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Case number 23-1171 et al.

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Starbucks Corporation doing business as Starbucks Coffee Company Petitioner versus National Liberal Relations Board.

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Mr. Baskin for the petitioner, Mr. Loro for the respondents, Mr. Eglinton for the intervener.

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Morning, Council.

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Please proceed when you're ready.

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Good morning.

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Maurice Baskin on behalf of Starbucks Corporation has to reserve two minutes for rebuttal.

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The issue in this case is whether a store manager violated the act by telling a partner employee, partner as they call them, that they should not hand out pins to customers during work time.

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The context of this instruction, which the board failed to address, was that the manager was reacting to specific incidents

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that occurred in the sales area during working time.

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No reasonable employee who would have understood the instruction any differently from partner Ibarra, whose understanding is quoted and agreed to by the administrative law judge.

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The understanding was the manager was saying, I quote, they could not hand out buttons to customers while on paid time.

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End of quote.

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A perfectly lawful policy.

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But the board majority, ignoring the context,

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at finding that an employee would have reasonably understood the manager's prohibition somehow to extend beyond the selling floor to non-public areas.

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The record shows that no one understood the instruction that way.

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You go back to, I've already said what Ibarra thought, but look at the union's unfair labor practice charge.

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They're representing the economically dependent employees that the board is talking about.

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And they said,

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What was the charge that the manager reprimanded an employee for handing a union button to a customer and telling the worker not to hand out union buttons to customers in the future?

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I'm going to go on to the general counsel, but it looks like you had a question.

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I think the record strongly supports you

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with one possible exception, which I want to ask you about, which is the last nugget of Marcicle's testimony.

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And she's saying that this is the second incident in question.

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She confronts Ibarra about it.

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Ibarra says, I was on a 10-minute break.

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and Marsicles response is that's still considered company paid time.

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It sounds like that's about the distinction between paid work time and paid breaks.

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And if a reasonable understanding of that exchange is

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can't solicit on paid breaks, that's overbroad.

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But it's not.

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If you consider the context of directing it to customers in the sales area, there's no exception for break time.

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For that break time rule, general solicitation does not apply to organizers in a sales area talking to customers.

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That's true.

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But if that's what was going on and Ibarra had objected and said, I'm on my break, the response should have been not, well, break time is no different from paid time.

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The response should have been, yeah, but you were on the sales.

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And so recognize the ambiguity that you're referring to.

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It's still saved by the fact that, first of all, the board gave no consideration to the context and the background, and neither did the administrative logic, other than acknowledging the facts of what Ibarra thought he was saying to her, which was don't hand out pins to customers in the sales area.

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Uh, it's regardless and that is regardless of the paid time.

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There was a follow up question and so I recognize the ambiguity you're describing, but in the context and the failed, the real question is what did the employee?

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In fact, it's the question that the way the board put it, what the employee would have reasonably understood the prohibition to be.

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And actually they say that in the context of extending even further to say the back room somehow is off limits when that

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was nothing to do with the incident at hand and was never mentioned in any testimony.

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What I don't understand about this argument is the facts had to do with giving buttons to customers.

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That I get.

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So whenever you're talking about you can't give buttons to customers, that's the narrow way to think about it.

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And then the follow-up question is why?

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And if the answer to why is, because you can't give buttons to anybody on work premises during work time, that's why.

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This particular incident happened to be about customers.

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But the reason you can't do it is we just don't do that on work premises during work time, including break time.

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If that's the answer, then the context is not what you say it is.

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The context is defined by the ultimate instruction.

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And the ultimate instruction is, and I'm just quoting,

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This is something they shouldn't be doing while they're, you know, on the clock, that they can't do that, that they can do that outside the store, you know, on their free time.

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That isn't what you're saying.

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If the only time you can do it is outside the store on free time, that doesn't mean the only prohibition is on doing it, is on distributing it to customers.

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Well, we would submit that with the background, with the knowledge that this was an incident in which it was to customers in the sales area.

