Fifth Circuit upholds Tesla’s uniform policy at its flagship factory

(CN) — Tesla lets workers at its California plant wear union stickers on their company T-shirts, so the National Labor Relations Board should not have meddled with the automaker’s attire strictures, a Fifth Circuit panel said Tuesday.

Fresh off strikes that led to tentative labor deals with the so-called Big Three Detroit car companies — General Motors, Ford and Stellantis — the United Auto Workers has set its sights on Tesla’s flagship factory in Fremont, California.

Some of the plant’s roughly 20,000 employees have formed a working committee with the UAW. Their goal is to convince the facility’s workforce to join the union, which would give them leverage to bring Tesla CEO Elon Musk to the bargaining table in a push for higher pay.

But Musk is hostile to organized labor.

His conflicts with the UAW go back to 2017, when employees of the Fremont plant started complaining about low pay, excessive mandatory overtime, and confidentiality agreements meant to stop them from criticizing working conditions.

Supporting the UAW’s bid to unionize the plant, some laborers began wearing black UAW shirts embossed with the union’s campaign slogan, “Driving a Fair Future at Tesla,” instead of their Tesla “Team Wear” T-shirts bearing the company’s name and logo.

Telsa let employees wear the UAW shirts for several months. But in August 2017, after discovering several “mutilations”—scratches, chips or dings — on vehicles, which it believed may have been caused by workers’ UAW attire touching the cars’ uncured paint on the assembly line, the electric vehicle maker started strictly enforcing its Team Wear rules, with supervisors looking for scofflaw shirts during shift startup meetings.

The company said its Team Wear policy was needed to minimize mutilations and facilitate “visual management” of employees via color coordination. Car assemblers at the plant wear black company shirts, red shirts are reserved for production leads and supervisors, and white ones for line inspectors.

Several Tesla workers and the UAW, chafing against the crackdown, accused the automaker of unfair labor practices in charges filed with the National Labor Relations Board.

In August 2022, the board found Tesla had violated the National Labor Relations Act by barring workers from wearing black union shirts without showing special circumstances justified the restriction. It ordered Tesla to nix or revise its uniform restrictions and notify its workers of the changes.

Shortly thereafter, Tesla filed a petition for review against the board in the Fifth Circuit.

A three-judge panel of the New Orleans-based federal appellate court ruled in Tesla’s favor Tuesday after hearing arguments in September.

U.S. Circuit Judge Jerry Smith, writing for the unanimous panel, emphasized that the National Labor Relations Act and Supreme Court precedent interpreting it requires the board to balance employees’ right of self-organization with employers’ right to maintain discipline in their establishments.

In striking Tesla’s uniform strictures, the board decided that, absent special circumstances, an employer cannot interfere in any way with its employees’ right to display union insignia, thus calling into question all company uniform policies.

“This extremely broad rule would make all company uniforms presumptively unlawful, whether for white-collar workers or blue,” Smith wrote in a 19-page order.

“Congress likely would not have intended to permit such a major decision without clearer statutory indication. For these reasons, it is well 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,” he continued. (Emphasis in original.)

The panel also noted that Tesla’s policy allowed its workers to stencil union logos onto their company shirts, or put as large a union sticker, and as many stickers, on them as they wanted.

“In other words, Tesla’s Team Wear policy places no prohibition on union insignia,” stated Smith, a Ronald Reagan appointee.

Joined by U.S. Circuit Judges Stephen Higginson and Leslie Southwick, appointees of Barack Obama and George W. Bush, respectively, Smith vacated the National Labor Relations Board’s order against Tesla and denied the board’s cross application to approve the order’s enforcement.

Neither Tesla nor the board’s attorney immediately responded late Tuesday to requests for comment on the appellate court’s ruling.

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