The U.S. Supreme Court on Thursday ruled in favor of coffee chain Starbucks Co. in a challenge to a judicial order ordering the company to rehire seven Memphis employees who were fired for trying to unionize, a decision that could make it harder for courts to quickly halt labor practices that are challenged as unfair under federal law.
The Supreme Court reversed a lower court’s approval of a preliminary injunction by the National Labor Relations Board ordering Starbucks to reinstate workers while an internal administrative lawsuit against the Seattle-based company is ongoing.
Starbucks had argued that the judge in the Memphis case should have considered the injunction motion using a strict four-factor test, similar to standards used in other courts and in legal disputes outside of labor law, that includes evaluating whether the party seeking relief would suffer irreparable harm and whether it was likely to succeed on substantial aspects of its case.
Starbucks said that under stricter standards, the lawsuit different In lower courts.
The Biden administration had defended the NLRB’s actions in the case. During arguments in the case before the Supreme Court in April, Justice Department lawyers said the NLRB seeks very few injunctions like the one it issued against Starbucks in “highest-level” cases, seeking just seven last year despite receiving 20,000 unfair labor practice complaints annually.
About 400 Starbucks stores in the United States have formed a union representing more than 10,000 employees, with each side sometimes accusing the other of illegal or inappropriate behavior.
Starbucks has faced hundreds of complaints with the NLRB alleging illegal labor practices, including firing union supporters, spying on employees, and closing stores during labor protests. Starbucks has denied any wrongdoing and said it respects the right of workers to choose whether or not to form a union.
The two sides announced an agreement in February to create a “framework” to guide organizing and collective bargaining and potentially resolve numerous pending legal disputes.
In 2022, employees at a Starbucks cafe on Poplar Avenue in Memphis were among the company’s first to form a union. Early in their effort, they allowed television news crews into the cafe after hours to talk about the union drive. Starbucks fired seven employees who were there that night, including several who were on the union organizers’ committee.
Despite the layoffs, employees subsequently voted to join the workers’ federation.
The union filed an unfair labor practice complaint with the NLRB over the firings and other discipline by management. The NLRB accused Starbucks of illegally firing workers who supported the union movement to send a message to other workers, and sought an injunction.
U.S. District Judge Cheryl Lippman granted the preliminary injunction in 2022, reinstating the workers to address the “chilling effect” the firings had on unionization efforts until the NLRB resolved the case. The Cincinnati, Ohio-based 6th U.S. Circuit Court of Appeals upheld the preliminary injunction in 2023.
The 6th Circuit Court of Appeals rejected the company’s argument that Lippman should have conducted a four-factor test before issuing an injunction, prompting Starbucks to appeal to the Supreme Court.
