In-N-Out Burger, Inc. v. National Labor Relations Board - Fifth Circuit Court of Appeals
Facts: In April of 2015, several employees at an In-N-Out Burger in Austin wore buttons that demonstrated their support for the "Fight for $15" movement to raise hourly minimum wage rates. In-N-Out had a policy in place that required its employees to follow a detailed dress code and required its employees to wear company issued buttons twice a year. However, In-N-Out prohibited its employees from deviating from this dress code and barred employees from wearing "Fight for $15" buttons.
After an unfair labor practice charge was filed with the National Labor Relations Board ("NLRB"), an Administrative Law Judge ("ALJ") held a hearing in which In-N-Out sought to demonstrate its interest in maintaining a unique public image and its concerns with ensuring food safety amounted to a "special exception" sufficient to justify its "no pins or stickers" rule. The ALJ disagreed and fond that In-N-Out committed an unfair labor practice by maintaining and enforcing the "no pins or stickers" rule when it prohibited employees from wearing the "Fight for $15" buttons.
The NLRB adopted the ALJ's findings and ordered that In-N-Out cease and desist from "[m]aintaining and enforcing a rule that prohibits employees from wearing, while on duty, any button or insignia apart from those it has approved, and that makes no exception for buttons or insignia pertaining to wages, hours, terms and conditions of employment or union or other protected activities"; [d]irecting employees to remove from their clothing any button or insignia pertaining to wages, hours, terms and conditions of employment or union or other protected activities"; and [d]irecting employees that they may not wear any [such] button[s] or insignia."
In-N-Out subsequently appealed.
Holding: As readers might be aware, a Court "will affirm the Board's [NLRB] legal conclusions 'if they have a reasonable basis in the law and are not inconsistent with the [National Labor Relations] Act.'" Broadly speaking, Section 7 of the National Labor Relations Act guarantees to employees "the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection." Section 8(a)(1) enforces these rights by making it an unfair labor practice for employers to "interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in [S]ection [7]."
While it has long been held that Section 7 protects the right of employees to wear items (including buttons) relating to the terms and conditions of employment (including wages and hours), an employer that maintains or enforces a rule restricting employees from displaying these items commits an unfair labor practice in violation of Section 8(a)(1). However, the NLRB has found that if an employer can demonstrate "special circumstances sufficient to outweigh [its] employees' Section 7 interests and legitimize the regulation of such insignia", the Section 7 rights may give way. While this is a narrow exception, it has been permitted when an employee displaying protected items would 1) jeopardize employee safety; 2) damage machinery or products; 3) exacerbate employee dissension; or 4) unreasonably interfere with a public image that the employer has established, as part of its business plan, through appearance rules for its employees. The burden in these types of cases is on the employer to put forth substantial, non-speculative evidence of the particular "special circumstances" that justify the restriction and show the restriction is narrowly tailored to the special circumstances justifying its maintenance.
Public Image Interest
For In-N-Out to establish "special circumstances" based on a "public image" interest, In-N-Out was requited to put for substantial, non-speculative evidence that the wearing of protected items by employees would "unreasonably interfere" with a "public image" that the company "has established, as part of its business plan, through appearance rules for its employees," and then show that its "no pis or stickers" rule was "narrowly tailored" to these circumstances.
In this instance, the Court of Appeals noted that the public image exception is exceedingly narrow and the following considerations, standing alone, do not support a rule restricting employees from wearing items protected by Section 7: an employer's requirement that employees wear uniforms or adhere to a dress code; an employer's status as a retailer or service provider; the fact that employees interact with the public or customer's may be exposed to employees displaying protected items; or the possibility that an employer's customers might be offended by the items' content or message.
Looking at the facts, the Court held that In-N-Out's requirement that its employees wear the company approved buttons twice a year actually undercut its claim that "special exceptions" required employee uniforms to be button free. If In-N-Out's employee uniform changes several times a year (when employees wear the company approved buttons), In-N-Out's interest in maintaining a "consistent" public image either was not as great as they argued or the uniform did not actually play a critical role in maintaining the public image. Consequently, the Court found that In-N-Out failed to meet its burden to establish the existence of a "special circumstance" which would support its no pins or stickers rule.
Maintaining Food Safety
In-N-Out argued that the "Fight for $15" buttons were small and rather flimsy, such that if one fell into a customer's food while the employee was working, it might not be noticeable. (In contract, the buttons In-N-Out provided were larger and "far sturdier"). However, the NLRB had found that In-N-Out's "no pins or stickers" rule banned all buttons (other than its own) without regard for their safety. Consequently, the Court of Appeals agreed with the NLRB's finding that the rule was no "narrowly tailored".
Judgment: The Fifth Circuit Court of Appeals upheld the NLRB's finding that In-N-Out Burger violated Section 8(a)(1) of the National Labor Relations Act ("NLRA") when it maintained a "no pins or stickers" rule and prohibited its employees from wearing "Fight for $15" buttons in the workplace, in violation of the employees' Section 7 rights under the NLRA.
The Takeaway: Quite the interesting case, right? I want to key readers into a few key sections of the Court's opinion here, although the entire opinion itself is worth a read.
Note that the Court pointed out several times the somewhat substantial burden that faced In-N-Out to justify its prohibition against the "Fight for $15" buttons. Based upon the evidence in the record, I think the Court was correct to find that In-N-Out simply failed to meet this burden. Considering the narrow exception for an employer to establish "special circumstances sufficient to outweigh [its] employees' Section 7
interests and legitimize the regulation of such insignia", coupled with the fact that the Court of Appeals would uphold the NLRB's ruling so long as it had a basis in law and did not violate the NLRA, this was always going to be an uphill climb for In-N-Out.
In particular, the suggestion that the In-N-Out uniform was integral to the employees' work (in so much that it created a uniform/standard public image), seemed to fall on deaf ears. The Court pointed out that while In-N-Out had argued it had a a business plan that involved creating a public image of a clean restaurant where all employees dressed alike, the "Fight for $15" buttons did no diminish that objective. In fact, the buttons that In-N-Out required its employees to wear twice a year were significantly larger (and could be argued more "distracting") than the smaller "Fight for $15" buttons.
As for the food safety argument made by In-N-Out, the NLRB found that In-N-Out's managers did not make any effort to examine the "Fight for $15" buttons for safety issues before they were barred. Therefore, the Court held that the food safety argument was likely nothing more than a "post hoc invention" and insufficient to support In-N-Out's claim.
Date: July 6, 2018
Opinion: http://www.ca5.uscourts.gov/opinions/pub/17/17-60241-CV0.pdf
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