On May 10, 2012, the US Court of Appeals for the Second Circuit issued a decision in NLRB v. Starbucks Corp.. The Second Circuit overturned an NLRB decision that Starbucks committed several unfair labor practices regarding employees' pro-union activities. Specifically, the Second Circuit held that Starbucks could:

Following an informal settlement between the NLRB and Starbucks in 2006, Starbucks instituted a policy that prohibits employees from wearing more than one pro-union pin on their work clothes as part of its detailed dress code. In 2008, an NLRB administrative law judge (ALJ) held that the one-button policy violated Section 8(a)(1) of the National Labor Relations Act (NLRA). In 2009 and 2010, the five-member panel (Board) that heads the NLRB's judicial function affirmed the ALJ's holding.

The Second Circuit reversed the Board's decision on grounds that employers can restrict union insignia and apparel that can "unreasonably interfere" with the employer's public image. Starbucks requires employees to wear company pins to convey certain messages to the public and multiple pro-union pins risk diluting that message.

The Second Circuit also overruled the Board by holding that Starbucks was justified in terminating two employees who happened to be outspoken in their support for unionization. One of the employees uttered obscenities during a protest of the one-pin policy. This protest occurred in a Starbucks location and in the presence of Starbucks customers. In Atlantic Steel Co., the Board articulated its test for whether employee speech constituted concerted activity under the NLRA (245 N.L.R.B. 814, 816 (1979)). The Second Circuit held that this test does not apply when an employee, in the course of discussing employment matters, uses obscene language in the presence of customers. However, the Second Circuit remanded the case to the Board to determine in the first instance the legal standard it will apply to such speech.

Finally, the Second Circuit held that Starbucks had a sufficient and independent reason to terminate the second employee, who engaged in a vigorous and public effort to unionize Starbucks employees. Although his termination coincided with his pro-union activities, this employee would have been terminated anyway because he was a poor worker who was given notice of his deficiencies but did not try to correct them.