Starbucks Corp. v. McKinney

Issues

Should courts grant preliminary injunctions against companies for labor disputes based on the traditional four-factor test or on a different standard of whether the injunction is “just and proper” when there is reasonable cause to believe the unfair labor practices occurred?

Oral argument:

April 23, 2024

Court below:

United States Court of Appeals for the Sixth Circuit

This case presents to the Supreme Court the issue of whether district courts should defer to the National Labor Relations Board’s (NLRB) preliminary investigations and legal judgments when deciding on preliminary injunctions under Section 10(j) of the National Labor Relations Act (NLRA) during unfair labor practice investigations. The Petitioner, Starbucks Corp., argues that the Sixth Circuit improperly weighted the scales in favor of the NLRB by deferring too much to the Board's initial assessment of the case and its labor-law expertise, thus undermining judicial independence and overstepping established boundaries of agency deference. The Respondent, the NLRB, maintains that such deference is warranted given its role, expertise in labor relations, and the comprehensive investigatory and adjudicative processes it undertakes before seeking injunctive relief under Section 10(j). The Court's determination will crucially affect the balance of power between administrative agencies and the judiciary and will have significant implications for labor practices and the enforcement of labor rights in the United States.

Questions as Framed for the Court by the Parties

Whether courts must evaluate the National Labor Relations Board’s requests for injunctions under Section 10(j) of the National Labor Relations Act using the traditional, stringent, four-factor test for preliminary injunctions or some other more lenient standard.

Facts

In January 2022, a shift supervisor, Nikki Taylor, at the Memphis Starbucks location decided she was interested in unionizing the Memphis store. McKinney v. Starbucks Corporation at 393. She discussed unionizing with her coworkers at work; but, after she began to talk about unionization, Starbucks managers issued Taylor disciplinary action forms without warning. Id. at 393–94. The forms were for insubordinate behavior towards a store manager and for wearing leggings to work. Id. Taylor denied both. Id. Additionally, a store manager testified that disciplinary actions were rarely taken without warning, and Taylor testified that other Starbucks employees were not issued disciplinary forms for dress code violations. Id.

Later in January, Taylor facilitated a Zoom meeting with other union-interested Starbucks employees, formed a union-organizing committee, and drafted a letter to the Starbucks CEO announcing their intent to unionize. Id. The next day, committee members distributed union-authorization cards to coworkers. Id. Starbucks closed the store early that day. Id. After the store closed, media representatives showed up at the store, and Taylor, who was off duty, invited them inside. Id. The organizing committee members were interviewed by the media. Id. Before leaving, one union committee member opened the store safe for the cash controller who lacked a personal access code, a typical task of Starbucks employees. Id.

Starbucks launched an investigation of the media event the next day. Id. Meanwhile, the union-organizing committee organized a sit-in for January 21-23, after which Starbucks announced that the store would operate as a drive-through only location from January 20-23. Id. Starbucks also began removing pro-union material pinned to the store’s community bulletin board. Id. at 395.

On February 8, Starbucks fired Taylor and six other pro-union employees. Id. Starbucks asserted that the firing was due to their behavior during the media event, including being in the store and going behind the counter while off-duty, unlocking the store to the media, handling cash, unlocking the safe while off duty, and supervising while those offenses occurred. Id. The two union organizing committee members who were not present during the media event were not fired. Id. Although Taylor and others acknowledged that their actions did violate company policy, they testified that management rarely if ever enforced those violations. Id.

After the firings, only one organizing-committee member still worked at the Memphis Starbucks. Id. The store continued to operate as a drive-through, and visiting managers came to the store every day. Id. Nearly everyone stopped wearing union pins to work, and one employee testified that he believed that wearing his union pin would make him a target for firing. Id. Additionally, Starbucks employees from other stores locations noted that the response to the employees in Memphis made them more concerned about unionization. Id.

On June 7, Memphis store partners voted to join the Workers United Union. Id.

Before the vote, the Workers United Union filed charges against Starbucks with the National Labor Relations Board (“NLRB”). Id. at 396. The union alleged that Starbucks had engaged in unfair labor practices. Id. The NLRB, through respondent Kathleen McKinney, petitioned the United States District Court for the Western District of Tennessee for injunctive relief including reinstatement of the seven fired employees, pending the NLRB’s administrative proceedings. Id. The district court granted McKinney’s petition and ordered reinstatement of the seven employees. Id. The district court held that there was reasonable cause to believe Starbucks had engaged in unfair labor practices and injunctive relief was just and proper. Id. Starbucks appealed the district court’s order; and, the Sixth Circuit affirmed, finding that Starbucks’ actions have demonstrably chilled unionization and holding that injunctive relief was justified. Id. at 399–401.

