Supreme Court signals support for Starbucks in bid to limit federal labor board

WASHINGTON (CN) — The Supreme Court on Tuesday appeared willing to side with the world's largest coffee chain and raise the standard necessary for the National Labor Relations Board to seek judicial intervention to stop unfair labor practices.

Arguments in Starbucks Corp. v. McKinney centered on the NLRB’s use of Section 10(j) injunctions. Federal judges apply either a four-factor test or two-factor test to decide whether the relief is appropriate. 

Starbucks urged the justices to curtail the NLRB’s authority by finding that the two-factor test does not allow courts to consider the facts of the case and serves only to rubber-stamp cases for the agency.

In the two-factor test, courts need to determine only whether there is reasonable cause in order to grant relief.

The four-factor test requires courts to weigh those first two factors along with two others: the likelihood that the NLRB 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. 

The justices appeared willing to accept the four-factor test as the uniform legal standard applied in such cases, specifically because the lighter test strips the courts of their usual fact-finding duties.

“You’re right, it’s the court that has to decide the likelihood of merits,” the Obama-appointed Justice Sonia Sotomayor said.

But Sotomayor noted that in addition to the merits of the case, the court would still weigh the remaining three prongs of the test, including the potential harms to the employer, the union and the NLRB, which could still result in a judge granting the injunction. 

Lisa Blatt, of the Washington-based firm Williams Connolly, represented Starbucks on Tuesday. In addition to restoring the federal court's ability to weigh the facts of each case, she said the justices also must redefine what constitutes irreparable harm under the four-factor test. The NLRB defines any harm to unionization as irreparable — which leads courts to grant injunctive relief. 

Justice Ketanji Brown-Jackson, a Joe Biden appointee, challenged Blatt’s characterization of the agency as an “abusive board,” noting the agency sought injunctions only 14 times in 2023 and in fact seems to be rather careful.

Austin Raynor, assistant to the U.S. solicitor general, represented the NLRB. He said the issue before the court had narrowed to the question of what constitutes irreparable harm. 

“We agree that not all unlawful discharges necessarily show irreparable harm,” Raynor said. “The question that we think the court should look at is whether that extinguishes the momentum of the union drive, or impairs it in such a serious way, that … a year or two down the road, won’t be able to restart the drive.” 

He highlighted Jackson’s point that the agency seeks injunctive relief in few cases, noting that out of over 20,000 unfair labor charges it receives, the agency only requested 14 injunctions, seven of which were granted. Raynor referred to that fraction as the “cream-of-the-crop cases.” 

“This is an expert agency that has said, ‘We think these are the most deserving of relief,’” Raynor said. 

Chief Justice John Roberts demurred: “I don’t know why the inference isn’t the exact opposite.” 

These cases brought by the board seem to be “the most vulnerable,” the George W. Bush appointee said.

Raynor said Congress in the 1930s granted the NLRB the authority to adjudicate labor disputes to avoid wide-ranging federal court involvement and created the 10(j) injunctions to allow district courts to protect the NLRB’s authority. 

By granting U.S. district courts the ability to issue injunctions, it allows the courts to prevent further harm to workers while an issue proceeds before the agency, Raynor said.

Justice Neil Gorsuch, a Donald Trump appointee, was unconvinced. 

“You would think therefore maybe a more restrictive injunctive test, rather than a looser one, might apply?” Gorsuch asked. “You maybe want the full considerations of equity brought to bear, rather than a looser standard that results in more judicial interference in labor affairs.” 

U.S. appellate courts fall into three camps on which test to apply. The Fourth, Seventh, Eighth and Ninth Circuits use the stricter four-factor test, while the Third, Fifth, Sixth, Tenth and Eleventh Circuits use the two-factor test. The First and Second Circuits use a hybrid test.

The Supreme Court will issue a ruling in the case by the end of June.

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