Articles

Employment Law Update: Supreme Court Sets Stricter Standard for NLRB Injunctions

Date: June 20, 2024
In a unanimous decision concerning the applicable standard for an injunction under Section 10(j) of the National Labor Relations Act (NLRA), the Supreme Court last week rejected a “reasonable cause” standard pushed by the National Labor Relations Board, which is charged with enforcing the Act, in favor of the stricter traditional four-part test for an injunction, ordinarily applied by the courts. Starbucks Corp. v. McKinney, et al., 602 U.S. (2024).
 
The case has its origins in the termination of seven employees during a union organizing campaign in 2022 at a Starbucks store in Tennessee, employees who came to be known as the “Memphis 7."  Utilizing its authority under Section 10(j), the Board sought the temporary reinstatement of these seven workers while the charges against Starbucks for violating the Act were being litigated. Section 10(j) of the NLRA provides that, “upon issuance of a complaint,” the Board may “petition any United States district court . . . for appropriate temporary relief.” §160(j). A district court considering a §10(j) petition may “grant to the Board such temporary relief . . . as it deems just and proper.”
 
Although infrequently used by the NLRB, Section 10(j) is considered an important enforcement tool of the Board, and has been viewed by the Board as an increasingly important tool to protect workers’ rights under the law, and preserve its authority to decide labor disputes. 
 
In assessing whether the Board was entitled to a preliminary injunction under §10(j), the lower court applied the two-part test established by Sixth Circuit precedent. That test asked only whether “there is reasonable cause to believe that unfair labor practices have occurred,” and whether injunctive relief is “just and proper.” This lower standard allowed the Board to meet its burden simply by showing that its “legal theory [was] substantial and not frivolous.” Moreover, relief would be “just and proper” if such relief was shown to be “necessary to return the parties to [the] status quo pending the Board’s proceedings in order to protect the Board’s remedial powers under the Act.
 
The Supreme Court took up the case to resolve a split among the Circuit Courts over the proper standard for a 10(j) injunction. In doing so, the Supreme Court agreed that the less deferential, four-part test, based on traditional standards of equity was the proper standard. This more rigorous test requires a court to look at:
  1. Whether the Board is likely to succeed on the merits of the underlying case,
  2. Whether the Board’s power to remedy the violation will be “irreparably harmed” without the injunction,
  3. The balance of the Board’s interest and the charged employer’s, and
  4. Whether the injunction is in the public’s interest.
In reaching this decision, the Court noted, that it concluded that nothing in §10(j) displaced the presumption that traditional principles of equity would govern the resolution of the question, and the phrase “just and proper” in the statute, only invoked the discretion that courts have traditionally exercised when faced with requests for equitable relief.
 
Under the traditional test, the Board must clearly show that it will likely succeed on the case's merits before an injunction will be issued. As a result, the ruling significantly limits what has been a powerful tool for the Board in quickly addressing what it considers more significant Employer violations of workers’ rights under the Act. For Starbucks, it will not need to reinstate the employees pending the resolution of their claims.  For employers generally, the decision provides them with greater protection against the efforts of the Board to force immediate relief such as reinstatement, particularly in cases where they may ultimately prevail on the merits.     
 
Our labor and employment team is available to assist employers with advice and guidance with matters relating to compliance with the NLRA and Board policy,  unfair labor practice charges, unionization efforts, and other matters that arise under the NLRA. 
The information contained here is not intended to provide legal advice or opinion and should not be acted upon without consulting an attorney. Counsel should not be selected based on advertising materials, and we recommend that you conduct further investigation when seeking legal representation.