The United States Supreme Court granted certiorari on January 12, 2024.

Analysis

TRADITIONAL VS. MODIFIED TEST

Petitioner, the Starbucks Corporation, argues that Section 10(j) of the National Labor Relations Act, which empowers federal district courts to grant temporary relief or restraining orders deemed "just and proper" during National Labor Relations Board (NLRB) adjudications, must be judged like an ordinary motion for preliminary injunction. Brief for Petitioner, Starbucks Corporation at 18. Starbucks alleges that the statutory language of Section 10(j) does not suggest any deviation from the traditional four-factor test for a preliminary injunction, which, according to Starbucks, is to demonstrate a likelihood of success on the merits, irreparable harm in the absence of relief, a favorable balance of equities, and that an injunction serves the public interest Id. at 19–20. Starbucks contends that these traditional factors constitute the "just and proper" test stated in section 10(j). Id. at 18.

Starbucks holds that Section 10(j)’s language aligns with historical principles of equity, suggesting that unless Congress explicitly states otherwise, established criteria for injunctions should apply. Id. at 22–24. Starbucks claims that, historically, the judicial system has operated under the presumption that established principles of equity, and thus the four-factor test, apply to federal court injunctions, a practice dating back to the First Judiciary Act of 1789 (which created the federal court system). Id. at 19, 21. Starbucks insists that the term "just and proper" in Section 10(j) signifies adherence to traditional equitable standards and the conventional four-factor test, rather than suggesting a departure from these established norms. Id. at 22–24.

Starbucks claims that the "historical context" of Section 10(j) underscores its intent to preserve the traditional four-factor test for preliminary injunctions, highlighting that Section 10(j) injunctions are designed to be exceptional measures for extraordinary cases, as evidenced by its enactment as a "limited exception" to the labor injunction prohibitions established by the Norris-LaGuardia Act. Id. at 30–33. Furthermore, Starbucks points out that the NLRB's initial interpretations post-enactment align with this view, advocating for Section 10(j)'s use in emergency situations only, and demonstrating through historical injunction authorization rates and internal criteria that the traditional, stringent four-part test was intended to guide the granting of Section 10(j) injunctions. Id.

Starbucks advocates that the alternative two-part test used by the Sixth Circuit, which asks only (1) whether the NLRB has “reasonable cause to believe that unfair labor practices have occurred” and (2) whether an injunction is needed to “protect the [NLRB’s] remedial powers under the NLRA,” represents a significant departure from the historical principles of equity and the historical context of Section 10(j). Id. at 33–35. Starbucks holds that this “atextual” interpretation not only lacks statutory support but also undermines the balance and discretion typically exercised in equity. Id. at 33, 34–37.

Starbucks contends that the two-part test introduces discrepancies within the legal system, particularly when it results in differing judicial standards for seemingly identical labor disputes. Id. at 35–37. Such inconsistencies, as Starbucks points out, may arise in cases where traditional equity principles would demand a more thorough analysis, yet the simplified two-part test leads to a more lenient or stringent application of injunctions. Id. This variance, Starbucks argues, not only produces legal anomalies—such as uneven enforcement or adjudication outcomes across similar cases—but also deviates from Congressional intent and the established legal tradition that seeks uniformity and predictability in labor relations law. Id. at 35–38.

Respondent Kathleen McKinney argues that Section 10(j) of the National Labor Relations Act empowers the National Labor Relations Board (NLRB) to petition district courts for temporary relief or restraining orders amid investigations of unfair labor practices. Brief For Respondent, Kathleen McKinney at 12–13. McKinney contends that this provision aims to safeguard the NLRB's capacity to enforce the Act decisively. Id. at 13–14.

McKinney emphasizes the necessity for courts to adhere to the ordinary and traditional interpretations of words when deciphering statutes, particularly within the context of the NLRA. Id. at 14–15. By applying this interpretive lens to the phrases "just and proper," McKinney argues that it inherently leads to the conclusion that court-granted relief should be closely aligned with the Act’s objectives, ensuring decisions are tailored to the specific circumstances of each case while upholding the legislative intent of the NLRA. Id.

