Supreme Court decision in Starbucks v. McKinney: implications for employees and unions

On June 13, 2024, the Supreme Court ruled that the National Labor Relations Board (the “Board”) is subject to the same standards as any other litigant when seeking a preliminary injunction in unfair labor practice cases. This decision, which will make it more difficult for the Commission to obtain a preliminary injunction, could provide employers with greater flexibility in making employment decisions during an organizing campaign.

Background of the case

In 2022, several Starbucks employees in Nashville, Tennessee, announced their intention to unionize and invited a local news crew to visit the store after hours to promote unionization efforts. When Starbucks learned of this activity, it launched an investigation and ultimately fired several employees involved for violating company policy. The Board filed a complaint against Starbucks and filed a petition under Section 10(j) of the National Labor Relations Act (a “10(j) Petition”) in a federal court seeking a preliminary injunction to force Starbucks to reinstate fired employees. , among others. 10(j) of the Act authorizes the Commission to seek a preliminary injunction prior to a final hearing and determination of the merits of an unfair labor practice complaint while the Commission’s final resolution of an unfair labor practice charge work is pending. In Starbucks, the Board argued that reinstatement of terminated employees was necessary to avoid the “chilling” effect that firing union supporters could have on employees’ unionizing efforts.

To determine whether the motion should be granted, the district court applied a two-part test asking whether:

there are reasonable grounds to believe that unfair labor practices have occurred”; And
whether the injunction is “just and appropriate”.

The district court granted the Board’s request for an injunction, and the Sixth Circuit Court of Appeals affirmed.

Supreme Court decision

The Supreme Court held that the lower courts erred in applying this standard of deference when ruling on the Commission’s 10(j) injunction. The Court instead held that in deciding whether the Commission is entitled to a preliminary injunction under Rule 10(j), lower courts should apply a four-part test used more commonly for preliminary injunctions sought by private parties. . This criterion, stated by the Court in Winter v. Natural Resources Defense Councilrequires a party seeking a preliminary injunction to indicate how:

it is likely that he will succeed on the merits;
he is likely to suffer irreparable harm in the absence of preliminary measures;
the balance of actions tilts in his favor; And
an injunction is in the public interest.

In so holding, the Court rejected the Board’s argument that Congress intended to grant it deference in determining when a preliminary injunction was necessary to protect employees’ rights protected by the statute, and that the test in two parts is therefore more appropriate. The Court held that the plain language of the Act did not support this interpretation and held that the four-factor test, which is “consistent with traditional principles of fairness”, should be used to determine whether the extraordinary remedy of a preliminary injunction should be granted to the Commission when it files a complaint against an employer for an unfair labor practice under the Act.

Conclusion

Nothing in this decision affects the ultimate decision-making authority of the Commission, which, as the Court points out, always shows deference to these decisions. However, the ruling means that the Commission is held to the same standards as any other party when seeking a preliminary injunction. District courts will be required to approve 10(j) injunctions when the Commission determines that there may have been an unfair labor practice. Thus, employers and unions may expect that there will be no rapid resolution of disputes under the Act and may instead seek resolution rather than subjecting themselves to prolonged administrative review.