Starbucks Denied Fees in Suit Over Alleged Union Activity Animus

Starbucks Corp. failed to convince a federal court in Arizona that it’s entitled to attorneys’ fees after the denial of an NLRB petition to reinstate three workers who were allegedly disciplined because of union activity.

The National Labor Relations Board’s claims on behalf of the employees weren’t frivolous, thus the coffee chain doesn’t qualify for fees, the US District Court for the District of Arizona ruled. The amount of Starbucks’s requested fees isn’t publicly available because the court allowed its counsel, Littler Mendelson PC, to file its statement of fees under seal.

The NLRB sought a temporary injunction to restore the employment of three employees, Laila Dalton, Alyssa Sanchez, and Tyler Gillette, in April 2022, according to the order. The court denied the request in June.

Starbucks argued that the NLRB “willfully misstated facts and pursued claims that were so groundless that the claims were frivolous,” the court said. Because surveillance video showed Dalton recorded her managers’ conversations without their permission and while she wasn’t present, the NLRB should’ve known that she was terminated for violating company policy and not union activity, Starbucks said.

Starbucks’s characterization “is not the full story” though, Judge John J. Tuchi said on Jan. 27. He noted that the court found some “evidence of a nexus between Dalton’s union activity and the monitoring and discipline,” despite denying the injunction.

Further, Sanchez submitted an affidavit that Starbucks stopped granting her schedule change requests after she engaged in union activity, and Gillette still maintains that Starbucks rescinded medical accommodations after it learned of his union activity.

Later evidence showed that Sanchez’s denials occurred before she engaged in union activity, but the court held the claim wasn’t frivolous from the NLRB’s point of view.

The NLRB represented itself. Littler Mendelson PC represents Starbucks.

The case is Overstreet v. Starbucks Corp., D. Ariz., No. 22-cv-00676, 1/27/23.