10-3511-ag (L)
NLRB v. Starbucks Corporation
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
August Term 2011
Heard: November 22, 2011 Decided: May 10, 2012
Docket Nos. 10-3511-ag, 10-3783-ag(XAP)
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NATIONAL LABOR RELATIONS BOARD,
Petitioner-Cross-Respondent,
v.
STARBUCKS CORPORATION, d/b/a STARBUCKS
COFFEE COMPANY,
Respondent-Cross-Petitioner.
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Before: NEWMAN, WINTER and KATZMANN, Circuit Judges.
Petition to enforce the August 26, 2010, decision and order
of the National Labor Relations Board ruling that employer
committed various unfair labor practices and cross-petition to
review the decision insofar as the Board determined that a an
employer’s dress code limiting employees to wearing only one pro-
union button on their work clothes and the discharge of two
employees are unfair labor practices.
Petition enforced only as to unfair labor practices not
challenged by employer; cross-petition for review granted as to the
dress code violation and the discharge of one employees; case
remanded as to the discharge of the other employee.
Judge Katzmann concurs with a separate opinion.
Jeffrey W. Burritt, National Labor
Relations Board, Washington, D.C.,
(Robert Englehart, Supervisor Attorney,
Lafe E. Solomon, Acting General
Counsel, Celeste J. Mattina, Acting
Deputy General Counsel, John H.
Ferguson, Associate General Counsel,
Linda Dreeben, Deputy Associate General
Counsel, National Labor Relations
Board, on the brief), for Petitioner-
Cross-Respondent.
Patricia A. Millett, Akin Gump Strauss
Hauer & Feld LLP, Washington, D.C.
(Daniel L. Nash, Stacey R. Eisenstein,
Hyland Hunt, Akin Gump Strauss Hauer &
Feld LLP, on the brief), for
Respondent-Cross-Petitioner.
JON O. NEWMAN, Circuit Judge.
This petition for enforcement of an order of the National
Labor Relations Board (“the Board”) and an employer’s cross-
petition for review primarily concern the validity of an employer’s
dress code provision limiting employees to displaying only one pro-
union button on their work uniforms. Also at issue are the
discharges of two employees. These issues arise out of efforts to
unionize employees at several Starbucks coffee shops in Manhattan.
The Board seeks enforcement of its August 26, 2010, order finding
Respondent-Cross-Petitioner Starbucks Corporation, d/b/a Starbucks
Coffee Company (“Starbucks” or “the company”), to have committed
several unfair labor practices, including the three challenged in
this case, in violation of subsections 8(a)(1) and 8(a)(3) of the
National Labor Relations Act (“the Act”), 29 U.S.C. § 158(a)(1),
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(3). Starbucks cross-petitions to set aside the challenged
portions of the Board’s Order. We conclude that Starbucks’s
enforcement of its one button dress code is not an unfair labor
practice, nor was one of the two challenged discharges; as to the
other discharge, a remand is required. We therefore enforce in
part, grant the cross-petition for review in part, and remand.
Background
The following facts, essentially not disputed, were found by
Administrative Law Judge Mindy E. Landow (“the ALJ”) and adopted by
the Board. From 2004 to 2007, the Industrial Workers of the World
(“IWW”) engaged in a highly visible campaign to organize wage
employees in four Starbucks stores. Among other efforts, union
supporters held protests, attempted to recruit “partners,”1 and
made numerous public statements to the media.
In response, Starbucks mounted an anti-union campaign aimed at
tracking and restricting the growth of pro-union sentiment. In the
course of this campaign, Starbucks employed a number of restrictive
and illegal policies. These included prohibiting employees from
discussing the union or the terms and conditions of their
employment; prohibiting the posting of union material on bulletin
boards in employee areas; preventing off-duty employees from
entering the back area of one of the stores; and discriminating
Starbucks retail stores are staffed by two classes of wage
1
employees: “baristas” and shift supervisors. Both types of employees
are described internally as “partners.”
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against pro-union employees regarding work opportunities. In this
Court, Starbucks does not challenge the Board’s determination that
this conduct violated the Act.
During this time period, the Board also found that Starbucks
committed three additional violations. First, it found that a
Starbucks policy prohibiting employees from wearing more than one
pro-union button on work clothes was an unfair labor practice.
