The U.S. Supreme Court is set to hear a challenge from Starbucks Corp. (NASDAQ: SBUX) against the National Labor Relations Board's decision to reinstate fired baristas who were organizing a union.
What Happened: The case stems from a 2022 incident where Starbucks fired seven baristas from a Memphis coffeehouse for violating company policy by inviting a TV news crew into the store after hours, The Washington Post reported on Monday. The workers claimed they were fired for their union activities, a claim the National Labor Relations Board (NLRB) agreed with.
A federal judge approved the NLRB's request for an order to reinstate the workers, a decision upheld by an appeals court.
The case arrives at the Supreme Court amid ongoing negotiations between Starbucks and the local union, to withdraw ongoing litigation. However, Starbucks is disputing the standard used by federal judges to determine whether workers should be reinstated when requested by the NLRB.
The Supreme Court's decision could potentially impact labor organizing across the country. Experts fear a ruling against the NLRB could weaken labor organizing in other scenarios.
"This could have a substantial impact," said James Cooney, a labor studies professor at Rutgers University.
"If a stricter standard is adopted by the Supreme Court, it'll be more difficult for the labor board to maintain the status quo for workers during an organizing drive."
Why It Matters: This case comes after a series of labor disputes at Starbucks. In November, the Workers United union announced a strike involving thousands of employees at numerous Starbucks locations on the company's Red Cup day, a key promotional event during the holiday season and called for better pay, staffing, and schedules.
In December, Starbucks reached out to the union representing hundreds of its stores in the U.S. to improve its strained association with some of its frontline workers. The union represents over 9,000 Starbucks workers at about 360 U.S. stores. There had been over five months of inactivity in contract bargaining from the Workers United union.
In March, the Strategic Organizing Center (SOC), a shareholder of Starbucks, withdrew its director nominations, believing that the recent agreement reached by Starbucks and Workers United represents meaningful progress that will benefit all stakeholders. The SOC started its campaign for change at Starbucks last November, believing that the company's response to its employees' attempts to unionize was misguided.
Price Action: On Tuesday, Starbucks shares were trading at 88.20, indicating a 0.023% increase as per Benzinga Pro.