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Tuesday, July 9, 2024 | Back issues
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Siding in favor of Starbucks, Supreme Court limits federal labor board

The high court agreed with the coffee giant and made a stringent four-factor test for granting preliminary injunctions the standard in labor disputes.

WASHINGTON (CN) — The Supreme Court sided with the world’s largest coffee chain on Thursday and raised the standard necessary for the National Labor Relations Board to seek judicial intervention to halt unfair labor practices.

The justices ruled that a federal judge and the Sixth Circuit Court of Appeals wrongfully applied a two-factor test and effectively lowered the standard necessary to receive a preliminary injunction. 

Justice Clarence Thomas wrote the court’s opinion, which included all nine justices at least in part, and rejected the labor agency’s argument that requiring judges to weigh additional factors wrongfully limited the board’s adjudicatory authority.

Thomas, a George H.W. Bush appointee, held that courts must adhere to the four-factor test as set in the 2008 case Winter v. Natural Resources Defense Council when considering whether to grant Section 10(j) injunctions. 

The labor board sought such an injunction to reinstate seven Starbucks employees at a store in Memphis, Tennessee, after they were fired in the midst of a unionization drive. A district court judge agreed with the board and issued a temporary injunction ordering Starbucks to rehire the workers in August 2022. Starbucks then challenged the Sixth Circuit's decision, which the justices vacated, remanding the case back to a district judge for further proceedings.

The coffee giant argued that a federal judge and later the Sixth Circuit panel erred in applying what it called a labor-friendly two-factor test rather than the more stringent four-factor test.

In the two-factor test, judges need only determined whether there is reasonable cause to grant relief and if an injunction would be just and proper.

Under the ruling, federal judges will follow the more stringent four-factor test: the likelihood that the board would succeed on the merits that a labor violation occurred, and whether denying relief would cause irreparable harm. That standard also considers whether the first two factors outweigh potential hardships on the employer and if an injunction serves the public interest. 

“Nothing in Section 10(j)’s text overcomes the presumption that the four traditions criteria govern a preliminary-injunction request by the board,” Thomas wrote. “We do not understand the statutory directive to grant relief when the district court ‘deems’ it ‘just and proper’ to jettison the normal equitable rules.”

Thomas also maintained that the court’s ruling would not limit the board's authority, as the irreparable harm and equitable relief factors are “irrelevant” to the board’s adjudicatory authority. 

He added that deference normally reserved for such department action did not apply in the case, as the only issue before the court was “nothing more than the agency’s convenient litigating position.”

Justice Ketanji Brown Jackson, a Joe Biden appointee, joined in part but wrote in a partially dissenting opinion that she disagreed with her colleagues’ interpretation of Congress’ intent in granting the board certain deference. 

“I cannot join the majority in ignoring the choices Congress has made in the [National Labor Relations Act] about how courts should exercise their discretion in light of the NLRB’s authority over labor disputes,” Jackson wrote. “Because the majority chooses the simplicity of unfettered judicial discretion over the nuances of Congress’ direction, I respectfully dissent in part.”

At arguments in April, Lisa Blatt, of the Washington-based firm Williams Connolly, represented Starbucks and argued that the justices first must restore federal courts’ ability to weigh the facts of each case.

Additionally, she argued the justices must redefine what constitutes irreparable harm under the four-factor test, as the board's current definition — that any harm to unionization is irreparable — leads courts to almost always grant injunctive relief.

Prior to the the high court’s decision, U.S. appellate courts were split on which test to apply. Four circuits — the Fourth, Seventh, Eighth and Ninth — used the stricter four-factor test, while five — the Third, Fifth, Sixth, 10th and 11th — used the looser two-factor test. Two circuits — the First and Second — used a hybrid test.

Starbucks justified the firings by arguing the Memphis employees trying to unionize broke company policy by reopening the store after close and inviting non-employees, including a television crew, to come inside. 

Despite the terminations, the store voted to join Workers United in June 2022, along with more than 400 other stores. Five of the seven workers are still employed at the Memphis store, while the other two remain involved with the organizing effort, according to Workers United, the union organizing Starbucks workers. 

Lynne Fox, president of Workers United, issued a statement on X, formerly Twitter, decrying the court’s decision. 

“Working people have so few tools to protect and defend themselves when their employers break the law,” Fox wrote. “That makes today’s ruling by the Supreme Court particular egregious. It underscores how the economy is rigged against working people all the way up to the Supreme Court.”

The Washington Legal Foundation, a pro-business nonprofit which filed an amicus brief in the case, applauded the Supreme Court’s decision to reject the board's “most-favored-litigant status.” 

“The NLRB must now play by the same rules as every other litigant in federal court,” the foundation's senior litigation counsel John Masslon said in an emailed statement. 

Follow @Ryan_Knappy
Categories / Appeals, Business

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