Labor & Employment Law Daily Wrap Up, LABOR—UNFAIR LABOR PRACTICES—2d Cir.: NLRB erred in invalidating Starbucks dress code policies, (Sep 3, 2026)

By Jason Albright, J.D.

“We, like the Fifth Circuit, reject the test set forth in the NLRB’s Tesla decision.”

The NLRB erred in finding that Starbucks Reserve Roastery unlawfully maintained dress code policies that prohibited employees from wearing, while at work, more than one union button; buttons or pins that advocate for political, religious, or personal issues; and shirts with writings that were not pre-approved by Starbucks, the Second Circuit held. The Board’s conclusion regarding the one-pin policy was foreclosed by the appeals court’s 2012 precedent in NLRB v. Starbucks Corp (Starbucks I), 679 F.3d 70 (2d Cir. 2012). Additionally finding that the Supreme Court’s decision in Republic Aviation does not support the rule adopted by the Board in Tesla, Inc., 371 NLRB No. 131 (Aug. 29, 2022), that all employer-mandated dress codes that limit employees’ right to display union insignia are presumptively unlawful, the appeals court denied enforcement of the Board’s order as to the other two dress code policies as well (Siren Retail Corp. v. NLRB , Nos. 24-3168 (Lead) and 24-3298 (XAP) (2d Cir. Sept. 2, 2026)).

Starbucks Workers United. On September 19, 2022, according to the court, during a national campaign to negotiate the first union contract for Starbucks employees, five to seven employees at Starbucks Reserve Roastery’s main coffee bar in New York City wore black t-shirts bearing the name and logo of the Starbucks Workers United union atop their Starbucks-approved aprons.

Violation of dress code policy. The event prompted the store’s operations manager to inform the participating employees that their attire violated the roastery’s dress code policy and to ask them to change into dress-code-compliant shirts. The employees changed attire and continued their shifts.

ULP charge. In response to these events, however, on October 25, 2022, the union filed an unfair labor practice (ULP) charge against Starbucks with the Board. The union alleged that Starbucks violated Section 8(a)(1) by “interfer[ing] with employees’ [Section 7] right to display union insignia.”

NLRB’s complaint. Following an investigation, on June 22, 2023, the NLRB initiated administrative proceedings against Starbucks. The agency’s complaint alleged that Starbucks committed ULPs by maintaining the three dress code policies. It further alleged that Starbucks violated the NLRA when enforcing the policies by instructing employees to remove their union t-shirts and threatening to discipline those who did not comply.

One-pin policy. First, the company’s one-pin policy provided that, in addition to Starbucks-approved or issued pins, Starbucks employees are permitted to wear on their apron “one reasonably sized and placed button or pinthat identifies a particular labor organization or a partner’s support for that organization, except if it interferes with safety or threatens to harm customer relations or otherwise unreasonably interferes with Starbucks[‘] public image.”

Issue-pin policy. Second, its issue-pin policy provided, in relevant part, that employees “are not permitted to wear buttons or pins that advocate a political, religious or personal issue.”

Logo-shirt policy. Third and finally, the company’s logo-shirt policy provided that, though employee shirts may have a “small manufacturer’s logo,” they may not have “other colors, designs, logos or writings” than those preapproved by Starbucks.

ALJ’s decision. On December 6, 2023, an ALJ for the Board issued a decision concluding that, except with respect to its maintaining of the one-pin policy, Starbucks committed the ULPs alleged. As to the one-pin policy, the ALJ recommended dismissing the allegation after determining that the policy was “nearly identical” to the one-pin rule that the Second Circuit had previously determined not to be a ULP in NLRB v. Starbucks Corp. (Starbucks I), 679 F.3d 70 (2d Cir. 2012). As to the other charges, the ALJ relied on the Board’s decision in Tesla, Inc., 371 N.L.R.B. No. 131 (Aug. 29, 2022), to conclude that Starbucks’ other dress code restrictions were not narrowly tailored to serve their proffered special circumstances.

Board’s decision. The Board, however, reversed the ALJ’s finding as to the one-pin policy and concluded that the factual circumstances here were distinguishable from the circumstances in Starbucks I. The Board then applied its own decision in Tesla to assess Starbucks’ other restrictions on employee dress.

The Tesla test created a rebuttable presumption that all mandated uniform codes violate the NLRA and obligates employers to narrowly tailor their uniform policies to avoid liability. Applying the Tesla test, the Board concluded that Starbucks’ dress code provisions were not narrowly tailored to serve the company’s proffered special circumstances and therefore violated the NLRA.

Petition for review and cross-application for enforcement. Starbucks petitioned the Second Circuit for review, and the Board cross-applied for enforcement. The parties disputed whether the Board’s one-pin policy finding was foreclosed by Starbucks I and whether the Board’s Tesla standard is consistent with the Supreme Court’s longstanding precedent in Republic AviationCorp. v. NLRB, 324 U.S. 793 (1945).

