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U.S. Judge Blocks Rule Extending Reach of Labor Law to Franchisers

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The ruling upends the National Labor Relations Board’s move to broaden the standard for determining when a company is liable for labor law violations.A federal judge, siding with business lobbying groups, has blocked a rule that would broaden the reach of federal labor law to make big franchisers like McDonald’s responsible for the conditions of workers they have not directly hired.The judge, J. Campbell Barker of the United States District Court for the Eastern District of Texas, on Friday vacated a rule issued by the National Labor Relations Board determining when a company is a joint employer, making it liable under labor law for the working conditions of those hired by a franchisee or provided by a staffing agency. He said the rule, which was to go into effect Monday, was too broad.The decision by Judge Barker, a nominee of former President Donald J. Trump, keeps in place a more business-friendly standard for assigning legal liability.Unions and employees support the rule because it makes it easier to bargain for better conditions, while franchisers say it would disrupt their business model.The U.S. Chamber of Commerce, which led a group of business groups challenging the rule, applauded the ruling. “It will prevent businesses from facing new liabilities related to workplaces they don’t control, and workers they don’t actually employ,” Suzanne P. Clark, chief executive of the chamber, said in a statement.The labor board’s chair, Lauren McFerran, who was named by President Biden, said in a statement that the ruling was “a disappointing setback,” but “not the last word” on the joint-employer standard. If the board appeals the ruling, the case would move to the conservative U.S. Court of Appeals for the Fifth Circuit. The labor agency pushed for the case to be moved to Washington, but Judge Barker denied that request.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Supreme Court to Hear Starbucks Bid to Overturn Labor Ruling

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    The coffee chain has challenged a federal judge’s order to reinstate a group of union activists who were fired at a store in Memphis.The Supreme Court agreed on Friday to hear a case brought by Starbucks challenging a federal judge’s order to reinstate seven employees who were fired at a store in Memphis amid a union campaign there.Starbucks argued that the criteria for such intervention by judges in labor cases, which can also include measures like reopening shuttered stores, vary across regions of the country because federal appeals courts may adhere to different standards.A regional director for the National Labor Relations Board, the company’s opponent in the case, argued that the apparent differences in criteria among appeals courts were semantic rather than substantive, and that a single effective standard was already in place nationwide.The labor board had urged the Supreme Court to stay out of the case, whose outcome could affect union organizing across the country.The agency asks federal judges for temporary relief, like reinstatement of fired workers, because litigating charges of unfair labor practices can take years. The agency argues that retaliation against workers can have a chilling effect on organizing in the meantime, even if the workers ultimately win their case.In a statement on Friday, Starbucks said, “We are pleased the Supreme Court has decided to consider our request to level the playing field for all U.S. employers by ensuring that a single standard is applied as federal district courts.”The labor board declined to comment.The union organizing campaign at Starbucks began in the Buffalo area in 2021 and quickly spread to other states. The union, Workers United, represents workers at more than 370 Starbucks stores, out of roughly 9,600 company-owned stores in the United States.The labor board has issued dozens of complaints against the company based on hundreds of accusations of labor law violations, including threats and retaliation against workers who are seeking to unionize and a failure to bargain in good faith. This week, the agency issued a complaint accusing the company of unilaterally changing work hours and schedules in unionized stores around the country.The company has denied violating labor law and said in a statement that it contested the latest complaint and planned “to defend our lawful business decisions” before a judge.The case that led to the dispute before the Supreme Court involves seven workers who were fired in February 2022 after they let local journalists into a closed store to conduct interviews. Starbucks said the incident violated company rules; the workers and the union said the company did not enforce such rules against workers who were not involved in union organizing.The labor board found merit in the workers’ accusations and issued a complaint two months later. A federal judge granted the labor board’s request for an order reinstating the workers that August, and a federal appeals court upheld the order.“Starbucks is seeking a bailout for its illegal union-busting from Trump’s Supreme Court,” Workers United said in a statement on Friday. “There’s no doubt that Starbucks broke federal law by firing workers in Memphis for joining together in a union.”Starbucks said it was critical for the Supreme Court to wade into the case because the labor board was becoming more ambitious in asking judges to order remedies like reinstatement of fired workers.The labor board noted in its filing with the Supreme Court that it was bringing fewer injunctions overall than in some recent years — only 21 were authorized in 2022, down from more than 35 in 2014 and 2015.A Supreme Court decision could in principle raise the bar for judges to issue orders reinstating workers, effectively limiting the labor board’s ability to win temporary relief for workers during a union campaign.The case is not the only recent challenge to the labor board’s authority. After the board issued a complaint accusing the rocket company SpaceX of illegally firing eight employees for criticizing its chief executive, Elon Musk, the company filed a lawsuit this month arguing that the agency’s setup for adjudicating complaints is unconstitutional.The company said in its lawsuit that the agency’s structure violated its right to a trial by jury. More

