Starbucks and the National Labor Relations Board faced off Tuesday at the U.S. Supreme Court hearing of Starbucks vs. McKinney, which will determine the scope of the National Labor Relations Board’s power in stepping in to resolve labor disputes. Starbucks argued before the Supreme Court against a previous district court order that had ordered the coffee chain to reinstate seven previously fired workers in Memphis, Tenn., who were terminated in 2022 during an attempt to unionize the store.
According to the legal representation for Starbucks, the highest court in the land should reconsider the district court decision in part because the NLRB’s request for a temporary injunction was approved on the grounds of a two-factor test, even though other circuit courts use a more rigorous four-factor test to determine if the injunction will be granted.
“Preliminary injunctions are extraordinary and drastic remedies,” Lisa Blatt, attorney representing Starbucks said during the oral arguments on Tuesday. “Here, the Board seeks a coercive injunction backed by contempt sanctions, and the Board seeks the very same injunctive relief that it would get if it won the case. Such relief is highly inappropriate absent a clear showing under all four factors. The government justifies deference because the Board, not trial courts, ultimately decide the merits at the back end.”
The National Labor Relations Board won the injunction against Starbucks in August 2022, requiring the company to temporarily rehire the “Memphis Seven,” who were allegedly fired because they stayed at work after hours, thereby violating safety and security policies. However, because the terminated employees were part of the union movement at the Memphis store (and other non-union activists were not fired alongside them), the NLRB argued that the actions were retaliatory.
According to court records, today, five of these employees still work for Starbucks, while the remaining two are otherwise involved with the union movement. Starbucks and its supporters argue that the NLRB relies too often on these injunctions, stating that by the time the agency releases a final board order after about two years, the decision is effectively final, allowing the NLRB to, in some cases, bypass the investigative effort by filing an injunction.
The NLRB, however, argues that injunctions are rare, and in fact, Supreme Court Justice Jackson pointed out that out of 20,000 complaints filed yearly with the NLRB, only about 700 of those resulted in investigations, and of those, the Board has asked for an injunction 14 times. While Starbucks’ attorney argued that “restraint is not a basis for deference,” Austin Raynor, assistant to the solicitor general, and legal representative for the NLRB, stated that the Board is intended to be the “primary adjudicator” in these cases of labor disputes, not the courts:
“We think that power has to be recognized cognizant of the fact that the Board is going to be adjudicating this dispute,” Raynor said. “The court is not going to get out in front of the Board. It's going to protect the Board's authority.”
The Supreme Court will ultimately decide whether the NLRB has the power to require employers to rehire employees with an injunction appeal in the midst of a unionization dispute, which could ostensibly affect other budding unions whose members have been fired (justly or unjustly) by their employers in the midst of a union vote.
“Section 10(j) injunctive relief is one of the most important tools available to the NLRB to protect workers’ statutory rights through effective enforcement of the only federal labor law in the country,” the NLRB said in a statement. “Without obtaining this temporary relief, the lawbreaker will fully reap the benefits of having violated workers’ rights—such as by snuffing out a nascent organizing drive—through the passage of time, because a Board remedy in due course will come too late to sufficiently address the harm.”
Starbucks, meanwhile, argues that “consistent federal guidelines” that require the more stringent four-factor injunction test over the two-factor test, are crucial to even the playing field between labor organizers and companies, and that injunctive interference should be rare.
“Consistent federal standards are not only important for employers, but also employees, ensuring each individual knows their rights and consistent labor practices are upheld no matter where in the country they work and live,” Starbucks said in a factsheet released about the case.
The Supreme Court is scheduled to release its decision in this case and others by the end of June.
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