) if employees retain a "meaningful opportunity" to display union insignia through some other means, noting that this argument was rejected in Republic Aviation and by federal circuit courts and the Board consistently thereafter.
  • Overruled the Board's recent decision in Wal-Mart Stores, Inc., in which the Board declined to apply the special circumstances test and instead evaluated the lawfulness of the employer's dress code policy under the less restrictive analysis established in Boeing Co. for facially neutral employer policies because the restriction did not have the effect of wholly prohibiting union buttons and insignia (368 N.L.R.B. No. 146 (Dec. 16, 2019); for more information, see Legal Update, Applying Boeing, Dress Code Policy Limiting Certain Union Insignia Lawful in Customer Areas, Unlawful Outside Selling Floor: NLRB). Specifically, the Board held that Wal-Mart Stores:
    • was fundamentally inconsistent with Republic Aviation and decades of Board precedent applying the special circumstances test; and
    • created unnecessary uncertainty in this previously well-settled area of the law.
  • Held that the overruling of Wal-Mart Stores applies retroactively, consistent with usual Board practice.
  • Concluded that the employer in the instant case failed to establish special circumstances that justified its team-wear policy's implicit prohibition on wearing shirts bearing union insignia, and therefore violated Section 8(a)(1) of the NLRA by maintaining the policy.
Members Kaplan and Ring dissented.
(371 N.L.R.B. No. 131 (Aug. 29, 2022).)
Tesla makes clear that the Board will analyze any prospective employer interference with employees' Section 7 right to display clothing with union messages or buttons, stickers, and insignia under the Republic Aviation balancing test and require employers to demonstrate special circumstances for even content-neutral limits. The decision clarifies that the Boeing analysis for facially neutral work rules and employment policies does not apply to dress or uniform policies potentially restricting employees from wearing Section 7 related expressive clothing and accessories, such as buttons, pins, or stickers. The Board presumes these kinds of restrictions violates Section 8(a)(1) of the NLRA and requires employers to justify their restrictions by showing special circumstances on a case-by-case basis.

UPDATE

On November 14, 2023, the Fifth Circuit held that the Board's ruling in Tesla failed to balance properly the competing interests of employees' self-organization and employers' right to maintain discipline in their establishments and relied on precedent involving dissimilar facts. The court therefore held that the Board's ruling rested on erroneous legal foundations and had no reasonable basis in law. The court also concluded that the Board exceeded its statutory authority under the NLRA because the statute does not authorize the NLRB to deem all company uniforms presumptively unlawful. The Fifth Circuit granted Tesla's petition for review, denied the NLRB's cross-application for enforcement, and vacated the Board's opinion. The Fifth Circuit would therefore reinstate the Board's decision in Wal-Mart Stores, which the Board overruled in Tesla (for more information on the NLRB's decision in Tesla, see 2022 Traditional Labor Law Developments Tracker: Section 8(a)(1): Employer Interference with Employees' Exercise of Section 7 Rights). However, it is unlikely that the NLRB will acquiesce to the Fifth Circuit's intention for it to reinstate Wal-Mart’s analysis. Wal-Mart applied the Boeing framework to a content neutral dress code policy, which framework the Board overruled in Stericycle (372 N.L.R.B No. 15 (Aug. 2, 2023)). (Tesla, Inc. v. NLRB, (5th Cir. Nov. 14, 2023); for more information on the Fifth Circuit's opinion, see 2023 Traditional Labor Law Developments Tracker: Section 8(a)(1): Employer Interference with Employees' Exercise of Section 7 Rights.)