Hunton Employment & Labor Perspectives

As we previously reported here, the National Labor Relations Board (the “Board”) upended years of settled law in Tesla, Inc., 370 NLRB No. 131 (2022), when it held that employers cannot restrict employees from displaying union insignia (e.g., buttons, clothing, pins, and stickers) on their clothing at work, absent a showing of “special circumstances”—a nearly impossible standard for employers to meet.

Following the Board’s decision, Tesla appealed the case to the United States Court of Appeals for the Fifth Circuit.  Hunton Andrews Kurth LLP submitted an amicus brief in the case on behalf of various business groups, including the Coalition for a Democratic Workplace and the Chamber of Commerce of the United States of America.  Our brief emphasized the significant disruptive impacts that the Board’s decision would have on employers going forward.

As pointed out in our brief, the Board’s decision represented a troubling departure from its own precedent, which, for the better part of sixty years, had always limited the “special circumstances” test to employer rules that completely banned employees from wearing union insignia and had never been applied to workplace policies that merely regulated (but still allowed employees to display) union insignia.  Amici also argued that to apply the “special circumstances” test to all dress codes and uniform policies put all such policies at risk of being found unlawful, and warned that commonplace and longstanding workplace dress codes and uniform policies could become a thing of the past.

The Fifth Circuit agreed. On November 14^th, it issued an order vacating the Board’s decision. In doing so, the Fifth Circuit recognized that applying the “special circumstances” test to all uniform policies (including ones that did not ban employees from wearing union insignia) “would make all company uniforms presumptively unlawful”—a result that “Congress likely would not have intended to permit” without “clearer statutory indication.”  Therefore, the Court held that it was “beyond the scope of the NLRA for the NLRB to declare all uniforms and dress codes presumptively unlawful and thus subject to a special circumstances test.”

Though a strong rebuke by the Fifth Circuit and a significant victory for employers, the Board is likely to continue to apply its own rule to employers outside of the Fifth Circuit unless and until similar attempts are rejected by other Circuit Courts or the U.S. Supreme Court weighs in.