Starbucks leads business opposition to pro-worker labor board

In the Biden-era, the National Labor Relations Board has pursued the boldest enforcement agenda in recent memory to bolster worker protections. The board, which referees disputes between employers and workers, has expanded pathways for forming a union and made it easier for employees to challenge workplace practices. It also has broadened the types of remedial compensation workers can receive if an employer treats them unfairly.

The NLRB has brought a dozen cases seeking court injunctions against Starbucks alone, challenging the coffee chain’s responses to unionization efforts.

With an aggressive board, union organizing has increased across the U.S. In 2023, more than 100,000 workers organized in NLRB-conducted elections, the largest in a single year since 2000.

The organizing push in recent years has expanded beyond traditional manufacturing settings into the technology sector, major retail chains and other areas.

“The amount of union activity is surging where you would not expect to see it," said Steven Suflas, who practices employment law at Holland & Hart. “And some of the companies suing have acrimonious relationships with the NLRB these days. You hit me, I hit you. It’s a recipe for chaos."

From Memphis coffeehouse to high court

The Starbucks case at the Supreme Court is an outgrowth of an employee unionizing campaign at a store in Memphis, Tenn. The union alleged the company engaged in a series of unlawful tactics to stifle the campaign, culminating with the firing of seven union activists. The NLRB filed a complaint alleging unfair labor practices and asked a federal court to issue a temporary injunction to restrain Starbucks. A judge among other things ordered the interim reinstatement of the terminated employees. An appeals court affirmed that order.

Starbucks said the fired employees broke several company policies, including by allowing a news crew into the store after hours to promote the unionization drive. The company petitioned the Supreme Court to hear the case on the grounds that some lower courts—including the judges in this litigation—have followed a legal standard that makes it too easy for the NLRB to win injunctions.

The company said that if the courts had followed a more traditional and stringent standard, “We believe this case would have come out differently."

William Gould, a former NLRB chair and law professor at Stanford University, said the specific legal question before the court—whether a two-part or four-part legal test should be used—may not have a huge impact, but he said the justices’ interest in the case has broader significance.

“The fact that they took this case indicates they are listening to Starbucks, and they think the board should somehow be reined in," he said. “The Supreme Court’s attention suggests in some way that it might make it more difficult for this particular provision to be employed in the future."

Starbucks recently agreed to new discussions with Workers United on a labor agreement. It will resume collective bargaining talks with the union this week. Workers at hundreds of stores have voted to unionize.

Companies lawyer up

The Supreme Court case comes as some companies are making arguments against the NLRB in litigation, including that the board’s entire structure is unconstitutional.

SpaceX, which faces a board complaint for allegedly firing workers who criticized Elon Musk, is pressing this claim in a federal lawsuit against the board, a five-member body that currently has three Democrats and one Republican, with one seat vacant. Most initial labor complaints and election petitions are handled by regional administrative law judges.

The company said this structure violates its right to a jury trial and says there should be more executive oversight of board members.

In defending labor board complaints against them, Amazon.com, Trader Joe’s and Starbucks are also making this argument.

The NLRB has said those claims are meritless. The agency also points to a 1937 Supreme Court decision that upheld the constitutionality of the board.

In other recent litigation, the board has seen its share of both wins and losses. It beat Starbucks in another case in March, when the U.S. Court of Appeals for the D.C. Circuit upheld a decision that found a store committed a labor violation when it stopped workers from distributing union buttons.

Among the NLRB’s defeats, the New Orleans-based Fifth U.S. Circuit Court of Appeals ruled the board acted irrationally when it concluded that Tesla violated employees’ rights by barring them from wearing union T-shirts instead of company-issued uniforms at work.

Critical time for NLRB

The NLRB’s policies and enforcement can vary considerably between administrations. The pendulum swing has been particularly pronounced since President Biden’s nominees replaced the leadership team put in place by former President Donald Trump.

“We are in a critical moment," NLRB General Counsel Jennifer Abruzzo said in an interview, citing workers’ interest in organizing. “You’re seeing deep-pocketed, low-road employers who are breaking the law, and then trying to prevent us from enforcing the statute. And unfortunately, they are doing it because they have money."

Abruzzo, a longtime NLRB official who took her post after a stint with the Communications Workers of America, has issued guidance memos expanding the range of ways workers should be protected. She has pushed for college athletes to have the right to organize, to allow workers to use their work email for organizing and to prohibit employers from holding mandatory antiunion meetings.

Speaking on a public panel this month, Abruzzo said the agency won’t succumb to pressures from the lawsuits.

“We have to be able to operate," Abruzzo said. “Even some who focus on employer interests have publicly said there would be chaos in the workplace without a functioning NLRB, and I completely agree with that."

Write to Erin Mulvaney at erin.mulvaney@wsj.com