In a continuation of the current National Labor Relations Board’s (“NLRB” or “Board”) reversal of recent precedent established by the NLRB under the prior administration, on August 29, 2022, the Board held that Tesla, Inc.’s (“Tesla”) dress code violated the National Labor Relations Act (“NLRA”) because employees were prevented from wearing shirts that supported their union.

Factual Background

The policy at issue required all employees to wear “the assigned team wear,” which could be substituted by all black clothing if approved by the supervisor and “[a]lternative clothing must be mutilation free, work appropriate and pose no safety risks (no zippers, yoga pants, hoodies with hood up, etc.).”  During the Union’s organizing campaign in the spring off 2017, employees began wearing black cotton shirts that had a small logo with the Union’s campaign slogan – “Driving a Fair Future at Tesla” – with a logo of “UAW” on the back.

Prior to August 2017, employees regularly wore shirts that were not black or had logos and emblems unrelated to Tesla.  However, in August 2017, Tesla began to strictly enforce its team-wear policy to ensure compliance, which included incidents where certain employees were told if they did not change their shirts to comply with the dress code, they would be sent home.

During the hearing, Tesla asserted that the team-wear policy was intended to aid in the “visual management” of the employees and to lower the risk of employees’ clothing causing mutilations to the vehicles.  There was also testimony during the hearing from certain supervisors and employees, that they were not aware of black cotton shirts causing a mutilation to a vehicle.

Prior Precedent – Republic Aviation, Stabilus and Wal-Mart Stores, Inc.

Employees have the right under the NLRA to wear union insignia, and when an employer interferes with this right under Section 7 of the Act, the employer has the burden to show that its interference was justified by “special circumstances.”  See Republic Aviation Corp. v. NLRB, 324 U.S. 793, 801–803 & fn. 7 (1945). In Stabilus, Inc., the Board stated that “[a]n employer cannot avoid the ‘special circumstances’ test simply by requiring its employees to wear uniforms or other designated clothing, thereby precluding the wearing of clothing bearing union insignia.” 355 NLRB 836, 838 (2010).

However, in Wal-Mart Stores, Inc., 368 NLRB No. 146 (2019) (which we reported on here), a divided Board held that the “special circumstances” test did not apply where instead of an employer banning all union buttons and insignia, an employer allowed certain buttons, but limited the size and/or appearance of union buttons and insignia that employees can wear.  In those circumstances, the NLRB found that the Boeing test for facially-neutral rules applies instead.  The impact of this ruling was that it made the employer’s prohibition presumptively valid, shifting the burden on the NLRB GC to prove otherwise.

The Board’s rationale in Wal-Mart was that by only limiting union insignia – not banning them outright – the impact on employees’ Section 7 rights was relatively slight.  In that case, then Member (now Chairperson) McFerran dissented, and argued that the “special circumstances” test should remain in place for such a “core” right under the NLRA.

Majority Overturns Wal-Mart Stores, Inc. and Reaffirms Application of “Special Circumstances” Test

Chairperson McFerran, along with Members Prouty and Wilcox (with Members Kaplan and Ring dissenting), overturned Wal-Mart, and reaffirmed that the “special circumstances” test applies “[w]hen an employer interferes in any way with its employees’ right to display union insignia.”  The Majority explained that NLRB precedent since Republic Aviation has consistently applied the “special circumstances” test where employees were prohibited from wearing an article of clothing bearing union insignia based on a policy requiring employees to wear certain clothing.

The Majority’s rationale in deciding to overturn Wal-Mart and reject the dissenting opinion can be summarized by the following excerpt:

“The decision in Wal-Mart shares a fundamental defect with the standard proposed by our dissenting colleagues today: it effectively treats the display of union insignia more as a privilege to be granted by the employer on the terms it chooses, rather than as an essential Section 7 right that—pursuant to federal labor law— the employer is required to accommodate absent a showing of special circumstances.”

The Board found that Tesla did not meet the “special circumstances” test.  While a justification could be avoiding damage to the employer’s products, Tesla did not demonstrate a sufficient risk of vehicle mutilation.  The Board found that the policy was also not narrowly tailored to address the claimed interest in “maintaining visual management, even assuming special circumstances could be established on that basis.”


