Supreme Court Seems to Side With Starbucks’ Challenge to Labor Ruling

Supreme Court Seems to Side With Starbucks’ Challenge to Labor Ruling

By Oghale Apr24,2024

The Supreme Court justices on Tuesday appeared willing to side with Starbucks in the company’s challenge to a federal judge’s order to reinstate workers who were attempting to unionize a store in Memphis.

Starbucks has asked the court to make it harder for the National Labor Relations Board to obtain intervention by judges in cases where a company is accused of violating labor law. The case stems from the February 2022 firing of seven workers who let local journalists into a closed store to conduct interviews about their unionization efforts.

If Starbucks prevails, it would be more difficult for workers to be reinstated if they’re fired during a labor dispute. The case is being heard a day before Starbucks is set to return to the bargaining table with the union that represents about 10,000 of its workers after a contentious, monthslong impasse.

A majority of the justices seemed sympathetic to Starbucks’ argument for a more rigorous test for allowing the labor board to reinstate workers. Through their questioning, the justices appeared to see the looser standard that the N.L.R.B. was given in this case as an outlier.

Starbucks, which has faced hundreds of accusations of labor law violations across the country, argued that there is a patchwork of standards under which the N.L.R.B. can seek a court injunction. The appellate court in this case, the U.S. Court of Appeals for the Sixth Circuit, applies a lower standard, and Starbucks argued on Tuesday for a stricter, uniform standard nationwide.

The standard used by the Sixth Circuit considers two factors. Other circuits use a four-factor test, which requires that the N.L.R.B. prove the possibility of irreparable harm if the injunction to reinstate workers isn’t granted, among other things.

Justice Neil Gorsuch pointed out that other federal agencies must abide by the four-part test to obtain an injunction. “So why is this particular statutory regime different than so many others?” he asked.

Austin Raynor, a Justice Department lawyer arguing for the labor board, said that the board had asked for injunctions sparingly and only in particularly egregious cases. The N.L.R.B. has requested injunctions about 15 times in the past year, out of hundreds of complaints it filed.

Justice Ketanji Brown Jackson pointed to that when questioning Starbucks’ lawyer, appearing to ask why the court needed to intervene. “This is not sounding like a huge problem,” she said.

Matthew Bodie, a professor at the University of Minnesota Law School, said that he expected a mild “housekeeping” opinion focused on bringing clarity and uniformity across circuits rather than a ruling on the labor board’s authority.

He said that injunctions were an important tool for the labor board. Without the ability to reinstate workers while proceedings play out, he said, employers could intimidate workers and chip away at union-supporting ranks.

“It dampens the whole process, and it’s more likely to result in a union loss,” said Mr. Bodie, a former N.L.R.B. attorney.

Starbucks said the workers were fired because admitting the journalists into the store violated several company policies. Starbucks Workers United, the union representing the company’s workers, filed an unfair labor practice charge over the firings, arguing that the company selectively enforced the rules against organized workers. The labor board issued a complaint against Starbucks two months later.

A federal judge granted the labor board’s request to reinstate the workers while proceedings over the firings played out, which could take years. An appellate judge upheld the reinstatements last year, and the company requested the Supreme Court review. The high court agreed to hear the case in January.

Lisa Blatt, a partner at the law firm Williams & Connolly, is representing Starbucks and is a veteran of the Supreme Court bar. In the past two years, she won rulings in favor of Google — a closely watched case seeking to make tech companies liable for content posted by its users — and for Jack Daniel’s in an intellectual property case against the seller of a dog toy.

Elizabeth B. Prelogar, the U.S. solicitor general, is representing the labor board. Mr. Raynor, the assistant solicitor general, argued the case on Tuesday.

Starbucks workers began organizing in 2021 with three Buffalo-area stores. Now, the union represents about 10,000 workers across more than 400 corporate-owned stores.

Several companies led by SpaceX have challenged the constitutionality of the N.L.R.B. Starbucks has sought to distance itself from that litigation.

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By Oghale

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