The court dealt a blow to the National Labor Relations Board by making it more challenging to mandate that businesses reinstate workers who have been fired.
In an appeal to a labor ruling issued by a federal judge, Starbucks won on Thursday’s case before the Supreme Court. This decision increases the difficulty for a major government agency to step in when a business is accused of unlawfully suppressing labor organizing.
Justice Clarence Thomas wrote the majority judgment, which was supported by eight justices. In a separate opinion, Justice Ketanji Brown Jackson agreed with the majority ruling but disagreed on a few grounds.
The decision was made in a lawsuit filed by Starbucks in response to the termination of seven Memphis employees who were attempting to unionize a store in 2022. They were dismissed, according to the employer, for letting a television team into a closed store. The workers, referring to themselves as the Memphis Seven, said that the firm rarely enforced the regulations they were accused of breaking and that they were fired as a result of their attempts to form a union.
Starbucks was accused of acting because the employees had “joined or assisted the union and engaged in concerted activities, and to discourage employees from engaging in these activities,” according to a complaint filed with the National Labor Relations Board following the firings. Separately, attorneys representing the board requested an injunction from a federal judge in Tennessee, which was granted in August 2022.
In these situations, the agency requests that judges grant workers’ reinstatement since it may take years to resolve the underlying legal challenges, discouraging other workers from organizing—even if the fired workers end up winning in the end.
The National Labor Relations Board (N.L.R.B.) is authorized by the National Labor Relations Act to seek injunctions that reinstate workers. The firm contended in its Supreme Court appeal that federal courts have different standards when making this decision.
Some have a less stringent requirement, requiring the labor board to demonstrate that there was “reasonable cause” to think the business had broken labor law. Some adhere to a more stringent criterion, which calls for the board to demonstrate that the board had a good chance of winning the lawsuit and that denying the workers their return would result in “irreparable harm.” (Some courts blend parts of the two requirements.)
Starbucks claimed that the more stringent guidelines for rehiring employees ought to be implemented nationally. The labor board contended that the Supreme Court didn’t need to get involved because there was really only one standard in place and that the apparent distinctions between the two standards were semantic.
The board contended that the distinctions between the two standards were merely semantic, but the majority opinion disagreed. The majority stated that “the reasonable-cause standard goes far beyond simply fine-tuning the traditional criteria.” “It significantly reduces the obstacles to obtaining a preliminary injunction.”
The ruling noted that the harsher criteria was usually utilized in circumstances when judges were authorized to issue preliminary injunctions by other legislation. It came to the conclusion that there was no indication in the labor legislation for judges to depart from this strategy when it came to the reinstatement of employees.
Since 2021, more than 400 Starbucks locations countrywide, employing over 10,000 people, have voted to become a union. In April, negotiations on a draft contract framework were initiated by both parties. In the nation, Starbucks owns and runs over 10,000 locations.
In April, the court seemed inclined to rule in favor of Starbucks, as conservative justices questioned the necessity of the N.L.R.B. having a lower bar than other agencies when requesting an injunction.
The case was sent back to the lower courts following the verdict on Thursday.
According to legal experts, the N.L.R.B.’s most potent weapon against corporations that unlawfully repress union activity is the injunction, which deters employers from terminating workers who are attempting to form a union.
Less than twenty injunctions were requested by the N.L.R.B. last year. However, according to Sharon Block, a Harvard Law School professor and former N.L.R.B. member, they act as a potent deterrent against dismissing employees who want to organize a union. More businesses might feel empowered to suppress unionization attempts if there were a stronger threshold in place for obtaining the reinstatement of fired employees, according to Ms. Block.
Justice Jackson concurred, in her view, that the board ought to prove both that it was likely to win on the merits and that there would be irreversible harm if the employees were not reinstated. However, she contended that in situations when the board requested injunctive action, these were very simple to demonstrate.
For example, she contended that since labor law infractions usually took years to resolve, proving irreparable injury was essentially easy. She argued that the board’s ability to address the matter will be irreversibly harmed if an employee is fired and there is no chance of a settlement for several years; inevitably, the relief will arrive too late.
Justice Jackson cited language in Congress that implied that even if the fired worker was eventually made whole, other workers would lose hope and give up on their organizing effort.
But some see the agency as having used the injunction inappropriately in recent years, accusing the N.L.R.B. of taking on the role of an advocacy group. Don Schroeder, a partner with the law firm Foley & Lardner who is a labor and employment lawyer, said the agency had used the injunction too frequently over the past few years. He said it should be granted rarely.
According to Mr. Schroeder, “it gives the N.L.R.B. a lot of leverage if the standard is very low.” He went on, “It’s not like spotting a unicorn to grant an injunction.” On the other hand, it shouldn’t happen frequently.
Starbucks said it was happy with the ruling made by the Supreme Court. No matter where in the nation they work or reside, “consistent federal standards are important in ensuring that employees know their rights and consistent labor practices are upheld,” a corporate representative stated.
He continued by saying that this year the business aimed to get ratified contracts at unionized locations.
The decision was deemed regrettable by Lynne Fox, head of Workers United, the organization that represents Starbucks employees. In a statement, she stated that “working people have so few tools to protect and defend themselves when their employers break the law.” “That makes the Supreme Court’s decision from today especially egregious.”
The N.L.R.B. did not comment on the decision, although it did cite a previous statement made by Jennifer Abruzzo, its general counsel. “Without this temporary relief, the lawbreaker will fully benefit from having violated workers’ rights through time—for example, by stifling an emerging organizing drive—because a board remedy in due course will come too late to adequately address the harm,” Ms. Abruzzo stated.
The most recent of several challenges to the N.L.R.B.’s jurisdiction was the Starbucks case (Starbucks Corporation v. McKinney, No. 23-367). Amazon contended in a court document in February that the board was unconstitutional, following in the footsteps of SpaceX and Trader Joe’s.
The Supreme Court decision also represents the continuation of a broader political right effort to strip authority from federal agencies in general and the N.L.R.B. in particular. It seemed inevitable that the judges will reverse the important legal principle known as Chevron deference in January.