Second, it found that Starbucks used protected activity to justify
the discharge of pro-union employee Joseph Agins. Third, it found
that Starbucks’s decision to discharge pro-union employee Daniel
Gross was primarily motivated by anti-union animus.
A. Starbucks’s One Button Policy
Starbucks implements a comprehensive dress code for its
employees. The code includes rules about appropriate types and
colors of shoes, pants, socks, shirts, undershirts, and jewelry.
The purpose of the dress policy, according to Starbucks’s employee
handbook, is to ensure that partners “present a clean, neat, and
professional appearance appropriate of [sic] a retailer of
specialty gourmet products.” Additionally, Starbucks encourages
employees to wear multiple pins and buttons issued by Starbucks as
part of its employee-reward and product-promotion programs. The
ALJ found that many of the adornments worn by employees are not
obviously related to employee programs, and that the resulting
public image is of a uniformed employee wearing a variety of
unrelated pins and buttons on their hats and aprons.
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Starbucks implemented a policy prohibiting multiple pro-union
buttons following an informal settlement agreement between
Starbucks and the Board in March 2006. Pursuant to that settlement
agreement, Starbucks replaced its prior prohibition of all pro-
union buttons with the following written policy:
Partners are not permitted to wear buttons or pins that
advocate a political, religious or personal issue. The
only buttons or pins that will be permitted are those
issued to the partner by Starbucks for special
recognition or advertising a Starbucks-sponsored event or
promotion; and reasonably-sized-and-placed buttons or
pins that identify a particular labor organization or a
partner’s support for that organization, except if they
interfere with safety or threaten to harm customer
relations or otherwise unreasonably interfere with
Starbucks [sic] public image.
Starbucks management interpreted this rule to preclude the wearing
of more than one pro-union pin, and requested that several
employees remove additional pins before being allowed to work.
The prohibited pins were less than one inch in diameter and
bore the initials “IWW” in white letters against a red background.
After examining photographs, the ALJ found that these pins were no
more conspicuous in size or design than the Starbucks-issued pins.
B. The Discharge of Joseph Agins
Beginning in May 2004, Joseph Agins worked at Starbucks’s 9th
Street store as a barista. In 2005, Agins became a vocal union
supporter, and was identified as such by management in internal
communications.
The May 14 incident. On May 14, 2005, Agins was working with
Assistant Store Manager (“ASM”) Tanya James and one other employee.
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During a particularly busy period, Agins became agitated with James
after she refused his request to help. When she eventually came to
help, Agins said that it was “about damn time” she came on the
line, and shoved a blender in the sink, causing a loud noise. He
later stated, “[T]his is bullshit,” and told James to “do
everything your damn self.” When James told Agins to clock out, he
initially refused.
Based on this encounter, Starbucks generated a corrective
action notice that informed Agins that “the aforementioned
behavior, if repeated will result in termination of employment at
Starbucks Corporation.” However, the notice was never provided to
Agins. Nevertheless, Agins was suspended for several days and
apologized for his outburst.
The November 21 incident. Several months later, Agins and
several other off-duty employees entered the 9th Street store to
show support for on-duty workers who had been instructed, pursuant
to the prior policy, to remove their pro-union pins. Agins and his
companions were wearing union t-shirts, caps, and insignia,
including pro-union pins and buttons.
Shortly after the group entered the store, Agins was
approached by Ifran Yablon, an off-duty manager from the company’s
Upper West Side store, who happened to be a regular customer at the
9th Street store. There was bad blood between the two. At an IWW
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rally several months before, Yablon had allegedly made derogatory
remarks to Agins’s father about the father’s support for the IWW.
Yablon engaged Agins in a conversation about his union pin and
whether Starbucks employees really needed a union. At some point,
Agins spoke of Yablon’s alleged insult to his father, and the
conversation became heated. Both men used hand gestures, spoke
loudly, and used obscenities. Agins admitted that he told Yablon,
“You can go fuck yourself, if you want to fuck me up, go ahead, I’m
here.” Agins’s fellow supporters then intervened to stop the
argument, and he withdrew with them to a table while James
approached Yablon and told him to “leave it alone.” Yablon then
left the store, and James went over to the table and admonished
Agins. He listened to her and did not utter obscenities or make
threatening gestures toward her. Agins and his companions left the
store approximately ten minutes later.