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It was perfectly correct for him to say outside, wouldn't even have occurred for her to say in a back area because customers don't go into back areas and it was not mentioned.

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So to say it seems consistent to me, I'm sorry, that if you're dealing with a customer sales area question that for

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Uh, the manager to say if you want to do that, wait till you go outside because that's where the incident occurred.

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That's what depends on what the that is.

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If the that is that when can I ever give a button to a customer?

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That's one way.

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The other way to frame the question is when can I ever give the button to anybody?

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How do you know?

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You don't know which one is being answered.

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Well, but the general said the incident actually involved the giving of a button to a customer.

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That doesn't mean the question that I'm telling you is these are the particular times that you can engage with customers.

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But the general counsel in the during the trial objected to any discussion of giving buttons to anyone but customers.

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There was a colloquy and we described in our brief and someone asked the question about the coworker.

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And the general counsel objected and the LJ interjected.

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Yeah, I get it.

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This is only about customers.

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That that's the and we describe that in our in our briefs.

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So they have waved or given up that argue when customers comes into play.

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You know, just the use of that term as opposed to giving it to anybody, right?

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It was not.

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The case was never about giving it to anybody but customers or presumed customers because Mariscal believed

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and both incidents involved customers.

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And Ibarra understood the instruction that way.

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So I would agree with you if there had been any incident involving to the company's knowledge, the management's knowledge, co-worker solicitation, there's a different set of rules.

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Is there any doctrine on the extent to which

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In an agency proceeding before the board, the proof can vary from the charge.

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Because one helpful fact for you is the charge is very specific.

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It says to a customer.

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But it doesn't seem obviously improper to me that that's the charge.

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They hold the hearing and it comes out at the hearing.

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Hypothetically, it comes out that a statement was made, a broad version of this statement, and the ALJ said, well,

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Proof.

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Proof varies a little bit from the charge, but I'm going to find an unfair labor practice based on a statement covering two answers to that.

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There is a doctrine of the board uses called Pergament case, which is cited in the boards brief.

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Two part tests for whether it's a violation of due process and we are not really contending that they failed that test.

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We did not address that, but we do note that.

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It was a bait and switch.

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It was unfair because of what I just described.

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During the trial, one of the parts of the test has to be fully litigated, going beyond the allegations of the complaint, as they clearly did.

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And they shut down full litigation with this exchange saying, you're not allowed to talk about co-orders.

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That's not the issue.

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I take your point, but the objection was overruled.

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But our real purpose in emphasizing what the complaint said, and what the charge said, and what Ibarra said, is that if that shows that no reasonable employee could have come to the conclusion that they're saying now.

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The general counsel is representing.

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They presumably have talked to Ibarra, the star witness.

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The union presumably is aware of what the allegations were, and how do they frame the case, that it's a case about

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the customer being told not to hand out to customers, nothing more, not even a statement of boilerplate statement and other similar activities.

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No, this is what they both said.

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And so it's regardless of due process concerns.

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Our real point about that is it totally undermines and undercuts the board's claim after the fact that a reason this is how reasonable employee would have understood it was to talk about backrooms and

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break times and the like, when that is not the way they themselves, the general counsel or the union or the employees understood.

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And that's really the critical part of the case.

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And, you know, it's all consistent with the cases that we cited, the Omni case.

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And the Dover Energy case of this court, which is really directly on point, it says, you know, you look at the events leading to his statement.

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They are relevant in considering how a reasonable employee would understand the statement.

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The board gave no consideration to that in their one liner of an opinion and the administrative law judge

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actually deliberately did not address the retail sales defense.

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The judge said, well, there are no special circumstances brought forth by the company.

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And then puts a footnote and says, so we don't need to reach the special circumstance, which is that it's a retail sales operation.

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And therefore, it's perfectly permissible to have this sort of requirement and to give this sort of instruction.

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I just noticed my time, but.

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We're gonna have additional questions for you.

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Two minutes.

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We'll give you a little time for rebuttal.

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Okay, thank you.