Skidmore deference. The Second Circuit initially observed that, although the NLRB’s legal conclusions may no longer have the “‘power to control,’” as they did under Chevron, they may still have the “‘power to persuade.’” Loper Bright Enterprises v. Raimondo, 603 U.S. 369, 402 (quoting Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944)). Under Skidmore, an agency’s legal conclusion may have persuasive force depending on the “‘thoroughness evident in its consideration, the validity of its reasoning, [and] its consistency with earlier and later pronouncements[.]’” But such persuasive force is not present, the appeals court noted, in instances in which the Board misinterprets and misapplies the law.

One-pin policy and Starbucks I. Turning to the Board’s challenged findings, the Second Circuit first found that the conclusion that maintaining the one-pin policy was unlawful was foreclosed by the court’s own precedent. In Starbucks I, the appeals court rejected the Board’s conclusion that a close analogue to the one-pin policy violated the NLRA. The policy at issue in that case applied to employees working in thousands of Starbucks neighborhood stores and, like the one-pin policy here, limited employees to wearing only one reasonably sized union button or pin.

“This case,” the Second Circuit noted, “in substance, is indistinguishable.” Under the applicable policies in both cases, employees could wear only one pro-union pin; were subject to a comprehensive dress code; and were encouraged to wear multiple pins and buttons issued by Starbucks as part of its employee-reward and product-promotion programs. Under those circumstances, the Second Circuit concluded in Starbucks I that Starbucks is “entitled to avoid the distraction from its messages that a number of union buttons would risk” and that Starbucks “adequately maintain[ed] the opportunity to display pro-union sentiment by permitting one, but only one, union button on workplace clothing.” That reasoning, the appeals court concluded, “compels the same conclusion with respect to the relevantly similar One-Pin Policy at issue here.”

Issue-pin and logo-shirt policies. Next turning to the Board’s invalidation of Starbucks’ issue-pin and logo-shirt policies, the court again denied enforcement of the Board’s order. Holding that the Board’s decision in Tesla “amounts to a misapplication of precedent,” the appeals court remanded the case to the Board “for further consideration under a more balanced test.”

Dress code restrictions. To assess whether a dress code restriction violates Section 8(a)(1), the Second Circuit noted, the Board has created a “narrow” rule: if an employer can demonstrate “special circumstances sufficient to outweigh [its] employees’ Section 7 interests and legitimize the regulation of such insignia[,]” then the employees’ Section 7 interests “may give way” to the employer’s restriction. Pac. Bell Tel. Co., 362 N.L.R.B. No. 105 (June 2, 2015). Over time, the Board has refined its special circumstances analysis and the level of scrutiny it gives to certain employer restrictions.

Tesla. The Board’s Tesla decision, however, “departed from this framework and enforced a stricter standard for determining the ‘lawfulness of workplace rules or policies’ that, even implicitly, ‘restrict the display of union insignia by requiring employees to wear uniforms or other designated clothing,’” said the Second Circuit.

Republic Aviation. The Supreme Court’s 1945 precedent in Republic Aviation, the appeals court held, does not support the rule adopted in Tesla that all employer-mandated dress codes that limit employees’ right to display union insignia are presumptively unlawful. Republic Aviation did affirm the Section 7 right of employees to wear union buttons and insignia, the Second Circuit noted, but the Supreme Court also recognized that the right is not absolute.

Instead, Republic Aviation and judicial decisions applying it do not support applying a strict presumption against employers without fairly balancing employer and employee interests, the appeals court said. “Otherwise submitting all employers—regardless of their degree of intervention—to a strict presumption of unlawfulness limits the agency’s ability to assess whether an employee’s ability to express union support is ‘truly diminished’ by an employer’s dress code rule.”

For similar reasons, the Second Circuit could not endorse Tesla’s narrow tailoring requirement. That requirement, the appeals court noted, “places a strict-scrutiny-like burden on all employers to justify even facially neutral, partial dress code restrictions,” and as the court previously observed, Republic Aviation and its progeny emphasize the need to strike a balance between “the undisputed right of self-organization assured to employees . . . and the equally undisputed right of employers to maintain discipline in their establishments” and to promote their legitimate business interests.

Aligning with the Fifth Circuit. “The Board’s Tesla standard,” the appeals court said, “does little more than pay lip service to balancing.” Here, the Second Circuit referenced the Fifth Circuit’s 2023 decision similarly vacating the Board’s application of Tesla: “[i]f the Board subjects every infringement to a special-circumstances test, it cannot adjust the level of scrutiny when it considers comparatively lesser or greater infringements.” Tesla, Inc. v. NLRB, 86 F.4th 640, 652 (5th Cir. 2023).

Remand. “We, like the Fifth Circuit,” the court concluded, “reject the test set forth in the NLRB’s Tesla decision. Accordingly, we also deny enforcement and remand this case to the NLRB for it to apply a more evenly measured balancing test, one that encompasses the balancing framework in Republic Aviation, when analyzing whether Starbucks’ dress-code policies violated the NLRA.”

The case is Nos. 24-3168 (Lead) and 24-3298 (XAP).

Judge: Walker, J., Jr.

Attorneys: Amy Mason Saharia (Williams & Connolly) for Siren Retail Corp. d/b/a Starbucks Reserve Roastery. Jared David Cantor for the NLRB.

Companies: Siren Retail Corp.; Starbucks Reserve Roastery

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