Littler Lightbulb – September 2026 Employment Appellate Roundup

Second Circuit Rejects NLRB’s Unfair Labor Practice Decision in Employer Dress Code Case 

In Siren Retail Corp. v. National Labor Relations Board, No. 24-3168, __ F.4th __ (2d Cir. Sept. 2, 2026),¹ the Second Circuit vacated a National Labor Relation Board’s (NLRB) decision finding that the employer violated the National Labor Relations Act (NLRA) by requiring employees to change out of union-logo shirts into dress-code compliant shirts. The court rejected the NLRB’s application of Tesla, Inc., 371 NLRB No. 131 (Aug. 29, 2022), which created a rebuttable presumption that all mandated uniform codes violate the NLRA. It further rejected the NLRB’s finding that Tesla was supported by the U.S. Supreme Court’s decision in Republic Aviation Corp. v. NLRB, 324 U.S. 793 (1945). In fact, the Second Circuit stated, “Republic Aviation and judicial decisions applying it do not support applying a strict presumption against employers without fairly balancing employer and employee interests.”

Moreover, the Second Circuit held, the NLRB’s Tesla standard for determining the lawfulness of workplace dress policies “does little more than pay lip service to balancing,” erroneously placing “a strict-scrutiny-like burden on all employers to justify even facially neutral, partial dress code restrictions…. Absent statutory authority from Congress to craft such a rule, the Board exceeded its authority in placing such a strict burden upon employers both in Tesla and in this case.” The court therefore denied enforcement of the NLRB decision and remanded the case with instructions to apply a “more evenly measured balancing test” including the following factors in assessing whether the company’s dress code violated the NLRA: “(1) the extent of intrusion on employee Section 7 rights (i.e., whether the employer enforced a full or partial ban on union insignia during working time); (2) whether the employer’s policy is facially neutral, nondiscriminatory, and consistently enforced; [and] (3) the context or circumstances underlying the intrusion.”

Fifth Circuit Rejects Most of NLRB’s Findings Arising from Union Organizing Campaign Efforts 

In Starbucks Corporation v. National Labor Relations Board, No. 24-60653, __ F.4th __ (5th Cir. Sept. 4, 2026), the Fifth Circuit declined to enforce the bulk of the NLRB’s order finding that the employer unlawfully threatened workers with reduced store hours and a hiring freeze and engaged in unlawful workplace surveillance during a union organizing campaign.² 

First, the Fifth Circuit found there was insufficient evidence that the employer’s reduction of store hours due to worker shortages was motivated by unionization efforts. Rather, the court found, the store manager’s remark that she was trying to “relieve some of the pressure that the Union had on the people” due to the worker shortages was not a threat and did not suggest that union activity would be penalized. Similarly, a manager’s statement that the company’s hiring portal was closed due to “reluctance to hire amid a union campaign” did not constitute an NLRA violation because, viewed in context, it reflected the challenges associated with discussing wages and benefits, which could change following unionization and were terms of employment prospective employees would reasonably want to know before beginning employment.

Finally, as to surveillance, the court found the store manager’s statements reflected only general awareness of union organizing activity. Rejecting the NLRB’s surveillance finding, the court found that the NLRB made a “flawed reading of the record” about what constitutes an “out of the ordinary” discussion about unions, and that employers should not have to “risk the Board’s wrath every time they bring up unionization.” Moreover, there was no evidence the employer interfered with, restrained, or coerced employees in the exercise of their Section 7 rights, as required to establish a violation of Section 8(a)(1). 

Eighth Circuit Vacates DOL Administrative Award and Holds Company Entitled to a Jury Trial 

BNSF Railway Co. v. DOL, Nos. 25-2436 and 25-2578, __ F.4th __ (8th Cir. Sept. 3, 2026), involved a decision by the Department of Labor (DOL) Administrative Review Board affirming an award of reinstatement and monetary damages to an employee who filed a complaint with the Occupational Safety and Health Administration alleging retaliation for reporting a hazardous safety condition after he was terminated from employment following a disciplinary proceeding. The employer appealed to the Eighth Circuit arguing that the award violated the company’s right to a jury trial under the Seventh Amendment, which provides for the right to a jury trial in common-law suits where the amount in controversy exceeds 20 dollars.

