Starbucks Scrutiny: Employer Takeaways Regarding Employee Conduct Policies

The green double-tailed mermaid Starbucks logo beckons weary airport travelers, early morning risers, long-day workers, and virtually all parents of small children who need a little extra pep in their step throughout the day.

Customers recognize that logo and know that on the other side of those doors they will be greeted by the aroma of percolating beans and pastries.

Starbucks’ employee policies recently have been receiving a lot more attention than their coffee, however.

In December 2021, a Starbucks store in Buffalo voted in favor of organizing and a movement caught fire, spreading all across the country. More than 50 Starbucks stores have voted to unionize with Starbucks Workers United and close to 250 stores have petitioned to hold votes.

Earlier this year, the National Labor Relations Board (NLRB) issued a complaint accusing Starbucks of numerous unfair labor practice charges related to their treatment of employees who are seeking to unionize in various ways.

In addition, on May 4, 2022, the NLRB filed a lawsuit against Starbucks, alleging that the Starbucks Partner Guide (their employee handbook) imposes overly broad and discriminatory rules that systematically violate workers’ labor rights. The NLRB is taking issue with 19 different sections of the handbook, stating that each is “interfering with, restraining, and coercing employees in the exercise” of their right to engage in protected activity under the National Labor Relations Act (NLRA).

Many of the challenged policies appear to be facially neutral conduct policies for which legitimate business reasons exist. This recent action suggests that the NLRB is reverting back to the evaluation standard in place during the Obama administration. Thus, employers should monitor the developments of this matter and conduct a self-assessment to determine if their own policies are subject to challenge.

What is the NLRA?

The NLRA is a federal law that protects the right of employees to organize, bargain collectively with their employers, and engage in other protected concerted activity. For instance, Section 7 of the NLRA states that employees have the right to not only organize a union and bargain collectively, but also to discuss wages and benefits and other terms and conditions of employment, and take action with one or more co-workers to improve working conditions, among other rights.

Further, the NLRA establishes that it is an unfair labor practice for an employer to interfere with, restrain, or coerce employees in the exercise of their Section 7 rights. The NLRB is the independent federal agency that was created to enforce the NLRA.

One key fact that often escapes employers is that the NLRA applies to most private sector employers, regardless of whether they are currently unionized. Thus, because Section 7 rights are relatively broad, private employers need to be aware of the NLRA’s protections and ensure their conduct is compliant.

What is the NLRB’s policy evaluation standard?

During the Obama Administration, the NLRB was very active in challenging facially neutral policies as infringing on employees’ Section 7 rights. At that time, the NLRB’s policy evaluation test asked whether employees would “reasonably construe” a work rule to infringe on their right to engage in protected activity. For instance, several challenges related to Social Media policies, and the NLRB highly scrutinized such policies that regulated social media communications in a way that could be used to discourage collective protected activity. Some policies restricted employees from sharing confidential financial data or disparaging the employer on social media sites. However, the NLRB felt that such policies prevented employees from using social media to discuss the terms and conditions of employment or wages. Thus, in several cases, the NLRB found that employer social media policies were overbroad and needed to be rewritten.

In 2017, during the Trump Administration, the NLRB appeared to shift its approach. In a challenge related to a “no-camera” policy, the NLRB evaluated (1) the nature and extent of the impact on NLRA rights and (2) the legitimate justifications associated with the requirements, in an attempt to “strike the proper balance between…asserted business justifications and the invasion of employee rights in light of the Act.” This approach was more favorable to employers as it recognized legitimate business interests in regulating certain conduct and did not necessarily doom a policy simply because it could possibly be applied against Section 7 rights – there generally needed to be evidence of improper application.

In this particular action against the Starbucks Partner Guide, the NLRB is not expressly alleging that Starbucks discriminately applied the facially neutral policies to single out protected activity. Instead, the fact that the policies could be applied to limit or deter protected activity is what appears to be the issue.

Thus, the NLRB may be possibly returning to the old employee-focused test.

What about Starbucks?

The NLRB has taken issue with several policies in the Starbucks Partner Guide, including, but not limited to, policies regarding corrective action rules, dress code, cell phone use while working, social media usage and confidentiality rules.

For instance, the dress code required the Starbucks employees to wear the barista apron with limited flair pieces, like only one button. The NLRB is concerned that that limitation might discourage employees from wearing buttons that would support unionizing the workplace. Another example is the prohibition on cell phone use while working, as the NLRB is concerned that employees are discouraged from taking pictures or recording videos related to the terms and conditions of employment.

The hearing for this action was scheduled for June 14, 2022.

It is possible that this particular challenge may be part of the toolkit the NLRB is using to address the other more overt allegations that Starbucks is actively engaging in conduct to surveil and punish workers for protected collective activity. However, no decision on the Partner Guide challenge has been issued as of the date of writing this article. Thus, employers should stay tuned.

Employers could also be proactive and work with legal counsel to review their current policies and determine whether any modifications could limit the risk of challenge related to infringement on Section 7 rights.

Lindsay Raymond of Danbrook Adams Raymond PLC is an experienced employment law attorney who counsels employers on workplace compliance. You can reach her at lraymond@darlawyers.com. This article was published in the July 2022 issue of the Traverse City Business News.