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    Federal Regulators Seek to Force Starbucks to Reopen 23 Stores

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    The National Labor Relations Board says the locations were closed because of union organizing, violating federal law.Federal labor regulators accused Starbucks on Wednesday of illegally closing 23 stores to suppress organizing activity and sought to force the company to reopen them.A complaint issued by a regional office of the National Labor Relations Board argued that Starbucks had closed the stores because its employees engaged in union activities or to discourage employees from doing so. At least seven of the 23 stores identified had unionized.The agency’s move is the latest in a series of accusations by federal officials that Starbucks has broken the law during a two-year labor campaign.The case is scheduled to go before an administrative judge next summer unless Starbucks settles it earlier. In addition to asking the judge to order the stores reopened, the complaint wants employees to be compensated for the loss of earnings or benefits and for other costs they incurred as a result of the closures.“This complaint is the latest confirmation of Starbucks’ determination to illegally oppose workers’ organizing,” Mari Cosgrove, a Starbucks employee, said in a statement issued through a spokesperson for the union, Workers United.A Starbucks spokesman said, “Each year as a standard course of business, we evaluate the store portfolio” and typically open, close or alter stores. The company said it opened hundreds of new stores last year and closed more than 100, of which about 3 percent were unionized.The union campaign began in 2021 in the Buffalo, N.Y., area, where two stores unionized that December, before spreading across the country. More than 350 of the company’s roughly 9,300 corporate-owned locations have unionized.The labor board has issued more than 100 complaints covering hundreds of accusations of illegal behavior by Starbucks, including threats or retaliation against workers involved in union activity and a failure to bargain in good faith. Administrative judges have ruled against the company on more than 30 occasions, though the company has appealed those decisions to the full labor board in Washington. Judges have dismissed fewer than five of the complaints.None of the unionized stores have negotiated a labor contract with the company, and bargaining has largely stalled. Last week, Starbucks wrote to Workers United saying it wanted to resume negotiations.According to Wednesday’s complaint, Starbucks managers announced the closing of 16 stores in July 2022, then announced several more closures over the next few months.An administrative judge previously ruled that Starbucks had illegally closed a unionized store in Ithaca, N.Y., and ordered workers reinstated with back pay, but the company has appealed that decision.The new complaint was issued on the same day that Starbucks released a nonconfidential version of an outside assessment of whether its practices align with its stated commitment to labor rights. The company’s shareholders had voted to back the assessment in a nonbinding vote whose results were announced in March.The author of the report, Thomas M. Mackall, a former management-side lawyer and labor relations official at the food and facilities management company Sodexo, wrote that he “found no evidence of an ‘anti-union playbook’ or instructions or training about how to violate U.S. laws.”But Mr. Mackall concluded that Starbucks officials involved in responding to the union campaign did not appear to understand how the company’s Global Human Rights Statement might constrain their response. The rights statement commits Starbucks to respecting employees’ freedom of association and participation in collective bargaining.Mr. Mackall cited managers’ “allegedly unlawful promises and threats” and “allegedly discriminatory or retaliatory discipline and discharge” as areas where Starbucks could improve.In a letter tied to the report’s release, the chair of the company’s board and an independent director said the assessment was clear that “Starbucks has had no intention to deviate from the principles of freedom of association and the right to collective bargaining.” At the same time, the letter added, “there are things the company can, and should, do to improve its stated commitments and its adherence to these important principles.” More

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    Affirmative Action Ruling May Upend Diversity Hiring Policies, Too

