Tesla fights feds’ claims that its dress code is anti-union

(CN) —Tesla mandated black company shirts for vehicle assemblers at its California plant and barred black union shirts. The company told a Fifth Circuit panel Wednesday that, contrary to a holding by the National Labor Relations Board, the uniform policy does not violate federal labor law.

Led by CEO Elon Musk, Tesla has outpaced Mercedes-Benz and Toyota to become the world’s most valuable automaker, with a market capitalization of $790 billion. It has also branched into manufacturing solar panels and energy storage batteries.

To meet the demand for its electric vehicles, it has opened “gigafactories” in Shanghai, Berlin and Austin, Texas, over the last four years, and plans to open another facility in Mexico in 2025.

The company opened its first auto plant in Fremont, California in 2010 and allowed its car assemblers to wear non-company shirts of various colors.

That changed in 2017, as employees started complaining about excessive mandatory overtime, low pay and confidentiality agreements meant to stop them from speaking out about working conditions.

Backing the United Auto Workers’ effort to unionize the plant’s workforce, some laborers took to wearing black shirts with the union’s campaign slogan, “Driving a Fair Future at Tesla,” on the front, and “UAW” on the back.

In response, Tesla in August 2017 started to strictly enforce its dress code: black shirts with its logo for those putting cars together; red company shirts for production leads and supervisors; and white ones for line inspectors. And it barred employees from wearing union shirts.

The UAW and several Tesla workers filed charges of unfair labor practices with the National Labor Relations Board, and in August 2022 the board determined Tesla had violated the National Labor Relations Act by prohibiting workers from wearing black union shirts without showing special circumstances justified the restriction.

The board also ordered Tesla to rescind or revise its team-wear policy and notify its personnel of the changes.

Two months later, Tesla filed a petition for review against the board in the Fifth Circuit.

The company’s counsel, Michael Kenneally, argued its case Wednesday before a three-judge panel of the appellate court.

“Countless employers around the country require their employees to wear standard-issue company uniforms,” Kenneally said. “Yet the NLRB held here, for the first time in its long history, that employees have a presumptive right to discard their company uniforms and replace them with apparel of their choosing.”

He stressed that Tesla does not stop its workers from expressing pro-union sentiments because it allows them to wear union stickers on their shirts, with no limits on the size or number of stickers.

Supporting Tesla, the U.S. Chamber of Commerce and several other business groups also complained in an amicus brief that the NLRB had broken new ground in its decision against the automaker, and undermined all employer dress codes and uniform policies by expanding its “special circumstances” test to all employer-apparel policies.

The board has found some scenarios justify barring workers from wearing union insignias, such as when letting them display items would imperil their safety, damage machinery or products, stoke employee dissension or interfere with the employer’s public image established through staff appearance rules.

Kenneally, who is with the Washington firm Morgan, Lewis, Bockius, also argued that Tesla’s policy is lawful because it is neutral — management does not enforce it only against workers who wear union shirts, but makes all employees wear Tesla company shirts.

U.S. Circuit Judge Stephen Higginson, a Barack Obama appointee, asked Micah Jost, the NLRB’s attorney, to explain how Tesla is violating the law given it allows union stickers.

Jost cited a case in which the Sixth Circuit upheld an NLRB enforcement action against Midwest chain retailer Meijer Inc. for not letting its employees wear union jackets on the job.

Applying its special circumstances test, the board had determined Meijer could bar employees who have contact with customers from wearing the jackets.

“But in the back of the store, the employer did not have a special circumstance,” Jost said. “They didn’t have a legitimate reason that was narrowly tailored for requiring employees to take off their union jackets.”

“Tesla is asking for that kind of rule to apply instead to factory workers,” Jost added, “where Tesla has conceded in its briefs that there is no public contact for these employees.”

Higginson pressed Jost on the implications of the board’s claims: “Any time an employer has a uniform policy, that is a presumptively unlawful policy without a special circumstance?” he asked.

Jost waffled: “Your honor, again, I don’t mean to recharacterize —"

“It’s a yes-or-no question,” snapped U.S. Circuit Judge Jerry Smith, a Ronald Reagan appointee.

“Yes,” Jost stated.

He said employers can avoid violations if they recognize employees’ statutory rights to wear union shirts that comport with the companies’ uniform color schemes.

The United Auto Workers intervened in the case on behalf of the NLRB. Its attorney, Daniel Curry of the Los Angeles firm Schwartz, Steinsapir, Dorhmann & Sommers, told the panel that Tesla’s team-wear policy was part of a progression of anti-union activities.

“In late 2016, Tesla banned workers from speaking to the media about conditions in the plant. In Feb. 2017, Tesla stopped workers from distributing union flyers. … These are all findings of the board not appealed by Tesla,” he stated.

U.S. Circuit Judge Leslie Southwick, a George W. Bush appointee, rounded out the panel.

The judges did not say when they would rule on Tesla’s request to set aside the National Labor Relations Board’s order or the agency’s cross-application to enforce its order.

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