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May 13, 2012

On May 10, 2012, the U.S. Court of Appeals for the Second Circuit rejected the National Labor Relations Board (NLRB) decision that Starbucks Corp. interfered with the rights of employees by forbidding them from wearing more than one union button at a time when they were on duty in the company’s stores (NLRB v. Starbucks Corp. d/b/a Starbucks Coffee Co., 2d Cir., No. 10-3511-ag, 5/10/12).

Denying enforcement of an NLRB ruling that the button limit violated Section 8(a)(1) of the National Labor Relations Act, the appeals court found that Starbucks encouraged workers to wear numerous buttons promoting its products. The company was entitled to avoid a “dilution” of its message by employees wearing multiple union buttons, Judge Jon O. Newman wrote for the appeals court.

The court also remanded to NLRB the case of an employee and union supporter who was fired after using obscenities in a public area of a New York Starbucks store. Newman and Judge Ralph K. Winter said the board’s customary four-part test for determining whether an employee has lost NLRA protection should not be applied to behavior that occurs in the presence of an employer’s customers. Judge Robert A. Katzmann concurred in the remand, but disagreed with the majority’s reading of NLRB precedent.

According to the decision and NLRB records, the disputes before the court arose out of organizing efforts by the Industrial Workers of the World (IWW) at four New York stores.

From 2004 to 2007, IWW supporters held protests and made numerous statements to news media. The court said Starbucks responded by using “a number of restrictive and illegal policies” that limited employees from engaging in pro-union activity that was protected by the NLRA.

Acting on unfair labor practice charges filed by IWW Local 660, the board, then consisting of Chairman Wilma B. Liebman and Member Peter C. Schaumber, issued a decision in 2009 (354 N.L.R.B. 876, 187 LRRM 1113 (2009)) finding that the company engaged in a variety of unfair labor practices.

The company petitioned for review in the U.S. Court of Appeals for the District of Columbia Circuit, but the court dismissed the proceedings at the request of the parties, and the board set aside the two-member decision after the U.S. Supreme Court held in New Process Steel LP v. NLRB, 130 S. Ct. 2635, 188 LRRM 2833 (2010), that the authority of the five-seat board could not be delegated to a panel with fewer than three members.

A three-member board panel reviewed the case and issued a decision in 2010 (355 N.L.R.B. 636, 189 LRRM 1493 (2010)) mostly affirming the rulings of the two-member panel. Starbucks petitioned for review in the Second Circuit, and NLRB filed a petition to enforce its order.

Newman said the first issue before the court was the board’s decision that the company violated the NLRA by enforcing a rule that permitted employees to wear one, but only one, union button at work.

The company had settled an NLRB unfair labor practice case in March 2006, the court noted. In the settlement, Starbucks gave up a total ban on union buttons and substituted a policy that permitted “reasonably-sized-and-placed buttons or pins that identify a
particular labor organization or a partner’s support for that organization,” with certain safety exceptions.

Starbucks managers interpreted the authorization for “buttons or pins” to limit employees to wearing one union pin at a time. The court said several employees were asked to remove IWW buttons from their clothing before they began work. IWW’s buttons, the court said, had the union’s initials in white letters on the red background of a button that was less than one inch in diameter.

Newman said an NLRB administrative law judge found, and the board agreed, that Starbucks did not have a legitimate
business interest in restricting displays of IWW buttons. The company encouraged employees to wear large numbers of buttons promoting Starbucks products.

Customers would not immediately recognize the company buttons as Starbucks-sponsored, the ALJ said, because the union buttons were “no more conspicuous than the panoply of other buttons employees displayed.”

The Second Circuit found that “the Board has gone too far in invalidating Starbucks’s one button limitation.” Starbucks had a right to shape its public image by encouraging or requiring employees to wear its product buttons, the court said. “The company is also entitled to avoid the distraction from its messages that a number of union buttons would risk.”

Citing the example of one employee who attempted to display eight union pins on her pants, shirt, hat, and apron, Newman said “wearing such a large number of union buttons would risk serious dilution of the information contained on Starbucks’s buttons.”

Denying enforcement of the NLRB finding that maintaining and enforcing the button rule was an unfair labor practice, the court concluded, “The company adequately maintains the opportunity to display pro-union sentiment by permitting one, but only one,
union button on workplace clothing.”


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