On June 13, 2024, the Supreme Court published its opinion in Starbucks v. McKinney. The Supreme Court held that the National Labor Relations Board (“NLRB” or “Board”) must satisfy the traditional, four-factor test for injunctions. In short, the decision makes it more difficult for the NLRB to successfully claim injunctive relief while adjudicating alleged labor law violations.
Factual Background
This case stems from a Starbucks in Memphis, Tennessee, terminating the employment of seven Starbucks employees. Starbucks discharged the employees for violating company policy. Specifically, the employees granted news reporters access to the store after business hours, which was prohibited.
Workers United filed charges with the NLRB, claiming Starbucks violated the National Labor Relations Act (“NLRA” or “Act”) by committing unfair labor practices in terminating the employees. The NLRB’s General Counsel issued a complaint alleging Starbucks unlawfully terminated the employees under the NLRA. The NLRB then petitioned the U.S. District Court of the Western District of Tennessee to issue a preliminary injunction under section 10(j) of the NLRA, requiring Starbucks to reinstate the terminated employees and maintain a union presence in the store.
Lower Courts
The federal district court for the Western District of Tennessee (located in the Sixth Circuit) granted the 10(j) injunction, requiring Starbucks to rehire and employ the terminated employees until the NLRB adjudicated the matter. The court employed a two-pronged standard to grant the injunction. First, the court determined that there was reasonable cause to believe Starbucks committed unfair labor practices. Second, the injunctive relief is “just and proper.” This two-factor standard is an easier burden for the NLRB General Counsel to establish, as opposed to the traditional four-factor approach to federal injunctions.
Notably, the Fourth, Seventh, Eighth and Ninth Circuit Courts of Appeal adhere to the traditional four-factor test. However, in this case, the Sixth Circuit agreed with the district court and upheld the decision to utilize the two-pronged injunction framework, despite Starbucks’ arguments that the four-factor approach is the appropriate standard. The Sixth Circuit reasoned that a bare showing of non-frivolous legal theory and a basic harm were sufficient to satisfy the two prongs, respectively. The decision was appealed to the Supreme Court.
Supreme Court Opinion
In an opinion authored by Justice Clarence Thomas, the Supreme Court ruled that the Section 10(j) injunction sought by the NLRB must be analyzed under the traditional, four-factor preliminary injunction test. The four-factor (Winter) test requires a showing that: (1) the plaintiff is likely to succeed on the merits; (2) the plaintiff is likely to suffer irreparable harm in the absence of preliminary relief; (3) the balance of equities tips in the plaintiff’s favor; and (4) an injunction is in the public interest.
The Supreme Court first analyzed the text of Section 10(j), finding no reason to employ a lower standard in granting 10(j) injunctions. When Congress grants a statutory injunction remedy, there exists a strong presumption that Congress does not intend to depart from the traditional four-factor test. Absent a clear command in the statute’s text, a court must apply the four-factor test. The Supreme Court determined Section 10(j) lacks such a command. Unlike other statutes that call for a different injunction standard, Section 10(j) does not explicitly address the standard to be applied. Section 10(j) states injunctions shall be granted when a district court deems it “just and proper” to do so. This does not lower the standard of law, but instead tells courts to use their discretion in applying traditional legal principles.
The second half of the opinion was dedicated to showing that the statutory context of Section 10(j) does not require courts to defer to the Board in determining whether an injunction is appropriate. The Board argued for a deferential standard, one which only requires a showing of “reasonable cause to believe that unfair labor practices have occurred” in lieu of the traditional “likelihood of success on the merits” standard. The “reasonable cause” standard would require courts to yield to the Board’s views of the facts and law, prohibiting any introduction of contrary facts or legal theories. While courts currently afford deference to the Board in reviewing final adjudications, the Board is not granted deference during a hearing for injunctive relief. A court conducting its own fact-finding and merits inquiry has no interference on the deference granted to the Board’s final determination. Since there was no textual evidence of intent to supersede the traditional application of the law, and statutory context does not grant the Board deference, Section 10(j) petitions must be held to the four-factor test for preliminary injunctions.
Practical Takeaways
The NLRA prohibits employers and unions from engaging in unfair labor practices, and organizations covered by the Act should continue to ensure compliance. However, employers facing allegations of unfair labor practices should now be aware of this updated standard and monitor its further interpretation and application. This decision could offer additional defenses at the outset of unfair labor practice allegations, particularly in jurisdictions not previously applying the four-factor test.
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- Brad Taormina at (248) 457-7895 or btaormina@hallrender.com;
- Diana White at (317) 429-3616 or dwhite@hallrender.com; or
- Your primary Hall Render contact.
Hall Render blog posts and articles are intended for informational purposes only. For ethical reasons, Hall Render attorneys cannot—outside of an attorney-client relationship—answer specific questions that would be legal advice.
