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Tesla Union Shirt Ruling Rolls Back Trump Labor Board Precedent

Aug. 30, 2022, 5:38 PM

Employers will have a harder time restricting workers from wearing union buttons and other emblems on the job thanks to the federal labor board’s recent ruling.

In a decision involving Tesla Inc., the National Labor Relations Board on Monday struck down a Trump-era ruling that gave companies more leeway to block button-wearing. It marks the first reversal of a significant Trump-era precedent since Democratic members gained the majority on the five-member board 11 months ago.

The ruling comes amid a surge in labor organizing across the country. Unions notched more wins in NLRB-administered elections in the first six months of 2022 than in the first half of any year since 2005, according to an analysis of Bloomberg Law union election data. Unions’ approval rating has hit a 57-year high, according to Gallup polling data released Tuesday.

Workers visibly demonstrating their solidarity with one another and commitment to their unions by wearing union shirts, buttons, and hats can have an impact on workplace organizing, said Rebecca Givan, a professor of labor studies and employment relations at Rutgers University.

“It shows coworkers and the public that workers are strong union supporters,” Givan said. “When workers show their support, they also affirm that they might take more job actions in support of their collective demands.”

Longstanding Right

Workers have long had the right to wear union buttons and other insignia under the US Supreme Court’s 1945 decision in Republic Aviation Corp. v. NLRB. But employers can restrict such demonstrations of union support when justified by “special circumstances.”

The NLRB in 2019 created an exception to that general rule in Wal-Mart Stores, Inc., which said employers don’t need to show special circumstances to limit the size or appearance of union buttons and other logos. Instead, the board said, the lawfulness of such restrictions would be assessed using the less demanding test for workplace rules from the NLRB’s 2017 decision in Boeing Co.

But in Monday’s decision, the Biden NLRB said Wal-Mart was fundamentally flawed because the ruling treated the display of union emblems as a privilege granted by employers, rather than a labor law right that must be accommodated unless there are special circumstances.

“Accordingly, the Board’s decision in Wal-Mart cannot be squared with Republic Aviation and its progeny and therefore must be overruled,” the board said.

New Precedent Set

The Republican-controlled board in February 2021 requested public comments in a case against Tesla asking whether it should reconsider an Obama-era ruling on union insignia in the workplace.

That 2010 ruling—Stabilus, Inc.—said employers can’t sidestep Republic Aviation’s special-circumstances test by mandating uniforms or other clothing in the workplace that prevents employees from wearing apparel with union insignia.

The board ruled in March 2021 that Tesla committed several unfair labor practices, but it held off making a decision on the union insignia issue.

The NLRB’s Democratic majority on Monday held that Tesla illegally restricted workers from wearing pro-union shirts. The board ordered the company to change its dress code to permit workers to wear black union shirts.

Tesla didn’t respond to a request for comment on the ruling.

Potential Court Challenge?

Tesla could appeal the decision to federal circuit court, as the electric car maker did with the NLRB’s ruling that CEO Elon Musk illegally threatened workers via a tweet with the loss of stock options if they formed a union.

But the NLRB’s decision on union buttons will be difficult to challenge because it’s based on the Supreme Court’s Republic Aviation opinion, said Anne Marie Lofaso, a labor law professor at West Virginia University.

“The Supreme Court has laid down this line, so it would have to be the Supreme Court that undoes this,” said Lofaso, a former NLRB attorney. “And because there’s no circuit split on this issue, it won’t go up to the Supreme Court.”

The Republican NLRB members dissented, arguing the majority’s decision made “all employer dress codes presumptively unlawful.”

But the Democratic majority said the board has previously found special circumstances that justified employer restrictions on union buttons, including when their display could threaten employee safety, damage machinery or products, aggravate employee conflict, or unreasonably interfere with an employer’s public image.

Moreover, the ruling “does not implicate facially neutral employer dress codes that do not restrict or limit employees’ right to display union insignia,” the board majority said.

The case is Tesla, N.L.R.B., Case 32-CA-197020, 8/29/22.

To contact the reporter on this story: Robert Iafolla in Washington at riafolla@bloomberglaw.com

To contact the editor responsible for this story: Laura D. Francis at lfrancis@bloomberglaw.com