Supreme Court appears open to Starbucks’ claims in labor-organizing case

What factors must a court consider when the National Labor Relations Board requests an order requiring an employer to rehire terminated workers before the completion of unfair labor practice proceedings?

That’s the central question that the Supreme Court considered on April 23, 2024, during oral arguments in the Starbucks Corp. v. McKinney case. The global coffee shop chain is challenging the NLRB, the federal agency responsible for enforcing U.S. workers’ rights to organize, saying that the agency used the more labor-friendly of two available standards when it asked a federal court to order the company to reinstate workers at a Memphis, Tennessee, store who lost their jobs in 2022 amid a nationwide unionizing campaign.

The Conversation U.S. asked Texas A&M law professor Michael Z. Green to explain what’s behind this case and how the court’s eventual decision, expected by the end of June, could affect the right to organize unions in the United States.

What is this case about?

Seven baristas who were attempting to organize a union at a Starbucks shop in Memphis, Tennessee, were fired in February 2022. Starbucks justified their dismissal by asserting that the employees, sometimes called the “Memphis 7,” had broken company rules by reopening their store after closing time and inviting people who weren’t employees, including a television crew, to go inside.

In June of that year, the shop became one of more than 400 Starbucks locations since 2021 that have voted in favor of joining Workers United, an affiliate of the Service Employees International Union.

While a complaint over the mass dismissal was pending with the NLRB, Kathleen McKinney, the NLRB director for the region that includes Memphis, sought an injunction in a federal district court to force Starbucks to give the Memphis 7 their jobs back while the case proceeded. The company must “cease its unlawful conduct immediately so that all Starbucks workers can fully and freely exercise their labor rights,” she said.

By August 2022, a judge had ordered Starbucks to do that, and in September the baristas were back on staff.

Although the seven baristas got their jobs back and the union vote prevailed, the company has appealed the case all the way to the Supreme Court because it believes the court should not have ordered the company to reinstate the workers while NLRB proceedings were still pending.

But the NLRB argues, and the lower courts agreed, that the terminations chilled further union activities at the store even after the election.

Nevertheless, Starbucks argues that firing the seven workers had no effect because employees at that coffeehouse still voted in favor of unionization.

What’s being challenged?

The justices will have to decide which approach federal courts should use when they consider requests for injunctions like this one.

Currently, five appeals courts, including the one where this case arose, base their decision on a two-part test.

First, the courts determine whether there is “reasonable cause” to believe an unfair labor practice has occurred. Second, they determine whether granting an injunction would be “just and proper.”

Four other appeals courts use a four-part test.

First, the courts ask whether the unfair labor practice case is likely to succeed on the merits in establishing that labor violations occurred. Second, they look to see if the workers the NLRB is attempting to protect will face irreparable harm without an injunction. Third, after showing likelihood of success and irreparable harm, they ask whether those factors outweigh any hardships the employer is likely to face due to compliance with the court’s order. Fourth, they ask whether issuing the injunction serves the public interest.

Two other appeals courts use a hybrid test that appears to have components of both of the tests. They ask whether issuing an injunction would be “just and proper” by considering the elements of the four-part test.

In its Supreme Court brief, Starbucks argues that having to give workers their jobs back in these circumstances can cause “irreparable injury” and that it’s an “extraordinary remedy.”

The NLRB, in its Supreme Court brief, says that the injunction was proper in this case because Starbucks terminated 80% of the union organizing committee at the Memphis store and the evidence showed the chilling effect this action had on the “lone remaining union activist.” According to the NLRB, this chilling effect “harmed the union campaign in ways that a subsequent Board ruling could not repair.”

A labor reporter discussing Starbucks’ unfair labor practice cases, including the one involving the Memphis 7, determined that NLRB administrative law judges had found labor violations in 48 out of 49 cases.

What’s the potential impact of the court’s eventual ruling on this case?

While the case may sound like it’s only about seven people employed at a single coffee shop, the scope is wider than that.

Although the NLRB issues hundreds of unfair labor practice complaints against employers every year, it usually doesn’t turn to the courts to force the rehiring of employees. It only sought these types of injunctions 17 times in 2023, for example.

And seven of those efforts involved Starbucks. Despite the small number of overall injunctions, the large number of unfair labor practice complaints – and the eventual 48 out of 49 findings of violations – might support the rare use of injunctions in this case.

If the Supreme Court rules in favor of Starbucks, the overall impact seems unclear.

For one thing, the court will have picked one test over another without any proof that one is more likely to result in an injunction or not. In addition, the underlying unfair labor practice case has been resolved, since the workers have gotten their jobs back and their workplace has joined a union.

What’s more, Starbucks has agreed to negotiate collective bargaining agreements with the union, which has continued to make inroads at the company’s coffee shops.

Because the NLRB rarely seeks injunctions, the fact that this issue has obtained enough importance for consideration by the Supreme Court seems odd considering its valuable time and the limited number of cases it can consider each year. But let’s see what the court’s majority decides.

What do you expect based on the justices’ questions during oral arguments?

You can’t always tell where justices are heading by their questions alone.

But, based on the questions asked and the justices who asked them, I anticipate that a majority will rule in favor of Starbucks by saying that all district courts must rely on a four-part test in these instances.

Whether that would make it harder for union organizers to preemptively get their jobs back in cases like this isn’t clear. But it’s at least theoretically possible if this ruling provides new guidance on how courts should apply that four-part test when the NLRB asks for an injunction.

This is an updated version of an article published on April 11, 2024.