Supreme Court Issues Employer-Friendly Decision Regarding the Standard to Apply to Requests for Section 10(j) Injunctive Relief Under the NLRA

On June 13, the United States Supreme Court issued its long-awaited ruling in Starbucks Corp. v. McKinney. In Starbucks, the Supreme Court clarified that the traditional four-factor test courts apply to requests for injunctive relief under Winter v. Natural Resources Defense Council, Inc. 555 U.S. 7 (2008) is the appropriate standard for analyzing requests for injunctive relief under Section 10(j) of the National Labor Relations Act (“NLRA”). The decision rejected the more deferential two-factor test that had been used in other circuits, including the Sixth, Fifth and Tenth Circuits. However, the Fourth, Seventh, Eighth, and Ninth Circuits consistently applied the traditional four-factor test. The Supreme Court’s decision in Starbucks resolved this decades-long circuit split in favor of the four-factor test.

The case arose after Starbucks fired seven baristas amid a union organizing campaign, prompting the union, Workers United, to file unfair labor practices charges. Once an unfair labor charge is filed, the National Labor Relations Board’s (“NLRB”) Regional Director is tasked with investigating the claims and, where merited, issuing a formal complaint that leads to an evidentiary hearing before an administrative law judge. Section 10(j) of the NLRA also permits the Regional Director to file a petition for injunctive relief with a federal district court while the underlying administrative proceedings are pending. In Starbucks, the Regional Director sought such relief from the district court for the Western District of Tennessee.

The district court granted the Regional Director’s petition after applying the two-part test that asks: (1) whether there is reasonable cause to believe an unfair labor practice has occurred; and (2) whether the relief sought is “just and proper.” To satisfy the “reasonable cause” element, the Regional Director was only required to show only that her legal theory was substantial and not frivolous. Likewise, to establish that the requested relief was just and proper, the Regional Director was only required to illustrate that the requested relief was necessary to return the parties to the situation they were in before the alleged unfair labor practice occurred. Following the district court’s ruling, Starbucks was directed, among other things, to re-hire the employees while the underlying issues were litigated.

Starbucks appealed to the Sixth Circuit, arguing that the traditional four-factor test applied to other requests for injunctive relief should also apply when seeking injunctive relief sought under Section 10(j). The four-factor test, in contrast to the two-factor test, requires a clear showing that the moving party: (1) is likely to succeed on the merits; (2) is likely to suffer irreparable harm in the absence of injunctive relief; (3) a balance of the equities tips in his or her favor; and (4) injunctive relief is in the best interests of the public.

In accordance with its prior decisions, the Sixth Circuit applied the two-factor test and affirmed the district court’s grant of injunctive relief under § 10(j) in favor of the Regional Director.

In its opinion, the Supreme Court held that the traditional four-factor test was applicable to Section 10(j) proceedings and remanded the case. The Court reasoned that the text of Section 10(j) of the NLRA, from which the two-factor test was derived, did not displace the presumption that, when empowered by Congress to grant equitable relief, “courts will exercise that authority in a manner consistent with traditional principles of equity.”

This decision is important for all employers, particularly those facing allegations that they have committed unfair labor practices. Starbucks will make it more difficult for the NLRB to secure injunctive relief under Section 10(j), which will provide more freedom for employers to defend themselves from an increasingly assertive NLRB.

Clark Hill attorneys are prepared to work with employers to navigate the challenges posed by NLRB investigations, complaints, and litigation. For more information, please contact Lauren Smith at lmsmith@clarkhill.com or the Clark Hill attorney with whom you regularly work.

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