Agins is fired. On December 12, when Agins came into work, he
was asked to sit at the rear of the store with two managers. They
informed him that he was being discharged for disrupting business.
A subsequent document filed by Agins’s District Manager (“DM”)
stated that Agins would be ineligible for rehire because “[p]artner
was insubordinate and threatened the store manager. Partner
strongly support [sic] the IWW union.”
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C. The Discharge of Daniel Gross
Daniel Gross was hired at the 36th Street store in May 2003.
His first employee performance review, in November 2003, assessed
his overall performance at 2.4 -- “meets expectations,” on a scale
of 1 (lowest) to 3 (highest). He was accorded particular praise
for “legendary service.”
In 2004, Gross became active in leading union organization
efforts. On May 17 of that year he filed, on behalf of the IWW, a
representation petition seeking to represent employees at the 36th
Street store.
Gross’s next performance review came shortly thereafter, on
May 28, 2004. In it his manager assigned him an overall rating of
2.7 -- “exceeds expectations.” His significant accomplishments
included his ability to build relationships with customers and co-
workers and his ability to keep calm in times of stress. His areas
of improvement included engagement with the employee awards
program, and “work in communicating changes in partner attitude
(concerns, compliments, complaints) to . . . management.”
In August 2004, Gross began attending law school and reduced
his availability from five to two days per week.
Gross’s next review occurred in May 2005. For the first time,
this review included two “1” ratings -- in the categories of
“Recognizes and reinforces individual and team accomplishments by
using existing organizational methods” (employee awards), and
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“Contributes to positive team environment by recognizing alarms or
changes in partner morale and communicating them to the management
team.” Gross’s continuing failure to hand out employee-to-employee
awards was again cited, as well as his failure to communicate with
management. As in other reviews, his ability to connect with
customers was listed among his accomplishments.
Between May 2005 and January 2006, Gross’s number of hours
decreased dramatically. He worked a total of just twenty-five
hours during that entire period, frequently giving away his shifts
and asking for time off. Toward the end of this period, Gross’s
supervisor requested that he stop giving away his shifts to others,
and he stopped doing so. Gross, however, did not increase his
listed availability, and he continued to request time off, which
was granted. As a result, Gross worked fewer hours than any other
Starbucks employee from May 2005 up to the date of his discharge.2.
In November 2005, Gross became a highly visible figure in the
pro-union effort. He was quoted in various publications, including
a high-profile article about the subject in the New York Times. He
moderated a press conference on the unionization efforts,
personally authored and signed letters to management, and authored
and posted numerous press releases to a pro-union website. Id.
Management was aware of Gross’s activities and attempted to counter
2
Although the Starbucks policy does not list a minimum number of
hours, it states that “[p]artners may be expected to make themselves
available for work for a minimum number of days or hours per week,
depending on the store’s need. The inability or failure to increase
one’s availability to work may result in separation of employment.”
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them with their own press releases and through letters to
employees.
After a delay caused by Gross’s two-month absence in the
winter of 2005, he received his next performance review in late
January 2006. Unlike most such reviews, a DM was present as well
as Gross’s Store Manager (“SM”).3 The review, which had an
effective date of November 27, 2005, rated Gross at “1” in half of
the categories, and “2” in the rest. Among others, he received a
“1” in “Adheres to Starbucks values, beliefs, and principles.” His
overall rating was 1.5.
As a reason for the low scores, the evaluation cited Gross’s
low work hours and listed “[o]pening his availability” as an
opportunity for improvement. The evaluation also stated that
although “Dan is familiar with our beverages enough to know the
basic standards of recipe and presentation,” he has “had little
exposure to our seasonal lineup” and “has not demonstrated that he
has kept up his knowledge of current promotional items.” The
review also cited Gross’s lack of proactivity, noted his continuing
failure to participate in Starbucks’s employee awards program and
communicate with management, and stated that Gross “does not
display . . . a positive attitude about Starbucks to partners and
customers.”
When Gross asked why a DM was present, the DM told him it was a
3
new store policy. When he asked to see the policy in writing, the DM
said that there was no policy and that it was just a “best practice.”
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Gross testified that he asked the DM if he would have to open
up his availability in order to improve his performance review, and
the DM said no. Gross was asked to fill out a new availability
form, but he put down the same availability that he had previously
listed. He also signed the review under protest, suggesting that
the ratings be increased across the board.
