Andrew Chang and John Krusel
WASHINGTON (Reuters) – U.S. Supreme Court justices on Tuesday said they sided with Starbucks (NASDAQ:) in the coffee chain’s challenge to a court order requiring it to rehire seven Memphis cafe employees who were fired for union involvement.
The justices heard arguments in the Seattle-based company’s appeal of a lower court’s approval of an injunction sought by the National Labor Relations Board (NLRB) ordering the workers’ reinstatement. The case could make it difficult to quickly stop labor practices deemed unfair under federal law while the NLRB reviews complaints.
The dispute centers on the legal standard that federal courts must use to grant a preliminary injunction requested by the NLRB under a federal law called the National Labor Relations Act. Such orders are intended to be a temporary tool to stop unfair labor practices while the matter is being reviewed by the board of directors.
Under Section 10(j) of the Act, the court may grant an injunction if it is considered “just and proper.”
Starbucks argues that the judge who granted the injunction should have used a strict four-factor test to weigh the injunction application, as courts typically do in non-employment disputes. This test involves assessing whether the party seeking relief will suffer irreparable harm and whether it will succeed on the merits of the case.
Some judges appeared to agree that the courts, not the NCRO, should play the primary role in determining the likelihood of success of a case before an injunction is granted.
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Conservative Justice Neil Gorsuch told Justice Department lawyer Austin Raynor, who defended the Starbucks injunction, that other federal agencies are held to stricter standards.
“In all the agencies that offer alphabet soup, we don’t do that,” Gorsuch said, using a term describing agencies known by their initials. “District courts apply the “likelihood of success” test as we generally understand it. So why is this particular legislative regime different from many others?”
Liberal Justice Elena Kagan pressed Raynor to explain “why courts should apply a lower standard.”
Raynor said the reason is “structural” because Congress intended, through the National Labor Relations Act, to make the NLRB, rather than the courts, the primary arbiter in unfair labor disputes.
“But it also gave the court the power to issue injunctions,” Kagan responded.
Starbucks argues that if lower courts had applied stricter criteria, the case would have turned out differently.
About 400 Starbucks locations in the United States have unionized, representing more than 10,000 employees. Both sides have at times accused each other of illegal or inappropriate behavior.
Hundreds of complaints have been filed with the NLRB accusing Starbucks of illegal labor practices, such as firing union supporters, spying on workers and closing stores during labor campaigns. While denying wrongdoing, Starbucks said it respects workers’ right to choose whether to join a union.
In a break from the acrimony, both sides agreed in February to create a “framework” that would guide organizing and collective bargaining and potentially resolve many pending legal disputes.
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‘THE CREAM’
Raynor told the justices that the NLRB seeks 10(j) injunctions in very few plum cases, asking for just seven last year, even though it receives 20,000 unfair labor charges each year.
“This expert agency said, ‘We believe they are the ones most deserving of relief,’” Raynor added.
But conservative Chief Justice John Roberts said, “I don’t know why the conclusion isn’t exactly the opposite.” Roberts said these may be cases that the board feels are “most vulnerable.”
Conservative Justice Amy Coney Barrett emphasized to Raynor that the federal courts serve as an “independent check” on the NLRB’s power.
“We recognize that this is not a cliche,” Raynor responded.
Liberal Judge Ketanji Brown Jackson also noted the relatively small number of injunctions the NLRB seeks each year.
“It doesn’t seem like a huge problem,” Jackson said.
“Whether or not this is a huge issue, the applicant (Starbucks) simply wants a level playing field,” Blatt responded.
The case began in 2022, when workers at the Memphis Poplar Avenue store were among the first to join the union. After hours, they let a television news crew into a Starbucks to talk about the union campaign. Seven workers present that evening were fired, including some members of the union’s organizing committee.
The employees ultimately voted to join the Workers United union.
The union brought unfair labor practices charges to the NLRB related to firings and other disciplinary actions by managers. The agency sought the injunction, arguing that Starbucks illegally fired workers for supporting unions and sending a message to other workers.
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U.S. District Judge Cheryl Lipman issued the injunction in 2022. The 6th U.S. Circuit Court of Appeals in Cincinnati upheld it in 2023.
The Supreme Court’s decision is expected by the end of June.