The Supreme Court Clarifies The Standard For The NLRB To Obtain A Preliminary Injunction

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In welcome news to employers, the U.S. Supreme Court on June 13, 2024 issued a decision in Starbucks Corp. v. McKinney that clarifies that the National Labor Relations...
United States Employment and HR
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New York, N.Y. (June 20, 2024) - In welcome news to employers, the U.S. Supreme Court on June 13, 2024 issued a decision in Starbucks Corp. v. McKinney that clarifies that the National Labor Relations Board can only obtain a preliminary injunction under the National Labor Relations Act if it can satisfy the four-factor test traditionally applicable to this extraordinary form of relief. In doing so, the Court resolved a circuit split whereby some courts had applied a less exacting standard when assessing the Board's preliminary injunction applications.

Underlying the issue presented is the Board's responsibility for enforcing the NLRA's prohibition of "unfair labor practices" and the administrative context in which the Board carries out this mandate. More specifically, the Board reviews complaints from unions or individuals alleging that an employer (or in some cases a union) has engaged in an unfair labor practice. When the Board finds a complaint to have merit, it initiates the formal enforcement process by issuing an administrative complaint. Following initiation, the complaint is adjudicated through administrative proceedings.

Because these proceedings can extend for years, Section 10(j) of the NLRA authorizes the Board to seek a preliminary injunction from a federal district court "for appropriate temporary relief" during the pendency of the proceeding. Section 10(j), in turn, authorizes the district court to grant the Board such relief "as it deems just and proper."

The courts, however, have diverged on the standard to apply when reviewing Section 10(j) injunction requests.

Some courts applied a familiar four-factor test for preliminary injunctions, i.e., a clear showing of a likelihood of success on the merits, irreparable harm in the absence of preliminary relief, balance of equities favoring relief, and that the injunction is in the public interest. Other courts, including the Sixth Circuit Court of Appeals, applied a less exacting two-part test to Section 10(j) injunction requests — whether "there is reasonable cause to believe that unfair labor practices have occurred," and whether injunctive relief is "just and proper."

In the case decided by the Supreme Court, the NLRB petitioned a Tennessee District Court for a Section 10(j) injunction against Starbucks in connection with administrative enforcement proceedings for alleged unfair labor practices at a Memphis store. The District Court applied the two-part test as mandated by Sixth Circuit precedent and granted the Board's injunction request. The Sixth Circuit then affirmed the application of its precedent.

The Supreme Court, by an 8-1 vote, reversed the judgment of the Sixth Circuit and held that district courts must apply the traditional four-factor test when considering Section 10(j) preliminary injunction requests. In reaching this decision, the Court emphasized that "[n]othing in the §10(j)'s text overcomes the presumption that the four traditional criteria govern a preliminary-injunction request by the Board." The Court went on to reject the NLRB's position that the two-part approach was appropriate because the NLRB, not the courts, is tasked with the initial adjudication of unfair labor practices allegations. The Court held that "Section 10(j)'s statutory context does not compel this watered-down approach to equity."

While this ruling does not completely alleviate the challenges employers and unions face when the NLRB prosecutes an administrative complaint, it certainly will create reliability as to the standards that will be applied in every jurisdiction to the NLRB's inevitable requests for injunctive relief.

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.

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