His SM later noted in Gross’s record that “Dan did not work
frequently enough to receive a high score. We are hoping that with
an increase in shifts that [Gross] works over the next review
period that we can help him bring up his scores by exposing him to
promos and partners.” There is no indication, however, that Gross
was made aware of this additional remark.
The ALJ concluded that some of these low scores were motivated
by anti-union animus, but noted that “[i]t appears undisputed . . .
that Gross did not meet company standards in other areas such as
utilizing existing organizational methods to recognize coworkers,
training new hires and communicating partner morale issues to store
management.”
Gross had his next performance review only two and a half
months later, on April 14, 2006. The stated reason for the review
was so new management could meet Gross and get “on the same page.”
During the meeting, managers presented Gross with a revised version
of his previous evaluation, with new narrative comments and new
scores. Overall, the performance evaluation was slightly higher,
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partly because Gross’s performance in “Maintains regular and
consistent attendance and punctuality” was upgraded from a “1” to
a “2” with a notation that “Dan, as agreed to during his last
review, has worked all of his shifts as scheduled and has been on
time and in dress code on all occasions.” The rest of the
evaluation continued to fault Gross for failing to engage in the
employee awards program, for failing to adhere to Starbucks
principles and values, for failing to display a positive attitude
about the company, and for failing to communicate with management.4
An additional page of notes was attached to this review but
never provided to Gross. The notes stated that Gross had failed to
act on feedback and needed to increase his hours in order to
improve. On April 29, Gross was given an “Update on Performance”
by his SM. This memorandum listed Gross’s lack of work
availability and repeated many of the same deficiencies listed on
previous evaluations. The memo stated if Gross did not improve
these deficiencies and increase his hours by the next performance
review, he would be terminated.
Gross, however, made no efforts to increase his hours or
improve other deficient areas. Furthermore, between April 29 and
his termination on August 5, 2006, Gross was cited twice for
The ALJ credited testimony that, when Gross asked whether he
4
would have to report co-worker complaints about working conditions and
compensation in order to improve this last rating, he was told, “yes.”
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instructing employees or managers not to do cleaning work.5 The
ALJ also appears to have credited testimony from a fellow employee
that, during this period, Gross exerted little effort and displayed
limited knowledge of drinks.
On July 15, 2006, Gross had a tense encounter with DM Allison
Marx during a demonstration outside a Starbucks store in support of
a suspended employee, Evan Winterscheidt. As Marx walked into the
store, Gross pointed his finger at her and repeated several times
that it would be “very bad for you to fire Evan Winterscheidt.”
Later that evening, Gross left a message for Marx stating that any
action against Winterscheidt would be met with a “swift response.”
Gross was discharged on August 5, 2006. One of the stated
reasons was his threatening behavior toward Marx. In addition,
Gross was provided with a final performance review, in which he
received a score of 1.4. The review stated that Gross “does not
. . . say anything positive about the culture, values and mission
of Starbucks,” that he made little effort beyond the bare minimum,
that he continued to refuse to participate in employee awards and
communicate with management, and that Gross had not sufficiently
improved his attendance.
5
In the first instance, Gross told an ASM that she was too good
to be cleaning floors, and that that was not what she was paid to do.
In the second instance, Gross told an employee that stocking and
cleaning was not part of her job description, and that she was doing
more than she had to. Both individuals reported these instances to
management.
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D. The ALJ’s Decision and the Board’s Affirmance
On December 19, 2008, ALJ Landow issued a decision concluding
that Starbucks’s one button policy violated section 8(a)(1) of the
National Labor Relations Act and that the discharges of Agins and
Gross violated section 8(a)(3) of the Act.
The Board affirmed these decisions on October 30, 2009, and
again on August 26, 2010.6
Discussion
A. Standard of Review
Our standard of review is well established. “Factual findings
of the Board will not be disturbed if they are supported by
substantial evidence in light of the record as a whole.” National
Labor Relations Board v. Caval Tool Division, Chromalloy Gas
Turbine Corporation, 262 F.3d 184, 188 (2d Cir. 2001). Substantial
evidence means “such relevant evidence as a reasonable mind might
accept as adequate to support a conclusion.” Id. (internal
quotation marks omitted). Legal conclusions “based upon the
Board’s expertise should receive, pursuant to longstanding Supreme
6
The Board issued a second opinion following the United States
Supreme Court’s decision in New Process Steel, L.P. v. National Labor
Relations Board, 130 S. Ct. 2635 (2010), which held that Board
decisions must be supported by at least three members. Member Hayes
joined Member Schaumber and Chairman Liebman in affirming the latter
two’s previous decision.
