Written by Anthony J. Amendola and Celia L. Guzman

In what has become an all too familiar practice of overruling and reinstating precedent based on the political party in control of the Executive Branch, last week, the National Labor Relations Board (“NLRB” or “Board”) reinstated the test that applies when analyzing whether an employer’s dress code or uniform policy interferes with employee rights under the National Labor Relations Act.  In Tesla Inc., 370 NLRB No. 131 (Aug. 29, 2022), at issue was an employer policy requiring employees to wear a designated uniform in its production facility and prohibiting employees from wearing any unauthorized clothing, including tee shirts with union insignia.

In Tesla, the NLRB held that a policy that in any way interferes with an employee’s right to wear union insignia or pro-union messages is unlawful, unless there are “special circumstances” justifying such restrictions.  In doing so, the Board overruled Wal-Mart Stores, Inc., 368 NLRB No. 146 (2019), decided during the Trump administration, which had allowed employers to maintain facially-neutral dress codes.  Under the Wal-Mart test, the “special circumstances” requirement only applied to policies that specifically prohibited the wearing of union apparel or insignia. 

On August 29, 2022, in a 3-2 split along party lines, the NLRB overruled Wal-Mart and reinstated the rule that any policy that interferes in any way with the employees’ right to display union insignia is presumptively unlawful.  In order to overcome that presumption, the employer must demonstrate “special circumstances” such as “when their display may jeopardize employee safety, damage machinery or products, exacerbate employee dissension, or unreasonably interfere with a public image that the employer has established, or when necessary to maintain decorum and discipline among employees.” 

Tesla argued that it had “special circumstances” justifying its dress code that required production assembly members to wear black shirts with the company’s logo, but allowed for union stickers to be worn.  In particular, Tesla argued that its “special circumstances” were that their uniforms (1) allowed for easy “visual management” of their employees; and (2) prevented damage to vehicles, as there had been an incident where a raised metal emblem damaged a fender.  However, the NLRB found that the black shirts with the union logo did not present any greater risk of the damage to the employer’s product than the company uniform or that it impaired the employer’s ability to manage its employees.  In reaching its conclusion, the Board rejected the argument that the employees had alternative means of expressing their pro-union sentiments without violating the company’s neutral dress code.  Rather, the Board stated that “an employer is not free to restrict one statutorily protected means of communication among employees, so long as some alternative means remains unrestricted.” 

During the Trump administration, numerous rules that were viewed as “pro-labor” were overturned and replaced with rules that were viewed as “pro-management.”  Now that a Democratic majority is in control of the Board, we should expect the pendulum to swing back on a number of issues, as occurred in Tesla.