CINCINNATI (CN) — The termination of seven pro-union employees from a Starbucks store was based on their misconduct — not their unionization efforts — and did not warrant an injunction, according to arguments made Thursday by the ubiquitous coffee retailer.
The National Labor Relations Board, or NLRB, petitioned a federal judge to issue an injunction in May 2022 after it claimed Starbucks violated numerous labor laws in an effort to chill growing pro-union sentiment among employees not only in Memphis and other Tennessee stores, but nationwide.
Employees and several managers at a Memphis Starbucks openly discussed forming a union in January 2022, which set off a chain of events that culminated in seven employees losing their jobs.
According to the NLRB, Cara Taylor set the unionization process in motion, and she was immediately targeted for baseless disciplinary actions in the wake of her co-workers' decision to support her efforts.
Taylor was punished for wearing leggings to work and was told to "stop talking" by managers who overhead pro-union conversations.
Starbucks then closed her store early the day after the Martin Luther King Jr. holiday to prevent an interview with local news outlets, although the employees who were eventually fired stayed on anyway and conducted the interview.
Several weeks later, Taylor and the six other employees who let news crews into the store were fired for being in the store while off-duty, letting unauthorized individuals into the store, and handling cash while off-duty, all of which the NLRB claims were used by Starbucks as pretextual reasons to get rid of the employees for their stance on unionization.
Chief U.S. District Judge Sheryl Lipman, an appointee of Barack Obama, agreed with the union and granted its motion for a preliminary injunction in August 2022 to prevent any further retaliation by Starbucks against employees who expressed support for the unionization effort.
The injunction also reinstated the seven fired employees to their previous positions.
In its brief to the Sixth Circuit, Starbucks argued the success of unionization efforts both in Memphis and across the country prove its actions against the seven employees had no chilling effect and did not violate any labor laws.
"In the aftermath of the terminations," it said, "the union campaign did not go underground. Instead, it remained visible, if not more so, and continued unabated. Union officials seized on the discharges to advance the campaign; organizing committee member and partner Reaghan Hall, instead of backing off of her support of union activities at the Memphis store, energetically kept the campaign going."
Across the country, the "Memphis 7" moniker was created and used by the union to garner support for its efforts, according to Starbucks, who also claims the union improperly informed the public those employees were fired explicitly for their unionization attempt.
In its brief to the appeals court, the NLRB disagreed with Starbucks' characterization of events and pointed out "most employees stopped wearing union pins after the mass discharge ... [and] at least one employee refrained from participating in union protests" after the terminations.
The federal labor agency emphasized Starbucks' decision to close the Memphis store for several days was made, at least in part, to disrupt a "sit-in" organized by the "Memphis 7," while the removal of pro-union material from the store bulletin board clearly violated federal labor laws.
Attorney Arthur Carter from Littler Mendelson PC in Dallas argued Thursday on behalf of Starbucks and made it clear to the panel his client believes the termination of the seven employees had no chilling effect on the unionization push.
"[We] fired the seven employees because they violated a critical safety rule," he said. "The factual record shows an absence of chill. The election was successful."
Senior U.S. Circuit Judge Danny Boggs, an appointee of Ronald Reagan, told the attorney his argument would seem to allow Starbucks to antagonize employees as long as a union election is still successful.
Carter disputed the point and emphasized the lack of concrete evidence in the record, as well as the fact that the Memphis 7 repeatedly returned to the store to hold demonstrations and talk with former co-workers about union activities.
"You had an organizer still in the store who talked to 10 new employees," he said. "The continuing engagement shows the opposite of being chilled."
Attorney Laurie Duggan argued on behalf of the NLRB and called Starbucks' actions "extraordinarily brazen," a phrase echoed by U.S. Circuit Judge Chad Readler in a different context.
"I think it's pretty brazen to allow the media into the store after hours," the Trump appointee said.
Readler took issue with the NLRB's claim that negotiations following the union vote were affected by any of Starbucks' conduct.
"It seems pretty speculative because bargaining had not started [when the injunction was granted]," he said.
"This is about as close to bargaining as you can get," Duggan responded. "Reinstatement of the employees was necessary to protect the efficacy of the bargaining process."
Starbucks has been under increased scrutiny as a large number of its employees across the country seek to unionize, and CEO Howard Schultz was questioned about the company's tactics by a Senate committee in March.
Chief U.S. Circuit Judge Jeffrey Sutton, a George W. Bush appointee, rounded out the panel but was not present at Thursday's arguments.
No timetable has been set for the panel's decision.
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