The Supreme Court heard arguments from Starbucks on Tuesday as the coffee giant aims to overturn a lower court’s order to rehire several workers at a Tennessee store. At stake is how tough it should be for the National Labor Relations Board (NLRB) to halt purported unfair labor practices while it investigates complaints. 

If Starbucks prevails, it could make it a lot harder for the agency to step in when it alleges corporate interference in unionization efforts. 

The hearing came just as tensions between the company and Workers United, the union organizing its workers, are starting to thaw. Both parties announced in February that they would resume negotiations with the goal of reaching contract agreements in 2024. This week saw their first bargaining session in almost a year. 

The Supreme Court case, meanwhile, marks the final showdown in a years-long legal saga. It stems from the so-called “Memphis Seven,” a group of employees who were ousted in February 2022 amid a push to unionize. Starbucks says they breached company policy by reopening the store after hours and inviting a TV news crew to come inside for an on-site interview. 

Workers United promptly filed a complaint with the NLRB alleging unfair labor practices. The agency determined the firings constituted illegal interference with the right of workers to organize and asked a federal district court to intervene while it processed the complaint. 

The judge agreed, issuing a temporary injunction ordering Starbucks to rehire those seven employees in August 2022. When an appeals court upheld that ruling a year later, the company lodged a second appeal with the Supreme Court, asking it to hear the case on the grounds that the lower courts followed a legal standard that makes it too easy for the NLRB to win injunctions. 

Several other companies have pushed back against the process for granting injunctions, but the Supreme Court picked the NLRB’s favorite target to review the issue. The agency has sought a total of 12 injunctions against Starbucks in the last two years. That accounts for over a third of all the requests it made during that time frame. 

Starbucks isn’t challenging the constitutionality of the NLRB, and the case has little to do with the propriety of its opposition to union organizers. At issue is what criteria apply when the NLRB goes to court seeking an injunction. It’s a procedural question with wide-reaching consequences for unionization disputes, since those injunctions can give employees their jobs back and restrict companies while the agency completes its administrative proceedings—a process that can take years. The one at the heart of this case has already been in place for 20 months. 

Starbucks is hinging its argument on the fact that federal courts have applied different legal tests when deciding whether to dole out injunctions requested by the NLRB. There’s a lenient two-factor test that asks the agency to show it has “reasonable cause” to believe unfair labor practices occurred and that a restraining order would be a “just and proper” solution. That’s the standard the appeals court used when it ruled against Starbucks in August 2023.

But other courts have required the NLRB to meet a traditional four-factor test, including showing the complaint is likely to win in the administrative case and that employees will suffer irreparable harm without an injunction. Starbucks has fared better in cases where this more stringent standard is applied. 

The company claims the two-part test requires considerable deference to the NLRB, and it’s asking the Supreme Court to establish the four-part test as the standard for handling all injunctions related to labor complaints.

“They should have to prove their case like any other party,” Lisa Blatt, the lawyer representing Starbucks, told the Supreme Court.

She appeared to have the upper hand when making that argument before the court’s conservative supermajority on Tuesday. 

“In all sorts of alphabet soup agencies, we don’t do this,” said Justice Neil Gorsuch, referring to the two-factor test for issuing injunctions. “So, why is this particular statutory regime different from so many others?”

Several of the court’s conservative justices echoed that sentiment, directing few questions to the coffee giant’s attorney while pressing the government on its preferred standard. Lawyers representing the NLRB said the agency should be given more deference given its role in investigating and addressing unlawful labor practices. Some members of the court seemed unconvinced. 

“The district court is an independent check, so it seems like it should be just doing what district courts do since it was given the authority to do it,” said Justice Amy Coney Barrett.

Starbucks saw the most pushback from Justice Ketanji Brown Jackson, who said the process for granting injunctions requested by the NLRB is different from “regular, ordinary cases.” She also latched on to data presented by Austin Raynor, a Justice Department lawyer representing the NLRB, who said the agency received around 20,000 complaints last year but only asked for a handful of injunctions. 

“This is not sounding like a huge problem,” Jackson said. Blatt countered that there should be a “level playing field” regardless of how often the courts intervene. 

Justice Sonia Sotomayor, one of the court’s liberals, also noted that the NLRB’s win rate under its preferred two-part test is only 61 percent—“so it’s not a rubber stamp to win.” 

A decision in the case is expected by the end of June. Many legal experts say Starbucks has a good chance of winning its appeal. 

Ronald Mann, a law professor at Columbia University who covers the Supreme Court’s commercial law cases at SCOTUSblog, said it’s likely the justices will rule in favor of lower courts applying the traditional four-part test.

“I would be surprised if several of the justices are not attracted to the logic of holding an agency to the same standard the court traditionally applies for private litigants, leaving it to Congress to specify departures from that standard,” he wrote in a case preview on Tuesday. “Furthermore, I expect some justices will be disturbed by the NLRB’s extensive attention on Starbucks. This may be yet another step in the court’s seeming effort to curtail the power of federal agencies this term.”

The NLRB has pursued a bold enforcement agenda to bolster workforce protections under the Biden administration. The five-person board has expanded pathways for union formation and lowered the barrier of entry for employees to challenge workplace practices. It also has expanded the types of remedial compensation employees can receive for unfair treatment. 

Beverage, Employee Management, Fast Food, Legal, Story, Starbucks