By Andrew Chung and John Kruzel
April 23, 2024
WASHINGTON, April 23 (Reuters) - U.S. Supreme Court justices on Tuesday appeared to agree with Starbucks (SBUX.O), opens new tab in the coffee chain's challenge to a judicial order requiring it to rehire seven employees at a Tennessee cafe who were fired as they pursued efforts to unionize.
The justices heard arguments in the company's appeal of a lower court's approval of an injunction sought by the U.S. National Labor Relations Board ordering the reinstatement of the workers. It is a case that could make it harder to bring a quick halt to labor practices challenged as unfair under federal law while the NLRB resolves complaints.
The case centers on the legal standard that federal courts must use to issue a preliminary injunction requested by the NLRB under the a federal law called the National Labor Relations Act. Such orders are intended as an interim tool to halt unfair labor practices while a case is proceeding before the board.
Under section 10(j) of the labor law, a court may grant an injunction if it is deemed "just and proper." Seattle-based Starbucks contends that if the lower courts had applied stricter criteria, similar to the standard used by some other courts and in non-labor legal disputes, the case would have come out differently, opens new tab.
Some justices appeared to agree that courts should have the primary role in determining a "likelihood of success" in the case before issuing an injunction.
Conservative Justice Neil Gorsuch told Justice Department lawyer Austin Raynor, who was defending the injunction against Starbucks, that other federal agencies are subject to the stricter standard.
"In all sorts of alphabet soup agencies, we don't do this. District courts apply the 'likelihood of success' test as we normally conceive it. So why is this particular statutory regime different than so many others?" Gorsuch asked.
Raynor told the justices that the NLRB seeks this kind of injunction only in "the cream of the crop cases."
"The board receives 20,000 unfair labor charges every year. It issues 750 complaints. Last year, it authorized 14 petitions and filed seven. That's seven out of 20,000," Raynor said.
"This is an expert agency that has said, 'We think these are the most deserving of relief,'" Raynor added.
But conservative Chief Justice John Roberts said that "I don't know why the inference isn't the exact opposite." Roberts said these could be the cases that the board feels "are the most vulnerable."
Conservative Justice Samuel Alito told Raynor, "I'm a little curious about your statistical argument."
Liberal Justice Ketanji Brown Jackson told Lisa Blatt, the lawyer arguing for Starbucks, that the agency has sought this type of injunction "in a very, very small number of cases."
"This is not sounding like a huge problem," Jackson said.
"Whether or not it's a huge problem, what petitioner (Starbucks) wants is just a level playing field, the normal injunctive factors that agencies and private parties should get," Blatt responded.
The company has argued that the judge who granted the injunction should have used a stringent four-factor test to weigh the bid for an injunction, as courts typically do in non-labor disputes. This test includes an assessment of whether the side seeking relief would suffer irreparable harm and is likely to succeed on the merits of the case.
About 400 Starbucks locations in the United States have unionized, opens new tab, involving more than 10,000 employees. Both sides at times have accused the other of unlawful or improper conduct.
Hundreds of complaints have been filed with the NLRB accusing Starbucks of unlawful labor practices such as firing union supporters, spying on workers and closing stores during labor campaigns. Starbucks has denied wrongdoing and said it respects the right of workers to choose whether to unionize.
In a break from the acrimony, both sides in February said they had agreed to create a "framework" to guide organizing and collective bargaining and potentially settle scores of pending legal disputes.
The case began in 2022, when the workers at the Poplar Avenue store in Memphis became among the first to unionize. Early in their efforts, they allowed a television news crew into the Starbucks cafe after hours to talk about the union campaign. Seven workers present that evening were fired, including several who belonged to the union organizing committee.
Despite the dismissals, employees there later voted to join Workers United.
The union filed unfair labor charges with the NLRB over the firings and other discipline by managers. The NLRB sought an injunction, alleging that Starbucks unlawfully fired the workers for supporting the union drive and to send a message to other workers.
U.S. District Judge Sheryl Lipman granted the injunction in 2022, reinstating the workers in order to address the "chilling effect" of the dismissals on the unionization effort while the NLRB resolves the case. The Cincinnati, Ohio-based 6th U.S. Circuit Court of Appeals upheld the injunction in 2023.
The 6th Circuit rejected the company's argument that Lipman should have used a stringent four-factor test.
The Supreme Court's ruling is expected by the end of June.
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Reporting by Andrew Chung and John Kruzel in Washington; Additional reporting by Daniel Wiessner in Albany; Editing by Will Dunham
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