NLRB’s Dress Code Test Criticized by Second Circuit Judges (1)

A federal appeals court expressed skepticism toward the National Labor Relations Board’s Biden-era precedent for employee dress codes that it applied to rule against Starbucks Corp.’s requirements for workers at its New York City Reserve Roastery café.

The NLRB’s standard from its 2022 decision in Tesla, Inc. appeared to stray from the type of balancing test the board traditionally used for considering limits on what workers can wear to show union support, judges on the US Court of Appeals for the Second Circuit said during oral argument Wednesday.

Judges William Nardini, a Trump appointee, and Susan Carney, an Obama appointee, each disapprovingly compared the Tesla test to “strict scrutiny”—the highest threshold courts use to determine the constitutionality of government action.

The Second Circuit seemed poised to join the Fifth Circuit in rejecting the Tesla standard, which presumes that an employer’s limitations on the display of union insignia in the workplace is unlawful unless they’re justified by special circumstances. The restrictions must also be narrowly tailored to address those special circumstances.

The court’s ruling will likely have a broader impact on how it handles future NLRB cases, as the judges probed lawyers on what level of deference courts should apply to the board’s decisions. The Manhattan-based appeals court hasn’t handed down a full, precedential opinion on an NLRB ruling since the US Supreme Court’s 2024 decision in Loper Bright Enterprises v. Raimondo, which ended the Chevron doctrine’s mandatory judicial deference to agency interpretations of vague laws.

The Supreme Court repeatedly deferred to the NLRB’s readings of federal labor law prior to establishing a general standard for yielding to agencies in its now defunct 1984 ruling in Chevron U.S.A., Inc. v. Natural Resources Defense Council. For example, the high court in 1979 held that the board’s interpretation of the National Labor Relations Act should be enforced as long as it’s “reasonably defensible.”

While Loper Bright told courts to exercise independent judgment, it didn’t explicitly overturn decades of pre-Chevron precedents on NLRB deference. Post-Loper Bright, several circuit courts have ignored that earlier case law on NLRB deference and stated they don’t yield to the board’s reading of the NLRA.

‘Chevron-ish’

Under questioning Wednesday, NLRB lawyer Jared Cantor said courts review the board’s legal conclusions to ensure they have a reasonable basis in the law.

“Can that possibly still be true that their legal conclusions have reasonable basis in the law?” Nardini said. “That sounds very Chevron-ish. I thought if it’s a pure and abstract question of law, we’d have to, after Loper Bright, review it de novo.”

Cantor insisted that the Second Circuit’s consideration of the NLRB’s case against Starbucks “is not a Loper Bright case” because it turns on applying established law rather than interpreting a statute.

Courts handling these types of cases determine whether the board had substantial evidence to support its decisions, Cantor said.

But the evidence in the case is undisputed, and the real question—whether Starbucks showed they had special circumstances—is a mixed question of law and fact, said Judge John Walker, a George W. Bush appointee. And there’s tension in the law between Tesla and the NLRB’s standard for dress codes set during the first Trump administration, he said.

Carney acknowledged the uncertainty about how Loper Bright affects judicial deference to the NLRB, as well as problems with considering that issue in the present case.

“There are really quite unsettled questions, and the standard of review and Loper Bright were not extensively briefed by you all here,” Carney said. “So we’re a little bit at loose ends.”

Strict Scrutiny

The case stems from the NLRB’s 2024 ruling Starbucks illegally prohibited shirts with graphics on them, including union insignia. The board also faulted the company for banning workers from wearing more than one pin related to labor organizing or any advocating for personal, political, or religious issues.

Carney said she’s worried about the NLRB getting away from a test for dress codes that balances the totality of the circumstances and gives credit to each side, instead subjecting employers’ restrictions to strict scrutiny. Starbucks takes a “reasonable position” by allowing a union pin and tightly regulating what shirts public-facing employees can wear, she said.

“Why wouldn’t the board take a more holistic approach in assessing this?” Carney wondered.

Nardini criticized the Tesla framework’s requirement that limitations on union insignia be narrowly tailored, suggesting that the board simply look for a link between the restriction and the special circumstance.

Starbucks’ attorney, Amy Mason Saharia of Williams & Connolly LLP, said the narrowly tailoring mandate is a strict scrutiny test. The NLRB can’t point to a case when it applied that requirement and ruled in favor of the employer, she said.

The case is Siren Retail Corp. d/b/a Starbucks Reserve Roastery v. NLRB, 2d Cir., No. 24-3168, oral argument held 11/12/25.