The standard is now clear – under the present configuration of the Board, at least – that when employers intend to institute and enforce workplace dress codes that interfere with employees’ ability to wear union insignia in the workplace, the burden shifts to the employer to demonstrate “special circumstances” to substantiate its policy.  The Tesla decision now removes a series of threshold questions that had to be answered as to whether the employer prohibition was a limit on the size/appearance of the insignia rather than a complete ban.

Pursuant to this well-established standard, the NLRB will closely scrutinize employers’ dress code policies – as it did in Tesla – if the policy interferes with employees’ exercise of their Section 7 rights to wear union insignia.  Whether a “special circumstance” exists may vary by industry, company, job title, employee, etc., based on the particular needs present in each situation.  Employers should now heed with caution and evaluate the facts of each situation in light of the policy has been previously enforced.

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Photo of Paul Salvatore Paul Salvatore

Paul Salvatore provides strategic labor and employment law advice to companies, boards of directors/trustees, senior executives and general counsel in such areas as labor-management relations, litigation, alternative dispute resolution, international labor and employment issues, and corporate transactions.

He negotiates major collective bargaining agreements…

Paul Salvatore provides strategic labor and employment law advice to companies, boards of directors/trustees, senior executives and general counsel in such areas as labor-management relations, litigation, alternative dispute resolution, international labor and employment issues, and corporate transactions.

He negotiates major collective bargaining agreements in several industries, including real estate and construction. Paul represents the NYC real estate industry’s multi-employer organization, the Realty Advisory Board on Labor Relations (RAB), and its principal trade organization, the Real Estate Board of New York (REBNY). In 2023, he helped the RAB reach a new collective bargaining agreement with SEIU Local 32BJ, covering 20,000 commercial building employees, enabling the industry to adapt its labor practices to tenants’ post-COVID utilization of office space, including that caused by remote/hybrid work.

Paul has long represented construction employers and developers, such as the Related Companies, Cement League, Association of Master Painters and others. He negotiates Project Labor Agreements (PLA’s), such as for Related (enabling the construction of Hudson Yards), and presently for Gateway Development Corporation (GDC) in building the New York-New Jersey train tunnels, the largest infrastructure project in America. City & State magazine has named him one of the most powerful lawyers in New York for his work in this sector.

Paul also tries arbitrations and litigations, and argues appeals, arising from labor-management relationships. He argued and won before the U.S. Supreme Court 14 Penn Plaza LLC v. Pyett. In a 5-4 decision of importance to employers, the Court held that a collective bargaining agreement explicitly requiring unionized employees to arbitrate employment discrimination claims is enforceable, modifying 35 years of labor law. Unions and employers now negotiate “Pyett clauses” in collective bargaining. He has argued and won federal circuit court cases reversing the National Labor Relations Board’s findings against employers, including in the D.C. and Fifth Circuits.

Paul represents universities and colleges in their labor and employment relations, including in the currently active areas of unionization and collective bargaining with graduate students, undergraduates, athletes and adjunct faculty. Among other schools he has worked with are Yale, Duke, Chicago, Washington University in St. Louis and Caltech. Paul pioneered innovative non-NLRB graduate student union election agreements at Cornell, Brown and Syracuse Universities.

An honors graduate of Cornell’s School of Industrial and Labor Relations (ILR) and the Cornell Law School, Paul served eight years on Cornell’s Board of Trustees, including on its Executive Committee. He subsequently was elected Trustee Emeritus and Presidential Councilor. He presently serves as a Trustee Member of the Board of Fellows of Weill Cornell Medicine, as well as on the Law School and ILR Deans’ Advisory Councils. In 2002, ILR awarded him the Judge William B. Groat prize, the school’s highest honor.

