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In a significant ruling, the Supreme Court has overturned the NLRB and Sixth (and other) Circuit’s approach to evaluating preliminary injunctions under Section 10(j) of the National Labor Relations Act (“NLRA”). This decision, stemming from the high-profile case of Starbucks v. McKinney, again declares the power of the courts over federal executive branch agencies.

Background

The case originated when Starbucks terminated seven employees allegedly for their pro-union stance. The National Labor Relations Board (“NLRB”) sought a preliminary injunction under Section 10(j) to force Starbucks to rehire those employees until the underlying charge of illegality was resolved. The federal District Court granted the injunction.

On appeal, the Sixth Circuit upheld the injunction applying its unique two-part test used by the NLRB. This test requires demonstrating “reasonable cause to believe that unfair labor practices have occurred,” and that injunctive relief is “just and proper.”

Circuit Split and the Winter Test

The Sixth Circuit’s test has been a point of contention due to its deviation from the more widely adopted Winter test, which is used in other judicial circuits for assessing all preliminary injunctions. The Winter test, named after the 2008 Supreme Court case Winter v. Natural Resources Defense Council, Inc., uses a four-part analysis. It requires plaintiffs to clearly demonstrate:

1. They are likely to succeed on the merits;
2. They are likely to suffer irreparable harm without preliminary relief;
3. The balance of equities tips in their favor; and
4. An injunction is in the public interest.

This discrepancy in the appropriate test led to a circuit split. The Supreme Court ended the split.

Supreme Court’s Decision

In its ruling, the Supreme Court rejected the Sixth Circuit’s approach, emphasizing the importance of a uniform standard across all jurisdictions. The Court favored the Winter test, arguing it is more in accord with the traditional, rigorous framework for preliminary injunctions. The Court reasoned that,

A preliminary injunction is an extraordinary equitable remedy that is never awarded as of right . . . .  The default rule is that a plaintiff seeking a preliminary injunction must make a clear showing that he is likely to succeed on the merits, that he is likely to suffer irreparable harm in the absence of preliminary relief, that the balance of equities tips in his favor, and that an injunction is in the public interest. These commonplace considerations applicable to cases in which injunctions are sought in the federal courts reflect a practice with a background of several hundred years of history.

(Citations and quotations removed.) Taking it further, the Court declared, “absent a clear command from Congress, courts must adhere to the traditional four-factor test.” After analyzing the text of 10(j), the Court concluded there was no Congressional intent to deviate.

Implications of the Ruling

The Supreme Court’s decision has significant implications for employers, employees, labor unions, and the NLRB. By endorsing the Winter test, the Court has (in some jurisdictions) raised the bar for obtaining preliminary injunctions under Section 10(j), potentially making it more challenging for the NLRB to secure temporary relief in cases of alleged unfair labor practices.

Additionally, the Supreme Court’s ruling is a clear message: even if the NLRB endorses liberal labor law interpretations, the conservative judiciary remains in place as a check. This flexing of judicial muscle is a trend we have recently seen from the Court and expect it to continue for years to come.

Brody and Associates regularly advises management on complying with the latest local, state and federal employment laws.  If we can be of assistance in this area, please contact us at info@brodyandassociates.com or 203.454.0560