CASE PREVIEW

Court to mull injunction in Starbucks case against Memphis union organizers

Union organizing efforts at Starbucks probably are the most protracted labor dispute of the decade, and on Tuesday the Supreme Court will hear argument in a closely watched case arising from the company’s firing of seven employees at a Memphis branch. The workers, known as the Memphis 7, said they were fired in retaliation for trying to unionize. The union, Starbucks Workers United, filed a complaint with the National Labor Relations Board, which went to federal court and won a preliminary injunction.

Now, to be clear, the legal issue in this case has little to do with the propriety of Starbucks’ opposition to the union organizers. Rather, it is largely a procedural question: What standard should courts use to determine whether to issue issuing such a preliminary injunction? But the question is crucial in unionization disputes, because those injunctions can win employees their jobs back and can restrict companies for years while the NLRB completes administrative proceedings – for example, the one in this case has been in place for 20 months already.

The case here involves administrative proceedings under the National Labor Relations Act. Under the statutory framework, the NLRB files an administrative complaint, which launches an agency proceeding before an administrative law judge, whose decision is subject to review by the NLRB and then, in due course, in the federal courts of appeals. While those proceedings go forward, the NLRB can seek immediate relief by asking a federal district court to grant a preliminary injunction under Section 10(j) of the NLRA.

Starbucks has been in a long and pitched battle with union efforts to organize employees at Starbucks retail locations. After employees at the Memphis store held an in-store interview with the press after hours, Starbucks fired them, saying they had violated company policy.

The NLRB responded by filing an administrative complaint. It then promptly went to a federal district court seeking an injunction under Section 10(j), which would order Starbucks to reinstate the employees and make a variety of other policy changes that would facilitate work by union organizers. The district court agreed with the NLRB and granted the injunction.

To understand the context of the case before the justices, it is important to understand the scope of the dispute between the NLRB and Starbucks. This is the 12th such injunction the NLRB has requested against Starbucks in the last two years, more than a third of all the requests it has made nationwide during that time period. So the justices have picked the NLRB’s hot topic for their review.

The legal question for the justices is crisp and easy to explain. Specifically, how hard should it be for the NLRB to get an injunction in a case like this one? The statute doesn’t say much, it simply provides that the court should grant “such temporary relief … as it deems just and proper.” For its part, Starbucks points to a traditional four-part test courts have developed for deciding when to issue preliminary injunctions (sometimes called the Winter test). That test calls for consideration of the likelihood that the party seeking the injunction will succeed on the merits; whether the party will suffer irreparable harm without preliminary relief; whether the balance of equity tips in that party’s favor; and the public interest. Starbucks argues that the Supreme Court has applied that standard in many contexts, and that the court requires a specific textual command to opt out of it. For Starbucks, the “just and proper” language is far too imprecise to justify a departure from the traditional standard.

Starbucks contends that the NLRB’s test, applied by the lower courts here, is much more lenient, because it considers only two factors, whether the NLRB can show “reasonable cause” to believe that unfair labor practices have occurred and that injunctive relief is “just and proper.” That might sound so vague as to be basically the same as the four-part test, but it is not. Most importantly, the reasonable cause standard (unlike the “likelihood of success on the merits” factor in the traditional test) requires considerable deference to the NLRB, which need show only “some evidence” and a “not frivolous” legal theory, with all factual and legal uncertainty being resolved in favor of the NLRB’s administrative expertise.

The government argues that the NLRB’s two-factor standard is really just an application of the traditional test, taking account of the unique statutory context of an expert agency’s administrative enforcement proceeding. On the merits – the “reasonable cause” prong – the government emphasizes that the court has to “keep in mind that the Board — not the courts — is responsible for adjudicating the underlying unfair-labor practice charge.” Accordingly, the government argues, it would make no sense for a district to “conduct a full-blown merits inquiry” at the preliminary stage. Rather, the “agency’s preliminary assessment of the merits” should be enough. In the same way, the government argues, the progress of agency proceedings should be enough to establish the only relevant public interest – that the absence of judicial relief to preserve the status quo pending agency proceedings will undermine the effectiveness of the relief the NLRB can grant at the conclusion of its process.

Starbucks’ reply is scathing. It emphasizes the stark difference between showing that the agency is “likely to succeed,” the traditional standard, and showing a “substantial and not frivolous” legal theory, the standard the agency defends before the court. Similarly, Starbucks says that the agency’s understanding of harm and the public interest depends solely on the agency’s perspective, as it entirely ignores any injury that employers might suffer from interference with their workplace or otherwise during the progress of the agency’s proceedings.

This is a fascinating case, and I expect the justices will be fully engaged. I would be surprised if several of the justices are not attracted to the logic of holding an agency to the same standard the court traditionally applies for private litigants, leaving it to Congress to specify departures from that standard. Furthermore, I expect some justices will be disturbed by the NLRB’s extensive attention on Starbucks. This may be yet another step in the court’s seeming effort to curtail the power of federal agencies this term.