Employers Fight NLRB Rulings With Fifth Circuit Forum Shopping

Starbucks Corp. is set to enter 2026 with six pending cases in the Fifth Circuit challenging National Labor Relations Board rulings, although none of the conduct at issue occurred within the circuit’s geographic boundaries.

The coffee giant leveraged a permissive—yet infrequently used—jurisdictional rule to give the conservative-leaning US Court of Appeals for the Fifth Circuit veto power over NLRB decisions that would typically go elsewhere based on where the unfair labor practice cases originated, including the often more liberal Second or Ninth circuits.

Starbucks’ forum shopping in conjunction with the Fifth Circuit’s growing hostility to federal agencies has the potential to inspire other employers to tap the New Orleans-based court to second-guess NLRB rulings, according to labor law observers.

The National Labor Relations Act permits a company to petition for judicial review of NLRB decisions in the DC Circuit, or wherever the unfair labor practices took place, where a company is headquartered, or where it “transacts business.” That last jurisdictional hook allows for choosing a forum from a slate of courts that’s as broad as a company’s geographic footprint.

“Larger companies that don’t have a place of business in the Fifth Circuit may want to consider opening one, because that could open doors if they’re anticipating labor law issues,” said Thomas Lenz, a management-side attorney at Atkinson, Andelson, Loya, Ruud & Romo and former NLRB lawyer.

The Fifth Circuit—which encompasses Texas, Louisiana, and Mississippi—is also an attractive venue for employers that want to stop NLRB proceedings.

The circuit court’s ruling in a case involving SpaceX virtually guarantees companies can win orders freezing unfair labor practice cases, provided they can establish the jurisdiction to file constitutional lawsuits against the agency.

“It shows how far outside mainstream Republican thinking the Fifth Circuit has been, especially with regards to the administrative state and attacks on New Deal agencies,” said Matthew Bodie, a University of Minnesota law professor and former NLRB attorney. “Even though other circuits have a lot of Republican-appointed judges, they haven’t joined in.”

Seeking Favorable Venue

Over the last 25 years, employers have sought judicial review of NLRB rulings in circuit courts based only on where they do business at least 41 times, according to a Bloomberg Law review of cases. Nearly 80% of those petitions were filed in the Fifth Circuit.

The DC Circuit—always a default option—has been employers’ top choice overall when they go outside of the circuit where they’re headquartered or where the underlying events took place.

But petitions filed in 2024 show the Fifth Circuit gaining on the DC Circuit. The Fifth Circuit received eight petitions for review when the “transacts business” justification was the only jurisdictional hook, compared to 15 filed in the DC Circuit in cases without either the events or the employers’ headquarters being based in the nation’s capital.

Starbucks was the most prolific, filing six of those eight Fifth Circuit petitions. A spokesperson said many issues in its cases “include legal interests to our operations in the 5th Circuit.”

The company also challenged an NLRB decision arising from a Los Angeles-based case in the Eighth Circuit, a St. Louis-based appeals court dominated by Republican-appointed judges. It won that appeal in June.

Employer appeals of NLRB rulings overall plummeted in 2025 because the board lacked the quorum necessary to decide cases for most of the year. The Senate confirmation of two NLRB members Dec. 18 means the board will be back in business and the frequency of circuit court petitions will eventually return to normal levels.

Loper Impact

One factor apparently motivating companies to select the Fifth Circuit is that, after the US Supreme Court dialed back judicial deference to agencies in its 2024 decision in Loper Bright Enterprises v. Raimondo, it’s less likely to yield to NLRB rulings on mixed questions of law and fact than other circuit courts, said Anne Lofaso, a University of Cincinnati law professor.

The coffee chain filed all of its Fifth Circuit petitions after Loper Bright.

“Starbucks’ lawyers are doing what they should be doing, which is looking for courts where their client will win,” said Lofaso, a former NLRB attorney.

Employer challenges to NLRB rulings filed in the Fifth Circuit based on “transacts business” jurisdiction previously spiked in 2015 and 2016, after the appeals court rejected the board’s views that class-action waivers in mandatory arbitration agreements violated federal labor law. Twelve of the 15 petitions filed in Fifth Circuit in that period involved NLRB decisions on class-action waivers.

Union Countermeasure

Companies don’t always succeed in securing a venue based on the “transacts business” option.

Macy’s Inc. challenged an NLRB ruling against it in the Fifth Circuit, but the International Union of Operating Engineers affiliate that originally filed charges against the department store chain filed a competing petition in the Ninth Circuit, where the underlying conduct happened.

The union won the US Judicial Panel on Multidistrict Litigation’s lottery to decide where the case would proceed, and later prevailed in the Ninth Circuit.

The key to the Operating Engineers local having the ability to file a competing petition for review was being able to show they were “aggrieved” by the NLRB’s ruling, which is a requirement for judicial review under the NLRA.

The union’s lawyer, David Rosenfeld of Weinberg, Roger & Rosenfeld, said he laid the groundwork by asking for extraordinary remedies in the charge against Macy’s. The NLRB’s denial of that request meant that the union was sufficiently aggrieved and could file its petition for review.

Rosenfeld said he always asks for extraordinary remedies “just to have protection” in the event that the unfair labor practice case ends up in circuit court. Unions lawyers should similarly plan ahead, because companies are likely to try to select the Fifth Circuit to challenge NLRB decisions, he said.

“Employers can win almost any case in the Fifth, so why not seek review there?” Rosenfeld said.