Starbucks appears likely to win Supreme Court dispute with federal labor agency

The U.S. Supreme Court appeared to side with Starbucks Tuesday in a case that could make it harder for the federal government to seek injunctions when it suspects a company of interfering in unionization campaigns.

Justices noted during oral arguments that Congress requires the National Labor Relations Board to seek such injunctions in federal court and said that gives the courts the duty to consider several factors, including whether the board would ultimately be successful in its administrative case against a company.

“The district court is an independent check. So it seems like it should be just doing what district courts do, since it was given the authority to do it,” Justice Amy Coney Barrett said.

But the NLRB says that since 1947, the National Labor Relations Act — the law that governs the agency — has allowed courts to grant temporary injunctions if it finds a request “just and proper.” The agency says the law doesn’t require it to prove other factors and was intended to limit the role of the courts.

The case that made it to the high court began in February 2022, when Starbucks fired seven workers who were trying to unionize their Tennessee store. The NLRB obtained a court order forcing the company to rehire the workers while the case wound its way through the agency’s administrative proceedings. Such proceedings can take up to two years.

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A district court judge agreed with the NLRB and issued a temporary injunction ordering Starbucks to rehire the workers in August 2022. After the 6th U.S. Circuit Court of Appeals upheld that ruling, Starbucks appealed to the Supreme Court.

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. The Memphis store voted to unionize in June 2022.

Starbucks asked the Supreme Court to intervene because it says federal appeals courts don’t agree on the standards the NLRB must meet when it requests a temporary injunction against a company.

In its review of what transpired at the Starbucks store in Memphis, the Sixth Circuit required the NLRB to establish two things: that it had reasonable cause to believe unfair labor practices occurred and that a restraining order would be a “just and proper” solution.

But other federal appeals courts have required the NLRB to meet a tougher, four-factor test used when other federal agencies seek restraining orders, including showing it was likely to prevail in the administrative case and that employees would suffer irreparable harm without an injunction.

Justice Ketanji Brown Jackson appeared to agree with the NLRB’s argument that Congress meant for the agency to operate under a different standard.

She noted the NLRB has already determined it is likely to prevail in a case by the time it seeks an injunction. And she noted that injunctions are very rare. In the NLRB’s 2023 fiscal year, it received 19,869 charges of unfair labor practices but authorized the filing of just 14 cases seeking temporary injunctions.

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“I appreciate that maybe the standards we need to look at, and I understand four factors versus two factors, but this is not sounding like a huge problem,” Jackson said.

Justice Sonia Sotomayor wondered aloud if whatever the Supreme Court decides will be moot since the injunction would have expired and an NLRB judge may have ruled in the Starbucks’ case by the time the court’s decision is published.

But she also seemed to agree that the courts should have a clearer role in NLRB cases.

“It’s the court that has to decide the likelihood of merit,” Sotomayor said.

The oral arguments took place even as the animosity between Workers United and Starbucks has begun to fade. The two sides announced in February that they would restart talks with the aim of reaching contract agreements this year. Starbucks and union representatives planned to meet Wednesday for their first bargaining session in nearly a year.

Workers at 424 company-owned U.S. Starbucks stores have voted to unionize since late 2021, according to the NLRB, but none of those stores has secured a labor agreement with Starbucks.