The U.S. Supreme Court has sided with Starbucks in its dispute over the dismissal of several pro-union employees at a unit in Tennessee, overturning the decision of two lower courts and affirming limits on the authority of the National Labor Relations Board.
For the chain, the decision handed down Thursday lifts a directive from the NLRB to reinstate the dismissed employees. Six of them were fired after they invited a TV crew into the store after hours for a news report on staff members’ organizing drive. Starbucks had argued that the workers grossly violated company policies by opening the door to the news crew and deserved to be terminated.
But the NLRB filed a complaint against the coffee company, calling the move an unfair labor practice intended to impede the store's unionization. It petitioned a federal district court for an immediate injunction to halt the dismissals, which was granted. On appeal, the U.S. Sixth Circuit Court affirmed the district court’s ruling.
Starbucks contended in its petition to the Supreme Court that the district court should have used the same criteria other courts at that level had traditionally used in evaluating similar petitions. It argued that all district courts should weigh the same four criteria to determine if an action constituted an unfair labor practice. Specifically, an immediate injunction should be issued only if it appears the party seeking the halt is likely to prevail in a full court hearing; a denial of the injunction would bring significant harm to the affected party; “the balance of equities,” a legal term indicating which party has more at stake, tips in the affected party’s favor; and the injunction would be in the public’s interest.
The district court had based its decision on two different criteria, consistent with the NLRB’s petition for an injunction: Whether there was reasonable cause to suspect an unfair labor practice, and if an injunction is just and proper. The Sixth Circuit Court concurred that the slimmer test was sufficient.
But the Supreme Court agreed with Starbucks’ contention that the more-stringent four-point test should have been used, and should be the standard employed by district courts going forward. The decision was written by Justice Clarence Thomas. The lone dissenting justice was Ketanji Jackson, who differed only in part.
Workers United, the union behind the effort to organize Starbucks, immediately blasted the Supreme Court's decision.
"It underscores how the economy is rigged against working people all the way up to the Supreme Court," Workers United President Lynne Fox said in a statement. “Starbucks should have dropped this case the day it committed to chart a new path forward with its workers, instead of aligning itself with other giant corporations intent on stifling worker organizing."
The NLRB was also highly critical. In a statement, General Counsel Jennifer Abruzzo said, "Injunction relief is one of the most important tools available to the NLRB to protect workers’ statutory rights through effective enforcement of the only federal labor law in the country...Without obtaining this temporary relief, the lawbreaker will fully reap the benefits of having violated workers’ rights—such as by snuffing out a nascent organizing drive."
The ruling came as Starbucks and its organized employees are negotiating new labor contracts in what both parties have hailed as a warming of their relationship. About 437 Starbucks units employing roughly 10,400 baristas have organized to date, according to the NLRB.
"We will continue to focus [on] making progress toward our goal of reaching ratified contracts for represented stores this year," Starbucks said in a statement. "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."
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