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Mr. Lara.

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Good morning, Your Honors.

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May it please the Court, here for the National Labor Relations Board, asking this Court to fully enforce the Board's order because it is supported by substantial evidence and subtle law.

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And I want to start by saying there are a few things that aren't in dispute here.

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My opponent's argument is that because they're a retail enterprise, they could extend such a ban on the selling floor where customers are present.

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The problem in this case is it raises the issue.

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When you look at Mariscal's statements, did she state a broader ban that employees would reasonably view as going beyond the selling floor to non-public areas like the back room and other areas of the store, even in non-working time?

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Because as was noted this morning, Mariscal said this covers even paid breaks.

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And I think it's important to go right to the source, Mariscal's statements herself.

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because they are about Mariscal's statements, not just what Ibarra, the employee, did or where her feet were standing at the time.

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And you touched on these statements this morning.

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Mariscal told Ibarra, you can't do that.

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Can you tell us where you're looking?

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Oh, yes, your honor.

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And I will give a site for each of these critical statements.

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their statements you noted this morning mariscal told abara you can't do that on starbucks property well on the clock and then she added you know she added and this will be in the same place this is at um page 367 this is at page 67 to 68

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of the appendix as well as page 96 to 97 and 99.

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I apologize that there are multiple pages, but there are multiple statements showing this broadband.

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So it's kind of three strikes here.

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First, it's you can't do that

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Well, on Starbrook's property and on the clock, there's immediately no limit as to what location she's talking about.

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Then she says, but you can do that outside of comforted property doing your time off.

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Which page is that?

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Can you just tell us the specific page for specific books?

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That's helpful.

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Yes, Your Honor.

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I believe that next one is at 96 to 97.

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But if you can hear me, because I appreciate your question, we can nail that down.

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And I'm just saying that's the second time she's made a broad statement that's not limited as to location.

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And just, I will go through them again with the sites you need.

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When you look at page 67 of the record, and this is where Abaras asks, did she make a specific comment?

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And she says, yes, the specific comment I mentioned is that I can't do this while at work on Starbucks property.

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Again, all of this stuff about she understood it as just being to customers or particular locations,

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She said, no, this is at A67.

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The specific comment was, I could not be distributing buttons on Starbucks property.

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And then the next one, if I can get this right, this is where Mariscal was asked, how would you characterize the conversation?

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And I think that's key.

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This is Mariscal characterizing her own instruction, said, I let them know.

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that this is not something they should be doing while they're on the clock.

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They can do it while they're outside the store.

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Again, this is 896 or page 246 of the transcript.

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And then she said, on their free time.

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And so we, on top of that, have the next thing, where the employee says, but I was on break the time we're just talking about.

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She said, well,

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That's still on the clock.

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That's still paid company time.

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And so that's substantial evidence to support finding that a reasonable employee presented with that broad dictate from their supervisor would feel, where can I do this?

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Only off Starbucks property on my free time, meaning not even paid breaks.

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That last statement, the barcical, is helpful to you.

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I've said that already.

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If you look at the, take a step back and look at the entirety of what's going on here, I mean, it seems a little rich to be parsing Marsicles testimony as if it were a statute when the board itself in its own charging document says this is about statements to customers.

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And Ybarra, when asked about that specific point, says, yeah, it was a statement about customers.

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And the undisputed facts of the case are this prompts the exchange is handing out buttons to customers.

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A couple things answer your question.

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First,

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Whatever precipitated Mara Skull's comments, when she actually spoke, she went much broader.

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As we just discussed, this isn't undisputed, she said, you can't do that on Starbucks property.

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You can do it off Starbucks property.

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Bottom of 96 is where you're reading from, which just raises the question of what is the that?

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And the that, if you go back to her direct testimony, is you can't hand out buttons to customers.

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If that's what the case is about, the later statement, you shouldn't be doing that on the clock, is perfectly fine.

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If that's what she said, but I don't think I'm parsing her statements like a statute.

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I think I'm quoting where she was asked, think.