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    The Supreme Court decision on college admissions could lead companies to alter recruitment and promotion practices to pre-empt legal challenges.As a legal matter, the Supreme Court’s rejection of race-conscious admissions in higher education does not in itself impede employers from pursuing diversity in the workplace.That, at least, is the conclusion of lawyers, diversity experts and political activists across the spectrum — from conservatives who say robust affirmative action programs are already illegal to liberals who argue that they are on firm legal ground.But many experts argue that as a practical matter, the ruling will discourage corporations from putting in place ambitious diversity policies in hiring and promotion — or prompt them to rein in existing policies — by encouraging lawsuits under the existing legal standard.After the decision on Thursday affecting college admissions, law firms encouraged companies to review their diversity policies.“I do worry about corporate counsels who see their main job as keeping organizations from getting sued — I do worry about hyper-compliance,” said Alvin B. Tillery Jr., director of the Center for the Study of Diversity and Democracy at Northwestern University, who advises employers on diversity policies.Programs to foster the hiring and promotion of African Americans and other minority workers have been prominent in corporate America in recent years, especially in the reckoning over race after the 2020 murder of George Floyd by a Minneapolis police officer.Even before the ruling in the college cases, corporations were feeling legal pressure over their diversity efforts. Over the past two years, a lawyer representing a free-market group has sent letters to American Airlines, McDonald’s and many other corporations demanding that they undo hiring policies that the group says are illegal.The free-market group, the National Center for Public Policy Research, acknowledged that the outcome on Thursday did not bear directly on its fight against affirmative-action in corporate America. “Today’s decision is not relevant; it dealt with a special carve-out for education,” said Scott Shepard, a fellow at the center.Mr. Shepard claimed victory nonetheless, arguing that the ruling would help deter employers who might be tempted overstep the law. “It couldn’t be clearer after the decision that fudging it at the edges” is not allowed, he said.(American Airlines and McDonald’s did not respond to requests for comment about their hiring and promotion policies.)Charlotte A. Burrows, who was designated chair of the Equal Employment Opportunity Commission by President Biden, was also quick to declare that nothing had changed. She said the decision “does not address employer efforts to foster diverse and inclusive work forces or to engage the talents of all qualified workers, regardless of their background.”Some companies in the cross hairs of conservative groups underscored the point. “Novartis’s D.E.I. programs are narrowly tailored, fair, equitable and comply with existing law,” the drugmaker said in a statement, referring to diversity, equity and inclusion. Novartis, too, has received a letter from a lawyer representing Mr. Shepard’s group, demanding that it change its policy on hiring law firms.The Supreme Court’s ruling on affirmative action was largely silent on employment-related questions.Kenny Holston/The New York TimesBeyond government contractors, affirmative action policies in the private sector are largely voluntary and governed by state and federal civil rights law. These laws prohibit employers from basing hiring or promotion decisions on a characteristic like race or gender, whether in favor of a candidate or against.The exception, said Jason Schwartz, a partner at the law firm Gibson Dunn, is that companies can take race into account if members of a racial minority were previously excluded from a job category — say, an investment bank recruiting Black bankers after it excluded Black people from such jobs for decades. In some cases, employers can also take into account the historical exclusion of a minority group from an industry — like Black and Latino people in the software industry.In principle, the logic of the Supreme Court’s ruling on college admissions could threaten some of these programs, like those intended to address industrywide discrimination. But even here, the legal case may be a stretch because the way employers typically make decisions about hiring and promotion differs from the way colleges make admissions decisions.