The Eighth Circuit agreed with the employer and rejected the DOL’s argument that a jury trial was not required based on the “public rights” exception. The claim in this case, the court found, was analogous to a common-law tort claim, and did not impact a broader regulatory scheme. Accordingly, the court held, the public rights exception did not apply, and the company was entitled to a jury trial.

D.C. Circuit Upholds Denial of SEC Whistleblower Award Where SEC Had Already Opened Investigation

In Doe v. Securities and Exchange Commission, No. 25-1152, __F.4th __ (D.C. Cir. Sept. 9, 2026), the plaintiff suspected his employer was facilitating a scheme to bribe foreign government officials. After leaving his employment, the plaintiff provided information about the suspected scheme to a journalist who reported the information to the Department of Justice (DOJ). Based on advice from the DOJ, the journalist recommended that the plaintiff report the information to the Securities and Exchange Commission’s (SEC) whistleblower program. Eight months later, the plaintiff did. In the meantime, however, the journalist published articles about the suspected bribery scheme, the DOJ informed the SEC it had opened an investigation of the allegations, and the SEC opened its own investigation.

The plaintiff subsequently applied for an SEC whistleblower award, which the SEC denied because the plaintiff submitted information to the SEC after it had already initiated its investigation and obtained the information from other sources. The plaintiff filed a petition for review with the D.C. Circuit, which denied the petition because the information the plaintiff gave to the SEC did not “lead” to a successful enforcement action given that the SEC already possessed the information provided by the plaintiff.

The D.C. Circuit recognized that under the applicable regulations an individual who discloses information to another agency and provides the same information to the SEC within 120 days may qualify for a whistleblower award. In this case, however, the plaintiff did not satisfy the 120-day requirement. In sum, the whistleblower program was not designed to broadly reward people who expose wrongdoing but rather was specifically designed to incentivize timely reports of violations to the SEC, enabling it to enforce security laws more effectively.

Seventh Circuit Affirms Summary Judgment on Race and National Origin Discrimination, Retaliation and Hostile Work Environment Claims

After he was escorted from the workplace by police and placed on a two-day unpaid suspension for yelling at his supervisor and screaming a profanity, the plaintiff in Ismail v. David Steiner, No. 25-1412, __ F.4th __ (7th Cir. Sept. 10, 2026) filed suit claiming race and national origin discrimination, retaliation, and creation of a hostile work environment in violation of Title VII. The district court granted summary judgment to the employer and the plaintiff appealed to the Seventh Circuit, which affirmed the district court’s decision.

First, the Seventh Circuit rejected the plaintiff’s claim that a white female employee yelled at her supervisor and was not escorted from the workplace by the police. The court found that the plaintiff lacked personal knowledge of the incident and did not know whether the other employee was disciplined for the incident. Accordingly, the plaintiff neither established that the other employee engaged in comparable conduct and received more favorable treatment, nor that the discipline he received was due to his race or national origin rather than his altercation with his supervisor.

Next, the Seventh Circuit rejected the plaintiff’s claim that the employer’s action was retaliation for an EEO complaint the plaintiff had filed three years earlier, finding the timing was too attenuated to create a reasonable inference of causation. Finally, as to the hostile environment claim, the Seventh Circuit agreed with the district court that regardless of how severe, humiliating, and physically threatening the supervisor’s actions were, there was no evidence that they had anything to do with the plaintiff’s race or national origin.

