Following a trend that has developed over the last several years,[1] the National Labor Relations Board (the “Board”) recently found that the termination of a Starbucks employee violated the National Labor Relations Act (the “NLRA” or the “Act”), even though the employee had engaged in extremely offensive, obscenity-filled conduct in the presence of customers.[2] During his off-duty hours, the employee, who was supporting a union organizing effort, entered a different location from the one where he worked and engaged in a profanity-laced confrontation with a store manager in the presence of customers.

This was the Board’s second look at the case.  Initially, the Board held that the employee’s conduct did not lose its “protected” status under Section 7. [3] The Board also found that the employer’s rule prohibiting employees from wearing more than one pro-union button while on duty violated Section 7 of the Act. When that decision was reviewed by the Second Circuit Court of Appeals, the Court found that the Board’s decision violated both previous court decisions and the Board’s own precedent.

“One-Button” Rule Allowed and Extreme Behavior Contextual to Workplace

As to the rule restricting the wearing of pro-union buttons, the Second Circuit found that Starbucks had established that its “one-button” restriction was a necessary and appropriate means of protecting its legitimate managerial interests.

As to the employee’s behavior, the Second Circuit found that the Board had misapplied its own test originally set forth in Atlantic Steel Co.,[4] as to when an employee’s behavior becomes so extreme that it loses protection under Section 7 of the Act. The Court noted that there, the Board was not considering the use of obscenities in a public place in the presence of customers, but rather was considering conduct in a workplace context, e.g., a factory floor. In many cases, the Board has acknowledged that the “language of the shop is not the language of ‘polite society’ . . .,” and has given some leeway for impulsive behavior by an employee. Since the Board has not previously ruled on the question of whether an employee who uses obscenities in the presence of customers loses the protection of Section 7 under certain circumstances, the Court remanded the case to the Board to give it the opportunity to consider what standard would apply in that context.[5]

In this second decision, based on the same facts, the Board concluded that Starbucks had violated the Act but for a different reason.  The Board found that Starbucks did not prove that the employee would have been terminated for his misconduct even if he had not engaged in protected pro-union activities. The Board’s decision was based on a notation on the termination form completed by the employee’s store manager that he was ineligible for rehire in part because he “. . . strongly support[s] the . . . union.”

The Board did “assume” that the employee’s conduct was severe enough to lose the protection of the Act but determined it would not set the standard to be applied in deciding whether a retail employee loses protection of the Act when engaged in misconduct in the presence of customers.[6]

Stay tuned, and look for a second appeal by Starbucks back to the Second Circuit.

Two Points of Guidance for Employers

The holding in this case provides valuable guidance to employers. First, any reference to an employee’s participation in protected activity should be avoided on any documentation or in discussion with the employee. Second, any termination decision based on “discourteous” or “disrespectful” behavior should be reviewed carefully with the company’s labor counsel before action is taken.

Given the current composition of the Board, it is unlikely that the board will find that an employee would lose the protection of Section 7 even by engaging in clearly unaccepted and offensive behavior. At the very least, however, there is hope that the appropriate Court of Appeals will follow the Second Circuit and refuse to enforce such a decision.