On Aug. 29, 2022, the National Labor Relations Board (NLRB) ruled in a 3-2
decision along party lines in Tesla, Inc.
, 370 NLRB No. 131 (2022), that an employer cannot impose any restriction
on its employees’ right to wear union apparel or clothing with union
insignia unless the employer can establish “special circumstances”
warranting such restrictions. In doing so, the NLRB expressly reversed its
position set forth in Wal-Mart Stores, Inc., 368 NLRB No. 146
(2019), which allowed employers to impose certain “partial” or “limited”
restrictions on their employees’ right to wear union apparel without
needing to justify those restrictions with special circumstances.
arises from a charge that Tesla committed an unfair labor practice by
implementing a workplace rule requiring employees at its Fremont,
California, facility to wear either company-issued uniforms with the Tesla
logo or their own clothes in the same colors with any non-Tesla logos and
emblems covered by black tape. A few months after the union began its
organizing campaign at its Fremont facility, Tesla began strictly enforcing
this policy. However, Tesla’s policy still allowed employees to wear union
buttons, pins and stickers on their clothing. Tesla, therefore, argued that
its policy complied with NLRB law as stated in Wal-Mart Stores, Inc.
The Walmart Stores, Inc., Balancing Test
The longstanding rule preceding Walmart Stores, Inc., was
established in Republic Aviation Corp. v. NLRB. There, the NLRB
ruled that employees displaying union insignia in the workplace is
protected activity. Although the NLRB acknowledged that employers have an
interest in managing their business in an orderly fashion, the NLRB ruled
that employers could restrict the display of union insignia activity only
if necessary because of “special circumstances,” such as maintaining
production, ensuring safety, preventing the alienation of customers,
maintaining decorum by restricting offensive or inflammatory displays, or,
in the healthcare setting, preventing any adverse effects on patients. The
rule had to be narrowly drawn, restricting employees from displaying union
insignia only in areas where the circumstances justified the rule.
Walmart Stores, Inc., the NLRB altered this “special circumstances” rule. The Walmart
NLRB adopted a new standard that permitted partial or limited restrictions
even in the absence of “special circumstances” if “legitimate
justifications” existed that outweighed any adverse impact on employees.
Specifically, the Walmart NLRB concluded that Walmart’s rule
restricting the size of union logos in places where customers are present
had “legitimate justifications — to enhance the customer shopping
experience and protect its merchandise from theft or vandalism” —
sufficient to “outweigh the adverse impact on employees’ Section 7 rights.”
On the other hand, there were insufficient justifications to support a rule
restricting the size of union logos in places where customers were not
The Tesla, Inc., Special Circumstances Test
With its new decision in Tesla, the NLRB has changed course again,
rejecting the Wal-Mart standard, and returning to the strict
“special circumstances” standard. In so doing, the NLRB held that
Tesla failed to present evidence of “special circumstances” for the rule
requiring employees to cover union logos with black tape and therefore
violated the National Labor Relations Act.
Going forward, employers risk committing unfair labor practices if they
place limitations on the display of union insignia if they cannot
demonstrate “special circumstances,” such as maintaining production,
ensuring safety, preventing the alienation of customers, causing damage to
the employer’s products, maintaining decorum by restricting offensive or
inflammatory displays, preventing any adverse effects on patients in the
case of a healthcare setting, or trying to extend a restriction beyond the
area actually tied to the special circumstances.
How to React
Employers should proceed with caution before maintaining or implementing
any workplace rules that would in any way restrict employees from
displaying union insignia. Employers will need to be prepared to articulate
the special circumstances justifying such restrictions.
Additionally, employers should take note of the Tesla decision as
a harbinger for other precedential changes from the NLRB expected in coming
months. The NLRB now has a full complement of members with a Democratic
majority and a General Counsel who clearly espoused an intent to seek
significant changes to longstanding NLRB precedents. Accordingly, employers
should regularly monitor NLRB decisions to ensure that their policies and
conduct are in compliance with legal standards that are in great flux.
For assistance with such matters, or for more information on this topic,
please contact the authors, your McGuireWoods contact, or a member of the
labor and employment team.