Tesla, Inc. TSLA was reportedly found not to have broken U.S. labor laws, as a federal appeals court ruled in favor of the company's decision to ban pro-union t-shirts at its main assembly facility in Fremont, California.
The 5th U.S. Circuit Court of Appeals, based in New Orleans, ruled that Tesla's uniform policy was lawful, according to a news report by Reuters.
The court's decision highlighted that Tesla mandated employees to wear company-issued shirts and permitted them to adorn union stickers, thereby upholding the policy's legality.
The electric vehicle behemoth embraced its uniform policy in 2017 amid an organizing campaign by the United Auto Workers union (UAW), the report read.
The report added that the union has blamed Tesla for various illegal tactics to stifle organizing, which the company has denied.
Tesla's "team wear" guideline required workers to wear black shirts imprinted with the Tesla logo. The company has said the policy was essential to confirm that vehicles were not harmed during assembly.
Also, according to the report, the full 5th Circuit Court is separately considering Tesla's appeal against a decision by the National Labor Relations Board (NLRB). This decision stated that Tesla's CEO, Elon Musk, breached federal labor law with his 2018 tweet suggesting that employees would lose their stock options if they chose to unionize.
Price Action: TSLA shares are trading higher by 2.17% to $242.62 on the last check Wednesday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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