5th Circuit Court of Appeals Reverses NLRB Decision to Limit a Company’s Ability to Implement and Enforce Dress Code Policy


Employers prevailed in a momentous victory against the National Labor Relations Board (NLRB) when the NLRB’s decision to limit a company’s ability to implement and enforce dress code policy was reversed. Federal law is impactful and possesses the potential to provide balance to struggles between commercial corporations and the NLRB. Interpretations of the law resonate through businesses, often requiring commercial litigation.

The Texas labor and employment attorneys at MehaffyWeber continually strive to represent the best interests of their clients in Texas, whether large corporations or individuals. Below, we look at the conflict between Tesla and the NLRB and a worker’s ability to step outside of the adherence to a corporation’s dress code based on specific rights. We recognize the influence of these decisions as challenges arise between employers, employees, and union labor policy decisions.

The Struggle Between Tesla and the NLRB

In an effort to decrease damage to Tesla products in the production process, Tesla began requiring its production team members to dress in Team Wear. The Team Wear uniform was a Tesla logo branded black shirt or sweater displaying the company’s name. However, union efforts led Tesla production team members to begin wearing shirts from the United Autoworkers Union (UAW) instead of the Team Wear required by Tesla.

The wearing of UAW shirts was allowed for months instead of Tesla’s team member uniform. Then, damage was detected to the paint on multiple vehicles after production. After the damage discovery, Tesla began stringently enforcing its Team Wear guidelines, deciding employees could no longer wear UAW shirts but could instead apply union stickers on the Team Wear shirts to protect union members’ rights.

With Tesla’s uniform policy enforcement, the United Autoworkers Union (UAW) filed charges with the NLRB. These charges stated that Tesla’s requirement of a uniform, or Team Wear, violated the National Labor Relations Act (NLRA) (Sec. 7), allowing employees the right to express their thoughts on unionizing and the work environment. This right includes the ability to wear a union’s insignia or display support of a union on the job.

The National Labor Relations Board’s Findings

Using previous Supreme Court decisions, the NLRB determined that a dress code enforced by an employer infringing on the statutory right of employees to exhibit the union insignia at work was susceptible to questioning. The findings stated an employer must provide evidence of why a policy should be maintained. The NLRB decision also explained that Tesla’s reasons for the uniform policy – restricting the display of union paraphernalia on their work attire – did not meet the special circumstances test under the NLRA, and therefore violated the Act.

Tesla’s Appeal to the 5th Circuit

Tesla appealed the NLRB’s decision to the 5th Circuit, recognizing the impact of the decision on employers in the future. The appeal pointed out the NLRB’s departure from previously established precedents. Tesla also argued the practice of work dress codes and uniform requirements could become obsolete if all policies were at risk of being deemed unlawful under the special circumstances test applied by the NLRB.

The Decision of the 5th Circuit

The 5th Circuit’s unanimous ruling by a panel of three judges concluded the special circumstances test for a neutral uniform policy – like the one implemented by Tesla – should not apply. It demonstrated Tesla’s policies on a dress code were not prohibitive of displaying the union symbol. The policy was restrictive in nature.

The 5th Circuit used a previous decision (Walmart Stores, Inc.) made by the NLRB to demonstrate that employers may limit union symbol appearance and size without passing the special circumstances test. The 5th Court noted the decision determined the limitations were less severe restrictions on the rights defined in Section 7. In addition, when subjecting every infringement to the special circumstances test, each infringement must be analyzed as strictly as other infringements, resulting in a lack of balance.

The court further explained the dress code policy implemented by Tesla was lawful. Tesla’s Team Wear promoted an authentic concern of the company without using discriminatory tactics. Their policies still permitted employees to exercise their right to display the union emblem by wearing a union sticker on their uniform.

Highlights From the 5th Court Decision

The judges on the panel determined the NLRB went beyond its authority in creating rules that would make implementing a work uniform or dress code policy unlawful. The 5th Circuit panel also expressed that the NLRB raised employees’ interests above that of plausible employer interests. It should be noted this decision only impacts Louisiana, Mississippi, and Texas because of the nonacquiescence policy.

Though the 5th Circuit decision impacts only the defined geographic area mentioned above, it guides other jurisdictions on decisions that benefit employers. Employers facing the same legal challenges may face optimistic rulings benefiting a company. This decision also provides positive potential for corporations in Texas facing complex federal litigation.

How the 5th Circuit Decision Impacts Texas Corporations and Surrounding Circuits

Many recent decisions by the 5th Circuit have complimented labor unions, making the reversal of the NLRB decision a welcomed relief for employers. Therefore, employees’ statutory rights and the ability to exhibit union emblems requires employers to create uniform policies and dress codes with these rights in mind.

Using the decisions of the 5th Circuit, commercial litigation attorneys at MehaffyWeber may craft a proactive approach to protect the interests of commercial clients while focusing on a commercial client’s individual needs. Highlighting previous court rulings may allow a case to be settled in favor of a client without the necessity of court intervention. However, we are ready with a plan to proceed to trial when successful resolutions are unattainable.

MehaffyWeber has represented its clients’ needs in Texas and other states through regional counsel since 1946. We have achieved a powerful record of success through arbitration, litigation, mitigation, and other avenues benefitting our clients. We continue to keep an eye on significant NLRB and Court decisions to better prepare for our clients’ business challenges in the future. Contact our experienced labor and employment lawyers to see how we can help.