 United States Court of Appeals
         FOR THE DISTRICT OF COLUMBIA CIRCUIT



Argued November 5, 2014           Decided January 16, 2015

                       No. 14-1028

WORLD COLOR (USA) CORP., A WHOLLY OWNED SUBSIDIARY
             OF QUAD/GRAPHICS, INC.,
                   PETITIONER

                             v.

           NATIONAL LABOR RELATIONS BOARD,
                     RESPONDENT


                Consolidated with 14-1037


     On Petition for Review and Cross-Application for
                        Enforcement
     of an Order of the National Labor Relations Board


    Ronald J. Holland argued the cause for petitioner. With
him on the briefs was Ellen M. Bronchetti.
    David A. Seid argued the cause for respondent. With him
on the brief were Richard F. Griffin, Jr., John H. Ferguson,
Linda Dreeben, and Jill A. Griffin.
    Before: GARLAND, Chief Judge, WILKINS, Circuit Judge,
and WILLIAMS, Senior Circuit Judge.
    Opinion for the Court filed by Circuit Judge WILKINS.
                              2
    Wilkins, Circuit Judge:
     This case comes before the Court on petition for review
of an order of the National Labor Relations Board. At issue is
a World Color policy prohibiting employees from wearing
baseball caps except for caps bearing the company logo. The
NLRB determined that this policy violates the rights of World
Color employees. Because the Board relied on a faulty
premise in making its determination, we grant the petition for
review and remand to the Board for reconsideration.

                                  I.

     Petitioner World Color is a wholly owned subsidiary of
commercial printing corporation Quad/Graphics (“Quad”).
World Color operates a printing facility in Fernley, Nevada.
This facility is subject to Quad policies, including the
employee policy that is at issue in this case. J.A. 4. The
challenged policy is found in the “Corporate Safety Program”
section of the Employee Guidelines, and reads as follows:

    All hair hanging past the bottom of the collar must be
    secured to the head while in the production areas. If hair
    does not hang past the collar but could potentially get
    caught in our equipment, it must be secured to the head
    with a hairnet or by other means. Baseball caps are
    prohibited except for Quad/Graphics baseball caps worn
    with the bill facing forward. Ponytails are strictly
    prohibited. Facial hair longer than the base of the neck
    must be secured. J.A. 117.

     The Graphic Communications Conference of the
International Brotherhood of Teamsters filed an unfair labor
practice charge before the NLRB, asserting that this policy
“interfere[s] with, restrain[s] or coerce[s] employees in the
                              3
exercise of their Section 7 rights.” 1 J.A. 91; see 29 U.S.C.
§ 158(a)(1) (“It shall be an unfair labor practice for an
employer to interfere with, restrain, or coerce employees in
the exercise of the rights guaranteed in section 157 of this
title.”). The rights in question are “the right to self-
organization, to form, join, or assist labor organizations, to
bargain collectively through representatives of their own
choosing, and to engage in other concerted activities for the
purpose of collective bargaining.” 29 U.S.C. § 157.

     It is beyond dispute that 29 U.S.C. § 157 protects an
employee’s right to wear union insignia at work unless special
circumstances are present. See Republic Aviation Corp. v.
NLRB, 324 U.S. 793, 801 (1945). The Administrative Law
Judge assigned to the case determined that the hat policy
violated this right. In doing so, the ALJ determined that the
hat policy was distinct from Quad’s uniform policy, and that
Quad had not substantiated its claims of special circumstances
regarding the safety of press operators, concerns about gang
activity, and employee presentation. World Color (USA)
Corp., 360 NLRB No. 37, 2014-15 NLRB Dec. ¶ 15759,
2014 WL 559195, at *13-14 (Feb. 12, 2014). The ALJ
recommended an order barring World Color from enforcing
the “discriminatory” hat policy.

