US Supreme Court’s ruling on employees’ dismissal after unionising

On 13 June 2024, the Supreme Court of the United States ruled in a labour case concerning a dismissal due to union drives. The world's largest coffeehouse chain S. has dismissed seven employees for violating company policy after they announced plans to unionise and invited a news crew from a local television station to visit the S. store in order to promote their unionising effort. 

The union that collaborated with the employees filed charges with the National Labour Relations Board, an independent federal agency that protects the rights of private sector employees to improve their wages and working conditions. In particular, the union alleged that S. had unlawfully interfered with the employees' right to unionise and discriminated against union supporters. Following the completion of an investigation, the National Labour Relations Board issued a complaint against S. and sought a preliminary injunction for the duration of the administrative proceeding.

In accordance with the provisions of paragraph 10(j) of the National Labour Relations Act, a preliminary injunction represents a legal mechanism employed by the National Labour Relations Board to compel employers to take or refrain from specific actions.

The lower courts determined that the National Labour Relations Board was entitled to a preliminary injunction and ordered a reinstatement of the seven employees.

The legal question that was referred to the Supreme Court centred on the legal standard that federal courts must use to issue a preliminary injunction requested by the National Labour Relations Board. In this sense, judges have been employing disparate standards for determining when to issue injunctions requiring the reinstatement of employees.

The Court ruled that the traditional preliminary injunction test should have been applied to the National Labour Relations Board, rather than the two-part test that some courts have applied. The District Court applied the two-part test which requires the court to determine whether «there is reasonable cause to believe that unfair labour practices have occurred», and whether injunctive relief is «just and proper». Nevertheless, some courts apply the four-part test for preliminary injunctions which requires the plaintiff to demonstrate that «he's 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 favour, and that an injunction is in the public interest».

The Court's ruling is likely to result in a reduction in the number of preliminary injunctions requested by the National Labour Relations Board considering that it may be more challenging for the latter to take action on behalf of employees dismissed during union drives.