HR May Feel More Confident About Terminations After Starbucks Ruling

Following the U.S. Supreme Court’s Starbucks ruling, HR professionals might feel more confident about terminating employees for serious violations of company policy. Even if the workers are union organizers, employers still may be able to avoid allegations of unfair labor practices.

The case isn’t over, but instead has been sent to the lower court to apply the correct standard for so-called Section 10(j) injunctions. So, when disciplining employees for company violations, documentation remains essential to show that the employer acted within its policies and in a manner consistent with past practice.

“At SHRM, we are dedicated to promoting balanced labor relations, ensuring that all parties are fully aware of their rights and obligations under the law. This includes the crucial understanding of how organizations can form a defense against allegations of unfair labor practices,” said Emily M. Dickens, SHRM chief of staff, head of government affairs, and corporate secretary. “The Supreme Court’s ruling is a step towards leveling the playing field, offering a clearer framework for businesses and employees alike.”

HR professionals, CEOs, and HR executives are hesitant to terminate employees during union organizing drives, said Amy Moor Gaylord, an attorney with Akerman in Chicago. “This ruling may provide some level of assurance that if they discipline or terminate an employee for serious misconduct—such as violations of the anti-harassment policy or the workplace violence policy—that those employees won’t be ordered back to work” unless they have a strong case, she said.

In the decision, the Supreme Court vacated opinions in favor of seven Starbucks workers who claimed they were unlawfully fired after their union-organizing efforts at a Memphis, Tenn., store. Rather than fulfilling a relaxed two-factor test for a court to issue a Section 10(j) injunction, the National Labor Relations Board (NLRB) must, as Starbucks maintained, satisfy the traditional four-part test for preliminary injunctions that is more stringent, the Supreme Court clarified. The fired employees had violated company policy by entering closed stores and letting in unauthorized people—members of the media—the company said.

For HR professionals, Starbucks’ win is “good news” because “it may mean they may not have to face the potential of injunction proceedings while simultaneously defending alleged labor violations before the NLRB,” said David Pryzbylski, an attorney with Barnes & Thornburg in Indianapolis. However, he added, while it may be more difficult in some cases for the NLRB to get an injunction, this case has no bearing on the agency’s ability to prosecute and adjudicate cases before the board.

“This [presidential] administration proudly touts itself as the most pro-labor administration in history, and this decision does not change this fact,” said Jon Klinghoffer, an attorney with Goldberg Kohn in Chicago.

HR professionals should continue to respect the right of employees to engage in concerted activity and feel comfortable following neutral company policies, said Phil Wilson, president and attorney with LRI Consulting Services in Broken Arrow, Okla.

Defending Discipline or Termination Decisions

Despite the decision, the NLRB will continue to scrutinize employers who fire union organizers for violating company policy.

Employers have the legal right to enforce company policies uniformly and terminate any employee found in violation. Meanwhile, the National Labor Relations Act (NLRA) protects the right of employees to engage in union activities without fear of retaliation. Any disciplinary action against union organizers should be supported by documentation showing a policy violation. Failure to adhere to these guidelines can result in claims of unfair labor practices. HR should ensure that its actions are consistent, nondiscriminatory, and compliant. HR should also be aware that the board may find company policies to be unlawful, as the board’s Stericycle ruling made clear.

Documentation is as important as ever, according to Gaylord. “It is critical to be able to show that an employee was disciplined or terminated for legitimate reasons and so there is little likelihood of success on the merits for the board,” she said.

The board has limited resources and so by necessity may have a reduced ability to bring Section 10(j) injunction proceedings after the Starbucks decision, noted Patrick Muldowney, an attorney with BakerHostetler in Orlando, Fla., and New York City.

However, “employers still need to be diligent in addressing union activism within the law,” he said.

Unfair Labor Practices

The NLRA prohibits employers from engaging in unfair labor practices, regardless of whether an employer is unionized or not.

Unfair labor practices may include:

• Retaliating against employee representatives.
• Interfering with employees’ rights to organize.
• Threatening employees with repercussions for union activity.
• Interrogating employees about union activities.
• Promising benefits to discourage union support.
• Surveilling employees’ union activities.

If an employer is found to have committed an unfair labor practice, the NLRB can obtain relief for employees, including back pay and reinstatement, as well as possibly consequential damages under current NLRB policy, said Peter Spanos, an attorney with Taylor English Duma in Atlanta.

Navigating the New Workplace Landscape

HR professionals can navigate the new workplace landscape by:

• Regularly reviewing workplace policies to ensure they’re in line with labor laws.
• Enhancing documentation practices for disciplinary actions to demonstrate they’re nondiscriminatory.
• Implementing training sessions on labor rights for both management and staff.
• Consulting with legal experts to understand how this ruling impacts future NLRB litigation.
• Most importantly, creating a workplace culture that prioritizes employee concerns, open communication and trust.

“The good news for employers is that the NLRB may be slower or more careful to act, knowing that it will receive a higher level of scrutiny from the courts,” said Robin Burroughs, an attorney with Venable in Washington, D.C.

“CEOs and HR should still ensure their company policies and employment decisions are documented, supported, and in compliance with the law, but should have greater confidence in enforcing those policies and making decisions that advance important business interests without immediate interference from the board,” said Jennifer Hostetler, an attorney with Lewis Roca in Las Vegas.