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| 2 minutes read

SCOTUS Benchslaps NLRB & Its Uneven Playing Field

Section 10(j) of the National Labor Relations Act ("NLRA") equips the National Labor Relations Board ("NLRB" or “Board”) with a powerful tool to address supposed unfair labor practices during the pendency of a Board unfair labor practice proceeding. The tool in question is the NLRB's authority to seek a preliminary injunction even before the Board concludes that the employer engaged in unlawful conduct. That tool is an extraordinarily blunt instrument, yet the Board has repeatedly argued that it can obtain a preliminary injunction any time it demonstrates to a federal court that the Board's claims are “substantial and not frivolous.”  

This “substantial and not frivolous” standard sets such a low bar to obtain an injunction that it virtually assures the Board a win any time it seeks a 10(j) injunction in a jurisdiction that uses this standard. The standard is far lower than the traditional four-part test courts apply in the vast majority of preliminary injunction proceedings. The four-part test requires a plaintiff to make a clear showing that it is likely to succeed on the merits, it is likely to suffer irreparable harm without an injunction, the balance of equities favors the plaintiff, and the injunction is in the public interest. This four-part test is ubiquitous in injunction jurisprudence, but the NLRB maintains it does not have to meet this standard because, well, it's the NLRB.  

But today SCOTUS reminded the Board that it's just not that special in Starbucks Corp. v. McKinney. Several Starbucks employees in Memphis announced plans to unionize a store. They brought news crews into the store after hours as part of their campaign. Starbucks fired several of the employees for violating company policy with the news crew stunt, and the NLRB filed an administrative complaint against Starbucks for the firings and other alleged misconduct. The Board then went into federal court seeking an injunction to reinstate the fired employees during the pendency of the unfair labor practice proceeding. The injunction was a cakewalk for the Board because case law in the Sixth Circuit Court of Appeals (which includes Tennessee) held that the Board need only meet the “substantial and not frivolous” test promoted by the Board. The Board's win was ultimately for naught, as SCOTUS has now resoundingly rejected the “substantial and not frivolous” test in an 8-1 opinion written by Justice Thomas. Justice Jackson filed a partial concurrence and partial dissent.  

Justice Thomas' opinion begins with the recognition that a preliminary injunction is meant to be an extraordinary remedy. The opinion then explains that a strong historical presumption exists in favor of applying the well-established four-factor test used in most injunction proceedings. And most importantly, the opinion debunks the Board's assertion that its lofty position as labor overlord entitles it to waltz into court and obtain a Section 10(j) injunction at will merely by showing that there is “reasonable cause to believe that unfair labor practices have occurred." Instead, the Board must make a ”clear showing" that it is likely to succeed on the merits under the four-factor test.

The significance of this case is not solely for labor law nerds. This decision has very real-world consequences. Consider that the Board's general counsel announced in 2021 and 2022 that she would be using the Board's Section 10(j) injunction authority with much greater frequency across a broad swath of alleged unfair labor practices. The general counsel knows all too well that Section 10(j) injunctions dramatically alter the course of union organizing campaigns, always to the employer's detriment. Today's Starbucks decision will force the Board to prove that these injunctions are appropriate, as opposed to another tool to bully employers and tilt the organizing campaign playing field in favor of unions.  

There is an obvious difference between having the Board show that it is “likely” to succeed on the merits and having it show only that its theory of the case is “substantial and not frivolous,” without having to convince the court that its theory is likely meritorious. In fact, it is hard to imagine how the Board could lose under the reasonable-cause test if courts deferentially ask only whether the Board offered a minimally plausible legal theory, while ignoring conflicting law or facts. As Judge Readler explained, if the reasonable-cause standard were “applied in the traditional civil litigation setting, any complaint that could withstand Rule12(b)(6) would automatically be deserving of injunctive relief as well, rendering the court more a spectator than a referee when it comes to matters of equity.”

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labor and employment and employee benefits