Flair and Flare-Ups: 2nd Circuit Reverses NLRB Decision on Union Conduct during Heated Organization Campaign

May 31, 2012

On May 10th, the Second Circuit Court of Appeals overturned the NLRB’s ruling in a case arising from a heated union organizing campaign at four Starbucks stores in New York City from 2004 to 2007. The Second Circuit reversed the NLRB’s finding that Starbucks’ policy prohibiting employees from wearing multiple pro-union buttons during work, which the company implemented during the union organizing campaign, constituted an unfair labor practice.  The NLRB had ruled that allowing pro-union employees to wear multiple buttons did not seriously harm Starbucks’ legitimate interest in employee image because Starbucks not only tolerated but encouraged employees to wear buttons, and the buttons were not immediately recognizable by customers as company-sponsored.  In reversing, the Second Circuit acknowledged that the NLRA sometimes protects employees' right to wear a union insignia or apparel, but also stressed that special circumstances can arise which justify restricting their display. Substantial evidence like one employee’s use of eight buttons at once constituted such special circumstances, which could unreasonably interfere with Starbucks’ established public image. The company was entitled to have employees wear buttons promoting its products free from the fear of union buttons detracting from its message. The Second Circuit also disapproved of the NLRB’s use of its four-factor Atlantic Steel test to find an off-duty employee’s use of obscenities towards a manager in front of customers during the union campaign was protected activity.  The Atlantic Steel test, which the NLRB has historically used to assess whether an employee is protected by the NLRA when making profane and insubordinate comments, considers: (1) the place of the discussion; (2) the subject matter of the discussion; (3) the nature of the employee’s outburst; and (4) whether the outburst was, in any way, provoked by an employer’s unfair labor practice.  Atlantic Steel Co. (1979).  The court ruled this test inapplicable to the facts at hand because when the NLRB developed the Atlantic Steel, it was not considering the use of obscenities in a public place in the presence of customers.  The case was remanded back to the NLRB to address these questions in the first instance and establish appropriate factors to be considered in such cases. It remains to be seen whether the Second Circuit’s decision is appealed.  Nonetheless, employers should be mindful of the potential impact dress codes may have on protected union activity and confer with counsel on ways to insulate customers from unwanted exposure to off-duty employees’ union related activities. If you have any questions or for further information about permitted employer conduct during union organizing campaigns, please contact James J. McGovern, Esq.jmcgovern@genovaburns.com or Douglas J. Klein, Esq., dklein@genovaburns.com, in the Labor Law Practice Group.