A federal appeals court has said that Tesla Inc. (TSLA.O.) did not violate U.S. labor law when it forbade employees at its central Fremont, California, assembly factory from donning pro-union t-shirts.
In a ruling on Tuesday, the 5th U.S. Circuit Court of Appeals, located in New Orleans, ruled that Tesla’s uniform policy was legal as it mandated that all employees wear shirts provided by the firm and let them display union emblems.
The court overturned the National Labor Relations Board (NLRB) ruling from 2022, which stated that any attempt to outlaw union insignia was illegal unless an employer could show “special circumstances,” such as safety concerns.
Tesla and the NLRB did not immediately respond to requests for comments. The manufacturer of electric vehicles implemented its standard policy in 2017 in response to a United Auto Workers (UAW) organizing drive. Tesla has refuted the union’s accusations that it employed various illegal strategies to impede organizing.
The UAW has said that, upon securing new contracts with the Detroit Three automakers, it intends to organize at non-union U.S. auto facilities vigorously. Last Monday, President Joe Biden declared his support for the union’s attempts to manage employees at Tesla and Toyota.
Employees were forced to wear black shirts with the Tesla emblem emblazoned under the company’s “team wear” policy. According to the corporation, the policy was required to ensure that cars weren’t harmed during assembly.
The 5th Circuit ruled on Tuesday that the NLRB erred in requiring Tesla to provide evidence that unusual circumstances warranted its policy.
The business was not illegally interfering with union organizing as it still let employees “affix any number or size of union stickers to their team wear,” the court said.
Tesla’s appeal of an NLRB ruling that stated CEO Elon Musk broke federal labor law by tweeting in 2018 that workers would lose their stock options if they formed a union is being considered by the whole 5th Circuit separately. A three-judge panel of the 5th Circuit upheld the labor board’s ruling in March.