Supreme Court Rules In Starbucks' Favor In Labor Case

The Supreme Court sided with Starbucks on Thursdayin a decision that could make it harder for labor prosecutors to win court injunctions against employers they believe to have broken the law. 

The case, McKinney v. Starbucks, revolved around the firings of seven baristas amid a union organizing campaign at a store in Memphis, Tennessee. The National Labor Relations Board secured an injunction in federal court requiring Starbucks to temporarily hire the baristas back while the underlying union-busting allegations were being litigated.

Starbucks had maintained that the firings were justified, and argued before the Supreme Court that the criteria the federal court used to evaluate the injunction request were too lax. Justice Clarence Thomas wrote the 8-1 decision for the court. Justice Ketanji Brown Jackson wrote a partial dissent. 

The case is unlikely to have a dramatic impact on labor law because of its relatively limited scope. But the decision fits into a broader pattern, as the court’s right wing has sided with corporations and sought to limit the power of federal agencies to intervene on behalf of consumers, workers or the environment.

Lynne Fox, the president of Workers United, the union organizing Starbucks, said in a statement on the decision that workers have “so few tools” to defend themselves when employers break the law.

“That makes today’s ruling by the Supreme Court particularly egregious,” Fox said. “It underscores how the economy is rigged against working people all the way up to the Supreme Court.”

The NLRB is an independent federal agency responsible for enforcing collective bargaining rights in the private sector. Its prosecutors bring cases against employers and unions when workers’ rights have been violated, with a five-member board in Washington that hears cases on appeal.

But when prosecutors believe the normal process can’t adequately protect workers, they sometimes ask federal judges to issue temporary injunctions to stop allegedly illegal labor practices. NLRB lawyers pursued such an order against Starbucks in the Memphis case, arguing that the ouster of several union supporters was illegal and could do irreparable damage to an active organizing campaign if it wasn’t quickly rectified.

Courts have been split on which factors should be used to determine whether an injunction is warranted. The federal judge in the Starbucks case applied a lower level of scrutiny than what the Supreme Court endorsed, meaning the labor board will need to satisfy a higher standard in order to get future injunctions against businesses.

The Starbucks case is part of the Supreme Court’s larger shift against deference to federal agencies. In a separate case this term, the court is re-examining what’s known as the landmark Chevron doctrine, which gives federal agencies latitude to interpret laws and issue regulations where Congress may have been ambiguous.

In oral arguments the conservative bloc seemed poised to overturn the Chevron precedent. Such a decision would make it harder for agencies to enact regulations and give courts greater power to strike them down — a blow to any progressive administration hoping to tackle pressing issues like climate change through regulatory power.

Patrick Muldowney, a management-side labor attorney at the firm BakerHostetler, said he viewed the Starbucks case as a companion to the bigger Chevron case, since the former hinged on how much courts should defer to the expertise of NLRB officials seeking injunctions.

“I think this is sort of part of a larger movement by the court,” Muldowney said in an interview before the Supreme Court issued the Starbucks decision. “They are looking at agency deference with a jaundiced eye at this point.”

The NLRB has turned out to be one of the most progressive agencies in the federal government under President Joe Biden. The general counsel, Biden appointee Jennifer Abruzzo, has applied a broad reading of workers’ rights and aggressively brought cases against employers for trying to snuff out organizing campaigns, angering business groups as well as congressional Republicans.

Abruzzo has said in memos outlining her agenda that she wants to ramp up the use of injunctions because she wants to stop illegal behavior before it gets worse. She instructed offices to investigate alleged threats as soon as possible to figure out whether an injunction might be called for.

In an interview with HuffPost following oral arguments in the Starbucks case, Abruzzo called the injunctions “one of the most important tools available to us.” She noted that workers who’ve been fired for organizing don’t have a private right of action to sue the employer for damages — their only tool for rectifying injustice is the labor board. 

“We are it for workers, and we’ve got to aggressively pursue section 10(j) relief in appropriate cases,” Abruzzo told HuffPost, referring to the law that allows the NLRB to seek injunctions. “It’s a very painstaking review… . We don’t do it lightly, but we do need to do it in certain cases.”

The board’s pursuit of injunctions is indeed rare, according to agency data. The NLRB has only litigated a total of 135 injunction cases since 2012, or less than a dozen a year on average. The board has succeeded in winning an injunction 74% of the time, and happens to have done better under the more stringent test in court than the more lax one. 

But Muldowney said it was hard to see Abruzzo expanding the use of injunctions if the bar is set higher. 

“I think the idea is if the court comes down in favor of Starbucks you won’t see an acceleration in terms of [injunctions],” he said. 

Starbucks isn’t the only company to challenge the way the board operates. SpaceX, the aerospace company owned by Elon Musk, has filed a lawsuit in federal court arguing that the NLRB’s structure itself is unconstitutional, and therefore the agency’s union-busting charges against SpaceX are illegitimate. If the company were to succeed, the case could upend labor relations.

Abruzzo vowed that none of these cases would deter the board from enforcing the law.  

“We’re not going to stop our investigations or our litigation or [union] elections because of these challenges,” Abruzzo said. “It’s just not going to happen.”