Tesla Allowed to Ban Wearing Union Shirts, 5th Cir. Decides (1) (bloomberglaw.com)
Tesla Allowed to Ban Wearing Union Shirts, 5th Cir. Decides (1)
Tesla Inc.’s ban on employees wearing union shirts on its electric car line is not a violation of federal labor law, a federal appeals court ruled, overturning a decision from the National Labor Relations Board.
Tesla’s uniform policy advances a legitimate employer interest, and neither discriminates against union communication nor impacts workers’ time away from the job, the US Court of Appeals for the Fifth Circuit said Tuesday.
The NLRB applied an “irrational” rule by treating any restriction on union apparel as an illegal prohibition, thus failing to balance the rights of employers and workers, the appeals court said.
“This extremely broad rule would make all company uniforms presumptively unlawful, whether for white-collar workers or blue,” the court said. “Congress likely would not have intended to permit such a major decision without clearer statutory indication.”
The Fifth Circuit’s ruling complicates the NLRB’s efforts to protect workers’ ability to demonstrate solidarity and commitment to their unions by wearing union apparel on the job. The NLRB’s 2022 decision against Tesla’s uniform policy, which the appeals court vacated, also struck down the board’s 2019 ruling in Wal-Mart Stores, Inc. giving companies more leeway to block workers from wearing union insignia.
The NLRB’s Tesla decision reaffirmed its longstanding position—based on a 1945 US Supreme Court ruling in Republic Aviation Corp. v. NLRB—that workers can wear union buttons and other symbols, though employers can impose restrictions when justified by special circumstances. The board in 2010 clarified that employers can’t avoid that special-circumstances test by requiring uniforms that prevent workers from wearing union insignia.
But the Fifth Circuit said it endorsed Wal-Mart Stores’ exception to the general rule, which said employers don’t need to show special circumstances to limit the size or appearance of union buttons and other logos.
The Fifth Circuit’s ruling doesn’t force the NLRB to change its framework for union insignias. The board since the 1940s has reserved the right to not acquiesce to circuit courts’ views on the National Labor Relations Act that conflict with its interpretations.
Nevertheless, the decision could create problems for court enforcement of some NLRB decisions disapproving of company restrictions on union insignia. The ruling is binding in the Fifth Circuit, which covers Texas, Louisiana, and Mississippi, and could be persuasive precedent in other circuit courts.
Lesser Scrutiny for Lesser Infringements
The case stems from Tesla’s “Team Wear” policy for production workers, which required them to wear black shirts with the electric carmaker’s logo. The company prohibited workers from wearing black United Auto Workers shirts, though it allowed them to put union stickers on their Tesla shirts.
The NLRB rejected Tesla’s argument that 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 Fifth Circuit said Tuesday that the NLRB’s application of its special-circumstances test “cannot possibly have been derived directly from Republic Aviation” because of the factual differences between Tesla’s policy and the restriction on union insignia at issue in that Supreme Court decision.
The NLRB lacks the authority to hold that all uniform policies are subject to the Republic Aviation standard, the three-judge Fifth Circuit panel said.
“If the Board subjects every infringement to a special-circumstances test, it cannot adjust the level of scrutiny when it considers comparatively lesser or greater infringements—instead, the Board scrutinizes every infringement as strictly as the next,” Judge Jerry Smith, a Reagan appointee, wrote for the panel. “For there to be balance, some infringements must be subject to lesser scrutiny than are others.”
Judges Stephen Higginson, an Obama appointee, and Leslie Southwick, a George W. Bush appointee, joined the decision.
An NLRB spokeswoman 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, 11/14/23.
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