Nov 12 (Reuters) - A panel of U.S. appeals court judges

on Wednesday voiced concerns that the National Labor Relations

Board has gone too far in policing employers' restrictions on

workers wearing union apparel, grappling with the issue in a

case involving Starbucks ( SBUX ).

Starbucks ( SBUX ) is challenging an NLRB ruling that said the

company violated federal labor law by barring workers at a

flagship New York City store from wearing t-shirts or more than

one pin supporting a union campaign.

The case at the 2nd Circuit U.S. Court of Appeals in New

York is the latest to ask a federal appeals court to rein in the

NLRB's test for determining when workplace dress codes

unlawfully interfere with employees' rights to advocate for

better working conditions and join unions.

The 8th Circuit in St. Louis last week said Home Depot had

the right to bar employees from writing "Black Lives Matter" on

their work aprons, and the New Orleans-based 5th Circuit in 2023

said Tesla could bar factory workers from wearing union

t-shirts. Both courts reversed NLRB decisions.

In the Starbucks ( SBUX ) case, a lawyer for the NLRB, Jared Cantor,

told a three-judge 2nd Circuit panel on Wednesday that the board

deemed any policy prohibiting union paraphernalia to be unlawful

unless an employer can prove that "special circumstances" exist

to justify restrictions.

Circuit Judges William Nardini and Susan Carney were

skeptical of that standard, saying it rendered many common

workplace dress codes illegal and failed to properly balance

employers' legitimate interests, such as safety or their public

image, with workers' rights.

Starbucks ( SBUX ) imposed its dress code "in accordance with a

general desire to create a vibe for this retail establishment,"

said Carney, an appointee of Democratic former President Barack

Obama. "Seems to me a reasonable position."

The 23,000-square-foot Starbucks ( SBUX ) store in Manhattan's

Meatpacking District includes an on-site roastery, coffee and

cocktail bars, a bakery and retail space.

Instead of Starbucks' ( SBUX ) standard green aprons and black tops,

workers there don brown aprons and collared shirts or

turtlenecks in muted colors and can opt to wear a handful of

pre-approved shirts and pins. Those support various causes such

as military veterans, Black Lives Matter, Hispanic Heritage

Month and World AIDS Day, according to court filings.

The store in 2022 became one of the first Starbucks ( SBUX )

locations to unionize; workers at 650 other U.S. stores have

voted to join unions since then, and in the process have filed

hundreds of complaints with the NLRB accusing the company of

illegal labor practices.

The board last year ruled that before the Manhattan store

unionized, Starbucks ( SBUX ) interfered with workers' rights there by

prohibiting union shirts and multiple pins, and that the company

failed to show any legitimate justification. The company

appealed to the 2nd Circuit.

Starbucks' ( SBUX ) lawyer, Amy Saharia, told the court on Wednesday

that the board had made it so difficult for an employer to prove

a special circumstance that even a policy allowing workers to

wear a union pin was deemed illegal. But even under that test,

Starbucks' ( SBUX ) policy was justified by its need to curate its public

image and was evenly applied, she said.

Nardini seemed to agree with Saharia about the scope of the

board's standard, questioning Cantor about its limits.

"Do have a right to wear union hats? And giant

blinking signs, sandwich boards that say 'hooray for the

union?'" asked Nardini, an appointee of Republican President

Donald Trump.

"In a workplace where employees are wearing lots of sandwich

boards, it's possible an employee could [have the right to] wear

that one," Cantor replied.

The panel includes Circuit Judge John Walker, who was

appointed by Republican former President George H.W. Bush.

The 2nd Circuit in 2012 upheld a Starbucks ( SBUX ) policy allowing

baristas at smaller Starbucks ( SBUX ) stores to wear only one union pin,

reversing a different NLRB decision. The court at the time said

multiple buttons or pins could be distracting and interfere with

the public image Starbucks ( SBUX ) intended to display.

The case is Siren Retail Corp v. NLRB, 2nd U.S. Circuit

Court of Appeals, No. 24-3168.

For Starbucks ( SBUX ): Amy Saharia of Williams & Connolly

For the NLRB: Jared Cantor and Milakshmi Rajapakse

For the union: Michael Ellement of James & Hoffman; Cristina

Gallo and Carley Russell of Cohen, Weiss and Simon

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(Reporting by Daniel Wiessner in Albany, New York)