By Daniel Wiessner

Tesla Inc did not violate U.S. labor law by prohibiting workers at its flagship Fremont, California, assembly plant from wearing pro-union t-shirts, a federal appeals court has ruled.

The New Orleans-based 5th U.S. Circuit Court of Appeals in a decision on Tuesday said that because Tesla required all employees to wear company-issued shirts while allowing them to display union stickers, its uniform policy was lawful.

The court reversed a 2022 decision by the National Labor Relations Board (NLRB), which had said that any attempt to ban union insignia was unlawful unless an employer could show "special circumstances" such as safety concerns.

Tesla and the NLRB did not immediately respond to requests for comment.

The electric vehicle maker adopted its uniform policy in 2017 amid an organizing campaign by the United Auto Workers union (UAW). The union has accused Tesla of various unlawful tactics to stifle organizing, which the company has denied.

The UAW has said that it plans to aggressively organize at non-union U.S. auto plants after winning new contracts with the Detroit Three automakers. President Joe Biden said last week that he supported the union's efforts to organize workers at Tesla and Toyota.

Tesla's "team wear" policy required employees to wear black shirts imprinted with the Tesla logo. The company has said the policy was necessary to ensure that vehicles were not damaged during assembly.

On Tuesday, the 5th Circuit said that it was wrong for the NLRB to require Tesla to prove that special circumstances justified its policy.

The company still allowed workers "to affix any number or size of union stickers to their team wear," so it was not unlawfully interfering with union organizing, the court said.

The full 5th Circuit is separately considering Tesla's appeal of an NLRB decision that said CEO Elon Musk violated federal labor law by tweeting in 2018 that employees would lose stock options if they joined a union.

A three-judge 5th Circuit panel in March had affirmed the labor board's decision.

(Reporting by Daniel Wiessner in Albany, New York; Editing by Nick Zieminski)