On June 13, 2024, the U.S. Supreme Court, in Starbucks Corp. v. McKinney (National Labor Relations Board), No. 23-367, rejected the arguments of the National Labor Relations Board (the “Board”) to relax the standard that a district court must employ in deciding whether to implement injunctive relief under Section 10(j) of the National Labor Relations Act (the “Act”).
The Board had sought a determination that preliminary injunctive relief is appropriate under a two-part test, a more relaxed standard than most courts traditionally apply for awarding injunctive relief.
The Court rejected the Board’s position and precedent from the Sixth Circuit and affirmed in an 8-1 decision that nothing in the Act suggests that a relaxed standard should be applied to Section 10(j) petitions. They ultimately ruled that district courts should use a traditional four-factor test.
What Are Section 10(j) Injunctions?
Under Section 10(j) of the Act, the Board can seek temporary injunctions in district courts against employers and unions to stop unfair labor practices while cases are litigated before the Board.
The Act permits district courts to grant the Board injunctive relief “as it deems just and proper,” but it does not identify which standard district courts should apply when deciding whether issuance of a preliminary injunction is proper.
Previous Standards Used by Circuit Courts of Appeals
Most Circuit Courts of Appeals have adhered to the traditional four-factor standard in determining whether a Section 10(j) injunction was appropriate. However, the Sixth Circuit had a less exacting standard, which the Board asked the U.S. Supreme Court to adopt.
Under the Sixth Circuit standard, the Board would only have to establish that there is “reasonable cause” to believe that unfair labor practices have occurred and determine whether injunctive relief is just and proper. The standard allows the Board to establish reasonable cause simply by showing that its legal theory was substantial and not frivolous.
The just and proper standard, according to the Sixth Circuit, would be established if injunctive relief was necessary to return the parties to the status quo pending the Board’s proceedings in order to protect the Board’s remedial powers under the Act.
The U.S. Supreme Court Adopts Traditional Four-Factor Test
The U.S. Supreme Court ruled that when considering the Board’s application for a preliminary injunction under Section 10(j), district courts must apply a traditional four-factor test, which includes a showing that:
- “a plaintiff is likely to succeed on the merits;
- that the plaintiff is likely to suffer irreparable harm in the absence of preliminary relief;
- the balance of equities tips in the petitioner’s favor; and
- an injunction is in the public interest.”
The Court clarified that without a clear command from Congress, courts must adhere to the traditional four-factor test it had previously articulated in Winter v. Natural Resources Defense Council, Inc., 555 U.S. 7 (2008).
The U.S. Supreme Court’s Reasoning
The U.S. Supreme Court noted that when Congress empowers courts to grant equitable relief, there is a strong presumption that courts will exercise that authority in a manner consistent with traditional principles of equity.
The Court stated that a preliminary injunction is an extraordinary equitable remedy that is never awarded as a matter of right. The Court also explained that there is nothing in the text of Section 10(j) to overcome the presumption that the four traditional criteria govern a preliminary injunction request by the Board. When traditional requirements for injunctive relief are not required under a particular law, the Court said there typically is expressed language in the governing statute indicating as much.
In this particular case, the U.S. Supreme Court found the reasonable cause standard advocated by the Board went far beyond simply “fine-tuning” the traditional criteria employed by courts in awarding injunctive relief.
The Court noted that the standard advocated by the Board “substantially lowers the bar” for securing a preliminary injunction by requiring courts to yield to the “Board’s preliminary view of the facts, law and equities.” In fact, the Court noted that under the Sixth Circuit standard, the Board “need not convince the Court of the validity of [its] theory of liability, as long as the theory is substantial and not frivolous.”
The majority opinion noted that “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.”
The Court also dispelled the notion that the traditional standard supplants the Board’s role and authority in effectuating a remedy. The U.S. Supreme Court noted that the Board continues to be able to exercise authority to implement the Act, conduct its own proceedings, and enter remedies consistent with those proceedings.
Justice Jackson concurred in using the traditional test requirement but disagreed that district courts are given too much discretion to ignore the underlying purpose of the Act and the Board’s role in enforcing it.
She noted what she called the “dubious history” of over-involvement by courts in awarding injunctive relief in labor disputes. Given the Board’s critical role in the collective bargaining process, Jackson would also afford greater deference to the Board in applying the four-factor test.
How Does the U.S. Supreme Court’s Ruling Impact Employers?
The U.S. Supreme Court ruling is good news for employers as traditional testing criteria will continue to be required before the Board can seek extraordinary relief.