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You've said a lot of things, Ms.

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Mariscal.

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How do you characterize your own statement?

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And she immediately said, I characterize it as this broader ban that the board found.

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And Ibarra was asked specifically, what did you hear?

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What was said?

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She heard the broader rule.

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And that happened again and again.

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And this is all in what we've quoted.

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So the question becomes, sense

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Mariscal went far beyond in her statements than what she had observed those incidents.

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Why would a reasonable employee in Abara's position, at risk of discipline, disregard her supervisor's much broader statement under the assumption that it was implicitly about this narrower context?

[00:18:24] Speaker 05:
Well, I mean, if she understood that it was about the narrower context, then she wouldn't be disregarding it because she'd be adhering it.

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It's all turns on whether you think the broader, I think it's hard to dispute that the broader statements taken just at face value could cover more than customer.

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And the question is whether the context tells you that actually, even those broader statements are articulated at a level of generality, they have to be talking about only customers because that's what the case was about.

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That's what the charge was about.

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That seems like that's the issue.

[00:18:57] Speaker 02:
If I may, Your Honor, I know my time is up.

[00:19:00] Speaker 02:
First, on the charge, I think that was well discussed already.

[00:19:02] Speaker 02:
That initiates the case and sets

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theory, but the parties together fully litigated the evidence of the broader statements.

[00:19:09] Speaker 02:
It was fully litigated.

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There was no surprise or switcheroo to the point where

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Starbucks Council cross-examined and asked questions about those broad statements, too.

[00:19:19] Speaker 02:
As to the context, again, a reasonable employee just knows how broad the directive is.

[00:19:24] Speaker 02:
And I think I know what you're referring to by context, but my opponent has a couple problems when they actually say that Mariscal explicitly limited it to customers, as if she actually said to the employees, to customers.

[00:19:38] Speaker 02:
One is that wasn't presented to the board.

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It's not a technical argument.

[00:19:42] Speaker 02:
It's a difference between what was argued before the board, which was interpretation of undisputed statements.

[00:19:47] Speaker 02:
And you can see that in their brief to the board, which we included.

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And then now, for the first time, it's disputed statements.

[00:19:54] Speaker 02:
Also, the context that they're referring to in the judge's decision isn't helpful to them.

[00:19:59] Speaker 02:
That's where the judge, according to his own headings, is saying, here's my recitation of the testimony, not here's my findings of what was said.

[00:20:07] Speaker 02:
When he makes findings of what was said, he finds the broader statement, and rightly so based on the substantial evidence in terms of Mariskol and Ibarra's testimony that we've discussed.

[00:20:17] Speaker 02:
Ibarra did not testify as they suggest.

[00:20:20] Speaker 02:
I understood this directive as only going to customs.

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And the judge did not find she did.

[00:20:27] Speaker 02:
It just stands to reason that if you're given this broad directive, you can do that off Starbucks property and on your free time.

[00:20:34] Speaker 02:
That would include doing it to customers.

[00:20:36] Speaker 02:
But she didn't say she only understood it that way.

[00:20:39] Speaker 02:
In fact, I think it's fair to say, and it's important to note,

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The issue is substantial evidence, even if this testimony could reasonably be read two ways, the board picked a reasonable way.

[00:20:49] Speaker 02:
And I want to say, not only is this about Mariscal statements, it's not about the company policy.

[00:20:55] Speaker 02:
The board addressed it and said she didn't even refer to it.

[00:20:58] Speaker 02:
And we'll explain this in our brief, and I won't belabor it absent questions, but even if employees would somehow view Mariscal statements in light of a policy she didn't refer to,

[00:21:11] Speaker 02:
put together, they wouldn't equate to a lawful rule.

[00:21:14] Speaker 02:
Because yes, the rule says working time and doesn't define it in this part, AmeriSkull sure did.

[00:21:19] Speaker 02:
She said that included breaks.

[00:21:22] Speaker 02:
And I think the policy viewed in that way would be broader than my opponent indicates so.

