SCOTUS Requires NLRB to Meet Traditional Standards for Preliminary Injunctive Relief

On June 13 the U.S. Supreme Court heightened the standard a court must apply to an NLRB request for a preliminary injunction against an employer accused of violating federal labor law. In resolving a circuit split in which courts applied different tests in determining when to grant preliminary injunctive relief, the Court held that district courts should apply the traditional, four-pronged test in determining whether to grant a preliminary injunction under Section 10(j) of the National Labor Relations Act (Act). Starbucks Corp. v. McKinney.

Section 10(j) authorizes federal courts to enjoin an employer from violating the Act at the outset of a case, before the employer can defend itself during the NLRB’s time-consuming administrative process. The traditional test for a preliminary injunction has four elements that, evaluated together, treat preliminary injunctions as an extraordinary remedy that is only rarely granted. The four factors require the court to find that the petitioner make a clear showing that it is “likely to succeed on the merits” of the underlying allegation of a federal labor law violation, it is likely to suffer irreparable harm without the injunction, the balance of equities weighs in favor of the petitioner, and the injunction is in the public interest.

Writing for the majority in an 8-1 decision, Justice Clarence Thomas concluded that Congress never intended by Section 10(j) to depart from the traditional test for injunctive relief and that “nothing in §10(j)’s text overcomes the presumption that the four traditional criteria govern a preliminary-injunction request by the Board.” Just because Section 10(j) allows courts to grant the NLRB temporary relief “as it deems just and proper” does not mean Congress replaced the traditional framework for assessing the propriety of equitable relief, Justice Thomas wrote. The majority decision followed the Court’s 1942 decision in Hecht v. Bowles where the Court applied the four-part test even though the statute at issue directed the court to grant an injunction upon a showing of an actual or imminent prohibited act. The Starbucks majority rejected the less rigorous two-part test applied by the Sixth Circuit that requires a showing only that (a) “reasonable cause” exists to believe the employer violated the Act and (b) it would be “just and proper” for court intervention. Justice Thomas reasoned that the two-part test “substantially lowers the bar for securing a preliminary injunction by requiring courts to yield to the Board’s preliminary view of the facts, law, and equities.” Justice Thomas wondered “how the Board could lose under the reasonable cause test….”

The underlying case stems from the unionization drive at a Starbucks store. In 2022 several baristas (known as the Memphis 7) invited television cameras into the coffee shop where they worked after closing time for an interview to discuss unionization efforts. They did so without the employer’s permission. The next day, Starbucks discharged the employees involved, who then filed unfair labor practice charges against Starbucks. The NLRB asked a federal judge to order Starbucks to rehire the employees, which the district court did through a Section 10(j) injunction. The Sixth Circuit affirmed the 10(j) injunction based on the less rigorous two-part test. Starbucks then appealed to the Supreme Court.

The Starbucks decision will have an immediate impact on employers faced with threats of preliminary injunctions by the NLRB, since the NLRB’s burden of proof has increased not only semantically but substantively. Justice Thomas expressly rejected the NLRB’s arguments that a district court should engage in a far less searching than normal review of the merits, and that the district court should apply a deferential standard to an NLRB injunction petition. Justice Thomas explained that the petition represents “simply the preliminary legal and factual views of the Board’s in-house attorneys….”

Until recently the NLRB has sought few Section 10(j) injunctions despite the thousands of unfair labor practice charges it processes. Nonetheless, this development is a setback to the NLRB General Counsel’s aggressive enforcement agenda. If you have any questions as to the impact of the Starbucks decision on issues in your workplace, please contact Firm Partner Patrick W. McGovern, Esq. via email here or by phone at 973.53.7129, or contact any attorney in the firm’s Labor Law Practice Group.