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Supreme Court rules in favor of Starbucks in case against National Labor Relations Board

The decision has broader implications over the board’s authority

The Supreme Court decided in favor of Starbucks on Thursday in a dispute between the coffee chain and the National Labor Relations Board over the termination of seven employees in Memphis.

The self-styled “Memphis Seven” were allegedly fired in 2022, while employees at the store where they worked were attempting to unionize, because they stayed at work after hours, violating safety and security policies. But the NLRB argued that the terminations were retaliatory because the employees were part of the union movement and other employees who were not part of the movement were not fired.

According to the Supreme Court case, the employees stayed after hours to allow the news crew of a local television station to visit “to promote the unionizing effort.”

The NLRB requested a temporary injunction against the termination of the employees, which was granted by a U.S. District Court Judge for the Western District of Tennessee in August of 2022. Starbucks appealed to the Supreme Court, arguing that different courts had different standards, with some requiring the NLRB simply to show reasonable cause that a company violated labor regulations, while others apply stricter standards requiring the board to show that not reinstating employees would cause “irreparable harm.” Starbucks argued that the stricter standards should be applied nationally.

The NLRB argued that the different standards were merely questions of semantics.

The Supreme Court found that district courts must apply the traditional four-factor injunction test, rather than the two factors that were applied in this case.

Eight of the nine Supreme Court justices backed the opinion written by Clarence Thomas, while the ninth justice, Ketanji Brown Jackson wrote an opinion that broadly agreed with the decision but dissented on certain aspects and advocated for a more nuanced approach to such cases.

The case has been remanded back to the district court “for further proceedings consistent with this opinion,” according to the decision.

That decision has broader implications over the ability of the NLRB to intervene in cases of suspected suppression of labor organizing.

This is a technical decision with a practical impact,” said Chris Foster, a labor and employment attorney for the law firm McDermott Will & Emery based in San Francisco. “Charged parties at the NLRB still have due process rights and aggressive agency tactics won’t be rubber stamped in the courts. The NLRB cannot secure preliminary injunctions, before a case is ultimately decided, based on theories that are merely ‘not frivolous’ and have ‘some evidence.’ More is needed in the American justice system. This decision will be one of many reestablishing rights to due process in administrative agency matters for any charged party, whether union or company, and more parties will look beyond the NLRB, to the courts, for vindication in high stakes cases.”

Starbucks, which refers to its employees as "partners," issued the following statement in response to the decision: 

"Partners are the core of our business, and we are committed to providing everyone who wears the green apron a bridge to a better future. We will continue to focus making progress toward our goal of reaching ratified contracts for represented stores this year. Consistent federal standards are important in ensuring that employees know their rights and consistent labor practices are upheld no matter where in the country they work and live."

Contact Bret Thorn at [email protected] 

Correction: June 13, 2024
This story has been updated with a statement from Starbucks.
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