By Doyinsola Oladipo
(Reuters) -The National Labor Relations Board (NLRB) said on Monday it was unlawful for Tesla (NASDAQ:TSLA) Inc to prohibit employees from wearing shirts bearing union insignia, ruling in a 2017 dispute between the electric car maker and the United Automobile Workers (UAW) union.
NLRB Chair Lauren McFerran said the decision reaffirms "any attempt to restrict the wearing of union clothing or insignia is presumptively unlawful and – consistent with Supreme Court precedent – an employer has a heightened burden to justify attempts to limit this important right."
In a 3-2 decision, the NLRB said that when companies interfere with employees' rights to display union insignia the employer "has the burden to establish special circumstances" and the majority "found that Tesla failed to establish special circumstances in this case."
Tesla and the UAW did not immediately respond to requests for comment.
In addition to ruling on the Tesla case, the NLRB also reversed a 2019 decision by the agency involving Walmart (NYSE:WMT) Inc, saying the earlier decision "ignored decades of board precedent."
The previous ruling by the NLRB had said Walmart's justification for restricting union insignia on the selling floor to enhance the customer shopping experience and prevent theft or vandalism was legitimate. The NLRB in 2019 did, however, acknowledge the potential interference with employees’ rights under the National Labor Relations Act (NLRA).
The 2019 decision set a precedent for employers across the country to have more control over limiting union apparel.
Walmart did not immediately respond to a request for comment. The NLRB said some Tesla employees assembling electric vehicles at its Fremont, California, plant wore shirts with union logos during a 2017 UAW union organizing campaign. At that time, the UAW was seeking to represent workers at Tesla’s facility in Fremont, who are not unionized.
Tesla's "team-wear" policy required employees to wear black shirts imprinted with the Tesla logo or their own black T-shirts without logo. The NLRB found that this implicitly prohibited employees from substituting any shirt with a logo or emblem, including a shirt bearing union insignia. The NLRB said that before 2017 Tesla production employees regularly wore shirts that were not black or had logos and emblems unrelated to Tesla. On Monday, it ordered Tesla to rescind its policy prohibiting employees from wearing black union shirts. This is not the first clash between Tesla and the NLRB. In 2021, the NLRB said that a 2018 tweet by CEO Elon Musk, in which he threatened that Tesla employees who formed a union would lose their stock options, was illegal and should be deleted.