Summary
This Third Circuit opinion reviews the National Labor Relations Board's order finding that Starbucks violated the National Labor Relations Act by terminating two baristas for engaging in protected labor organizing activities. The court holds that it lacks jurisdiction over Starbucks' constitutional challenge to the layered removal protections of NLRB Administrative Law Judges and finds that Starbucks lacks standing due to an inability to demonstrate concrete injury. Applying the substantial evidence standard, the court affirms the Board's findings on the unfair labor practices but vacates the portion of the remedial order requiring compensation for direct or foreseeable pecuniary harms, concluding it exceeds the Board's statutory authority under the NLRA.
Topics
Practice areas
Questions Presented
- Whether the Third Circuit had jurisdiction to review Starbucks' constitutional challenge to layered removal protections for NLRB ALJs.
- Whether substantial evidence supported the NLRB's findings that Starbucks violated Sections 8(a)(1) and 8(a)(3) of the NLRA by terminating Nowakowska and Bussiere and reducing Nowakowska's hours because of protected labor-organizing activity.
- Whether Starbucks could invoke an after-acquired-evidence defense based on the employees' recordings to defeat reinstatement or limit backpay.
- Whether the NLRB had authority under Section 10(c) of the NLRA to order compensation for all direct or foreseeable pecuniary harms, including search-for-work and interim-employment expenses regardless of interim earnings.
- Whether Starbucks' nondelegation, due-process, Seventh Amendment, and Article III challenges to the Thryv remedy were properly before the court.
Holdings
- The court lacked jurisdiction under 29 U.S.C. § 160(e) to consider Starbucks' constitutional challenge because Starbucks failed to raise it before the Board and no extraordinary circumstances excused the failure. In any event, Starbucks failed to establish injury in fact from the challenged removal protections.
- Substantial evidence supported the NLRB's findings that Starbucks would not have terminated Bussiere or Nowakowska, and would not have reduced Nowakowska's hours, absent their protected labor-organizing activity.
- Starbucks could not rely on the employees' recordings to defeat reinstatement or limit backpay because substantial evidence supported the finding that Starbucks knew of the recording activity before the terminations.
- Section 10(c) of the NLRA authorizes equitable remedies, including backpay and restitutionary relief tied to compensation wrongfully withheld by the employer, but does not authorize the Board's broad Thryv remedy requiring compensation for all direct or foreseeable pecuniary harms.
- Starbucks forfeited its nondelegation and appellate due-process objections because it did not provide the Board adequate notice of those specific grounds. The statutory-interpretation and Seventh Amendment objections were preserved, but the court did not reach the constitutional questions because the remedy was invalid under the NLRA.
Key quotations
“That portion exceeds the Board’s authority under the NLRA. We remand for further proceedings consistent with this opinion.” (125 F.4th at 78-79)
“Starbucks thus has not met its burden to show that it was unaware, when the terminations occurred, of the purportedly after-acquired evidence.” (125 F.4th at 97)
“Simply put, the Board’s current order exceeds its authority under the NLRA.” (125 F.4th at 102)
Factual background
Echo Nowakowska and Tristan Bussiere worked as baristas at Starbucks stores in Philadelphia and engaged in organizing activity concerning working conditions and store management. Starbucks reduced Nowakowska's hours and terminated both employees, asserting poor performance, policy violations, and disruptive conduct as legitimate reasons. The NLRB found that the adverse actions were motivated by protected organizing activity and that Starbucks knew about the employees' recording activity before the terminations. The Board also ordered compensation for direct or foreseeable pecuniary harms under Thryv.
Procedural history
NLRB ALJs found that Starbucks reduced Echo Nowakowska's hours and terminated Nowakowska and Tristan Bussiere because of protected labor-organizing activity, and ordered reinstatement and make-whole relief. The NLRB adopted the ALJ's findings in February 2023 and affirmed on reconsideration in June 2023. The Board sought enforcement in the Third Circuit, while Starbucks sought review; the court granted enforcement in part, denied review on most issues, vacated the challenged Thryv remedy, and remanded.
Remand instructions
The court granted the NLRB's petition for enforcement, denied Starbucks' cross-petition for review on the removal-protection, substantial-evidence, and after-acquired-evidence issues, vacated the portion of the Board's order requiring compensation for all direct or foreseeable pecuniary harms, and remanded for further proceedings consistent with the opinion. The Board may award monetary relief within its statutory equitable authority, including appropriate backpay and restitutionary relief, but not the challenged broad compensatory damages.