Supreme Court Decision in Favor of Starbucks in Unionization Case

The U.S. Supreme Court ruled the decision in favor of Starbucks on Thursday in a challenge against a labor ruling by a federal judge. This Starbucks union ruling makes it more difficult for a key federal agency to intervene when a company is accused of illegally suppressing labor organizing.

By siding on Thursday with Starbucks in the coffee chain’s challenge to a judicial order to rehire seven Memphis employees fired as they sought to unionize in a ruling that could make it harder for courts to quickly halt labor practices contested as unfair under federal law.

Eight justices backed the majority opinion, which was written by Justice Clarence Thomas. Justice Ketanji Brown Jackson wrote a separate opinion that concurred with the overall judgment but dissented on certain points.

Starbucks court decision

The justices unanimously threw out a lower court’s approval of an injunction sought by the U.S. National Labor Relations Board (NLRB) ordering Starbucks to reinstate the workers while the agency’s in-house administrative case against the Seattle-based company proceeds.

The justices ruled that lower courts had used an improper legal standard – one that Starbucks argued was too lenient – to issue a preliminary injunction requested by the agency under a federal law called the National Labor Relations Act.

Decision for unlawful labor practices

Such orders are intended as an interim tool to halt unfair labor practices while the NLRB resolves unfair labor complaints. Under that law’s section 10(j), a court may grant an injunction if it is deemed “just and proper.”

Starbucks had argued that the judge who granted the injunction should have used a stringent four-factor test in deciding to issue that order, similar to the standard used by some other courts and in non-labor legal disputes. This test includes an assessment of whether the side seeking relief would suffer irreparable harm and is likely to succeed on the merits of the case.

Starbucks case to lower court

Conservative Justice Clarence Thomas authored Thursday’s ruling in which the justices unanimously agreed to return the case to the lower court to apply the four-factor test. Liberal justice Ketanji Brown Jackson, in a partial dissent, broke with the other justices on how the lower court should apply part of that test.

Starbucks has contended that under a stricter standard, the case would have come out differently in the lower courts.

President Joe Biden’s administration had defended the NLRB’s actions in the case. During Supreme Court arguments in the case in April, a Justice Department lawyer said the NLRB seeks injunctions like the one issued against Starbucks in very few “cream of the crop” cases, last year requesting just seven even though it receives 20,000 unfair labor charges annually.

Starbucks union ruling

About 400 Starbucks locations in the United States have unionized, involving more than 10,000 employees. Both sides at times have accused the other of unlawful or improper conduct.

Hundreds of complaints have been filed with the NLRB accusing Starbucks of unlawful labor practices. This included firing union supporters, spying on workers and closing stores during labor campaigns. Starbucks has denied wrongdoing and said it respects the right of workers to choose whether to unionize.

Both sides in February announced they had agreed to create a “framework”. This framework would be to guide organizing and collective bargaining and potentially settle scores of pending legal disputes.

Starbucks goal

Starbucks after the ruling reiterated its goal of reaching contracts with union-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,” the company said in a statement.

Starbucks union workers fired

In 2022, workers at a Starbucks café on Poplar Avenue in Memphis was one of the first in company to unionize. Early they allowed a television news crew into the café after hours to talk about the union campaign. Starbucks fired seven workers present that evening, including several who belonged to the union organizing committee.

Despite the dismissals, employees there subsequently voted to join the Workers United union.

Unfair labor charges filed by union

The union filed unfair labor charges with the NLRB over the firings and other discipline by managers. The NLRB sought an injunction, accusing Starbucks of unlawfully firing the workers for supporting the union drive and to send a message to other workers.

U.S. District Judge Sheryl Lipman granted the injunction in 2022. She reinstated the workers in order to address the “chilling effect” of the dismissals on the unionization effort while the NLRB resolves the case. The Cincinnati, Ohio-based 6th U.S. Circuit Court of Appeals upheld the injunction in 2023.

The SC ruling also marks the continuation of a larger movement on the political right. Power to remove power from N.L.R.B. and also federal agencies.

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