At Proskauer, Paul was elected to its Executive Committee and served as co-chair of its global Labor & Employment Law Department, named during his tenure by The American Lawyer and Chambers USA as one of the premier U.S. practices. He is widely recognized as a leading U.S. labor and employment lawyer in such publications as Chambers Global and USA (Band 1), and Legal 500 (“Hall of Fame”). The National Law Journal selected Paul as one of “The Decade’s Most Influential Lawyers” – one of only three in the labor and employment law field. His peers elected him to the College of Labor and Employment Lawyers.

An active speaker and writer on labor and employment law issues, Paul’s recent publications include “One Dozen Years of Pyett: A Win for Unionized Workplace Dispute Resolution” in the American Bar Association Labor & Employment Law Journal (“ABA Journal”), Volume 36, Number 2 at 257, and “The PLA Alternative in an Increasingly Open Shop New York City Construction Market: The REBNY-BCTC Statement of Principles,” Volume 37 ABA Journal, Number 3 at 415. He is an Adjunct Professor at Cornell Law School, teaching “Current Issues in Collective Bargaining.”

Photo of Joshua Fox Joshua Fox

Joshua S. Fox is a senior counsel in the Labor & Employment Law Department and a member of the Sports, Labor-Management Relations, Class and Collective Actions and Wage and Hour Groups.

As a member of the Sports Law Group, Josh has represented several…

Joshua S. Fox is a senior counsel in the Labor & Employment Law Department and a member of the Sports, Labor-Management Relations, Class and Collective Actions and Wage and Hour Groups.

As a member of the Sports Law Group, Josh has represented several Major League Baseball Clubs in all aspects of the salary arbitration process, including the Miami Marlins, Boston Red Sox, Los Angeles Dodgers, Kansas City Royals, San Francisco Giants, Tampa Bay Rays and Toronto Blue Jays. In particular, Josh successfully represented the Miami Marlins in their case against All-Star Catcher J.T. Realmuto, which was a significant club victory in salary arbitration. Josh also represents Major League Baseball and its clubs in ongoing litigation brought by current and former minor league players who allege minimum wage and overtime violations. Josh participated on the team that successfully defended Major League Baseball in a wage-and-hour lawsuit brought by a former volunteer for the 2013 All-Star FanFest, who alleged minimum wage violations under federal and state law. The lawsuit was dismissed by the federal district court, and was affirmed by the U.S. Court of Appeals for the Second Circuit.

Josh also has extensive experience representing professional sports leagues and teams in grievance arbitration proceedings, including playing a vital role in all aspects of the grievance challenging the suspension for use of performance-enhancing drugs of then-New York Yankees third baseman Alex Rodriguez. Josh also has counseled NHL Clubs and served on the trial teams for grievances alleging violations of the collective bargaining agreement, including cases involving use of performance-enhancing substances, domestic violence issues, and supplementary discipline for on-ice conduct. He has played a key role in representing professional sports leagues in all aspects of their collective bargaining negotiations with players and officials, including the Major League Baseball, National Hockey League, the National Football League, Major League Soccer, the Professional Referee Organization, and the National Basketball Association,.

In addition, Josh has extensive experience representing clients in the performing arts industry, including the New York City Ballet, New York City Opera, Big Apple Circus, among many others, in collective bargaining negotiations with performers and musicians, the administration of their collective bargaining agreements, and in grievance arbitrations.

Josh also represents a diverse range of clients, including real estate developers and contractors, pipe line contractors, hospitals, hotels, manufacturers and public employers, in collective bargaining, counseling on general employment matters and proceedings before the National Labor Relations Board, New York State Public Employment Relations Board and arbitrators.

Josh has also recently served as an adjunct professor at Cornell University’s School of Industrial Labor Relations for the past two years, teaching a course regarding Major League Baseball salary arbitration.

Prior to joining Proskauer, Josh worked for a year and a half at the National Hockey League, where he was involved in all labor and employment matters, including preparations for collective bargaining, grievance arbitration, contract drafting and reviewing and employment counseling. Josh also interned in the labor relations department of Major League Baseball and at Region 2 of the National Labor Relations Board. He was a member of the Brooklyn Law Review and the Appellate Moot Court Honor Society and served as president of the Brooklyn Entertainment and Sports Law Society.