U.S. Supreme Court thwarts NLRB’s attempt to ease its burden of obtaining an injunction; Level playing field for employers (United States)

Unless you’ve been stranded on a desert island for the past few years, you’ve probably heard that Starbucks is waging a long-running battle to unionize its employees. In addition to dealing with the union seeking to represent its employees, Starbucks also had to deal with the National Labor Relations Board (NLRB or Board) which, through its aggressive and openly pro-union General Counsel (GC), , filed dozens of complaints. of unfair labor practice claims against Starbucks, alleging that Starbucks engaged in a wide range of allegedly illegal conduct in response to unionization.

One of the most important weapons in the NLRB GC’s litigation arsenal is what is known as a “10(j)” injunction. A “10(j)” refers to the section of the National Labor Relations Act that authorizes the GC to seek a preliminary injunction (also sometimes called a temporary restraining order) from a federal court while the Administrative enforcement proceedings take place before the NLRB. . These injunctions generally prohibit an employer from taking certain actions or, more commonly, require it to take specific actions – such as rehiring employees it has fired – while an underlying unfair labor practice claim is pending. brought before the NLRB. In its simplest form, a 10(j) injunction requires an employer to restore the status quo that existed before the alleged unfair labor practice while the legal challenge to that alleged unfair labor practice is pending before the Commission.

For many years, the NLRB has held – and a number of federal appeals courts have agreed – that the burden on it to obtain a 10(j) injunction is less than that generally required for parties to obtain an injunction in the federal courts. For example, the Third, Fifth, and Sixth Circuits only require that the NLRB demonstrate that there is “reasonable reason to believe that unfair labor practices have occurred” and that an injunction would be “just and appropriate” to obtain a 10(j) injunction. In contrast, other circuits, including the Fourth, Seventh, Eighth, and Ninth Circuits, use the traditional, more rigorous four-part test to evaluate whether a temporary injunction should be granted before a case is fully and finally brought. before the tribunal. This test evaluates whether (1) the NLRB is likely to succeed on the merits of the underlying unfair labor practice claim; (2) irreparable harm will result if an injunction is not issued; (3) the balance of actions favors an injunction; and (4) an injunction is in the public interest.

In 2022, Starbucks fired several employees at one of its Memphis, Tennessee, locations for violating company policy. The union seeking to represent these employees filed an unfair labor practice complaint with the NLRB, alleging that Starbucks’ decision to fire the employees was unlawfully motivated by their organizing activities and to discourage other employees from seeking to unionize. The NLRB filed a complaint based on these accusations. While this complaint was pending – and therefore before a final decision had been issued – the NLRB GC sought a 10(j) injunction from a federal district court in Tennessee that would, among other things, require Starbucks to rehire the fired employees pending the outcome of the case. the procedure for unfair labor practices.

The federal district court applied the Sixth Circuit’s relaxed two-part test and concluded that the NLRB had sufficiently demonstrated reasonable grounds to believe that Starbucks engaged in unlawful action in terminating the employees and that an injunction would be “fair and appropriate”. The court determined that “reasonable cause” required only that the NLRB demonstrate that its legal theory was substantial and not frivolous, and that an injunction is “just and appropriate” if it restores the status quo that existed before the work practice alleged unfairness – both of which are relatively low bars to clear. The district court therefore issued the injunction and ordered Starbucks to rehire the terminated employees pending the final outcome of the NLRB’s unfair labor practice administrative complaint. Starbucks appealed the district court’s 10(j) injunction, and the Sixth Circuit Court of Appeals affirmed. Starbucks then took the case to the United States Supreme Court.

The question before the Supreme Court was quite simple: Does the NLRB benefit from a lesser burden in obtaining a 10(j) injunction than other litigants, or does the traditional four-part test apply? in place ? Writing for a nearly unanimous Court (Justice Jackson dissented in part but agreed with the Court’s judgment to vacate the injunction and remand the case to the Sixth Circuit), Justice Thomas rejected the NLRB’s position that a lesser burden applies to his requests for 10(j) injunctive relief. Instead, the Court held that the traditional four-factor test – probability of success; irreparable harm; balance of shares; and the public interest – applies.

The practical impact of the Court’s decision is (at least) twofold. First, it establishes a uniform standard across all federal courts applicable to NLRB 10(j) injunctive claims, replacing the varying and inconsistent standards applied by different circuits. Second, it confirms that the NLRB deserves no special treatment and must meet the same standards as any other litigant when it comes to injunctive requests. Going forward, the more lenient, NLRB-friendly “reasonable/just and proper cause” standard used by some circuits no longer applies. Either way, this is a win for employers because it not only provides certainty about the standard applicable to 10(j) injunctions, but it also levels the playing field by requiring the NLRB to follow the same standards of equitable compensation as all other litigants. must come together to obtain an injunction.