Labor & Employment Law Update

Employers may have more flexibility to enforce neutral dress code and uniform policies, even when those policies affect employees' display of union insignia.

On September 2, 2026, in a decision involving Starbucks’ New York Reserve Roastery, the Second Circuit rejected the NLRB’s stringent standard to workplace rules that restricts employees’ ability to display union insignia under its Tesla decision. The court concluded that the Board’s Tesla standard did not adequately balance employees’ rights with an employer’s legitimate business interests.

For employers, this is a significant development, but not a nationwide green light to restrict union apparel. While the decision does not eliminate employees’ rights to display union messages or overrule Tesla nationwide, it signals growing judicial skepticism of the Board’s restrictive approach. For employers with dress code, uniform, or appearance policies, the decision provides additional support for maintaining neutral, consistently enforced workplace standards.

The Workplace Policy at Issue in Starbucks

Starbucks maintained rules at its Reserve Roastery in New York City governing what employees could wear, including restrictions affecting union pins and shirts. The NLRB concluded that several of those rules violated employees’ rights under the National Labor Relations Act. Starbucks challenged that decision in federal court, and the Second Circuit sided with Starbucks in significant part.

The upheld Starbucks’s one-pin policy based on an existing Second Circuit precedent on a similar issue. For Starbucks’s other restrictions, including its policies concerning issue pins and logo shirts, the court sent the case back to the NLRB and directed it to use a more balanced approach that takes both employee rights and legitimate employer interests into account.

Why the NLRB Tesla Standard Matters for Employers

The Starbucks dispute centered on the NLRB’s 2022 Tesla, Inc. decision, which adopted a particularly strict approach to employer restrictions on union insignia. Under Tesla, any restriction on employees’ ability to display union insignia was presumed unlawful, even if it resulted from an otherwise neutral uniform or dress-code policy, unless the employer could establish special circumstances.

The Second Circuit took a different view of that approach in the Starbucks case. It instructed the Board to seriously consider such things as how much the policy actually limits employees’ ability to show union support, whether the policy is neutral and consistently enforced, and why the employer has the policy in the first place.

That last point matters. Safety, protecting products, maintaining a particular public image and other legitimate operational concerns may not automatically justify a restriction, but they should meaningfully factor into the analysis.

Employers Should Still Proceed Carefully: Tesla Remains the Law for Now

This is where employers need to be careful. The Second Circuit’s decision does not overrule Tesla as Board precedent nationwide and the NLRB has not abandoned it. Rather, the Second Circuit refused to enforce the Board’s application of that standard and directed it to apply a more balanced analysis that considers legitimate employer interests.

That said, the Second Circuit is not alone. The Fifth Circuit previously rejected the Board's approach in Tesla, and recent signals from the NLRB’s general counsel suggest the Board may revisit the standard and potentially return to an older, more employer-friendly framework.

The bottom line for busy employers is that courts are showing greater willingness to consider legitimate business reasons for workplace rules, but Tesla remains Board precedent and the law continues to evolve.