Additionally, as noted, the Board affirmed a number of
determinations that Starbucks does not contest in this Court.
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Court precedent, considerable deference.” Id. (internal quotation
marks omitted).
B. The One Button Policy
Section 7 of the National Labor Relations Act guarantees to
all employees “the right to self-organization . . . and to engage
in other concerted activities for the purpose of collective
bargaining or other mutual aid or protection . . . .” 29 U.S.C. §
157. Employers may not “interfere with, restrain, or coerce
employees in the exercise of [those] rights.” 29 U.S.C. §
158(a)(1).
In particular, “the right of employees to wear union insignia
at work has long been recognized as a reasonable and legitimate
form of union activity, and the respondent’s curtailment of that
right is clearly violative of the Act.” Republic Aviation Corp. v.
National Labor Relations Board, 324 U.S. 793, 802 n.7 (1945);
accord District Lodge 91, International Ass’n of Machinists and
Aerospace Workers, AFL-CIO v. National Labor Relations Board, 814
F.2d 876, 879 (2d Cir. 1987). To overcome this presumption, an
employer bears the burden of showing “special circumstances” that
justify curtailment of the right. Guard Publishing Co. v. National
Labor Relations Board, 571 F.3d 53, 61 (D.C. Cir. 2009); Midstate
Telephone Corp. v. National Labor Relations Board, 706 F.2d 401,
403 (2d Cir. 1983). These include “ensuring employee safety,
protecting the employer’s product, [and] maintaining a certain
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employee image (especially with respect to uniformed employees).”
Guard Publishing, 571 F.3d at 61.
The ALJ found, and the Board agreed, that allowing pro-union
employees to wear multiple buttons did not seriously harm
Starbucks’s legitimate interest in employee image because “the
Company not only countenanced but encouraged employees to wear
multiple buttons as part of that image.” These other buttons, the
Board found, were not immediately recognizable by customers as
company-sponsored, and the pro-union pins at issue were “no more
conspicuous than the panoply of other buttons employees displayed.”
Starbucks contends that the Board’s rule permits employees to
wear an unlimited number of buttons and would convert them into
“personal message boards” and “seriously erode” the information
conveyed by Starbucks-issued pins.
We conclude that the Board has gone too far in invalidating
Starbucks’s one button limitation. As the Board has previously
recognized, “Special circumstances justify restrictions on union
insignia or apparel when their display may . . . unreasonably
interfere with a public image that the employer has established.”
Starwood Hotels & Resorts Worldwide, Inc., 348 N.L.R.B. 372, 373
(2006) (internal quotation marks omitted). Starbucks is clearly
entitled to oblige its employees to wear buttons promoting its
products, and the information contained on those buttons is just as
much a part of Starbucks’s public image as any other aspect of its
dress code. But the company is also entitled to avoid the
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distraction from its messages that a number of union buttons would
risk. The record reveals that one employee attempted to display
eight union pins on her pants, shirts, hat, and apron. Wearing
such a large number of union buttons would risk serious dilution of
the information contained on Starbucks’s buttons, and the company
has a “legitimate, recognized managerial interest[]” in preventing
its employees from doing so. District Lodge 91, 814 F.2d at 880.
The company adequately maintains the opportunity to display pro-
union sentiment by permitting one, but only one, union button on
workplace clothing. Starbucks has met its burden of establishing
that the one button restriction is a necessary and appropriate
means of protecting its legitimate managerial interest in
displaying a particular public image through the messages contained
on employee buttons.
C. Agins’s Discharge
As noted, Agins was discharged primarily for his use of
obscenities in an outburst during an organized protest of
Starbucks’s restrictive button policy. The Act generally prohibits
employers from “discriminat[ing] in regard to hire or tenure of
employment or any term or condition of employment to encourage or
discourage membership in any labor organization . . . .” 29 U.S.C.
§ 158(a)(3). If a decision to terminate an employee is motivated
by that employee’s union-related activity, the termination is
unlawful.
