September 8, 2022

NLRB Makes It Harder for Employers to Enforce Dress and Uniform Policies

On Aug. 29, 2022, the National Labor Relations Board (“NLRB”) issued its decision in Tesla, Inc., 371 NLRB No. 131 (2022), one of the first major decisions by the now Democratic-controlled board to overrule a decision from the board as constituted during the Trump administration. In Tesla, the board overruled Wal-Mart Stores Inc., 368 NLRB No. 146 (2019), and in so doing held that any employer attempts to impose restrictions on the display of union insignia are presumptively unlawful, absent “special circumstances” that justify such a restriction.

Wal-Mart held that the “special circumstances” test applies only when an employer completely prohibits union insignia, and that lesser size-and-appearance restrictions on union insignia could be deemed lawful based on less compelling employer interests. In overruling Wal-Mart, the board clarified that the burden is on employers to justify any dress code and uniform policies that prohibit employees from substituting union apparel for required clothing, or limit the size and/or appearance of union insignia.

Section 7 of the NLRA and Union Insignia

Employees have a right under Section 7 of the National Labor Relations Act (“NLRA”) to wear union insignia, such as union buttons or logos, at work. By and large, employer limitations on the display of union insignia are presumed invalid, with certain narrow exceptions like restrictions on the display of union insignia in immediate patient care areas in healthcare facilities. An employer can overcome this presumption if it can establish that “special circumstances” exist to support the restriction. This test places a heavy burden on employers. The board has found special circumstances justifying union-insignia bans in very limited circumstances: when their display may jeopardize employee safety, damage machinery or products, exacerbate employee dissension, or unreasonably interfere with a public image that the employer has established, or when necessary to maintain decorum and discipline among employees. As the board has emphasized, “the ‘special circumstances’ exception is narrow.”

Wal-Mart Lowers the Standard for Partial Restrictions on Employees’ Display of Union Insignia

In 2019, recognizing this burden, the Republican-controlled board in Wal-Mart dialed back the standard of scrutiny applicable to certain types of employer limitations. In Wal-Mart, the board held 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 the more deferential “Boeing standard” rather than the stringent special circumstances test. In doing so, the board made a general distinction between (1) rules that completely prohibit the display of union insignia (to which the special circumstances test should apply) and (2) rules that partially restrict the display of union insignia (to which the less stringent Boeing standard should apply).

Tesla Overrules Wal-Mart and Restores the Special Circumstances Test for All Restrictions

In Tesla, the board was confronted with a similar partial restriction on union insignia. There, the challenged “team-wear” policy required employees to either wear black shirts imprinted with the Tesla logo or their own black T-shirts with no logo. As the majority opinion acknowledged, while the team-wear policy implicitly prohibited employees from wearing union shirts in place of the required team-wear shirts and thus partially restricted the display of union insignia, it did not completely prohibit union insignia (as the policy did not restrict employees from displaying union insignia in other ways, such as by affixing union stickers and buttons to their team-wear shirts). Under Wal-Mart, such a policy would be reviewed under the less stringent Boeing standard.

The board, however, rejected Wal-Mart’s distinction between complete and partial prohibitions and overruled the opinion. In doing so, the board reaffirmed that any limitation on the display of union insignia, however slight, is presumptively unlawful—regardless of whether an employer permits other related Section 7 activity. According to the board, Tesla’s team-wear policy limited the ways union insignia may be displayed by precluding the substitution of union apparel for required clothing. Accordingly, the policy was presumptively invalid, and Tesla had the burden to establish special circumstances that justify its interference with employees’ right to display union insignia. In support of its holding, the board cited language from a 2010 NLRB opinion: “[a]n employer cannot avoid the ‘special circumstances’ test simply by requiring its employees to wear uniforms or other designated clothing, thereby precluding the wearing of clothing bearing union insignia.”

What Employers Need to Know

After Tesla, when an employer interferes in any way with employees’ Section 7 rights to display union insignia (whether through buttons, pins, stickers, shirts, hats, or any other accessories or attire), that interference is presumptively unlawful, and the employer has the burden to establish special circumstances that justify its interference. In particular, employers should take note that under Tesla, uniform policies or dress codes that (1) prohibit employees from substituting union apparel for required clothing, or (2) limit the size and/or appearance of union insignia are presumptively unlawful. Employers should carefully review their dress code and uniform policies and consider whether (1) they expressly or implicitly limit employees’ ability to display union insignia, and (2) if so, whether those limits are justified by “special circumstances.”

Disclaimer: Please contact your Payne & Fears attorney for current guidance on the subject matter of this article.