Tesla has won a legal battle over its employees’ right to unionize after a federal appeals court ruled that the company did not infringe on these rights. The 5th U.S. Circuit Court of Appeals overturned a previous decision by the National Labor Relations Board (NLRB), which had stated that Tesla could not prohibit its workers from wearing T-shirts with the United Auto Workers (UAW) logo.
The court’s opinion highlighted that Tesla allowed its employees to attach pro-union stickers of any size or number to their company-issued clothing. The unanimous panel of three judges from the 5th Circuit stated in their ruling on Tuesday that they might have reached a different conclusion if Tesla had banned union insignia altogether.
Requests for comments on the ruling were sent to both Tesla and the UAW, but no responses have been received yet. According to court records, Tesla provided special black clothing, known as “Team Wear,” to employees working on recently painted vehicles. This clothing was meant to prevent any accidental damage to the paint, which hadn’t fully cured yet.
However, some employees started wearing UAW shirts as an alternative in 2017. After a few months, the company cracked down on this practice, leading to the NLRB ruling in August 2022 that the policy was too broad and should be stopped.
Nevertheless, the appeals panel argued that the company’s policy did not prevent the union from effectively communicating its message to the employees. Judge Jerry Smith, writing for the panel, stated that the Team Wear policy, along with any hypothetical uniform policy implemented by a company, served a legitimate interest and did not discriminate against union communication or affect nonworking time.
This ruling comes as the 5th Circuit is preparing for arguments in another union-related case involving Tesla, the NLRB, and the assembly plant in Fremont, California. In March, a different panel from the 5th Circuit found that Tesla CEO Elon Musk unlawfully threatened to revoke employees’ stock options in a 2018 tweet on Twitter (before Musk acquired the platform and renamed it X) during a unionization effort by the UAW. The panel upheld an NLRB order to delete the tweet, but this order was later overturned when the full 5th Circuit, consisting of 16 full-time judges, decided to review the case. A hearing for this matter is currently pending.
The panel responsible for this week’s ruling included Judge Jerry Smith, nominated by President Ronald Reagan; Judge Leslie Southwick, nominated by President George W. Bush; and Judge Stephen Higginson, nominated by President Barack Obama.
