Starbucks takes on the federal labor agency before the US Supreme Court

After Starbucks fired seven employees who tried to unionize their store in Tennessee, a U.S. government agency obtained a court order forcing the company to rehire them. Now Starbucks wants the Supreme Court to curb government power in such cases.

On Tuesday, judges will hear Starbucks’ case against the National Labor Relations Board, the federal agency that protects workers’ right to organize. If the court sides with Starbucks, it could make it more difficult for the NLRB to intervene when it claims companies are interfering with union efforts.

The hearing comes as hostility between Starbucks and Workers United, the union that organizes its workers, begins to fade. The two sides announced in February that they would resume talks with the aim of reaching contract agreements this year. Starbucks and union representatives planned to meet Tuesday for their first bargaining session in nearly a year.

Employees at 420 company-owned U.S. Starbucks stores have voted to unionize since late 2021, but none of those stores have entered into an employment contract with Starbucks.

The Supreme Court case began in February 2022, when Starbucks fired seven employees who led a union organization in Memphis, Tennessee. Starbucks argued that employees violated policy by reopening the store after hours and inviting non-employees — including a television news crew — to enter.

The National Labor Relations Board determined that the layoffs constituted an illegal interference with workers’ right to organize. The agency found that Starbucks routinely allowed off-duty employees and non-employees to stay in the store after hours to make drinks or pick up items.

The NLRB asked a federal district court to intervene and order Starbucks to rehire the workers as the case wound its way through the agency’s administrative procedures. A district court judge agreed with the NLRB and issued a temporary injunction for Starbucks to rehire the employees in August 2022. After the 6th U.S. Circuit Court of Appeals upheld that ruling, Starbucks appealed to the Supreme Court.

Five of the seven employees are still employed at the Memphis store, while the other two remain involved with the organization, Workers United said. The Memphis store voted to unionize in June 2022.

Starbucks said the Supreme Court should intervene because federal appeals courts disagree on the standards the NLRB must meet when seeking a temporary injunction against a company. Starbucks says temporary injunctions can be a major burden on companies because the NLRB administrative process can take years.

Since 1947, the National Labor Relations Act – the law governing the agency – has allowed courts to issue temporary injunctions at the request of the NLRB if it deems them “just and appropriate.” In its review of what happened at the Starbucks store in Memphis, the Sixth Circuit required the NLRB to establish two things: that there were reasonable grounds to believe that an unfair labor practice was taking place and that a restraining order was a “just and proper” solution would be.

But other federal appeals courts have required the NLRB to meet a four-factor test when seeking restraining orders, including showing that it would likely prevail in the administrative case and that employees would suffer irreparable harm without an injunction .

Starbucks has asked the Supreme Court to establish the four-factor test as the standard for all courts to follow when reviewing NLRB ban cases.

“This court’s intervention is urgently needed,” Starbucks wrote in a court filing in October. “National employers like Starbucks must defend themselves against years of injunctions under materially different tests depending on where alleged unfair labor practices occur or where employers live.”

The NLRB says it considers the likelihood of success before it takes a case to trial, making the question of whether courts apply two or four factors largely irrelevant. The agency notes that it rarely asks courts for temporary injunctions; in fiscal year 2023, it received 19,869 unfair labor practice charges and authorized the filing of 14 cases seeking temporary injunctions.

“The two-part review conducted by the Sixth Circuit and other courts … subjects petitions to meaningful scrutiny, and does not call for courts to merely ‘rubber stamp’ agency requests,” the NLRB argued in a filing last month.


Durbin reported from Detroit.