The recent lawsuit brought by Elon Musk’s SpaceX challenging the constitutionality of the National Labor Relations Board (NLRB) might seem to have little to do with Starbucks. The Seattle-based coffee giant has publicly distanced itself from SpaceX’s frontal assault on the nearly 90-year-old labor law regulator. (See Elon Musk’s War on the New Deal—and Democracy by Caroline Fredrickson, the Georgetown Law Center professor, in the Washington Monthly.)
However, when Starbucks argued before the Supreme Court last week, the two companies seemed to be aiming at a common adversary. The SpaceX case uses constitutional theories of due process and the appointment of members of the NLRB to try to avoid legal repercussions for its attempt to stymie unionization.
Last week, by contrast, Starbucks was before the Roberts Court challenging the NLRB’s use of its statutory authority to remedy what the panel deems to be ongoing unfair labor practices at the 53-year-old beverage giant. The federal agency fulfills this function by using a typical tool in a lawyer’s toolbox—the status quo (or preliminary) injunction. Under Section 10(j) of the 1935 National Labor Relations Act, the NLRB can ask a federal court to temporarily block employers from engaging in unfair and illegal labor practices (such as firing workers organizing unions) until the dispute can be settled. The arguments in Starbucks Corp. v. McKinney, the company’s challenge to an injunction reinstating the self-named “Memphis 7,” while an NLRB administrative judge decides whether it violated federal labor law by retaliating against the employees for their union organizing drive. Over the past four years, Starbucks, with a market capitalization hovering around $100 billion, has swatted back various attempts to bargain with its some 381,000 employees, although a framework to start bargaining may be in the works in exchange for settling pending unfair labor practices such as this one.
Meanwhile, the SpaceX suit has been trying to find a home in the friendly confines of the Fifth U.S. Circuit Court of Appeals, arguably the most conservative circuit in the country, instead of in California, home of the Ninth U.S. Circuit Court of Appeals. Much to SpaceX and Musk’s probable chagrin, it looks like the case may land in the Ninth Circuit, believed by many conservatives as the equivalent of a workers’ paradise, where the NLRB would surely win, at least until the U.S. Supreme Court gets involved.
The SpaceX suit challenging the NLRB’s right to exist would not be new if it landed at the Supreme Court. For generations, plutocrats have hated the statute that gave workers collective bargaining power when a union represents more than 50 percent of employees in a specified workplace. Employers challenging the very foundations of the New Deal made the NLRB (and its precursor, the National Recovery Administration or NRA) a cause célèbre of supposed government overreach and denial of liberty, even though, or perhaps because, the statute’s preamble acknowledged that employees lack freedom of contract if they do not have the collective power that organized employees do. The Court upheld the New Deal agency’s existence in 1937—and the premise that the government could assist in leveling the bargaining imbalance between employers and employees.
So, it was an ironic twist this week when Starbucks came into the board seeking relief from the injunction that they argued tilted the playing field against them–an injunction upheld by the conservative Sixth Circuit Court of Appeals. Armed with the 6th Circuit’s ruling, the world’s largest coffee purveyor, with 17,068 Starbucks coffee shops in the United States, claims it is a victimized employer, not unlike SpaceX, whose due process rights are being steamrolled by the NLRB. In fact, corporations worried about injunctions brought by the NLRB have pretty good odds. Of the nearly 20,000 charges of unfair labor practices the NLRB received last year, it only went to court seeking temporary relief 15 times—and then actually obtained the injunction only about half the time. Even when the Board prevails, there is no guarantee that the workers will ever get a union or a collective bargaining agreement, as numerous examples around the country show, including one in Las Vegas where the court-ordered bargaining has yet to commence because of the seemingly endless right of companies to appeal.
Unlike the traditional preliminary injunction that goes back to English common law, the 10(j) injunction was created by Congress in 1947 as an interim measure for different, more modern reasons. What happens when a dispute runs from investigation to complaint to adjudication that takes so long that the fired workers have lost interest in the union? Won’t the employer have won even if guilty of unfair labor practices in firing the workers? This is precisely why labor law gives the board the option to seek a temporary injunction if a federal trial court deems it to be “just and proper” to maintain the status quo, whether by requiring worker reinstatement or forcing bargaining with a union which has not yet won an NLRB-supervised election. Otherwise, Congress allowing for “temporary relief or restraining order” if found by the federal trial court to be “just and proper” would be meaningless, even dangerous, gloss on the usual four-part test for a preliminary injunction.
Unsurprisingly, the NLRB is among the few federal agencies Congress designed with a status quo built-in injunction remedy. This is because the tripartite design of the NLRB—investigator, prosecutor, and adjudicator—is unique. The board is a repository of labor law knowledge, a labor-management mediator, and a regulatory agency with a statutory mandate of promoting collective bargaining. Its design has maddened employers through 15 Democratic and Republican administrations since 1935, particularly when those who hold the reins at the NLRB board take seriously the preamble of the Act—”to promote the practice of procedure of collective bargaining.” If the board puts a thumb on the scale of employees who want to organize, it’s because Congress explicitly put it there.
The argument in the Supreme Court this week was: Do the courts let the NLRB’s thumb on the scale weigh too heavily against besieged employers? Powerhouse Supreme Court advocate Lisa Blatt argued that Starbucks merely seeks a “level playing field.” Technically, the case concerns whether the Sixth Circuit applied the proper standard in allowing the injunction against Starbucks’s firing of the Memphis 7. But, as oral arguments concluded, the justices were still divided (albeit in a lopsided 8-1 or 7-2 fashion) about whether the NLRB is seeking too much deference from the courts or whether, like administrative agencies such as the Environmental Protection Agency on climate change or the Department of Education on student debt relief, have too much power.
Unfortunately, the Court has been unwilling to give the NLRB any deference in recent cases. Just two years ago, the Court allowed a lawsuit by a different employer, a cement company called Glacier Northwest, against a Teamster local in the Seattle area for allegedly injurious actions it took during a short strike. As I wrote for this publication about the Glacier Northwest opinion, the real target in that case, and possibly the Starbucks case, at least for some Justices, seems to be the existence of the administrative state itself.
Only Justice Ketanji Brown Jackson’s dissent in Glacier Northwest represented the kind of full-throated endorsement of the NLRB’s particular expert role in determining unfair labor practices as a reason not to treat the employer’s lawsuit “just like any other tort.” Unfortunately, it sounds again as if Jackson may be in dissent in another labor law decision—a minority voice pointing out the unique authority that Congress vested in the expert agency on labor matters.
During the oral argument in the Starbucks case, Justice Jackson asked Blatt, arguing for Starbucks, why, if Congress set up a labor board and gave it an injunctive remedy, the 10(j) order should be treated as any other “ordinary PI [preliminary injunction] that the district courts see?” Of course, the Williams & Connolly lawyer responded that the 10(j) order was just like another “PI.” Once again, though, it appears that Justice Jackson may be the lone dissenter when the Court rules this summer.
The stakes of the Starbucks argument and the resolution of the SpaceX lawsuit, in whatever court that rocket company ultimately reenters the atmosphere, obviously are of enormous importance to those companies and the Memphis 7, whose courageous actions may result in losing their Starbucks jobs permanently. As noted above, whatever the outcome of these cases, the labor movement will fight legally stacked decks as the United Automobile Workers (UAW) did stunningly in a right-to-work state by winning a landslide union election at Volkswagen in Chattanooga, Tennessee. While labor is making steps forward in organizing, workers’ confidence that the NLRB, and ultimately the Court, will effectively enforce their statutory rights to organize and bargain collectively will likely suffer.