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However, “even when an employee is engaged in protected
activity, he or she may lose the protection of the Act by virtue of
profane and insubordinate comments.” Verizon Wireless, 349
N.L.R.B. 640, 642 (2007). But not all such behavior results in a
loss of protection; rather, “employees are permitted some leeway
for impulsive behavior when engaging in concerted activity . . .
balanced against an employer’s right to maintain order and respect
in the workplace.” Id. (internal quotation marks omitted); accord
Caval Tool, 262 F.3d at 192 (“[E]mployees receive some leeway since
passions may run high and impulsive behavior is common.”). To
determine, in some contexts, whether an employee has lost the
protection of the Act, the Board considers four factors: “(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., 245 N.L.R.B. 814, 816 (1979).
In this case, the ALJ found that, on balance, these factors
favored protecting Agins. She acknowledged that the first factor
weighed against protection because the outburst took place in a
public area of one of Starbucks’s stores, permitting both employees
and customers to hear it. The ALJ found that the second factor
weighed in favor of protection because the outburst originated out
of a discussion that was primarily about the union. The ALJ
reached the same conclusion regarding the third factor because the
outburst was brief and did not involve threats toward a supervisor.
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Finally, the ALJ determined that the fourth factor either weighed
in favor of protection or only slightly against it because the
comments that elicited Agins’s outburst, although not illegal, were
provocative. The Board adopted the ALJ’s reasoning, as well as
her conclusion that Agins’s outburst was protected by the Act.
We think the analysis of the ALJ and the Board improperly
disregarded the entirely legitimate concern of an employer not to
tolerate employee outbursts containing obscenities in the presence
of customers. When the Board formulated its four-factor test in
Atlantic Steel for determining whether an employee’s obscenities
would cause the employee to lose the protection of the Act, it was
not considering obscenities in a public place in the presence of
customers. The context was the workplace, e.g., the factory floor
or a backroom office, and the concern was whether the outburst
would impair employer discipline. In that context, the Board
distinguished between “a spontaneous outburst during the heat of a
formal grievance proceeding or in contract negotiations[,]” which
would not cause a loss of protection, and “an employee's use of
obscenity to a supervisor on the production floor,” which would not
be protected. Id. at 816. The Board recognized “that even an
employee who is engaged in concerted protected activity can, by
opprobrious conduct, lose the protection of the Act[,]” id., and
then formulated the four factor test to determine “whether the
employee has crossed that line, id. (emphasis added). Thus, it is
clear that “place,” the first of the four factors, serves to
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distinguish outbursts in the presence of other employees from those
away from other employees or in the course of grievance proceedings
or contract negotiations. It has nothing to do with public venues
where customers are present. In that context the Atlantic Steel
test is inapplicable.
The Board had previously acknowledged that “the language of
the shop is not the language of ‘polite society.’” Dreis & Krump
Mfg., Inc., 221 N.L.R.B. 309, 315 (1975) (emphasis added),
enforced, 544 F.2d 320 (7th Cir. 1976). But even when the Board
recognized “some leeway for impulsive behavior” by an employee, it
said that that leeway was to be balanced against “an employer’s
right to maintain order and respect,” Piper Realty Co., 313
N.L.R.B. 1289, 1290 (1994), thus indicating that the focus was on
workplace outbursts that might undermine an employer’s authority,
not outbursts in public spaces that risked losing customers.
In the context of outbursts containing obscenities uttered in
the workplace, the Board has regularly observed a distinction
between outbursts under circumstances where there was little if any
risk that other employees heard the obscenities and those where
that risk was high. Compare Alcoa, Inc., 352 N.L.R.B. 1222, 1226
(2008) (outburst in grievance meeting; protection maintained),
Stanford New York LLC, 344 N.L.R.B. 558, 558-59 (2005) (outburst in
employee lunchroom behind closed door in absence of other
employees; protection maintained), Felix Industries, 339 N.L.R.B.
195, 195-97 (2003) (outburst in private telephone conversation;
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protection maintained), with Verizon Wireless, 349 N.L.R.B. at 642-
43 (outburst in office cubicle adjacent to other employees’
cubicles; protection lost), DaimlerChrysler Corp., 344 N.L.R.B.
1324, 1329-31 (2005) (outburst in workplace heard by other
employees; protection lost), Aluminum Co. of America, 338 N.L.R.B.
