Supreme Court backs Starbucks over Biden labor board in 'Memphis 7' union case

WASHINGTON – The Supreme Court sided with Starbucks on Thursday in a high-profile labor dispute, issuing a ruling that could set back the Biden administration's push to strengthen unions.

The decision is a disappointment for the labor movement at a time when it is winning significant union fights and is benefitting from the Biden administration’s aggressive National Labor Relations Board.

"It underscores how the economy is rigged against working people all the way up to the Supreme Court," said Lynne Fox, president of Workers United, the union negotiating with Starbucks.

The decision could make it harder to force companies to reinstate workers who were fired for union organizing. The court ruled that judges have to consider more factors before ordering employers to reinstate fired workers.

The National Labor Relations Board has relied on court orders when it thinks a company is trying to illegally squelch organizing campaigns.

A corporate backlash to union organizing?

Starbucks had the support of business groups, including the Chamber of Commerce and the National Association of Manufacturers, which had urged the court to intervene because of the agency’s “aggressive anti-employer agenda.”

Labor sympathizers saw the case as part of a corporate backlash to the success of Biden's labor board, and to a rise in union organizing – a backlash that includes recent legal filings by Starbucks, SpaceX, Amazon, and Trader Joe’s challenging the constitutionality of the NLRB.

After Starbucks fired seven workers at a Tennessee coffee shop – a group who became known in union lore as the “Memphis 7” – the union complained to the NLRB.

Starbucks said the workers were fired for violating company rules, including when they invited a news crew into a closed coffee shop without authorization.

But the NLRB considered it likely Starbucks acted improperly and asked a court to order the workers be rehired while the board undertook a lengthy review to reach a final decision.

It was one of a dozen court orders the NLRB sought against Starbucks in the past two years.

The global coffee giant took this one to the Supreme Court, arguing the judge should have used a tougher test.

The factors considered were whether there was reasonable cause to believe that Starbucks had committed unfair labor practices and whether the temporary relief was “just and proper," terms included in the National Labor Relations Act.

The Justice Department argued that Congress set a limited role for courts because lawmakers didn’t want “wide-ranging district court involvement in labor disputes.”

Other courts, however, evaluate NLRB requests using the traditional four-factor tests for injunctions not related to labor law. 

The Supreme Court said Thursday that "absent a clear command from Congress," the four-factor test must be used and the district court must do-over its decision about the Memphis 7.

Starbucks said it's important to have what it called "consistent federal standards." The coffee giant also reiterated its goal of ratifying contracts with unionized workers this year.

Fox, the president of Workers United, said it's difficult for Starbucks to build a productive relationship with employees when it attacked one of the few mechanisms workers have to defend themselves.

A spokesperson for the National Labor Relations Board declined to comment on the ruling but pointed to a previous comment from the board’s top lawyer that the agency has “been very successful” getting court injunctions regardless of the test used.

The case, which was argued in April, is Starbucks v. McKinney.