Traditional Equitable Principles Guide NLRB Section 10(j) Preliminary Injunctions

Supreme Court Makes it More Difficult for the NLRB to Obtain Preliminary Injunctions

It will now be more difficult for the National Labor Relations Board to obtain preliminary injunctive relief on behalf of aggrieved employees in pending Board cases. On June 13, 2024, in Starbucks Corporation, Petitioner v. Kathleen McKinney, Regional Director, the United States Supreme Court determined that courts must evaluate petitions for § 10(j) preliminary injunctions made by the National Labor Relations Board (“NLRB”), using the well-known traditional four-factor test, which requires a plaintiff to make a clear showing that: (1) the plaintiff is likely to succeed on the merits; (2) is likely to suffer irreparable harm in the absence of preliminary relief; (3) the balance of equities tips in the plaintiff’s his favor; and (4) that the requested injunction is in the public interest. Winter, 555 U.S. 7, 20-22.  This holding is expected to make it much more difficult for the NLRB to obtain quick preliminary injunctions against employers during the pendency of administrative enforcement proceedings, which proceedings often take years to bring to a final resolution. 

The Starbucks Case

The decision arises out of a much-publicized group of Starbucks employees seeking to unionize in 2022.Six employees at a Memphis, Tennessee Starbucks location announced plans to unionize and created an organizing committee. Several employees invited a local television station news crew to the store, after hours and in violation of company policy, to support their efforts to unionize, resulting in termination of several employees. The union working with the employees filed charges with the NLRB, alleging unlawful interference with the employees’ right to unionize and discrimination against union supporters. The NLRB then issued an administrative complaint against Starbucks, which resulted in the Regional Director filing a §10(j) petition in the United States District Court for the Western District of Tennessee and seeking a preliminary injunction that would require Starbucks to reinstate the terminated employees, among other requested relief.

The National Labor Relations Act (the “Act”) allows the NLRB to bring in-house enforcement proceedings against employers for engaging in alleged unfair labor practices. Section 10(j) of the Act authorizes the NLRB to seek, and a federal district court to issue, a preliminary injunction while administrative enforcement proceedings take place. The statutory language stated an injunction could issue as the district court deems “just and proper.”  A circuit split emerged regarding the standard for when an injunction is “just and proper,” and whether § 10(j) created a special, relaxed standard for issuance of an injunction. The question presented to the United States Supreme Court by the Starbucks case was whether the traditional four-factor test for a preliminary injunction established in Winter v. Natural Resources Defense Council, Inc., 555 U.S. 7 (2008), governs the NLRB’s petitions under §10(j), which the Supreme Court ultimately answered in the affirmative. 

District Court’s Analysis

In considering the NLRB’s § 10(j) petition, the district court applied a two-part test previously established by the Sixth Circuit. The Sixth Circuit test requires the Court to determine whether “there is reasonable cause to believe that unfair labor practices have occurred,” and whether injunctive relief is “just and proper.” See McKinney v. Ozburn-Hessey Logistics, LLC, 875 F.3d 333, 339 (2017). Here, the District Court granted an injunction to the NLRB under this test, which decision was subsequently affirmed by the Sixth Circuit.  Under the Sixth Circuit’s standard, the Board only needed to determine that the unfair labor practice charge appeared to have merit.  The Court had previously held that reasonable cause exists where a charging party’s legal theory was substantial and not frivolous.  As the Court pointed out, it would be difficult to imagine a scenario in which a district court would find that a party’s legal theory was frivolous.

Analysis of the Majority Opinion

The Supreme Court first noted that a preliminary injunction is an “extraordinary” equitable remedy that is “never awarded as of right.” Winter, 555 U. S., at 24. In fact, it is well-established that the purpose of a preliminary injunction is to preserve the relative positions of the parties until a trial on the merits can be held. Generally, absent a clear mandate from Congress, courts must adhere to the traditional four-factor Winter test. The Supreme Court ultimately determined that nothing in the text of §10(j) overcomes the presumption that the four traditional criteria govern a preliminary-injunction request by the NLRB.

Again, §10(j) authorizes a district court “to grant to the Board such temporary relief . . . as it deems just and proper.” The Supreme Court did not understand this statutory directive to jettison the normal equitable rules. Rather, the Court explained the phrase “just and proper” calls upon the discretion that courts have traditionally exercised when faced with requests for equitable relief.

The Supreme Court pointed out that §10(j)’s text does not compare to the language that Congress has used in the past when it intended to depart from the traditional equitable rules. The Court noted historically some statutes have increased the burden for obtaining an injunction, while others expressly relieved the party moving for an injunction from showing that he or she can satisfy one of the traditional criteria.  For example, there is a lower standard where the President and Attorney General petition the district court to enjoin strikes in certain industries or when there is a threat to national health or safety.  At the other end of the spectrum, there is a heightened showing in criminal appeals dealing with prison conditions. Trademark cases also generally have a relaxed standard given the interests at stake.

To the contrary, §10(j), however, does not include any specific directive that demonstrates Congress intended to alter the traditional four-part test. For this reason, the Supreme Court held, because nothing in the text of §10(j) overcomes the presumption that traditional equitable principles apply, district courts considering the NLRB’s request for a preliminary injunction are in fact required to apply the Winter four-part test.

In arguing its cause, the NLRB focused on the fact Congress made the Board responsible for deciding charges of unfair labor practices. Further, it pointed out Congress required that courts of appeals review the NLRB’s final decisions with due deference. The NLRB argued these factors support the application of the Sixth Circuit’s less exacting reasonable-cause standard. Rejecting the Board’s argument, the Supreme Court cautioned the Sixth Circuit’s reasonable-cause standard substantively lowers the burden for obtaining a preliminary injunction by requiring courts to defer to the NLRB’s preliminary view of the facts, law, and equities.

The NLRB further argued the traditional four factor test risks replacing the Board’s adjudicatory authority by allowing the district court to conduct an independent assessment of the merits and equitable factors. While the Supreme Court acknowledged that §10(j) proceedings are different from traditional preliminary-injunction proceedings in that the NLRB and not the district court, adjudicate the claims, the Supreme Court rejected this NLRB’s concern, noting no matter what evidence the district court considers or how deep it dives into the merits, the NLRB remains free to reach its own legal conclusions and develop its own record in its administrative proceedings. Further, it held, since irreparable harm and the other equitable factors are not part of the unfair-labor-practice claim, the district court’s assessment of those factors is wholly irrelevant to the NLRB’s adjudicatory authority.

Ultimately, the Supreme Court held that district courts must apply the traditional four factors articulated in Winter when considering the NLRB’s requests for a preliminary injunction under §10(j).

Key Takeaways

This Supreme Court’s decision is viewed as a win for employers, weakening the NLRB’s ability to easily obtain preliminary injunctions in favor of employees, while lengthy administrative enforcement proceedings are pending.

While district courts may now be less likely to grant injunctive relief, the decision is unlikely to deter the Board from seeking injunctions in the future.  In 2022, the Board’s general counsel Jennifer Abruzzo called 10(j) injunctions among the most important tools for enforcing labor rights.  She encouraged the aggressive use of 10(j) injunctions to spur voluntary interim settlements to maintain the status quo pending Board proceedings.