Justices Warm to Starbucks’ Bid to Curb Labor Board Power (1)

Several US Supreme Court justices expressed support for Starbucks Corp.’s position that federal judges should review National Labor Relations Board requests for injunctions the same way they would any other litigant’s bid for an immediate court order.

The justices appeared to split along ideological lines during oral argument on Tuesday, with the court’s conservative majority signaling opposition to the NLRB’s argument that federal labor law directs judges to apply a more lenient standard to the agency’s petitions than they would for a preliminary injunction motion in the course of private litigation.

Federal district courts have a duty to check the NLRB’s power to obtain injunctions, which are a “big deal,” said Justice Amy Coney Barrett, a Trump appointee.

“So the district court is an independent check, so it seems like it should be just doing what district courts do since it was given the authority to do it,” Barrett said.

The court’s liberal minority, however, seemed more supportive of the NLRB’s view.

The high court’s consideration of the standard judges should use to weigh NLRB injunction petitions could determine whether the agency’s ability to obtain those orders will remain one of its most effective tools for protecting workers’ ability to organize and form unions.

The NLRB requests 10(j) injunctions—named after the section of the National Labor Relations Act that permits the agency to pursue them—to quickly address the workplace impact of an alleged labor law violation, and to prevent a situation in which the board’s eventual remedy comes too late to fix the harm caused by the violation. The agency seeks court orders while the underlying administrative case is pending, and they dissolve when the board rules.

The injunctions could be rendered much less effective in practice if convincing a court to issue such an order requires lengthy and burdensome litigation.

Although the NLRB rarely asks for such court orders, the agency has frequently targeted Starbucks for these extraordinary requests as part of its efforts to enforce federal labor law in response to the company’s aggressive opposition to unionization at its stores nationwide.

The board has authorized the NLRB general counsel’s office to request injunctions against the coffee giant a dozen times, making up 40% of the 30 petitions it approved over the past two years. District courts have granted two of those petitions and denied another two.

‘Memphis Seven’ Case

Starbucks has pursued a novel strategy of seeking broad discovery in 10(j) cases, resulting in several cases getting delayed over discovery disputes. In its ultimate decision, the Supreme Court could normalize this approach to defending against 10(j) requests, to the extent the justices require lower courts to conduct a more thorough inquiry into the facts before issuing an injunction.

The issue in the case before the high court Tuesday arose from Starbucks’ challenge to a US Court of Appeals for the Sixth Circuit decision upholding a federal judge’s temporary order to reinstate a group of pro-union workers known as the “Memphis Seven.”

The justices are now poised to settle a circuit split over what type of test courts should apply to 10(j) injunction requests.

The Sixth Circuit is one of five circuits that use a two-factor test specific to 10(j)s, while four circuits use the four-part test that’s commonly invoked for other types of injunctions. Two circuits use a hybrid standard that incorporates elements of both tests.

A Bloomberg Law analysis showed that the agency has won in court at roughly the same rate in recent years regardless of which test the court used.

In briefing and during oral argument, however, lawyers for the NLRB conceded that all four factors from the standard test for preliminary injunctions are relevant to reviewing the agency’s requests for a court order. Those factors are the petitioner’s likelihood of success on the merits, the chance of irreparable harm if the injunction isn’t granted, a balance of the parties’ interests, and whether an injunction is in the public interest.

Instead, the agency said, the case turns on how courts should apply those four factors.

Likelihood of Success

Justice Department lawyer Austin Raynor, who represented the NLRB, said the agency’s burden when it comes to the likelihood-of-success factor amounts to showing a “substantial legal theory” and “sufficient facts” that would permit a judge to find for the board.

But Justice Neil Gorsuch, a Trump appointee, said Raynor’s characterization “doesn’t sound like likelihood of success on the merits at all.”

Gorsuch, who emerged as the most vocal critic of the NLRB’s arguments, said the Sixth Circuit’s two-factor 10(j) test forbids judges from engaging in fact finding to determine the likelihood of success.

“I think there’s been a tendency to caricature what the Sixth Circuit is doing,” Raynor responded. “There was a two-day evidentiary hearing in this case and there was discovery.”

Courts also should consider the “substantial winnowing” that happens before the agency even files a 10(j) petition in district court, Raynor said. The NLRB receives 20,000 unfair labor practice charges per year and the general counsel’s office issues 750 complaints, while the board authorized just 14 injunction petitions last year and the agency filed seven of them in court, he said.

Raynor’s argument about the statistical rarity of 10(j) petitions prompted Justice Samuel Alito, a George W. Bush appointee, to ask whether the Supreme Court should take into account that the Solicitor General’s Office only urges the justices to take a small minority of cases.

When Raynor said there’s no bar to the justices considering that factor when they weigh whether to grant a case, Alito laughed and then asked, “Seriously?”

No Joking

Justice Ketanji Brown Jackson, a Biden appointee, seemed the most supportive of the NLRB’s position.

She explicitly acknowledged that the agency’s requests are different from the standard preliminary injunction motions that courts see on a daily basis. The context of the board’s role in enforcing labor law and the fact that Congress granted the agency the power to go directly to court should inform the court’s consideration, Jackson said.

Starbucks’ lawyer, Lisa Blatt of Williams & Connolly LLP, responded to Jackson’s comments by suggesting “maybe we should just talk about what we’re talking about.”

The issue is whether the NLRB “gets to walk in and get a coercive injunction” in a process in which “all that matters is the government has not presented a joke,” Blatt said.

Justice Sonia Sotomayor, an Obama appointee, told Blatt early in the oral argument session that she understands that courts shouldn’t give deference on the likelihood-of-success factor. That led to Blatt saying that part of the test is “off the table.”

But near the conclusion of arguments, Justice Elena Kagan, also an Obama appointee, said “the real question in dispute is whether the likelihood-of-success inquiry is ratcheted down somewhat.”

The case is Starbucks Corp. v. McKinney, U.S., No. 23-367, oral argument held 4/23/24.