20, 21-22 (2002) (outburst in employee breakroom within hearing of
other employees; protection lost), Atlantic Steel Co., 245 N.L.R.B.
at 816-17 (outburst on production floor; protection lost).
Because we conclude that the Atlantic Steel test is
inapplicable to an employee’s use of obscenities in the presence of
an employer’s customers, we face one further issue in this case:
whether an employee’s outburst in which obscenities are used in the
presence of customers loses otherwise available protection if the
employee is off duty although on the employer’s premises.
On the one hand, it is arguable that section 7 never protects
an employee who uses obscenities in the presence of customers, even
when discussing employment issues, whether or not the employee is
present as an identifiable employee or only as a customer. On the
other hand, it is also arguable that section 7 withdraws protection
from an employee discussing such issues and using obscenities only
when the employee is identifiable by customers as an employee,
e.g., in a work uniform. Although an employer has the undoubted
right to remove from a store any person, including an employee, who
causes a disturbance likely to risk loss of customers, the
discharge of an employee has more serious and long-lasting
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consequences for the employee than a demand that a customer or an
employee leave the premises.
Now that the Board is advised that its Atlantic Steel four-
factor test is not applicable to determining section 7 protection
for an employee who, while discussing employment issues, utters
obscenities in the presence of customers, we think the Board should
have the opportunity in the first instance to consider what
standard it will apply in that context. Whether it will deny
protection to any person who in fact is an employee or only to
persons whom the employer reasonably believes customers would
reasonably perceive to be an employee, or will develop some other
formulation remains to be seen. We simply leave such matters for
the Board’s consideration in the first instance. Of course, if the
Board’s standard for the context of customers involves the
employer’s and the customers’ reasonable perceptions concerning an
off-duty employee’s status as an employee, the Board will also have
to make findings as to the relevant facts. Allowing the Board to
consider the appropriate standard for the customer context and, if
necessary, find the facts concerning reasonable perceptions of the
employee as an employee requires a remand.
D. Gross’s Discharge
The lawfulness of Gross’s discharge implicates dual motivation
analysis. “Initially, the General Counsel must establish a prima
facie case that protected conduct was a motivating factor in the
employer’s decision to fire. The burden then shifts to the
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employer to show, as an affirmative defense, that the discharge
would have occurred in any event and for valid reasons.” National
Labor Relations Board v. S.E. Nichols, Inc., 862 F.2d 952, 957 (2d
Cir. 1988) (internal quotation marks omitted); accord Wright Line,
251 N.L.R.B. 1083, 1089 (1980), as clarified by Director, Office of
Workers’ Compensation Programs v. Greenwich Collieries, 512 U.S.
267, 276-78 (1994).
With regard to the first step in the analysis, the General
Counsel established a prima facie case that Starbucks’s discharge
of Gross was substantially motivated by Gross’s union activity. As
noted, it is undisputed that Starbucks unlawfully sought to
restrict employee unionization efforts through a number of
discriminatory policies. From this, it was reasonable for the ALJ
to infer that Starbucks possessed a general anti-union animus. In
addition, it is undisputed that the company was aware of Gross’s
union activities, and it was reasonable for the ALJ to find that
Gross’s later performance reviews, and in particular the April 29
“Update on Performance,” were persuasive evidence of negative
animus directed specifically toward Gross for those activities.
This sufficed to make out a prima facie case.
The ALJ, however, appears to have misapplied the second step
of the burden-shifting analysis. As noted, at that step the issue
is whether Starbucks would have fired Gross absent his union
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activity. Here, there was strong evidence that it would have done
so.
It is undisputed that Gross was, in many respects, a poor
employee. Indeed, the ALJ found that “the picture that emerges of
Gross’ work performance, in general, is one of an employee who
worked infrequently, whose primary goal was to organize employees
on behalf of the IWW and [who] was otherwise disengaged from the
Starbucks employee culture.” No Starbucks employee consistently
worked as few hours as Gross from May 2005 up to the date of his
discharge. In addition, Gross told employees and managers not to
perform their assigned tasks, actions which two Members of the
Board found were not protected by the Act. Finally, although some
of Gross’s low evaluation numbers might have been pretextual, many
were related to legitimate deficiencies in his performance. In
particular, the ALJ found that Gross “did not meet company
standards in other areas such as utilizing existing organizational
methods to recognize coworkers, training new hires and
communicating partner morale issues to store management.”
