Second Circuit: No Deference To NLRB’s Dress Code Restrictions

Last week, the U.S. Court of Appeals for the Second Circuit refused to enforce the National Labor Relations Board’s (NLRB) restrictive view of employer dress code policies, as premised on the Board’s erroneous legal foundation for assessing such policies.

In Starbucks Reserve Roastery, No. 24-3168 (2d Cir. Sept. 2, 2026), the Starbucks Workers United union challenged the following Starbucks dress code policies:

• In addition to Starbucks-approved or issued pins, Starbucks employees may wear on their apron “one reasonably sized and placed button or pin that 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.”
• Employees are “not permitted to wear buttons or pins that advocate a political, religious or personal issue.”
• While employee shirts may have a small manufacturer’s logo, they may not have “other colors, designs, logos or writings” other than those pre-approved by Starbucks.

The Second Circuit refused to enforce the Board’s findings that these policies were unlawful, reasoning that the Board’s reliance on its decision in Tesla, Inc., 371 NLRB No. 131 (Aug. 29, 2022), misapplies precedent and rests on erroneous legal foundations. 

In Tesla, the NLRB adopted the presumption that all employer dress code policies that limit an employee’s right to display union insignia are presumptively unlawful. There, the Board invalidated Tesla’s content-neutral dress code policy, which required employees to wear Tesla-issued shirts. The Second Circuit now joins the Fifth Circuit in refusing to enforce Tesla. The Second Circuit said that Tesla applies a “strict-scrutiny like burden on all employers to justify even facially neutral, partial dress code restrictions,” which is inconsistent with precedent. 

Referencing Supreme Court precedent from Republic Aviation, 324 U.S. 793 (1945), the Second Circuit urged a return to the balancing test between “the undisputed right of self-organization assured to employees…and the equally undisputed right of employers to maintain discipline in their establishments.” The court further opined that employees have the right to wear items that relate to unionization and other protected matters at work, but employers are not prevented from making and enforcing reasonable rules covering the conduct of employees on company time, because “working time is for work.”

The Second Circuit remanded the case to the Board to “apply a more evenly measured balancing test” and gave the Board guidance about what factors to consider in its analysis, including: 1) the extent of intrusion on employees’ Section 7 rights (i.e. whether the employer enforced a full or partial ban on union insignia during working time); 2) whether the employer’s policy is facially neutral, nondiscriminatory, and consistently enforced; and 3) the context or circumstances underlying the intrusion. 

Deference to Board Decisions Under Loper Bright

The Second Circuit also had the opportunity to weigh in on the level of deference owed to NLRB decisions following the Supreme Court’s decision in Loper Bright Enterprises v. Raimondo, 603 U.S. 369 (2024), where the Court held that deference to federal agency interpretations of enabling legislation is not required. The Second Circuit said that the courts retain “unfettered authority” under Loper Bright to analyze questions of law de novo, and that the NLRB’s legal conclusions may have the “power to persuade” but not the “power to control.” Citing Loper, 603 U.S. at 402 (quoting Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944)). The court distinguished its authority to decide questions of law de novo, from the requirement to defer to the NLRB’s factual findings that are supported by “substantial evidence,” holding that Loper Bright did not disturb the nature of review of an agency’s factual findings. However, the court made clear that it has the “primary interpretive responsibility” on statutory meaning.

Key Takeaway for Employers

The Starbucks decision signals wider breadth for employers to maintain and enforce facially neutral dress code policies, even if they may restrict an employee’s right to wear union insignia at work. At least for employers in the Second and Fifth Circuits, the NLRB will not be permitted to apply Tesla and instead, will be required to balance an employee’s Section 7 right to display union insignia against the employer’s right to maintain workplace rules. Employers may be successful in maintaining content-neutral dress code policies where it can show special circumstances for a restriction, including where the insignia may jeopardize employee safety, damage machinery or products, or interfere with a public image that the employer has established as part of its business plan through appearance rules for employees. 

On August 26, 2026, the NLRB’s General Counsel issued GC Memo 26-04 and included dress codes and reversal of Tesla as one of her priorities for future Board Action, indicating that any such action could reinstate the Board’s former standard for dress codes announced in Wal-Mart Stores, Inc., 368 NLRB No. 146 (2019).

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