[00:21:27] Speaker 02:
Absolutely.

[00:21:28] Speaker 02:
Thank you, counsel.

[00:21:28] Speaker 01:
Thank you.

[00:21:34] Speaker 01:
We may intervene as counsel now.

[00:21:36] Speaker 01:
Thank you.

[00:21:36] Speaker 01:
May it please the court, over the last several years, we've had an extraordinary

[00:21:41] Speaker 01:
labor development, over 9,500 workers employed by Starbucks have unionized 385 separate Starbucks stores.

[00:21:50] Speaker 01:
And that didn't happen by magic, and it didn't happen by luck.

[00:21:54] Speaker 01:
It happened because these workers are able to talk to each other about the terms and conditions of their employment and their desire to have a union.

[00:22:01] Speaker 01:
And they're not allowed to talk about it on the selling floor, but they talk to each other in the break rooms.

[00:22:07] Speaker 01:
Fundamentally, if a worker is told you can't talk about the union, which is what solicitation and distribution means, if you can't talk about it at all during work time, and we define work time as including your breaks, that is an effort by Starbucks to shut down this key component of labor organizing.

[00:22:25] Speaker 01:
And we have focused excessively, even today, I think, on what Ms.

[00:22:30] Speaker 01:
Mariscal testified.

[00:22:32] Speaker 01:
and have not focused on the substantial evidence which is based purely sufficiently on what Ms.

[00:22:40] Speaker 01:
Ibarra testified on.

[00:22:44] Speaker 01:
She, line 12, she, meaning Mariscal, called me to the back when she came in and had a conversation with me telling me that I was not allowed to give out union pins.

[00:22:54] Speaker 01:
I was not allowed to give out pins.

[00:22:58] Speaker 01:
And on AJA 67, Ibarra again testifies when the judge asks her, asks them, what did she say about Starbucks property?

[00:23:08] Speaker 01:
Ibarra says that I could not be distributing buttons while at work at Starbucks property.

[00:23:15] Speaker 01:
An effort is made wholly, unpersuasively, with respect, with Judge Katz's zeroed in on this, where on cross-examination, Ms.

[00:23:25] Speaker 01:
Sade says to Ibarra, you understand she was telling you that you couldn't hand out buttons

[00:23:32] Speaker 01:
to a customer full-on work time, and Ibarra, recognizing that that is a subset, that is certainly part of what Ibarra understood they were being told, Ibarra says, correct.

[00:23:43] Speaker 01:
But immediately thereafter, Judge Gianopoulos asks the follow-up questions to Ibarra, says, what did you understand Mariscal to be saying?

[00:23:52] Speaker 01:
And Ibarra returns to their larger statement.

[00:23:56] Speaker 01:
This is a JA-68.

[00:23:58] Speaker 01:
I understood it that I could not distribute items while at work on the clock.

[00:24:04] Speaker 01:
Substantial evidence.

[00:24:06] Speaker 01:
We look only at what Ibarra said and ask whether the

[00:24:11] Speaker 01:
board could legitimately conclude, based on what Ybarra said, that what Ybarra, presumptively a reasonable employee, heard was, you can't distribute it while anywhere on Starbucks premises on the clock.

[00:24:26] Speaker 01:
And of course, and this is the second point Judge Katz has made, it is powerfully significant that when Ybarra protests, actually just tries to understand and says, but I was on rape,

[00:24:41] Speaker 01:
That would have been the time that the store manager should have said, oh, yeah, no, I understand who were on break.

[00:24:49] Speaker 01:
But even when on break, you can't do it in a selling area.

[00:24:53] Speaker 01:
And that is exactly not what the store manager says.

[00:24:56] Speaker 01:
Instead, and this is JA99, when I mentioned it to Rachel, this is Pam Mariscal testifying, they made the comment that they were in on a 10 minute break.

[00:25:06] Speaker 01:
And I said, that is still considered a company paid time.

[00:25:10] Speaker 01:
So it is not something you should be doing while on the clock.