Moreover, the undisputed evidence shows that Gross was placed
on notice of many of these deficiencies and did nothing to correct
them. First, Gross was placed on notice as early as May of 2005
that he needed to participate in the employee awards program and
that he needed to communicate more effectively with management.
Despite this notice and repeated remarks to the same effect in
subsequent evaluations, Gross never attempted to remedy these
deficiencies.
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Second, it appears that Gross was aware as early as January
2006 that his low attendance was a problem, yet did little to
correct it. Gross’s January 29, 2006, performance review stated
that he “does not maintain adequate hours of availability,” he “has
had little exposure to the seasonal lineup” because he “worked only
infrequently,” and he “has not demonstrated that he has kept up his
knowledge of current promotional items.” Three months later,
Gross’s April 27, 2006, “Update on Performance” stated that “[your]
inadequate attendance record largely contributed to your inability
to demonstrate several of the key responsibilities and core
competencies of your barista position” and that he would be
terminated if he failed to improve in these areas. Thus, by late
January 2006, and at the very latest by April 27, the documented
evidence shows that Gross was on notice that Starbucks considered
his low availability to be a serious performance issue. Gross,
however, made little or no effort to increase his availability.
Despite this evidence of poor performance, the ALJ determined
that Starbucks would not have fired Gross absent his union activity
because, “[w]hile Gross may not have been a model employee, . . .
he was proficient in preparing beverages and customer service[,] .
. . [and h]is cash-handling skills were adequate.” But an employer
is entitled to conclude that preparing coffee drinks and making
change does not insulate from discharge an employee who
consistently fails to abide by legitimate store employment
policies. Gross’s documented performance deficiencies provide a
sufficient and independent reason to fire him.
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Conclusion
For the foregoing reasons, we enforce the Board’s order only
with respect to unfair labor practices not challenged in this
Court, grant the cross-petition for review with respect to
Starbucks’s one button policy and its discharges of Gross, and
remand the issue of the discharge of Agins for further proceedings
consistent with this opinion. In the event of a subsequent
petition for review, jurisdiction will be restored to this panel.
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KATZMANN, Circuit Judge, concurring:
I concur in the majority’s conclusions that Starbucks’s decision to discharge Daniel
Gross was lawful and that its enforcement of its one button dress code was not an unfair labor
practice. I also concur in the majority’s decision to remand the issue of Joseph Agins’s
discharge to the Board for further consideration. I write separately, however, to note my
disagreement with the majority’s conclusion that the four-part test articulated in Atlantic Steel
Co., 245 N.L.R.B. 814 (1979), is not applicable to a situation in which the employee utters a
profane word in the presence of customers.
I certainly agree that an employee’s use of profanity on store premises in front of
customers constitutes serious misconduct, and that an employer may legitimately discipline an
employee who engages in such conduct. Indeed, when an outburst takes place in front of
customers on store premises, the Board may reasonably conclude that this factor weighs so
heavily against protection as to prove essentially dispositive in certain cases.
Nonetheless, with great respect for the majority opinion, it is not clear to me why we
must instruct the Board to abandon the Atlantic Steel test in its entirety, an outcome urged by
neither party in this case. Even if Atlantic Steel has heretofore been applied to incidents arising
in the workplace outside the presence of customers, it does not necessarily follow that this test
was meant to apply only to that circumstance. Indeed, it appears that the presence of customers
fits well within the existing framework as an important factor to be considered under the “place
of discussion” prong of the Atlantic Steel test. Moreover, I am not convinced that the remaining
factors become irrelevant simply because the outburst occurred within earshot of customers. In
my opinion, the subject matter of the discussion, the nature of the employee’s outburst, and
whether the outburst was provoked by an employer’s unfair labor practice could, in fact, prove
highly relevant in certain situations. A balancing approach, in my view, is a prudent method of
resolving these highly fact-specific cases, and I therefore believe that the Board’s decision to
apply the Atlantic Steel test to the facts of this case was eminently reasonable.
But in light of the Court’s conclusion that the Atlantic Steel test is inapplicable to the
facts of this case, I concur in its decision to remand and allow the Board to consider in the first
instance the appropriate standard for the customer context and, if necessary, find the additional
relevant facts.