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Starbucks Ordered to Rehire Memphis 7 after Losing Appeal

After losing its appeal earlier this month, Starbucks announced it would reinstate seven employees who were fired in February allegedly because they led efforts to unionize their Memphis store.  Starbucks said these employees were terminated for violating its policies by reopening their store after hours to provide access to non-employees, including a local television crew. The store was unionized in August by a vote of 11-3, even without the seven terminated employees.

The National Labor Relations Board (the “NLRB”) took exception to Starbucks’ explanation and to the termination of these seven employees who soon became known nationally as the Memphis 7.  The NLRB has since accused the coffee giant of interfering with workers’ rights to unionize. It also sought a 10(j) injunction for the reinstatement of the Memphis 7 from the federal court in Memphis while the underlying matter is pending. Late last month, the federal court granted the 10(j) injunction and ordered the employees reinstated while it considered the NLRB’s lawsuit.

Starbucks immediately appealed the federal court’s 10(j) decision, but on Tuesday the 6th U.S. Circuit Court of Appeals sided with the NLRB’s injunction request.

This case has been closely watched by the union, businesses and legal minds alike as it is the first recent test of what was once an uncommonly used procedural maneuver known as a 10(j) injunction.  Section 10 (j) of the National Labor Relations Act authorizes the NLRB to seek temporary injunctions against employers and unions in federal district courts to stop unfair labor practices while the case is being litigated before administrative law judges and the Board. These temporary injunctions are needed to protect the process of collective bargaining and employee rights under the Act, and to ensure that Board decisions will be meaningful.