On September 2, 2026, the Second Circuit handed employers a win in Siren Retail Corp. v. NLRB, No. 24-3168, rejecting the NLRB’s Tesla test and calling for a more balanced approach to evaluating workplace dress code restrictions.
Background
Back in 2022, several employees at the Starbucks Reserve Roastery in New York City wore union t-shirts to work during an organizing campaign. Starbucks asked them to change, and Workers United filed an unfair labor practice charge. The NLRB ultimately found that three Starbucks dress code policies – its one-pin rule, its ban on issue-related pins, and its restrictions on non-approved logos on shirts – all violated the NLRA. The Board applied its 2022 Tesla decision, which treated all employer dress codes that limit union insignia as presumptively unlawful. Under Tesla, employers were required to “narrowly tailor” any restrictions, functionally creating a strict-scrutiny standard for dress code disputes involving union insignia.
The Court’s Analysis
The Second Circuit disagreed.
First off, affirming that we are now in a post-Loper Bright world, the Second Circuit held that the Board’s legal conclusions are now reviewed de novo; while they may carry persuasive force, they no longer control.
The court held that the one-pin policy challenge was already settled by its 2012 decision in Starbucks I, which upheld a nearly identical rule. The Board tried to distinguish the cases because the work location had a “steampunk, hipster vibe,” but the court rejected the argument and applied the core reasoning about protecting a company’s public image.
More importantly, the court rejected the Tesla framework entirely. Exercising de novo review of the Board’s legal conclusions, the court found that Tesla‘s strict presumption against employers is inconsistent with Republic Aviation Corp. v. NLRB, 324 U.S. 793 (1945), which requires a balance between employer and employee interests; not a one-sided thumb on the scale. Joining the Fifth Circuit, which vacated Tesla on similar grounds, the Second Circuit concluded the Board exceeded its authority.
The case has been remanded for the Board to evaluate the issue-pin and logo-shirt policies under a more balanced test, with the court directing the Board to consider: (1) the extent of the intrusion on Section 7 rights; (2) whether the policy is facially neutral and consistently enforced; and (3) the context surrounding the restriction.
How does this affect employers?
This is welcome news, but it is not a green light to restrict union activity. The court made clear that employer and employee interests must be balanced.
Employers operating in the Fifth and Second Circuit can take some comfort that facially neutral, consistently enforced dress code policies will not automatically be deemed presumptively unlawful. All employers should make sure their dress code policies are facially neutral, nondiscriminatory, and consistently enforced. And as always, consult with experienced labor counsel before taking any disciplinary action related to dress code enforcement, especially during a union organizing campaign.
For those employers outside the Fifth and Second Circuit, Tesla still controls – for now. In a recently released memo, the NLRB’s General Counsel identified the Tesla decision for the chopping block. While the memo is not controlling, it does indicate that Tesla may be targeted for overruling soon.
We will be monitoring this area closely, including how the Board handles the remand and whether other circuits follow suit. If you have questions about how this decision affects your workplace policies, please contact a member of our Employment and Labor practice group.