A ‘Grande’ Decision for Employers: The Supreme Court Raises the Bar on Section 10(j) Injunctions

Four months ago, we told you about a brewing labor law issue - whether the National Labor Relations Board (NLRB or Board) must satisfy the traditional preliminary injunction standard to secure an injunction against an employer under Section 10(j) of the National Labor Relations Act. On June 13, in Starbucks v. McKinney, the Supreme Court answered yes, rejecting a more lenient standard adopted by most of the circuit courts of appeal.

Under the standard endorsed by the Court, a Section 10(j) injunction is only available when the plaintiff clearly shows that (1) there is a likelihood of success on the merits, (2) there is a likelihood of irreparable harm absent preliminary relief, (3) the balance of equities favors an injunction, and (4) an injunction is in the public interest. The Supreme Court in Starbucks focused on the first element - the likelihood of success - and held that courts must conduct the same exacting search applicable to ordinary requests for preliminary injunctions. Justice Clarence Thomas wrote the opinion for the eight-member majority, with Justice Ketanji Brown Jackson concurring in the result while issuing a partial dissent advocating for deference to the NLRB in such matters.

Takeaways

• The Supreme Court set forth a standard that makes it more difficult for the NLRB to earn a Section 10(j) injunction. Under the two-step standard applied by various lower courts, the NLRB only needed to prove that its legal theory was substantial and not frivolous, or that reasonable cause existed to believe that the employer committed an unlawful labor practice. Now the Board must clearly show that it is likely to succeed on the merits. Moreover, courts may no longer defer to the NLRB's view of the facts and theory of the case; instead, courts must conduct an exacting search - as they do for all preliminary injunctions - based on the evidence.

• The Starbucks decision is a win for employers. The heightened standard should ease the settlement pressures imposed by threatened Section 10(j) injunctions, and it should also curb increased Section 10(j) activity (which the Board's General Counsel previously stated she wished to pursue). Moreover, the uniform standard will preclude the Board from using Section 10(j) to seek nationwide injunctions in circuits that had applied the deferential approach.

• The Supreme Court's new standard will also make it more costly to earn a Section 10(j) injunction. Both parties - the NLRB and employer - will likely seek significant amounts of discovery before a Section 10(j) injunction is entered, driving up costs and prolonging proceedings. This additional evidence will likely lead to longer hearings before the court, which must conduct an exacting review of the record before granting any relief.