Tesla’s Union Shirt Ban Tests NLRB’s Framework in Fifth Circuit

Tesla Inc. will try to convince a federal appeals court to overturn a National Labor Relations Board decision and permit the company to ban union shirts on its electric car assembly line.

Tesla’s counsel will appear at the US Court of Appeals for the Fifth Circuit on Wednesday to argue that the company can legally prohibit workers from wearing black United Auto Workers shirts because the company gave production workers the option of putting union stickers on their black shirts emblazoned with the car maker’s logo.

The case gives the New Orleans-based Fifth Circuit the opportunity to weigh Tesla’s attempt to dial down labor law protections for wearing union emblems in the workplace, which would effectively replace the right to wear such insignia with a right to communicate a message through an employer-approved channel.

The NLRB reaffirmed its long-standing test for union apparel in its 2022 decision ordering Tesla to rescind its uniform requirement or revise it to clarify that production workers can wear black union shirts. The board’s Democratic majority overturned a Trump-era ruling that had allowed Walmart Inc. to restrict union buttons based on their size and appearance.

The NLRB’s legal framework, which the US Supreme Court upheld in 1945’s Republic Aviation Corp. v. NLRB, holds that employers can’t interfere with workers’ right to wear union emblems unless special circumstances justify the interference.

Tesla argued its uniform policy was necessary to prevent damage to cars, and to help supervisors tell production workers apart from other employees at the company’s facility in Fremont, Calif.

The NLRB rejected Tesla’s claim to special circumstances, saying the company didn’t establish how a shirt could damage a vehicle or why wearing black union shirts instead of black Tesla shirts would disrupt visually tracking workers by shirt color.

Although the case originated in California, which is in the Ninth Circuit, the company appealed the NLRB’s ruling to the Fifth Circuit. Tesla moved its headquarters in 2021 from California to Texas, which is in the Fifth Circuit, and companies have the option to appeal board rulings in the circuit where they’re based.

Judges Jerry Smith, a Reagan appointee, Leslie Southwick, a George W. Bush appointee, and Stephen Higginson, an Obama appointee, will hear oral argument.

Dress Codes at Risk?

According to Tesla, Republic Aviation doesn’t support a presumption that uniform requirements violate federal labor law absent special circumstances. The correct reading of that case is that employers can’t restrict speech based on its content and viewpoint, the company said in its brief.

Tesla’s uniform policy is neutral and nondiscriminatory, as it permits workers to convey their pro-union message via stickers attached to their clothes and hats, the company said.

“Because the Board failed to acknowledge the significant difference between a prohibition on a particular message and a prohibition on a single medium for conveying that message, its decision is arbitrary and capricious and cannot stand,” Tesla said.

A coalition of business groups that includes the US Chamber of Commerce filed an amicus brief backing Tesla. The decision on the electric car maker’s uniform policy marks the first time the NLRB used its Republic Aviation test to strike down a facially neutral rule that limits union insignia in the workplace, the coalition said.

“If the Board’s underlying decision is upheld, commonplace and longstanding workplace dress codes and uniform policies may become a thing of the past—to the detriment of employers and employees,” the groups said in their brief.

Reasons v. Rights

Neither the NLRB nor the Supreme Court relied on First Amendment concepts of content or viewpoint discrimination in Republic Aviation—and Tesla pointed to no precedent supporting its reframing of the decision, the NLRB said in its brief.

Workers might prefer union shirts instead of just stickers because they display the message more prominently, or because they’re more cost effective, or because stickers can fall off and leave residue on clothing, or because they think wearing union shirts and stickers make the display more effective, the board said.

“Whatever employees’ reasons might be, their right to wear union garments is statutorily protected unless their employer has a sufficient reason to interfere,” the NLRB said.

The board pointed to multiple Fifth Circuit decisions upholding its framework for union insignia, including a 2018 ruling involving “Fight for $15" buttons work by employees at In-N-Out Burger Inc.

NLRB spokesperson Kayla Blado declined to comment. Tesla’s lawyer, Michael Kenneally of Morgan, Lewis & Bockius LLP, didn’t respond to requests for comment.

The case is Tesla, Inc. v. NLRB, 5th Cir., No. 22-60493, oral argument scheduled 9/6/23.