“What seems to bother the court is that the admissions programs at issue treated race as a plus without regard to the individual student,” Pauline Kim, a professor at Washington University in St. Louis who specializes in employment law, said in an email. But “employment decisions are more often individualized decisions,” focusing on the fit between a candidate and a job, she said.The more meaningful effect of the court’s decision is likely to be greater pressure on policies that were already on questionable legal ground. Those could include leadership acceleration programs or internship programs that are open only to members of underrepresented minority groups.Many companies may also find themselves vulnerable over policies that comply with civil rights law on paper but violate it in practice, said Mike Delikat, a partner at Orrick who specializes in employment law. For example, a company’s policy may encourage recruiters to seek a more diverse pool of candidates, from which hiring decisions are made without regard to race. But if recruiters carry out the policy in a way that effectively creates a racial quota, he said, that is illegal.“The devil is in the details,” Mr. Delikat said. “Were they interpreting that to mean, ‘Come back with 25 percent of the internship class that has to be from an underrepresented group, and if not you get dinged as a bad recruiter’?”The college admissions cases before the Supreme Court were largely silent on these employment-related questions. Nonetheless, Mr. Delikat said, his firm has been counseling clients ever since the court agreed to hear the cases that they should ensure that their policies are airtight because an increase in litigation is likely.That is partly because of the growing attack from the political right on corporate policies aimed at diversity in hiring and other social and environmental goals.Gov. Ron DeSantis of Florida has signed legislation to limit diversity training in the workplace.Haiyun Jiang for The New York TimesGov. Ron DeSantis of Florida, who is seeking the 2024 Republican presidential nomination, has deplored “the woke mind virus” and proclaimed Florida “the state where woke goes to die.” The state has enacted legislation to limit diversity training in the workplace and has restricted state pension funds from basing investments on “woke environmental, social and corporate governance” considerations.Conservative legal groups have also mobilized on this front. A group run by Stephen Miller, a White House adviser in the Trump administration, contended in letters to the Equal Employment Opportunity Commission that the diversity and inclusion policies of several large companies were illegal and asked the commission to investigate. (Mr. Miller’s group did not respond to a request for comment about those cases.)The National Center for Public Policy Research, which is challenging corporate diversity policies, has sued Starbucks directors and officers after they refused to undo the company’s diversity and inclusion policies in response to a letter demanding that they do so. (Starbucks did not respond to a request for comment for this article, but its directors told the group that it was “not in the best interest of Starbucks to accept the demand and retract the policies.”)Mr. Shepard, the fellow at the center, said more lawsuits were “reasonably likely” if other companies did not accede to demands to rein in their diversity and inclusion policies.One modest way to do so, said David Lopez, a former general counsel for the Equal Employment Opportunity Commission, is to design policies that are race neutral but nonetheless likely to promote diversity — such as giving weight to whether a candidate has overcome significant obstacles.Mr. Lopez noted that, in the Supreme Court’s majority opinion, Chief Justice John G. Roberts Jr. argued that a university could take into account the effect on a candidate of having overcome racial discrimination, as long as the school didn’t consider the candidate’s race per se.But Dr. Tillery of Northwestern said making such changes to business diversity programs could be an overreaction to the ruling. While the federal Civil Rights Act of 1964 generally precludes basing individual hiring and promotion decisions explicitly on race, it allows employers to remove obstacles that prevent companies from having a more diverse work force. Examples include training managers and recruiters to ensure that they aren’t unconsciously discriminating against racial minorities, or advertising jobs on certain campuses to increase the universe of potential applicants.In the end, companies appear to face a greater threat of litigation over discrimination against members of minority groups than from litigation over discrimination against white people. According to the Equal Employment Opportunity Commission, there were about 2,350 charges of that latter form of discrimination in employment in 2021, among about 21,000 race-based charges overall.“There’s an inherent interest in picking your poison,” Dr. Tillery said. “Is it a lawsuit from Stephen Miller’s right-wing group that doesn’t live in the real world? Or is it a lawsuit from someone who says you’re discriminating against your work force and can tweet about how sexist or racist you are?”He added, “I’ll take the Stephen Miller poison any day.”J. Edward Moreno More

