SCOTUS Rules for Starbucks in Brewing Union Case: Traditional, Four-Factor Preliminary Injunction Standard Applies to NLRB Injunctions

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July 12, 2024

Section 10(j) of the National Labor Relations Act (NLRA) provides that, “upon issuance of a complaint,” the National Labor Relations Board (NLRB) may petition any U.S. district court “for appropriate temporary relief” and the district court may grant “such temporary relief . . . as it deems just and proper.”

On June 13, 2024, the Supreme Court of the United States (SCOTUS), in an 8-1 opinion, resolved a split among the U.S. Courts of Appeal and issued a decision holding that, when considering the NLRB’s request for a preliminary injunction under Section 10(j) of the NLRA, district courts must apply the traditional four-factor preliminary injunction standard.

The Starbucks and Union Dispute
In 2022, Starbucks fired five of six employees in Memphis, Tennessee who were members of an organizing union committee, along with two other union-aligned workers, for violating company policy after the employees invited a news crew from a local television station to visit the store after hours to promote their unionizing effort.  The union that worked in coordination with the organized employees filed charges with the NLRB alleging that Starbucks unlawfully interfered with the employees’ right to unionize and discriminated against union supporters.  The NLRB then issued a complaint against Starbucks and petitioned a U.S. District Court for a preliminary injunction that would require Starbucks to reinstate the fired employees.

The District Court granted the injunction for the NLRB after applying a two-part test, the reasonable-cause standard, from Sixth Circuit precedent, which asks whether “there is reasonable cause to believe that unfair labor practices have occurred,” and whether injunctive relief is “just and proper.”  The U.S. Court of Appeals for the Sixth Circuit affirmed.  Starbucks appealed.

The SCOTUS Decision
The question for SCOTUS was what standard must courts use to evaluate requests for injunctions under Section 10(j) of the NLRA?  SCOTUS held that district courts must use the traditional four-factor preliminary injunction standard – i.e., (1) likely to succeed on the merits; (2) likely to suffer irreparable harm in the absence of preliminary relief; (3) that the balance of equities tips in favor of the moving party; and (4) that an injunction is in the public interest.

Justice Thomas delivered the opinion of the Court, in which Chief Justice Roberts and Justices Alito, Sotomayor, Kagan, Gorsuch, Kavanaugh, and Barrett joined.  Justice Jackson concurred in the judgment, but filed a separate opinion, concurring in part and dissenting in part.  SCOTUS vacated the District Court’s injunction and remanded the case for proceedings consistent with its opinion.

In reaching its decision, SCOTUS:

• relied on the language of Section 10(j) of the NLRA. SCOTUS reasoned that nothing in Section 10(j) displaces or overcomes the presumption that traditional principles govern a preliminary injunction request by the NLRB.  SCOTUS did not interpret the statutory directive to grant relief when the district court “deems” it “just and proper” to replace traditional equitable rules.  To the contrary, the phrase “just and proper” invokes the discretion that courts have traditionally exercised when faced with requests for equitable relief.
• pointed to the history of SCOTUS injunction cases over hundreds of years where SCOTUS did not interpret intent to depart from the traditional four-factor standard absent a clear command from Congress. SCOTUS compared Section 10(j) to other statutes where Congress altered the traditional equitable rules.  SCOTUS reasoned that the language of Section 10(j) bore no resemblance to those statutes.  Rather, Section 10(j) omits any specific instruction that suggests Congress altered the traditional equitable rules.  It simply invites courts to grant equitable relief where they deem it “just and proper.”  Because there was no clear desire from Congress to depart from established principles, nothing in Section 10(j) overcomes the presumption that traditional equitable principles govern, and thus district courts must adhere to the traditional four-factor test.
• disagreed with the NLRB’s arguments. First, SCOTUS held that the reasonable-cause standard significantly lowered the bar for securing an injunction from the traditional standard to show “likelihood of success,” and thus, required courts to yield to the NLRB’s preliminary view of the facts, law, and equities.  SCOTUS found it problematic that, if the reasonable cause standard were applied in the traditional civil litigation setting, any complaint that could withstand Rule 12(b)(6) would automatically be deserving of injunctive relief as well.  SCOTUS reasoned that Section 10(j)’s statutory context did not compel a watered-down approach to equity, but that the NLRB would remain free to reach its own legal conclusions and develop a record in its administrative proceedings.  Second, SCOTUS refused to apply a deferential standard to the NLRB’s final decisions.  SCOTUS reasoned that the views in the NLRB’s complaint requesting an injunction represent its position, which are the preliminary legal and factual views of the NLRB’s in-house attorneys who investigated and initiated the administrative complaint.  SCOTUS concluded that it is inappropriate to give deference to the NLRB’s litigating position.

Justice Jackson’s Dissent
In her opinion, concurring in judgment and dissenting in part, Justice Jackson focused on a two-part inquiry centered on congressional intent.  Justice Jackson argued that the SCOTUS majority did not apply the second part of the inquiry and did not consider the statutory context.  She argued that Congress designed Section 10(j) as a means of preserving or restoring the status quo as it existed before the onset of unfair labor practices.  If granted, a Section 10(j) injunction returns workers, unions, and employers to the status quo as it existed before the alleged NLRA violation and the NLRB’s ultimate ability to remedy an unfair labor practice would not be impeded.  She highlighted that two years passed since the filing of the initial injunction, yet the case remains pending.  Finally, Justice Jackson emphasized that the NLRB’s screening process for seeking an injunction is rigorous, resulting in rare instances where the NLRB seeks an injunction.  Thus, by the time the district court gets the injunction request, the NLRB has already deemed an unfair labor charge likely meritorious, and has determined that preservation of the status quo is needed.

Takeaways From The Case
The Starbucks holding resolved a Circuit split that brings clarity and consistency across jurisdictions to Section 10(j) injunctions.  Previously, several Circuits applied the two-factor reasonable-cause test, other Circuits used the traditional four-factor preliminary injunction standard, while some used a hybrid approach.

The higher standard for Section 10(j) injunctions has the potential for causing a chilling effect on employees looking to unionize.  The traditional four-factor preliminary injunction standard will make it more difficult for the NLRB to obtain a preliminary injunction.  However, there is no indication that the NLRB will not continue to seek Section 10(j) injunctions, arguing that injunctive relief still is warranted under the four-factor test required by SCOTUS.

This article is designed to provide one perspective regarding recent legal developments, and is not intended to serve as legal advice.  Always consult an attorney with specific legal issues.