Hunton Employment & Labor Perspectives

As we previously reported here, the National Labor Relations Board (the “Board”) upended years of settled law in Tesla, Inc., 370 NLRB No. 131 (2022), when it held that employers cannot restrict employees from displaying union insignia (e.g., buttons, clothing, pins, and stickers) on their clothing at work, absent a showing of “special circumstances”—a nearly impossible standard for employers to meet.

The National Labor Relations Board (“Board” or NLRB) decided in McLaren Macomb, 372 NLRB No. 58 (2023) that an employer violated the National Labor Relations Act (NLRA) by offering furloughed employees severance agreements that contained confidentiality and non-disparagement provisions. “A severance agreement is unlawful if its terms have a reasonable tendency to interfere with, restrain, or coerce employees in the exercise of their [NLRA] rights, and that employers’ proffer of such agreements to employees is unlawful,” announced the Board. In rendering the decision, the NLRB overruled Baylor Univ. Med. Ctr., 369 NLRB No. 43 (2020)[1] and IGT d/b/a Int’l Game Tech., 370 NLRB No. 50 (2020). In those cases, the Board decided that employers did not independently violate the NLRA simply by presenting employees with severance agreements containing non-assistance, non-disclosure, and non-disparagement provisions that arguably restricted NLRA rights absent some additional circumstances.

Earlier this week, the National Labor Relations Board (“Board” or “NLRB”) decided that employers cannot restrict employees from displaying union insignia (e.g., buttons, clothing, pins, and stickers) absent a showing of “special circumstances” in Tesla, Inc., 370 NLRB No. 131 (2022).  In connection with this ruling, the Board overruled Wal-Mart Stores, Inc., 368 NLRB No. 146 (2019), which analyzed the lawfulness of facially neutral work rules that regulated the size and appearance of such union insignia under a less exacting standard.  Employers with policies that address employee appearance, such as dress code or uniform policies, should review those policies for compliance purposes in light of Tesla.

Over the past 40 years, the National Labor Relations Board (the Board) has grappled with the appropriate balance between an employer’s right to discipline an employee for abusive behavior and an employee’s right to engage in Section 7 activity. Much to the dismay of employers, this balancing act has historically tipped heavily in favor of protecting an employee’s right to engage in Section 7 activity at the expense of an employer’s right to discipline its employees for conduct such as using racial slurs while picketing, engaging in sexist behavior, or yelling obscenities at a supervisor while discussing wages. As a result, the Board has issued countless decisions finding an employer violated the National Labor Relations Act (the Act) for disciplining employees who engage in objectively offensive, racist, and abusive conduct while also engaged in Section 7 activity.