The National Labor Relations Board (NLRB or Board) has been using a caffeinated approach to challenge employers in unfair labor practice disputes, with Section 10(j) injunction petitions at the top of the menu, often resulting in drastic relief imposed by a court, such as reinstatement of terminated employees to maintain the “status quo,” while the case works its way through the administrative process. The NLRB has expressed no plans to cool off its 10(j) injunction efforts despite the U.S. Supreme Court recently serving a win for employers facing NLRB petitions under 10(j) of the National Labor Relations Act (NLRA). However, fortunately for employers, the decision adopts and unifies the more stringent traditional “four-factor” analysis courts must apply when considering whether to grant preliminary injunctions against employers under the NLRA. Employers may still need to think long and hard about the consequences of taking actions that could invite a 10(j) petition, such as disciplining or discharging employees who violate company policy, but they can at least expect a more standard approach by courts when evaluating whether or not a preliminary injunction is appropriate.
Building Momentum of Section 10(j) Injunctions
Section 10(j) of the NLRA authorizes the NLRB to seek an injunction against employers and unions in federal court to stop an alleged unfair labor practice while the case is being litigated before administrative law judges and the Board. Section 10(j) injunctions have become more commonplace over the past few years, with the NLRB wielding them as a powerful tool to thwart the discharge of, or other retaliatory actions against, employees, including during organizing campaigns where the NLRB contends that employer threats or other coercion may lead to irreparable harm to employees’ Section 7 rights. Essentially, the NLRB has launched its own campaign to deter potential violations of the NLRA before they escalate into unlawful terminations or other adverse actions, by actively seeking injunctions against employers under the guise of protecting collective bargaining and other employee rights. Injunctions are significant remedies that can have a serious and detrimental impact on employers.
The Starbucks Decision
In Starbucks v. The National Labor Relations Board, the Supreme Court resolved a split among the federal circuit courts and clarified what the NLRB must prove before it can obtain a preliminary injunction against employers prior to fully litigating allegations contained in an unfair labor practice complaint. In that case, the employer fired multiple employees after they announced plans to unionize and had invited a news crew from a local television station to visit the store after hours to promote their unionizing effort. The employer contended that the employees were fired for violating company policy. However, the NLRB filed an administrative complaint against the company, alleging that it had engaged in unfair labor practices, and then filed a petition under Section 10( j) seeking a preliminary injunction to include, among other relief, reinstatement of the fired employees. The 10(j) injunction was granted by the lower court, using a two-part test that asked whether “there was reasonable cause to believe that unfair labor practices have occurred” and whether the injunction is “just and proper.” The Supreme Court rejected the two-part “reasonable cause” test in favor of a more stringent — but traditional — “four-factor” test that, when applied, resulted in the Court vacating the 10(j) injunction.
The four-factor test requires a showing that: (1) the plaintiff is likely to succeed on the merits; (2) the plaintiff is likely to suffer irreparable harm in the absence of preliminary relief; (3) the balance of equities tips in the plaintiff’s favor; and (4) an injunction is in the public interest.
The Supreme Court held that the two-part “reasonable cause” standard was too lenient and thus gave too much deference to the NLRB’s factual determinations and legal theories to support the issuance of a preliminary injunction. In doing so, the Supreme Court noted that a preliminary injunction is an “extraordinary remedy that is ‘never awarded as of right,’” but instead is applied sparingly “to preserve the relative positions of the parties until a trial on the merits can be held.”
The NLRB’s Commitment After the Starbucks Decision and Implications for Employers
Following the Starbucks decision, the NLRB’s General Counsel released Memorandum GC 24-05 confirming the Board’s commitment to continuing to aggressively seek Section 10(j) injunctions in “appropriate cases.” Notwithstanding the NLRB’s persistence, the Starbucks decision — and the more uniform approach of applying the traditional four-factor test — places guardrails on the Board’s ability to obtain preliminary injunctions against employers. This ultimately may force the NLRB to be more selective in seeking preliminary injunctions under Section 10(j), thereby somewhat reducing the threat for employers.
As always, Akerman attorneys will continue to monitor changes in NLRB guidance and policies.