[00:25:14] Speaker 01:
That is the time that the store manager needed to clarify if the rule was you just can't do it in selling areas.

[00:25:21] Speaker 01:
And instead,

[00:25:23] Speaker 01:
The board had an independent basis for finding the

[00:25:42] Speaker 01:
Even when you're on break, the company still owns you.

[00:25:45] Speaker 01:
You are on work time.

[00:25:47] Speaker 01:
You can't distribute.

[00:25:49] Speaker 01:
You can't solicit.

[00:25:51] Speaker 01:
Just the statement by Starbucks.

[00:25:54] Speaker 01:
Even when you are on a paid break, you're working for us.

[00:25:57] Speaker 01:
is so outrageous and so broad that it impinges not just solicitation and distribution, but all Section 7 protected activity.

[00:26:07] Speaker 01:
Three board members agreed with that, that they reference Kaplan and that the others agreeing with Kaplan.

[00:26:14] Speaker 01:
I don't believe that Starbucks has engaged with that finding at all.

[00:26:18] Speaker 01:
It's clearly supported by substantial evidence.

[00:26:20] Speaker 01:
And on that basis, we ask that you fully affirm the board's decision below.

[00:26:25] Speaker 01:
Thank you, counsel.

[00:26:26] Speaker 01:
Thank you.

[00:26:31] Speaker 05:
Baskin will give you two minutes for rebuttal.

[00:26:33] Speaker 03:
Thank you.

[00:26:37] Speaker 03:
Okay, I just want to point out response to the union first.

[00:26:41] Speaker 03:
There's a reason why we haven't spent much time talking about what Ibarra understood the comment to mean other than us saying it at the start, and that's because the administrative law judge made a finding of fact.

[00:26:53] Speaker 03:
And the finding was that Ibarra understood Mariscal was saying

[00:26:57] Speaker 03:
They could not hand out buttons to customers while on paid time while at work on the clock.

[00:27:03] Speaker 03:
That is the finding.

[00:27:05] Speaker 03:
And now the union and the board, they seem to be wanting to run away from that.

[00:27:09] Speaker 03:
But that was the understanding of the notion that that we haven't engaged with member Kaplan's

[00:27:18] Speaker 03:
this partial dissent is that we appreciate the part that he agreed, but the rest of it, it still fails because of the failure of analysis by the board.

[00:27:30] Speaker 03:
You can't uphold a decision in which the board has not followed your specific instructions and their own in their precedence in how they analyze the case.

[00:27:40] Speaker 03:
The board gave no consideration

[00:27:42] Speaker 03:
to the circumstances and we maintain and I repeat again that you have to accept that the supervisor the manager was referring at all times to the incident before her which was.

[00:27:59] Speaker 03:
giving pins to customers in the sales area, and it's no more and no less.

[00:28:05] Speaker 03:
And that's why everything that was stated around that at most ambiguous, but ultimately saved by the fact that that's what she was confronting.

[00:28:14] Speaker 03:
And that's what your own decisions have held.

[00:28:16] Speaker 03:
That's what you have to look at.

[00:28:17] Speaker 03:
And that's what we've argued.

[00:28:19] Speaker 03:
And I would just lastly challenge the board attorney

[00:28:24] Speaker 03:
Saying that we didn't present these issues to the board, I submit that at pages 356, 358 of the Joint Appendix, those sections of the brief and supportive exceptions go through chapter and verse.

[00:28:39] Speaker 03:
We talked about the context, the background circumstances that the board had failed to consider, the selling area case law that the administrative law judge and the board failed to address.

[00:28:50] Speaker 03:
And it just puts an entirely different light

[00:28:53] Speaker 03:
On the case, if you think about it as a customer incident, no more, no less.

[00:28:59] Speaker 03:
So we ask that you do that and deny enforcement to the board's order.

[00:29:02] Speaker 03:
Thank you.

[00:29:03] Speaker 05:
Thank you, counsel.

[00:29:04] Speaker 05:
Thank you to all counsel will take this case under submission.