SCOTUS Winks At Starbucks Union-Busting

Starbucks is arguing that firing the Memphis workers did not “chill” the union campaign, because the other shop workers voted for the union.

By Steve Wishnia

The Supreme Court’s far-right majority seems to be leaning toward narrowing the grounds on which the National Labor Relations Board [NLRB] can ask federal courts to order employers to reinstate fired union supporters while their unfair-labor-practice cases are pending.

The Court heard oral arguments April 23 on Starbucks’ appeal of a federal court decision ordering it to reinstate the seven workers it fired in 2022 from a Memphis coffee shop until the NLRB can decide on whether their termination violated federal law protecting union activity. The “Memphis Seven” were ostensibly sacked for letting a TV news crew into the shop after the managers had ordered it to close early. The federal Sixth Circuit Court of Appeals upheld the reinstatement injunction in August 2023, noting that Starbucks did not challenge the lower court’s holding that there was “reasonable cause to believe” that the firings were illegal.

Starbucks, however, is challenging that decision on procedural grounds. It is arguing that the “two-factor” standard the Sixth Circuit used to order the Memphis workers reinstated, that there was “reasonable belief” that their firing was an unfair labor practice and that reinstating them was “just and proper,” should be replaced with the narrower “four-factor” standard used for most other preliminary injunctions. That would require the NLRB to show that it was likely the board would rule in the workers’ favor, that waiting to reinstate them until the case was decided would do them and the union campaign “irreparable harm,” and that the “balance of equities” and the public interest both favored reinstatement.

The National Labor Relations Act authorizes the NLRB to seek injunctions before cases are decided. It’s one of the very few federal agencies with that power. That is important, the board argues, to ensure that its decisions are not completely irrelevant when they are finally made a year or two in the future, given the reality of how union organizing and union-busting work.

“Effective interim relief is critical to preventing employers from illegally suppressing attempts to improve working conditions,” a group of 12 former and current Starbucks workers, including one of the Memphis Seven, stated in an amicus brief.

“The question is not whether there is a certainty of harm. The question is whether there's a likelihood of harm,” federal attorney Austin Raynor told the Court. Not all unlawful discharges necessarily show irreparable harm, he said, but “the question that the Board looks at and the question that we think the Court should look at is whether that extinguishes the momentum of the union drive or impairs it in such a serious way that an order from the Board a year or two down the road won't be able to restart the drive.”

The Court’s far-right majority was skeptical. Justice Brett Kavanaugh, backed by Neil Gorsuch, posited that the NLRB’s definition of “reasonable probability of success” meant “lower than 50%.” The three liberal Justices were more sympathetic to labor protections.

The NLRB says it receives about 20,000 accusations of unfair labor practices each year, most of them from workers and unions. Most cases are settled, withdrawn, or dismissed. Regional offices issue about 750 complaints, the administrative equivalent of an indictment, which lead to a hearing before an administrative-law judge. Last year, it authorized 14 petitions for court orders and filed seven.

The 11 federal appeals-court circuits, however, are divided on how they handle those petitions. Five use the two-factor standard, four use the four-factor one, and two use a combination of both. The NLRB has sought 10 injunctions against Starbucks since the Starbucks Workers United organizing campaign began in late 2021, more than it has against any other employer. It has won two, in Memphis and Ann Arbor, Michigan; been denied two, in Arizona and Buffalo, and six more are pending. It is appealing the Buffalo denial.

Starbucks is arguing that firing the Memphis workers did not “chill” the union campaign, because the other shop workers voted for the union. It also claims the lower courts never assessed the “hardships to Starbucks” of a “years-long injunction that reinstates workers discharged for serious misconduct,” and that this pressures employers to settle: 49% of cases are settled in jurisdictions that use two factors, but only 31% in those that use four.

The company’s claims are backed by amicus briefs from a typical assortment of business groups, anti-labor organizations, and groups litigating against the “administrative state.” They include the U.S. Chamber of Commerce; the nonunion trade group Associated Builders and Contractors and the National Retail Federation (represented by the union-avoidance law firm of Morgan, Lewis & Bockius); the Washington Legal Foundation; the Buckeye Institute in Ohio; the National Right to Work Legal Defense Foundation, and the attorney generals of Tennessee and 20 other states.

Those states argue that the NLRB’s enforcement powers are unconstitutional, as it can override states that have chosen to enact “pro-growth business policies,” and “five unelected Board members exercise significant, nationwide power to target employers for onerous enforcement.”

The NLRB, however, does not have the power to order employers to pay damages or enforce penalties when they are found guilty of illegal practices. If an employer refuses to comply with an order, the board has to ask the federal courts to enforce it, and employers can also appeal board decisions to the federal courts.

The NLRB’s administrative judges have found that Starbucks “committed more than 400 violations of federal labor law, including firing 59 union leaders and supporters,” the 12 current and former workers stated in their amicus brief.

Ten of the 12 were fired for union activity. Two were reinstated, but one of them quit after Starbucks cut his hours to as low as 10 a week. Several of the fired workers lost their health-insurance coverage, and some had to apply for public assistance.

One man, the father of a 2-year-old girl, said he’d “applied to hundreds of jobs” but was unable to find work, and the family car was repossessed.

But under current law, the most he’s likely to get reimbursed for is about $12,000, the brief says: Damages for illegally fired workers are usually limited to back pay.

Employers “know they can violate the National Labor Relations Act without facing consequences until years in the future,” the brief concludes. “Workers have learned that the deck is stacked against them. Adopting Starbucks’s arguments will only decrease the effectiveness of one of the most important tools in advancing the purpose of the NLRA.”