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    Labor Board, Reversing Trump-Era Ruling, Widens Definition of Employee

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    The National Labor Relations Board, with a Democratic majority, restored a standard that counts more workers as employees rather than contractors.Labor regulators issued a ruling on Tuesday that makes it more likely for workers to be considered employees rather than contractors under federal law.Overturning a ruling issued when the board was under Republican control, the decision effectively increases the number of workers — like drivers, construction workers or janitors — who have a federally protected right to unionize or take other collective action, such as protesting unsafe working conditions.The ruling ensures that “workers who seek to organize or exercise their rights under the National Labor Relations Act are not improperly excluded from its protections,” said a statement by Lauren McFerran, the Democratic chairman of the labor board, which voted 3 to 1 along party lines to broaden the standard.Determining whether a worker is an employee or a contractor has long depended on several variables, including the potential employer’s control over the work and provision of tools and equipment.In 2019, when the board was controlled by appointees of President Donald J. Trump, it elevated one consideration — workers’ chances to make more money based on their business savvy, often described as “entrepreneurial opportunity” — above the others. It concluded that such opportunities should be a key tiebreaker when some factors pointed to contractor status and others indicated employment.In its decision in 2019, the board said that a ruling during the Obama administration had improperly subordinated the question of moneymaking opportunities.That 2019 ruling appeared to be a victory for gig companies like Uber and Lyft, whose supporters have argued that ride-share drivers should be considered contractors in part because of the opportunities they have for potential profit — say, by determining which neighborhoods to work in.The latest decision returned the board to the standard laid out in the Obama era, explicitly rejecting the elevation of entrepreneurial opportunity above other factors.The turnabout was criticized on Tuesday by businesses that rely heavily on contractors. In a statement, Evan Armstrong, chair of the Coalition for Workforce Innovation, which represents companies like Uber and Lyft as well as industry trade groups, said that the ruling “decreases clarity and threatens the flexible independent model that benefits workers, consumers, entrepreneurs, businesses and the overall economy.”Some labor experts, however, say it is not clear that gig companies like Uber and Lyft, which set the prices that passengers pay, provide drivers with enough bona fide entrepreneurial opportunity to qualify them as contractors even under the old standard.In his dissent, Marvin E. Kaplan, the board’s lone Republican member, made a version of this argument, concluding that the workers in the case before the board — wig, hair and makeup stylists who work with the Atlanta Opera — “have little opportunity for economic gain or, conversely, risk of loss.”As a result, he agreed with the board’s majority that the stylists should be considered employees who have the right to unionize.But Mr. Kaplan wrote that the lack of entrepreneurial opportunities meant that the stylists should have been considered employees even under the Trump-era standard, and that there was no need to alter it. More

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    Supreme Court Backs Employer in Suit Over Strike Losses

