The restriction is the shirt cannot be made from a real flag. Flag designs or screen prints that are not an actual flag made into a shirt are acceptable.
Or at least that is the way I understand the law, or not! Too confusing.
Here is the latest from a senate ruling,2008.
http://www.senate.gov/referenc...rces/pdf/RL30243.pdfUse of the Flag in Jewelry, Commercial Products, Wearing
Apparel, and Advertising
The Flag Code addresses the impropriety of using the flag as an article of
personal adornment, a design on items of temporary use, and item of clothing.48 The
evident purpose of these suggested restraints is to limit the commercial or common
usage of the flag and, thus, maintain its dignity. The 1976 amendments to the Code
recognized the wearing of a flag patch or pin on the left side (near the heart) of
uniforms of military personnel, firemen, policemen, and members of patriotic
The Code also states that the flag should never be used for
advertising purposes in any manner whatsoever.
While wearing the colors may be in poor taste and offensive to many, it is
important to remember that the Flag Code is intended as a guide to be followed on
a purely voluntary basis to insure proper respect for the flag. It is, at least,
questionable whether statutes placing civil or criminal penalties on the wearing of
clothing bearing or resembling a flag could be constitutionally enforced in light of
Supreme Court decisions in the area of flag desecration.
In the past, the Supreme Court has held that states may restrict use of pictures
of the flag on commercial products.52 There is a federal criminal prohibition on the
use of the flag for advertising purposes in the District of Columbia.53 While
commercial speech does not receive the full protection of the First Amendment,54 the
status of these statutes and cases can not be taken for granted in light of Eichman and
Johnson.