NLRB Overturns A Trump-Era Precedent; Employers Cannot Ban Union Insignia

• Published date: 02 September 2022
• Subject Matter: Employment and HR, Employee Rights/ Labour Relations
• Law Firm: Benesch Friedlander Coplan & Aronoff
• Author: Mr W. Eric Baisden, Adam Primm and Brad Wenclewicz

On August 29, 2022, the National Labor Relations Board (the "Board") issued a precedent-shifting decision ruling that it was unlawful for Tesla Inc. to prohibit employees from wearing shirts bearing union insignia. Tesla Inc., 370 NLRB No. 131 (2022).

In the 3-2 ruling, the Board reestablished old precedent confirming that when an employer interferes in any way with its employees' right to display union insignia, the employer must prove "special circumstances" that justify its interference. See Republic Aviation Corp. v. NLRB, 324 U.S. 793, 801-803 (1945). Previously, employers were not bound by the "special circumstance" test when evaluating the lawfulness of an employer's dress code policy that partially restricted the display of union buttons and insignia. Wal-Mart Stores, Inc., 368 NLRB No. 146 (2019). The Board in Wal-Mart found that "[w]here...the [e]mployer maintains a facially neutral rule that limits the size and/or appearance of union buttons and insignia that employees can wear but does not prohibit them," the Board should apply a different test articulated in Boeing rather than the "special circumstances" test. Under Boeing, if an employer's facially lawful rule or policy, when reasonably interpreted, would potentially interfere with the exercise of employees' Section 7 rights, the Board must balance the following two factors: "(i) the nature and extent of the potential impact on NLRA rights, and (ii) legitimate justifications associated with the rule." Id.

The Board in Tesla found that the decision in Wal-Mart upset the "proper balance" in evaluating workers' rights to display union insignia and employers' rights to control their workforce dress code policies. In the new ruling, the Board evaluated Tesla's dress code under Republic Aviation finding that Tesla's dress code policy'which allowed production associates to wear only black shirts with the Tesla logo or, on occasion, all-black shirts'interfered with associates' Section 7 rights to display union insignia. Accordingly, Tesla's dress code policy was presumptively invalid, and Tesla had the burden to establish "special circumstances" to justify its interference. The Board...