By: Mark H. Dellinger and Benjamin J. Wilson
Earlier today, the Supreme Court of the United States issued an 8-1 decision in Starbucks Corp. v. McKinney, 602 U.S. __ (2024), making it more difficult for the National Labor Relations Board (“NLRB” or the “Board”) to win injunctions against employers by directing district courts to apply the traditional four-factor test when the Board sues to stop alleged unfair labor practices (“ULP”) while the merits of the ULPs are addressed through the administrative process and court system.
Section 10(j) of the National Labor Relations Act (“NLRA”) empowers the Board to pursue injunctive relief against an employer when a complaint that the employer is engaging in a ULP is brought. Specifically, Section 10(j) provides:
The Board shall have power, upon issuance of a complaint as provided in subsection (b) charging that any person has engaged in or is engaging in an unfair labor practice, to petition any United States district court, within any district wherein the unfair labor practice in question is alleged to have occurred or wherein such person resides or transacts business, for appropriate temporary relief or restraining order. Upon the filing of any such petition the court shall cause notice thereof to be served upon such person, and thereupon shall have jurisdiction to grant to the Board such temporary relief or restraining order as it deems just and proper.
29 U.S.C. § 160(j).
The decision follows a unionization push at a Memphis, Tennessee, Starbucks store, where several employees involved in the organization effort invited a local news crew to visit the store after work hours to promote their effort. Management learned of the interview and proceeded to launch an investigation, which ultimately resulted in Starbucks terminating the employment of those employees involved in the media event for violating company policies. Thereafter, the NLRB filed an administrative complaint against Starbucks, alleging that it had committed ULPs. The Regional Director then filed a petition pursuant to Section 10(j) which sought a preliminary injunction for the duration of the administrative proceedings that would require Starbucks to reinstate the terminated workers who were referred to in media coverage as the “Memphis 7.” The District Court assessed whether the Board was entitled to an injunction by applying a two-part test that assessed whether there was “reasonable cause” to believe that Starbucks had committed an ULP and whether injunctive relief was “just and proper.” Finding that the test was satisfied, the District Court granted the injunction, and on review, the Sixth Circuit Court of Appeals affirmed.
The Supreme Court, however, declined to apply the less-exacting two-part test advocated by the Board, instead holding that the NLRB must show that it is “likely to succeed on the merits” of the underlying claim. Relying on the Court’s 2008 ruling in Winter v. Natural Resources Defense Council, 555 U.S. 7, Justice Clarence Thomas explained that “[b]ecause nothing in §10(j)’s text overcomes the presumption that traditional equitable principles govern, district courts considering the Board’s request for a preliminary injunction must apply the Winter framework, which embodies those traditional principles.” The traditional four-factor test requires a court to determine (1) whether the Board is likely to succeed on the merits of the underlying case, (2) whether the Board’s power to fix the violation will be “irreparably harmed” without an injunction, (3) the balance of the Board’s interest and the targeted employer’s, and (4) whether an injunction would serve the public interest.
The lone dissent came from Justice Ketanji Brown Jackson, who agreed that the four-part test should apply, but that the lower courts should give the Board deference on the likelihood of success prong. Justice Jackson argued that the Court’s approach largely ignores the purpose of § 10(j), which serves “as a means of preserving or restoring the status quo as it existed before the onset of unfair labor practices,” so that the Board’s “ability to remedy an unfair labor practice,” through its internal adjudicative process, “would not be impeded.”
The decision essentially standardizes what had been a patchwork of approaches by the lower courts, with some utilizing the two-part “just and proper” test, others already utilizing the four-part test, and still others applying a hybrid approach. The NLRB typically seeks injunctions in only a handful of cases of the thousands it investigates every year.
In the midst of a strong push by the labor movement and an aggressive NLRB, the decision is a win for employers. The decision will make it more difficult for the Board to convince courts to enter injunction orders for ULPs, including reinstatement of workers, as lower courts will now have to consider more factors before granting this type of interim relief for alleged ULPs that have not been adjudicated on their merits.
To keep up to date with this and other developments, please contact a member of the Jackson Kelly Labor and Employment team.