    World Color filed exceptions to the order and the
decision, which were considered by a three-member panel of
the National Labor Relations Board. World Color (USA)
Corp., 2014 WL 559195, at *1. The panel accepted the ALJ’s
determination that the hat policy was distinct from Quad’s


1
  While there were other charges made by the Graphic
Communications Conference, the hat policy is the only issue
that is before this Court.
                               4
uniform policy and noted that, even were the hat policy a part
of the uniform policy, it would still be subject to the “special
circumstances” test. Id. at *1 n.3. The panel struck the
portions of the ALJ’s order referring to the policy as
“discriminatory,” instead relying on the policy’s overbreadth
to establish a violation of § 158(a)(1). Id. The overbreadth
determination was based on the Board’s conclusion that it was
“undisputed that the policy on its face prohibits employees
from engaging in the protected activity of wearing caps
bearing union insignia.” Id. The NLRB ordered World Color
to rescind the hat policy, issue a revised policy, and post a
notice stating that the NLRB had found that World Color had
violated federal labor laws. Id. at *3-4. World Color filed a
timely petition for review, and the NLRB cross-filed an
application for enforcement of the order.

     Contrary to the Board’s assertion, World Color did
dispute that the hat policy facially prohibits employees from
wearing caps bearing union insignia. We therefore grant the
petition for review and remand to the NLRB for
reconsideration.

                                   II.

     As this Court described in Guardsmark, LLC v. NLRB,
475 F.3d 369, 374 (D.C. Cir. 2007), the NLRB’s
determination of whether a policy violates § 158(a)(1)
involves a two-step inquiry. “First, the Board examines
whether the rule explicitly restricts section 7 activity; if it
does, the rule violates the Act.” Id. (citations omitted)
(internal quotation marks omitted). If the policy does not
explicitly restrict protected activity, the Board considers
whether “(1) employees would reasonably construe the
language to prohibit Section 7 activity; (2) the rule was
promulgated in response to union activity; or (3) the rule has
                               5
been applied to restrict the exercise of Section 7 rights.” Id.
(quoting Martin Luther Memorial Home, 343 NLRB 646, 647
(2004) (internal quotation marks omitted).

     The NLRB short-circuited this inquiry at the first step by
concluding that there was no dispute regarding whether the
policy facially prohibited employees from wearing caps
bearing union insignia. We disagree with this conclusion.
Although the hat policy restricts the type of hat that may be
worn, it does not say anything about whether union insignia
may be attached to the hat. Moreover, the general uniform
policy allows employees to accessorize “in good taste and in
accordance with all safety rules” and asserts that “[a]ll
uniform requirements will be applied in accordance with
applicable laws.” J.A. 112. World Color has consistently
argued that the hat is part of its uniform policy and that World
Color’s policies therefore facially allow an employee to adorn
their Quad hat with union insignia. Indeed, World Color
made this argument before the Board, asserting that “the hat
policy does not expressly prohibit employees from wearing
union insignia at work, on their hat or otherwise,” and noting
that “the Government presented no evidence that Quad’s
policy prevents employees from wearing union insignia on
their hats . . . the policy simply prevents employees from
replacing the Company hat with any hat of their own
choosing.” Respondent Quad/Graphic Inc.’s Brief in Support
of its Exceptions to Decision and Order of the Administrative
Law Judge at 15-16, World Color, 2014 WL 559195. The
Board’s conclusion that “it is undisputed that the policy on its
face prohibits employees from engaging in the protected
activity of wearing caps bearing union insignia” is therefore
contradicted by the record. World Color, 2014 WL 559195,
at *1 n.3 (emphasis added).
                              6



                             III.

     This Court will uphold an order of the NLRB unless it
“has no rational basis or is unsupported by substantial
evidence.” Bally’s Park Place, Inc. v. NLRB, 646 F.3d 929,
935 (D.C. Cir. 2011) (quoting United Mine Workers of Am. v.
NLRB, 879 F.2d 939, 942 (D.C. Cir. 1989) (internal quotation
marks omitted)). In the present case, the NLRB’s order was
premised on its finding that there was no dispute concerning
whether World Color’s hat policy facially prohibited
employees from wearing hats bearing union insignia. As
discussed above, this finding has no basis in the record before
the agency. Although the policy required employees to wear
a Quad hat rather than any other hat – including a union hat –
the company argued that it allowed employees to “bear union
insignia” on the Quad hat by accessorizing it in an appropriate
manner. We therefore grant the petition for review and
remand to the NLRB for reconsideration. The NLRB’s
application for enforcement is consequently denied.

                                                   So ordered.
