Monday morning musings for workplace watchers.
Starbucks Petitions SCOTUS|Tech Wins in Newsom Vetoes
Robert Iafolla:
The coffee giant filed a petition earlier this month asking the US Supreme Court to raise the bar that the NLRB must meet to win federal court injunctions while agency prosecutors move forward with underlying administrative cases.
Lisa Blatt of Williams & Connolly LLP, a veteran of the US Solicitor General’s Office who’s won 41 of the 46 cases she’s argued before the justices, is the counsel of record on Starbucks’ petition.
“She’s one of the most prominent and well regarded lawyers of the Supreme Court bar, with perhaps the best win-loss record of any advocate who has argued a significant number of cases,” said John Elwood, head of the appellate and Supreme Court practice at Arnold & Porter Kaye Scholer LLP.
Blatt’s hiring signals Starbucks will continue to reach into its deep pockets—the company’s revenue in the third quarter of fiscal year 2023 hit a record $9.2 billion—to fund lawyers for its campaign to repel unionization across its nationwide network of coffee shops.
Littler Mendelson PC has been the main beneficiary of Starbucks’ legal spend, representing the company in a massive amount of litigation at the National Labor Relations Board since 2021, when the union won the first of more than 360 elections.
Legal clashes over Starbucks Workers United’s organizing campaign have thus far led to 100 regional director decisions and 30 administrative law judge rulings, 28 of which found the company violated federal labor law. The NLRB has issued eight published decisions involving the company, plus another 25 unpublished rulings.
More administrative decisions are on the way. About 70 complaints against Starbucks are pending before ALJs. The company is also involved in litigation over attempts to eject the union from individual locations.
While Starbucks has appealed NLRB decisions to federal circuit courts, the agency’s attempts to get injunctions hit federal district courts first.
The NLRB has authorized regional directors to sue Starbucks 10 separate times for 10(j) injunctions, which are named after the section of the National Labor Relations Act empowering the agency to go to federal courts when there’s harm caused by alleged labor law violations that can’t be fixed by an eventual administrative ruling.
The company is challenging the US Court of Appeals for the Sixth Circuit’s August decision upholding an injunction related to workers fired from a Memphis store.
The case could resolve a circuit split over the standard for 10(j) injunctions.
Four circuits use the same test for 10(j) injunctions as they do other preliminary injunctions, according to Starbucks’ petition. Five circuits, including the Sixth Circuit, use a test specific to 10(j) injunctions that’s easier to meet. Two circuits use a hybrid approach.
“We are taking this proactive step because we believe the NLRB should be held to a consistent standard, and the Sixth Circuit erred in affirming, or granting, an injunction in this case,” Starbucks said of its move to seek high court review.
Chris Marr: California’s tech sector killed off several of the latest session’s bills regulating the workplace after they reached the governor’s desk, including layoff notifications for contract workers and limits on use of autonomous vehicles. But employers will still face new requirements such as broader restrictions on noncompete contracts.
In the state’s just-finished annual lawmaking bonanza, Gov. Gavin Newsom (D) vetoed several high-profile bills that major tech companies opposed via the industry association TechNet. Among those, Newsom rejected AB 1356, which would have expanded the requirements for businesses to give workers notice before a mass layoff to include contract workers, rather than employees only.
The contractor notice could have penalized a business for layoffs by a staffing agency done without the business’s knowledge, Newsom said in his Oct. 8 veto message.
The measure was proposed as a response to widespread layoffs in the tech industry, whose workforce includes many contract workers, according to the worker advocacy group TechEquity Collaborative, which supported and cosponsored AB 1356.
California “would have been first in the nation to require notice to contract workers, which makes sense given the state’s heavy reliance on contract workers in the tech industry,” said Samantha Gordon, chief program officer for TechEquity.
The tech industry has announced cutting 200,000 jobs since the beginning of 2022, including the former Twitter platform (now
Federal law requires companies to give at least a 60-day notice to employees before a mass layoff, under the Worker Adjustment and Retraining Notification (WARN) Act. But some states mandate longer notices or additional benefits such as New Jersey’s new severance pay requirement.
The tech industry and its workforce also could feel the impacts of expanded restrictions on noncompetition contracts, although they didn’t publicly support or oppose those bills.
California already largely bans enforcement of contracts that block employees from going to work for a competitor. But a new measure that Newsom signed Sept. 1 (SB 699) declares the state’s courts won’t enforce noncompetes even if they were signed in other states, and it subjects California employers to civil penalties for requiring employees to sign the contracts, even if they don’t try to enforce them.
A second measure (AB 1076), which Newsom signed Oct. 13, broadens the scope of California’s noncompete ban to cover any contract restricting employees’ job mobility, potentially covering non-recruitment or overly broad nondisclosure agreements. That new law also sets a Feb. 14 deadline for employers to notify current or former employees who previously signed noncompetes that those contracts are void.
Newsom also vetoed a bill (AB 316) that would have banned the testing and use of automated delivery trucks without human drivers—a proposal pushed by the Teamsters but opposed by TechNet,
And he vetoed what would have been the nation’s first statewide ban on caste discrimination as well as a bill to provide unemployment benefits to striking workers.
But to the disappointment of business groups, Newsom signed a measure (SB 365) that will let worker and consumer lawsuits proceed in court without delay after a company’s motion to order arbitration is denied. The change in law hits the litigation strategy for many businesses, including the way gig economy companies such as
Under existing law, further court proceedings are automatically stayed while a company appeals the denial of arbitration.
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