Supreme Court Tightens Standards for NLRB Injunctive Relief

The National Labor Relations Board (NLRB) is an independent federal agency tasked with safeguarding employees' rights and addressing unfair labor practices by employers. In the recent Supreme Court case Starbucks Corp. v. McKinney, 144 S. Ct. 1570 (2024), the Court's 8-1 decision imposed the stricter traditional four-factor test for granting injunctive relief, rather than the more lenient two-part test advocated for by the NLRB. This setback for the NLRB comes amid ongoing legal challenges at a pivotal moment when the Board seeks to strengthen its authority and impact. This blog delves into the potential implications of this ruling for your business. 

The Facts 

After several Starbucks employees announced plans to unionize, the employees invited a news crew to the workplace to promote their unionization effort. Subsequently, Starbucks terminated these employees for violating company policy. In response, the NLRB filed an administrative complaint alleging unfair labor practices and petitioned under §10(j) of the National Labor Relations Act for a preliminary injunction which would require Starbucks to reinstate the terminated employees for the duration of the proceedings.  

The NLRB advocated for a two-part test to assess the validity of the granted injunction requiring consideration of: 

1. Whether there is reasonable cause to believe that unfair labor practices have occurred, and 
2. Whether injunctive relief is just and proper. 

In contrast, Starbucks advocated for the more stringent traditional four-part test, which necessitates the plaintiff to demonstrate that: 

1. They are likely to succeed on the merits 
2. They are likely to suffer irreparable harm in the absence of preliminary relief 
3. That the balance of equities tips in his favor, and 
4. That an injunction is in the public interest. 

The Decision 

The Supreme Court sided with Starbucks' stricter criteria for injunctive relief, emphasizing that nothing in §10(j) suggests a departure from the traditional four-part test. Adopting the NLRB's interpretation would have significantly relaxed the Board's requirements for obtaining a preliminary injunction. The Court reasoned that such a departure from traditional equitable principles would necessitate a clear and explicit directive from Congress, which was absent in the statute’s text. 

What This Means Going Forward 

This decision grants employers an advantage in employment disputes, raising the bar for employees seeking prompt relief from unfavorable employment actions before the proceedings conclude. Nevertheless, employers should recognize that if the NLRB succeeds in its claims, employees will be entitled to recover their incurred costs. 

If you have questions about how this ruling may impact your business, please contact Dani Smid or your BrownWinick employment attorney. Special thanks to summer associate Katelyn Schmitz for her assistance in the writing and research of this blog.