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    The justices ruled that federal labor law did not block state courts from ruling on a case regarding damage caused when workers walked off the job.The Supreme Court ruled on Thursday that federal labor law did not protect a union from potential liability for damage that arose during a strike, and that a state court should resolve questions of liability.The majority found that if accusations by an employer are true, actions during a strike by a local Teamsters union were not even arguably protected by federal law because the union took “affirmative steps to endanger” the employer’s property “rather than reasonable precautions to mitigate that risk.” It asked the state court to decide the merits of the accusations.The opinion, written by Justice Amy Coney Barrett, was joined by Chief Justice John G. Roberts Jr. and Justices Sonia Sotomayor, Elena Kagan and Brett M. Kavanaugh.Three conservative justices backed more sweeping concurring opinions. A single justice, Ketanji Brown Jackson, dissented.Some legal experts had said a union setback in the case would discourage workers from striking by making the union potentially liable for losses that an employer incurred during a work stoppage.“It will definitely lead to more expensive-to-resolve lawsuits against labor unions,” said Charlotte Garden, a law professor at the University of Minnesota who was an author of a brief in support of the union. Professor Garden did note, however, that the decision was less far-reaching in discouraging strike activity than it could have been.Others have argued that the ruling was necessary to prevent workers from intentionally harming an employer’s property, an act not protected by federal labor law, and that such restrictions do not jeopardize the right to strike.“Damages from intentional destruction of property are not inherent to the act of striking,” said Michael O’Neill of the Landmark Legal Foundation, a conservative legal advocacy group that submitted a brief in the case. As a result, Mr. O’Neill said, the law does not shield workers or unions from liability for such damage.The case, Glacier Northwest v. International Brotherhood of Teamsters, No. 21-1449, involved unionized employees of a concrete mixing and pouring company who walked off the job during contract negotiations, leaving wet concrete in their trucks. The employer argued that it suffered substantial monetary losses because the abandoned concrete was unusable.The union argued that it had taken reasonable steps to avoid harming the employer’s property, as federal law requires, because workers kept their trucks running as they walked off the job. That allowed the company to dispose of the concrete without damage to the trucks. The union said the lost concrete amounted to the spoilage of a product, for which unions were not typically held liable.At issue were two key questions. The first was procedural: whether the case should be allowed to go forward in state court, as employers generally prefer. The alternative is that the state court — in this case, Washington — should step aside in favor of the National Labor Relations Board, the federal agency responsible for resolving labor disputes.The second question was about what economic damage is acceptable during a strike, and what amounts to vandalism — which federal labor law does not protect — of property or equipment.The two issues are linked because under legal precedent, the labor board is supposed to elbow aside state courts when the alleged actions during the strike are at least “arguably protected” by federal law.The Supreme Court ruled that the union’s actions, as alleged by the employer, were not arguably protected because the spoilage of the product was not merely an indirect result of the strike. Instead, the employer contended in a lawsuit, “the drivers prompted the creation of the perishable product” and then waited until the concrete was inside the trucks before walking off the job.“In so doing, they not only destroyed the concrete but also put Glacier’s trucks in harm’s way,” the majority opinion said. It sent the case back to Washington State court to be litigated.Sean M. O’Brien, the president of the Teamsters, issued a defiant statement after the decision was announced. “The Teamsters will strike any employer, when necessary, no matter their size or the depth of their pockets,” he said.The U.S. Chamber of Commerce said the court “got it right” in ruling that federal law “does not pre-empt state tort claims against a union for intentional destruction of an employer’s property during a labor dispute.”In a concurring opinion, Justice Clarence Thomas agreed that the Washington State court should be allowed to take up the case. He wrote that in a future case, the Supreme Court should reconsider whether the National Labor Relations Board should have such wide latitude to take the first pass in such cases.Justice Jackson noted in her dissent that the labor board had issued its own complaint since the case was first filed in Washington State. In issuing its complaint, the labor board’s general counsel found that the strike activity was in fact protected. This by definition meant that the activity was “arguably protected,” Justice Jackson wrote, requiring the state court to stand down.The decision, which some experts said could cause unions to reconsider striking or take a more cautious approach when a perishable product could be harmed, followed a series of rulings that appeared to scale back the power of unions and workers.The court ruled in 2018 that companies could prohibit workers from collectively bringing legal actions against their employers, even though the National Labor Relations Act protects workers’ rights to engage in so-called concerted activities.In the same year, the court ruled that public-sector unions could no longer require nonmembers to pay fees that help fund bargaining and other activities that unions do on their behalf.In 2021, the court deemed unconstitutional a California regulation that gave unions access to agricultural employers’ property for recruitment.In interviews, union leaders said that the ruling on Thursday would further tilt an already uneven playing field toward employers, and that it was often not a strike itself but the threat of a strike that helped unions win concessions.“Without the threat of a strike, you have little leverage in negotiations,” said Stuart Appelbaum, the president of the Retail, Wholesale and Department Store Union, which has organized successful strikes.Mr. O’Neill’s group, the Landmark Legal Foundation, argued that a ruling against the employer could have jeopardized the labor peace that the National Labor Relations Act was enacted to assure, “placing workers and the public at risk” by essentially blessing acts of vandalism and sabotage.Unions and workers often deliberately plan strikes to exploit employers’ vulnerability — for example, Amazon workers walked out during the holiday season — and rely on an element of surprise to maximize the economic harm they inflict, and therefore the leverage the union gains.In the near term, unions that are contemplating strikes or already striking, such as unions representing Hollywood writers or United Parcel Service employees whose contract expires this summer, may have to take greater precautions to insulate themselves from legal liability.Such precautions will typically weaken the impact of strikes, said Ms. Garden, the University of Minnesota professor. “You could get unions prophylactically adopting less effective tactics — things like giving advance warning about strike, which gives the employer a lot more time to hire replacement workers,” she said.Other unions may simply decide not to strike at all out of fear of heightened legal exposure, she said.Further out, unions and their political allies may seek to enact legislation that explicitly exempts workers from liability for certain types of economic damage that arise during a strike.“There will be efforts in blue states to make the best of it, to do something protective,” said Sharon Block, a former Biden and Obama administration official who is a professor of practice at Harvard Law School.But even these laws could wind up being challenged before the Supreme Court, experts said.Adam Liptak More

