Injunctive Relief Is Injunctive Relief: In A Sweeping Victory For Employers, SCOTUS Rules Standard For 10(j) Relief No Different Than Any Other Preliminary Injunction

Executive Summary: On June 13, 2024, the Supreme Court of the United States (SCOTUS) ruled in favor of Starbucks, and employers alike, holding that when district courts consider a request for preliminary injunction under §10(j) of the National Labor Relations Act (NLRA), they must apply the more stringent, traditional four-factor test for preliminary injunctions. This decision, which will make it more difficult for the National Labor Relations Board (NLRB or Board) to win temporary reinstatement of workers fired during labor disputes, may be a light at the end of a long tunnel for employers.

What is 10(j) Relief? When the NLRB believes an employer has committed a serious unfair labor practice (ULP), the General Counsel of the Board can ask a federal district court to order certain temporary measures, such as reinstating employees, while the merits of the ULP charge are being litigated.

The authority to seek court relief at this early stage comes from Section 10(j) of the NLRA and is intended to quickly address the workplace impact of an alleged labor law violation, and to prevent a situation in which the Board's eventual remedy comes too late to fix the harm caused by the violation. Thus, the Board seeks a court order while the underlying administrative case is pending, and it dissolves when the Board rules.

While this sounds like a helpful safeguard, a disagreement had developed among federal appeals courts on how requests for injunctive relief under Section 10(j) should be evaluated, with some courts applying a traditional, strict test, and others applying a more lenient approach.

Circuit Split: The 3rd, 5th, 6th (the court from which Starbucks appealed the present litigation), 10th, and 11th Circuits, at the urging of the Board, have applied a lenient two-part test, requiring the Board to show only:

1. there is "reasonable cause" to believe that an unfair labor practice occurred; and
2. relief is "just and proper."

Alternatively, the 4th, 7th, 8th, and 9th Circuits have applied the traditional four-factor test that governs requests for injunctive relief in many other contexts, and which requires the Board to show:

1. it is likely to succeed on the merits;
2. it will likely suffer irreparable harm without preliminary relief;
3. the balance of the equities tips in its favor; and
4. an injunction is in the public interest.

Cue Starbucks v. McKinney.

Procedural History of the Case:

Alleged ULP: After several employees working at a Memphis Starbucks location announced plans to unionize, they invited a news crew from a local television station to visit the store, after hours, to promote their unionizing effort. Because employees are not allowed to let unauthorized people into the stores when they are closed, including off-duty employees, Starbucks terminated multiple employees involved.
• The Board Complaint: The Board filed an administrative complaint against Starbucks asserting a number of unfair labor practices, and the Board's Regional Director filed a petition under §10(j) seeking a preliminary injunction that would, among other things, require Starbucks to reinstate the fired employees.
• The District Court Decision: Applying the more lenient, two-part test, the District Court found the Board met its "relatively insubstantial burden to establish reasonable cause," and granted the injunction requiring Starbucks to rehire the terminated employees.
• The 6th Circuit Decision: The 6th Circuit affirmed the District Court's ruling finding, specifically, injunctive relief "just and proper" because, among other things: 1) termination of 80 percent of the organizing committee during a unionization campaign could lead to injury of the union movement; and 2) it did in fact lead to a chill (e.g., employees stopped wearing pins/discussing organizing efforts). The 6th Circuit found no merit to Starbucks' arguments that: 1) a return to status quo was not possible; 2) the proper standard for injunctive relief should be a 4-part test (not the 2-part test applied by the District Court); and 3) the union's unclean hands led to the chilling effect.

SCOTUS Decision: Relying heavily on long-standing precedent and the text of the NLRA to glean Congress' intent, the Supreme Court held: "[w]hen considering the NLRB's request for a preliminary injunction under §10(j), district courts must apply the traditional four factors articulated in Winter v. Natural Resources Defense Council, Inc., 555 U. S. 7. Pp. 4-11."

Specifically, SCOTUS reiterated that "a preliminary injunction is an 'extraordinary' equitable remedy that is 'never awarded as of right.'" The Court also noted that the four commonplace considerations of the traditional rule reflect a practice with a background of several hundred years of history. Thus, absent a clear command from Congress, courts must adhere to that test. With that in mind, the Court rejected the Board's attempts to suggest it is entitled to the more deferential standard and stated that Section 10(j)'s statutory directive to grant injunctive relief when the district court "deems" it "just and proper" does not jettison the normal equitable rules; it simply invokes the discretion that courts have traditionally exercised when faced with requests for equitable relief.

The Bottom Line

The Supreme Court's ruling is certainly a win for employers as it: 1) establishes a uniform standard across all federal courts; and 2) makes clear that requests by the NLRB for injunctive relief are not entitled to more lenient treatment. That said, it remains to be seen how courts will apply the test to any given set of facts. The 6th Circuit could arrive at the same conclusion applying the more stringent, four-part test.

We recommend you continue creating positive relationships with your employees, ensure your supervisors and managers are properly trained, and carefully evaluate disciplinary actions during union organizing efforts.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Mr Frederick Warren
Ford & Harrison LLP
271 17th Street, NW 271 17th Street, NW
Suite 1900
Atlanta
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UNITED STATES
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