A Fifth Circuit panel on Friday vacated a National Labor Relations Board order that had found Starbucks violated federal labor law by obtaining Board-issued subpoenas for information from two union-supporting shift supervisors, ruling the Board applied the wrong legal standard and sending the case back for further proceedings.
The unanimous panel held that the Board should have asked whether Starbucks' conduct would "tend to be coercive" when considered "within the totality of circumstances," the test drawn from NLRB v. Brookwood Furniture. Instead, the Board relied on National Telephone Directory Corp., a 1995 decision the panel described as "a discovery rule governing when subpoenas should be quashed."
"Because that standard does not answer the question whether an employer has committed an unfair labor practice," Circuit Judge Stephen A. Higginson wrote for the panel, the court vacated the order and remanded. Circuit Judges Leslie H. Southwick and Dana M. Douglas joined the opinion.
The dispute traces to a December 2021 union organizing campaign at Starbucks' La Quinta, California store, where shift supervisors Andrea Hernandez and Jazmine Cardenas joined the organizing committee. Workers United won the certification election, and the Union later filed unfair labor practice charges. In defending the resulting complaint, Starbucks obtained Board-issued subpoenas directed at Cardenas and Hernandez seeking communications with the Union and related materials.
An administrative law judge granted petitions to revoke the subpoenas as overbroad and ultimately dismissed the underlying complaint. The Board then initiated a second proceeding alleging the subpoenas themselves interfered with Section 7 rights by requesting "information and communications concerning their protected and concerted activities, and/or union activities." The ALJ concluded the "proper standard to apply" was "that contained in National Telephone," and the Board adopted that ruling.
The panel said that was error. The National Telephone test balances "employees' rights under Section 7 to keep their protected activities confidential" against an "employer's need for the information to present its defense." That "balancing inquiry does not resolve the distinct question whether the employer's conduct is coercive within the meaning of Section 8(a)(1)," Higginson wrote.
On appeal, the Board conceded the governing test, acknowledging that "[e]mployer conduct violates Section 8(a)(1) if, considering the totality of the circumstances, it would reasonably tend to coerce employees in the exercise of their statutory rights." The panel rejected the Board's argument that it had transformed National Telephone into a liability standard in Wright Electric, Inc., and distinguished the Ninth Circuit's decision in United Nurses Ass'ns of California v. NLRB.
The panel declined to resolve the "incongruity" that the Board itself issued the subpoenas it later held violated the Act. "[W]e do not resolve it here because the Board erred at the threshold by applying the wrong liability standard," Higginson wrote in a footnote.
Quoting the court's en banc plurality in Tesla, Inc. v. NLRB, the panel noted that "[o]n remand, the Board is free to reconsider the record and make any decision supported by substantial evidence."