The Supreme Court Rejects a Watered-Down Approach to Preliminary Injunctions

On June 13, 2024, the United States Supreme Court held that when considering the National Labor Relation Board’s (the “Board” or “NLRB”) request for a preliminary injunction under Section 10(j) of the National Labor Relations Act (the “NLRA”), district courts must apply the traditional four-factor test for injunctive relief rather than a less stringent two-factor test used by many courts in evaluating the Board’s injunction requests.  Starbucks Corp. v. McKinney, No. 23-367 (See here).

McKinney involved the so-called “Memphis Seven,” former Starbucks employees whose employment was terminated after they invited a news crew to visit their Starbucks store after business hours to promote their unionizing efforts.  Following the employees’ termination, the NLRB issued a complaint alleging that Starbucks violated the NLRA by firing the employees in retaliation for the employees’ pro-union support.  The Board also sought a preliminary injunction that would require Starbucks to reinstate the employees.

Section 10(j) authorizes federal district courts with jurisdiction “to grant to the Board… such temporary relief… as it deems just and proper” during the pendency of the Board’s administrative proceedings.  29 U.S.C. § 160.  In determining whether the Board is entitled to a preliminary injunction, courts have taken different approaches.  Some courts have applied the traditional four-part test for evaluating preliminary injunctions, which requires the party seeking an injunction to make a clear showing of a likelihood of success on the merits, that irreparable harm is likely in the absence of preliminary relief, that the balance of equities tips in favor of an injunction, and that an injunction is in the public interest.  Alternatively, other courts applied a significantly less onerous two-part test that only requires the Board to demonstrate there is “reasonable cause” to believe that unfair labor practices occurred, and that injunctive relief is just and proper.  Using this lowered standard, the district court granted the Board’s preliminary injunction against Starbucks and the Sixth Circuit Court of Appeals affirmed.  Starbucks appealed to the Supreme Court, arguing that the traditional four-part test is the correct standard.

Agreeing unanimously with Starbucks, the Supreme Court reasoned Section 10(j)’s statutory context does not compel the watered-down approach used by the Sixth Circuit.  The Court explained that, when granting equitable relief, there is a strong presumption courts will exercise this authority in a manner consistent with traditional principles of equity.  The Court rejected the Board’s assertion that it was entitled to deference or a “watered-down” test when it sought injunctive relief, holding that the traditional four-factor test encompassed the relevant equitable principles that must be considered when reviewing the Board’s requests for preliminary injunction under Section 10(j).

In recent years, Section 10(j) injunctions have been an increasingly important weapon in the Board’s arsenal.  Under the test used by the Sixth Circuit in this case, the Board expected to be granted injunctive relief when requested.  This decision will now challenge the NLRB to make a clear showing that it is likely to succeed on the merits and that irreparable harm is likely to occur, a much higher burden.