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    Starbucks Violated Labor Law in Buffalo Union Drive, Judge Rules

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    The decision cited “egregious and widespread misconduct,” including illegal monitoring and firing of workers. Starbucks signaled that it would appeal.In a sweeping decision, an administrative judge in New York ruled on Wednesday that Starbucks had violated federal labor law dozens of times in responding to a union campaign in the Buffalo area shortly after the campaign began roughly 18 months ago.Michael A. Rosas, a judge for the National Labor Relations Board, concluded that Starbucks had illegally monitored, disciplined and fired employees engaged in union organizing; added workers to stores to dilute support for the union; and promised new benefits to workers in an attempt to defuse support for the union.The ruling mandates the reinstatement of seven Buffalo-area workers who the judge concluded were unlawfully discharged from the company, and back pay and damages to more than two dozen workers who the judge concluded had suffered retaliation that affected their compensation, such as a reduction of hours.In addition, the judge ordered the chief executive of Starbucks, Howard Schultz, to read or be present for the reading of a notice, more than 10 pages long, promising to refrain from committing a series of labor law violations in the future, and to make and distribute a video of the reading.Because of the company’s “egregious and widespread misconduct demonstrating a general disregard for the employees’ fundamental rights,” Judge Rosas wrote, it was necessary to issue a broad order requiring Starbucks “to cease and desist from infringing in any other manner on rights guaranteed employees.”“This is truly a historic ruling,” Gary Bonadonna Jr., the regional head of Workers United, the union organizing Starbucks, said in a statement. “We will continue to fight and hold billionaires like Howard Schultz accountable for their actions. We will not rest until every Starbucks worker wins the right to organize.”The ruling can be appealed to the labor board in Washington, and to federal court after that, and Starbucks indicated that it might do so. “We believe the decision and the remedies ordered are inappropriate given the record in this matter and are considering all options to obtain further legal review,” the company said in a statement.The organizing campaign notched its first victory in Buffalo in 2021. Since then, more than 280 of the roughly 9,300 corporate-owned Starbucks locations in the United States have unionized. The ruling covers the period from August 2021 to July 2022, by which point the campaign had spread from the Buffalo area to dozens of stores nationwide.In the early months of the campaign, Starbucks workers complained that executives and other company officials were converging on Buffalo in an attempt to undermine their unionization effort.Judge Rosas found that Starbucks had violated labor law by “having high-ranking company officials make repeated and unprecedented visits to stores in order to more closely supervise, monitor or create the impression that employees’ union activities are under surveillance.”He also ordered the company to bargain with the union at a Buffalo-area location where the union lost an election in December 2021, concluding that the scope of the violations at the store tainted the vote and made a rerun of the election an “insufficient” remedy.It is rare but not unprecedented for a judge to effectively order in a union upon concluding that it had support among workers but that a fair vote is nearly impossible. More

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    Judge Scales Back Ruling Against Starbucks in Union Fight

