Supreme Court Sides With Starbucks in Labor Dispute With Union Activists

Justices find that a federal union board must follow the normal rules when seeking a preliminary injunction.
Supreme Court Sides With Starbucks in Labor Dispute With Union Activists
The U.S. Supreme Court in Washington on May 29, 2024. (Madalina Vasiliu/The Epoch Times)
Matthew Vadum
Updated:
0:00

The Supreme Court ruled unanimously in favor of Starbucks on June 13, reining in the National Labor Relations Board’s authority to decide whether fired union activists in Tennessee should get their jobs back.

For years, the coffee giant has been battling organized labor, which is trying to unionize baristas across the United States.

The court’s 9–0 opinion in Starbucks Corp. v. McKinney was written by Justice Clarence Thomas.

The court has tended to rule for employers in recent years.

In June 2023, in Glacier Northwest Inc. v. Teamsters, the Court found 8–1 that employers may sue collective bargaining units for damages caused by strikes.

Justice Ketanji Brown Jackson was the sole dissenter in the Glacier Northwest ruling.

In the Starbucks case, Justice Jackson dissented in part and concurred in part.

Headquartered in Seattle, the petitioner, the world’s largest coffeehouse chain, reported nearly $36 billion in revenue last year. The respondent is M. Kathleen McKinney, regional director for Region 15 of the board.

More than 400 of the company’s 9,600 corporate-run U.S. stores have reportedly voted to unionize since 2021.

The company stated that it terminated the employment of the so-called Memphis Seven because they ran afoul of company policy by letting a television news crew into a store after business hours. The employees announced that they intended to unionize the store.

The Starbucks Workers United union complained to the board and filed unfair labor practice charges, claiming that Starbucks interfered with the workers’ right to form a union and discriminated against union members.

The board secured a preliminary injunction from a federal district court in 2022 after alleging that Starbucks had engaged in unfair labor practices. The company was ordered to temporarily rehire the fired employees.

The U.S. Court of Appeals for the Sixth Circuit found that the district court “did not abuse its discretion” in issuing the injunction and allowed it to stand.

In the new Supreme Court opinion, Justice Thomas wrote that the board can bring in-house enforcement proceedings against employers and labor unions for engaging in unfair labor practices.

Section 10(j) of the National Labor Relations Act (NLRA) authorizes the board to pursue a preliminary injunction from a federal district court while these administrative enforcement proceedings take place.

“The question in this case is whether the traditional four-factor test for a preliminary injunction articulated in Winter v. Natural Resources Defense Council ... governs the board’s requests under [Section] 10(j),” the court’s opinion reads.

“We conclude that it does, and therefore vacate and remand.”

The four-part test in Winter for issuing a preliminary injunction is whether a plaintiff is thought likely to succeed on the merits, whether the plaintiff is likely to suffer irreparable harm in the absence of the injunction, whether the balance of equities and hardships weighs in favor of the plaintiff, and whether the injunction is deemed to be in the public interest.

But the district court used the Sixth Circuit’s two-part test for preliminary injunctions instead of the Winter test. The circuit test asks whether “there is reasonable cause to believe that unfair labor practices have occurred” and whether injunctive relief is “just and proper,” Justice Thomas wrote.

This meant that the board could establish reasonable cause merely by showing that its “legal theory [was] substantial and not frivolous.” Relying on this standard, the district court granted the board’s request for an injunction. Later, the Sixth Circuit affirmed that decision.

When Congress enables courts to grant equitable relief, there is a strong presumption that courts will use their authority “in a manner consistent with traditional principles of equity.”

The four criteria in the Winter test “encompass the relevant equitable principles,“ and ”nothing in [Section] 10(j) displaces the presumption that those traditional principles govern,” according to the Supreme Court.

This means that district courts are required to use the traditional four-part test when assessing the board’s request for a preliminary injunction under Section 10(j), Justice Thomas wrote.

The Supreme Court sent the case back to the Sixth Circuit “for further proceedings consistent with this opinion.”

In her partial dissent, Justice Jackson cited various legal precedents and wrote that when interpreting a statute that authorizes equitable relief such as a preliminary injunction, the Supreme Court normally applies a two-part test that focuses on the intent of Congress.

First, the court decides if Congress stripped courts of their traditional equitable discretion by “a clear and valid legislative command.”

Then, if no command is found, the court looks to the statutory context to figure out how courts should exercise their equitable discretion “as conditioned by the necessities of the public interest which Congress has sought to protect.”

But here the court “correctly applies the first step, but ignores the second,” she wrote.

Justice Jackson wrote that she agreed with the majority that nothing in the National Labor Relations Act clearly deprives courts of their equitable discretion to determine whether to issue a Section 10(j) injunction.

She also agreed with the majority that the Sixth Circuit decision should be vacated and remanded.

“But I cannot join the majority in ignoring the choices Congress has made in the NLRA about how courts should exercise their discretion in light of the National Labor Relations Board’s authority over labor disputes,” she wrote.

“Because the majority chooses the simplicity of unfettered judicial discretion over the nuances of Congress’s direction, I respectfully dissent in part.”