Second Circuit Amends its Decision in COVID-19 Vaccine Religious Exemption Case

In Bergin v. New York State Unified Court System, No. 25-721, __F.4th __ (2d Cir. Sept. 15, 2026), the Second Circuit amended its July 15, 2026 decision in the case³ to clarify the requirement that a plaintiff prove the employer acted out of a discriminatory motive in failing to provide a religious exemption from a COVID-19 vaccination policy. In the amended decision the Second Circuit reiterated its July holding that to establish failure to accommodate under Title VII a plaintiff must plead and prove that the employer was motivated in part by the desire to avoid offering a religious accommodation. However, in its September decision the court added a footnote stating it is not suggesting “a new, heightened discriminatory motive requirement,” and explaining that while an employee must show the denial of the accommodation request was “because of the employee’s religion,” it is not requiring plaintiffs to prove the employer was motivated by discriminatory animus against religion.

Seventh Circuit Affirms Denial of NLRB’s Request for Injunction to Reinstate a Union After Employer Withdrew Union Recognition

In Hamada v. Laborforce, LLC, __F.4th __ (7th Cir. Sep. 18, 2026) the Seventh Circuit affirmed the denial of a Section §10(j) injunction that would have reinstated a union after the employer withdrew union recognition following an employee petition for decertification. Citing Starbucks Corp. v. McKinney, 602 U.S. 339 (2024), the Seventh Circuit emphasized that injunctions are “extraordinary” remedies and applied the four-factor test the Supreme Court used to justify a preliminary injunction under §10(j), including the requirement that the petitioner show “irreparable harm absent an injunction.”

First, the Seventh Circuit stated, “§10(j) does not establish ‘a rebuttable presumption of irreparable harm… anytime collective bargaining is disrupted in any way.’” In contrast to other statutes, the court held that nothing in the text of the statute relieves the NLRB of the burden of establishing irreparable harm. Next, the court pointed out, 29 U.S.C. § 157 provides not only for employees’ rights to organize and bargain collectively, but also their right “to refrain from any or all of, such activities.” Based on this language the court found no basis for limiting irreparable-harm analysis to the union’s interests alone. Particularly in cases like this one where employees expressed dissatisfaction with the union, the Seventh Circuit stated, “prioritizing the union’s interests risks defeating the employees’ rights and worsening the conditions of their employment.” As a final point, the court stated, the NLRB delay in seeking an injunction until three years after the first decertification petition was submitted undercut the alleged need for an extraordinary remedy.

Seventh Circuit Affirms Summary Judgment for Employer in COVID-19 Vaccine Accommodation Case

The plaintiff in Mason v. Cook County, __F.4th __ (7th Cir. Sep. 28, 2026) filed suit for religious discrimination in violation of Title VII after she was terminated from employment as a county hospital pharmacist for refusing to obtain a COVID-19 vaccination for religious reasons. The district court granted summary judgment for the employer after finding that accommodating the plaintiff would create an undue hardship for the employer, and the plaintiff appealed to the Seventh Circuit, which affirmed the district court’s decision.

Quoting the Supreme Court’s decision in Groff v. DeJoy, 600 U.S. 447, 471 (2023) the Seventh Circuit stated, “when assessing whether a requested accommodation amounts to an ‘undue hardship,’ we cannot consider the accommodation in isolation but must consider it ‘in the context of an employer’s business’ in a ‘common sense manner.’” Examining the facts of the case in that context, the Seventh Circuit noted that the plaintiff worked in a room with 20 other pharmacists and 40 pharmacy technicians and, in her role as a pharmacist, she regularly interacted with patients and delivered medication to a hospital floor dedicated to treating patients with COVID-19. Based on guidance from the Centers for Disease Control and Prevention, and other scientific evidence, which found that COVID-19 vaccination was the best way to reduce transmission and prevent severe illness, hospitalization, and death, and that other mitigation methods, such as masking, social distancing, and testing, did not sufficiently address patient and employee safety, the county denied the plaintiff’s request to continue working unvaccinated while masking and social distancing. In the plaintiff’s situation, the risks and consequences of spreading COVID-19 were particularly high, and the employer’s denial of the plaintiff’s request was justified and not religious discrimination.

The Seventh Circuit also rejected the plaintiff’s claim of disparate treatment based on religion because the alleged comparators were not similarly situated. The other employee that the plaintiff claimed was treated differently had a different job in a different location and, most significantly, did not seek and was not granted an exemption from the vaccination policy.