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    After barring Starbucks from firing any U.S.-based worker over labor activity, a federal judge said he had erred and limited the action to one store.It was the most sweeping intervention by a court in the 18-month campaign to unionize Starbucks: Last week, a federal judge in Michigan issued an order blocking Starbucks from firing any U.S. worker because they engaged in collective action, like seeking to form a union.Union supporters cheered. Starbucks seemed taken aback, calling the order “extraordinary” and “unwarranted” and denying that the company had broken the law.But a few days later, the judge, Mark A. Goldsmith, announced that he had made certain unspecified “errors” and withdrew his earlier injunction. On Thursday, Judge Goldsmith issued a new injunction — only this time it was limited to a store in Michigan where a worker said she had been fired for her involvement in union organizing. The injunction’s national scope had vanished.In a revised opinion accompanying Thursday’s order, Judge Goldsmith said that the key criterion for determining whether to impose a nationwide injunction was whether the company had pursued a general policy of violating labor law. He said that while the National Labor Relations Board had filed about 24 complaints involving roughly 50 workers fired by Starbucks across the country, many of those cases were in their early stages.As a result, Judge Goldsmith concluded, the evidence supported an injunction only at a store in Ann Arbor, Mich., where a labor board judge found in October that a worker had illegally been fired.Legal experts said that the original injunction would have allowed the labor board to seek expedited reinstatement of workers who had been fired at any of the roughly 9,000 corporate-owned Starbucks stores in the country, and that it could have led to fines if the court found that Starbucks was continuing to fire workers for union organizing. Now those measures will apply only to a single store.The general counsel of the labor board, who oversees the office that had gone to federal court seeking the worker’s reinstatement, called the reversal disappointing but said in a statement that “the judge’s revised order still provides critical protection for the workers at Starbucks’ Ann Arbor store.” The statement said the agency would continue to seek nationwide remedies for labor law violations “as appropriate.”The union, Workers United, said it would “continue to fight for a national remedy to address Starbucks’ unprecedented union-busting campaign and hold the company accountable for their actions.”A Starbucks spokesman said, “We are pleased that the court rejected the National Labor Relations Board’s overreaching and inappropriate request for a nationwide cease-and-desist order as we pursue a full legal review of the merits of the case.”As to why the court initially issued the national injunction before abandoning it, Judge Goldsmith’s opinion did not elaborate.Legal experts said they couldn’t recall seeing a judge make a similar about-face. “I don’t think I can think of anything like this,” Wilma Liebman, a former chairwoman of the National Labor Relations Board, said in an email.Ms. Liebman said the most plausible explanation she could imagine was that the board had provided the judge with the order it was seeking, and that the judge had incorporated the order without sufficient modification — “careless but not intentionally mistaken,” Ms. Liebman said.A clerk reached at the court said the judge could not comment. More

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    Labor Board Curbs Gag Rules in Severance Agreements

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    The National Labor Relations Board said severance pacts requiring confidentiality and nondisparagement violated a law on collective worker activity.The National Labor Relations Board has ruled that it is generally illegal for companies to offer severance agreements that prohibit workers from making potentially disparaging statements about the employer or from disclosing details of the agreement.The ruling by the board, which has a Democratic majority, overturns a pair of 2020 decisions, when the board was controlled by Republicans and found that such severance agreements were not illegal on their face. It continues the labor board’s worker- and union-friendly trajectory under appointees of President Biden.The earlier decisions held that the severance agreements were illegal only if accompanied by other circumstances making them suspect, such as the possibility that they were being used to cover up the illegal firing of employees who tried to form a union.Still, Anne Lofaso, a professor of labor law at West Virginia University, said the latest decision was limited to rights under the National Labor Relations Act, such as employees’ rights to draw attention to unsafe working conditions, or to engage in other activities that protect or benefit workers as a group.She said an employer could still offer workers a severance agreement requiring them to give up their right to sue over, say, race discrimination under the Civil Rights Act of 1964.In the ruling, issued Tuesday, the board said it was returning to longstanding precedent. The 2020 standard, it said, ignored the fact that a severance package with confidentiality or nondisparagement provisions could on its own “unlawfully restrain and coerce” workers’ labor rights.“It’s long been understood by the board and the courts that employers cannot ask individual employees to choose between receiving benefits and exercising their rights,” the board’s chairman, Lauren McFerran, said in a statement.Charlotte Garden, a professor of labor law at the University of Minnesota, said the 2020 approach had effectively tried to “narrow the rule to situations where an employer was trying to cover up their own previous unlawful activity and prohibit employees from talking about it.” The current ruling, she added, takes a broader view of when employees have the right to speak out.The case involved a Michigan hospital that permanently furloughed 11 union members during the pandemic. To receive severance benefits, they were required to sign an agreement that barred them from making statements that could disparage the hospital and from sharing the terms of the agreement.In furloughing the workers and offering them the agreement, the hospital also bypassed the union, depriving it of a chance to negotiate the terms, according to Tuesday’s ruling.In his dissent, Marvin Kaplan, the board’s lone Republican, argued that offering the severance agreement was illegal because the hospital circumvented the union, but not specifically because of its nondisclosure and nondisparagement provisions.Under Mr. Biden’s appointees, the labor board has moved relatively quickly to reinstate workers who it determines have been fired illegally. It has also issued rulings effectively expanding the financial remedies available to such workers and making it easier for a subset of employees within a workplace to unionize. More