McKinney asserts that historical equity principles and the courts' approach to federal agency enforcement highlight the importance of considering statutory context in equitable relief decisions. Id. at 15–16, 18. This is particularly relevant in suits brought by federal agencies to implement federal schemes, where courts have acknowledged that their equitable powers expand beyond the typical scope seen in private disputes. Id. at 18–19. McKinney claims when public interest and federal law are involved, a court's ability to grant equitable relief is both broader and more flexible, reflecting a deep-seated judicial philosophy that aligns with the objectives of Congress. Id. McKinney suggests that this framework should inform the application of "just and proper" relief under Section 10(j), advocating for a nuanced interpretation that recognizes the special role of equity in furthering public policy through federal agencies. Id.

McKinney insists that the debate over employing a two-factor versus a four-factor test for Section 10(j) relief shouldn’t revolve around the number of factors but rather how these considerations are informed by the NLRA's statutory framework and its approach to resolving labor disputes. Id. at 25–26. McKinney elaborates that this involves not just identifying the presence of unfair labor practices but understanding their impact within the specific context of labor relations, ensuring that the application of such tests aligns with the NLRA's intent to protect workers' rights and promote fair labor practices. Id. at 25–28. McKinney argues that the NLRA recognizes the NLRB's primary function in adjudicating unfair labor practices and the distinctive nature of labor-related harms, which may not and should not always conform to the standard four-factor test for preliminary injunctions. Id. at 30–34.

McKinney claims that the judiciary's implementation of Section 10(j), whether through a two-factor or four-factor test, shows a consensus on the importance of statutory context and the NLRA's objectives in defining "just and proper" relief. Id. at 34–37. McKinney reasons that this customized approach ensures that the relief under Section 10(j) effectively backs the NLRA’s goals without undermining the NLRB's authority, aligning judicial measures with the legislative intent and public policy objectives of fostering industrial stability and safeguarding labor rights. Id. at 35-37. McKinney concludes that it is crucial for courts to deeply understand the NLRA's provisions and the labor relations landscape to make informed decisions that reflect the Act's spirit and purpose, ensuring fair and equitable labor practices. Id. at 37–40.

DEFERRING TO THE NLRB

Starbucks argues that district courts evaluating Section 10(j) injunctions are improperly urged to defer to the NLRB’s initial investigations, in-house attorneys' views, and labor-law expertise. Brief for Petitioner, Starbucks Corporation at 38–39. Starbucks claims that this proposed deference, extending to preliminary legal and factual assessments, challenges traditional limits where deference is typically reserved for final agency actions based on formal decision-making. Id. Starbucks insists that such an approach contradicts the expectation of impartiality in agency processes and the principle against deferring to an agency's litigating position. Id.

Starbucks extends that advocating for deference to the NLRB's early case assessments risks undermining district courts' purpose as an independent safeguard in evaluating Section 10(j) injunctions, potentially shifting the balance of power unduly in favor of regulatory agencies. Id. at 39–41. Starbucks holds that this could weaken judicial review across various statutory frameworks, granting agencies an unwarranted advantage in regulatory contexts beyond labor law. Id. at 40–42. Starbucks states that no deference is afforded to judicial review of injunction actions by other federal agencies, including the Attorney General and the Department of Labor. Id. at 44–47. Starbucks concludes that siding with McKinney risks undermining federal agency injunction proceedings universally, compromising the principle that decisions should be based on an independent assessment of law and facts, devoid of undue agency influence. Id. at 46–47.

McKinney counters that concern over district courts deferring to the NLRB's preliminary findings miss the core issue, highlighting that courts, including the Ninth Circuit, employ the four-factor test under Section 10(j) of the NLRA with a level of deference to the NLRB. Brief For Respondent, Kathleen McKinney at 22. This approach, McKinney contends, aligns with the two-factor model, as it stresses the critical role of such deference in fulfilling the NLRA's objectives, notably in protecting collective bargaining integrity and upholding the NLRB's remedial authority. Id. at 22–25.

