Starbucks Corp.

United States Court of Appeals for the Third Circuit · 2024 · Labor Law

Labor LawNLRBSection 8(a)(1)Section 8(a)(3)Section 10(c)Section 10(e)ALJ removal protectionsissue exhaustion

Facts

Starbucks terminated baristas Echo Nowakowska and Tristan Bussiere after they engaged in labor organizing at a Philadelphia store, and it also reduced Nowakowska's hours. Starbucks claimed the actions were based on policy violations, poor performance, and disruption, including customer-service incidents and Bussiere's spreading of a false rumor. The Board found that the reduction in hours and both terminations were motivated by protected organizing activity, relying in part on management statements and comparative discipline evidence. Starbucks also argued that later-discovered recordings made by the employees would independently justify termination, but the record showed management knew of the recordings before the firings.

Issue

Whether the court could review Starbucks' unexhausted constitutional challenge to NLRB ALJ removal protections, whether substantial evidence supported the Board's findings that Starbucks violated Sections 8(a)(1) and 8(a)(3), whether Starbucks could invoke an after-acquired-evidence defense based on employee recordings, and whether Section 10(c) authorized the Board's order requiring compensation for direct or foreseeable pecuniary harms under Thryv.

Rule

Under NLRA Section 10(e), a court lacks jurisdiction to review an issue not raised before the Board absent extraordinary circumstances. Under Wright Line, once the Board shows protected activity was a motivating factor in an adverse action, the employer must prove by a preponderance of the evidence that it would have taken the same action for legitimate reasons even absent the protected conduct. An employer invoking after-acquired evidence must show the employee engaged in misconduct, the employer was unaware of it at discharge, and the employer would have discharged a similarly situated employee for that misconduct alone. Section 10(c) authorizes equitable remedies, including reinstatement and backpay or other relief tied to what the employer unlawfully withheld, but not broad compensatory damages for all direct or foreseeable pecuniary harms.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

A warehouse operator in Columbus, Ohio loses before the NLRB and petitions for review. For the first time in the court of appeals, it argues that the Board hearing was invalid because the agency's ALJs are protected by multiple layers of for-cause removal restrictions. The company had raised no such objection before the Board.

How should the court of appeals treat the removal-protections argument?

Explanation. Section 10(e) generally bars review of objections not urged before the Board unless extraordinary circumstances exist. The majority treated a removal-protections challenge as different from an appointments challenge because removal protections do not negate the official's authority to act. So a party that failed to raise the removal issue before the Board cannot obtain review merely by labeling the claim structural. (Derived from Starbucks Corp. (n.d.).)