McKinney alleges that courts’ historical acknowledgment of the NLRA’s distinctive features underscores the Ninth Circuit’s method, dating back to the provision’s inception in 1947. Id. at 23. McKinney contends that such judicial decisions affirm that relief under Section 10(j) is grounded not only in statutory text but also in the broader legislative intent to foster fair labor practices and ensure effective enforcement originating from the NLRB’s expertise. Id. at 23–28. McKinney concludes that this nuanced application of equitable principles, considering both the merits and equities informed by the NLRA’s framework, ensures that judicial interventions support, rather than undermine, the objectives of national labor policy. Id.

Discussion

EMPLOYER INTERESTS

The Washington Legal Foundation, in support of Starbucks, argues that labor disputes should be treated like any other disputes in district court by following the four-factor test. Brief of Amicus Curiae Washington Legal Foundation, in Support of Starbucks at 12. The Washington Legal Foundation argues that more lenient preliminary injunctions create strong incentives for businesses to settle so they are not stuck keeping on bad employees for years while litigation occurs. Id. at 17. Additionally, the Washington Legal Foundation asserts that many labor injunctions are extremely broad, affecting operations nationwide, which has such a negative effect on companies that they have incentives to settle even weak claims against them. Id. at 18. The Washington Legal Foundation claims that this allows the NLRB to push its policy preferences by performing a “shakedown” of employers. Id. at 19. The Chamber of Commerce of the United States of America, National Association of Manufacturers, and National Federation of Independent Business Small Business Legal Center, Inc. (collectively, “Chamber of Commerce”), in support of Starbucks, contends that injunctions do great harm to businesses, and if they are easier to obtain, the NLRB will use them to obtain their own goals at the cost of businesses. Brief of Amici Curiae Chamber of Commerce of the United States of America et al., in Support of Starbucks at 16–18. The Chamber of Commerce argues that the NLRB has a strong pro-union agenda and will weaponize injunctions against employers who are acting lawfully, though engaged in practices the NLRB would prefer to stamp out. Id. at 21.

The American Federation of Labor and Congress of Industrial Organizations (“AFL-CIO”), in support of McKinney, responds that in the absence of a preliminary injunction, employers will be able to defeat unions by firing employees before they have even had a vote. Brief of Amicus Curiae American Federation of Labor and Congress of Industrial Organizations, in Support of McKinney at 15. AFL-CIO explains that, because NLRB hearings can be lengthy, preliminary injunctions are a critical mechanism to create a conducive environment for the collective bargaining process. Id. at 6. AFL-CIO adds that, therefore, the purpose of the preliminary injunction is key in preserving the NLRB’s ability to adjudicate union disputes. Id. at 16. Starbucks Workers, in support of McKinney, contend that Starbucks has abused its power to mount an anti-union campaign, and a preliminary injunction is entirely appropriate to stop them. Brief of Amici Curiae Starbucks Workers, in Support of McKinney at 10–11, 20. Additionally, Starbucks Workers claims that firing an employee means that employee often cannot pay the bills, which functions as an overly strong disincentive to unionization, and that this has happened to multiple Starbuck ex-employees that attempted to unionize. Id. at 14–16. Starbucks Workers emphasize that preliminary injunctions are essential because employees cannot afford to wait for a NLRB hearing result that grants reinstatement with limited damages.

HARM TO EMPLOYEES

Right to Work Legal Defense Foundation, Inc. (“Right to Work”), in support of Starbucks, argues that employees have a right not to support unions, and preliminary injunctions may frustrate that choice by tipping the balance of power and persuasion in favor of the unions. Brief of Amicus Curiae Right to Work, in Support of Starbucks at 5–7. Right to Work argues that preliminary injunctions speed along unionization, which compels all employees to accept the union as their sole representative. Id. at 7–8. Right to Work argues that a primay problem with the more lenient standard for injunctions is that employees choosing to revoke their support for the union is seen to constitute coercive behavior by the employer rather than the employee making a rational and personal choice. Id. at 9.

Starbucks Workers respond that unionization is critical to improving working conditions. Brief of Starbucks Workers at 8–9. Starbucks Workers argue that preliminary injunctions are crucial to ensuring unionizing efforts can occur without the threat of termination and loss of livelihood. Id. at 14–16. Starbucks Workers argue that without preliminary injunctions, employers can engage in coercive practices until the conclusion of litigation, which can take years. Id. at 17. Starbucks Workers argue that the prolonged timeframe means that employers have time to set in an anti-union culture and deep fears of retaliation that persist even after litigation. Id. at 19.