Federal agencies such as the National Labor Relations Board (NLRB), Federal Trade Commission (FTC), and U.S. Department of Labor (DOL) are entrusted by Congress with sweeping powers. They can adopt and enforce regulations, establish administrative tribunals, impose fines and civil money penalties, even go into court and seek injunctive relief. But they remain subject to the same laws that govern other actors, public and private: and sometimes it falls to the nine Justices to remind them of their limitations.

In Starbucks v. McKinney, decided June 13, 2024, the Supreme Court, in an 9-1 decision (Justice Jackson concurred in part and in the result, but dissented in part), reminded the NLRB that it is subject to the same four-factor test that anyone seeking a preliminary injunction or temporary restraining order must pass to get that kind of relief—its exalted federal agency status notwithstanding.

Here’s the background: After several Starbucks employees in Tennessee announced plans to unionize, they invited a television news crew to visit their store after hours to promote their unionizing effort. Starbucks promptly fired them for violating company policy. The NLRB initiated an administrative complaint alleging that Starbucks had engaged in unfair labor practices. Then the Board’s regional Director filed a petition in federal district court for a preliminary injunction that would, among other things, require Starbucks to immediately reinstate the fired employees.

The Board asserted that it was entitled to a preliminary injunction by applying a two-part test that asks only whether “there is reasonable cause to believe that unfair labor practices have occurred,” and whether injunctive relief is “just and proper.” Applying this standard, the district court granted the injunction, and the Sixth Circuit affirmed.

But the Supreme Court reversed. It held that when considering the NLRB’s request for a preliminary injunction, a district court must apply not the streamlined, two-step test the NLRB advocated, but rather the traditional four factors articulated in Winter v. Natural Resources Defense Council, Inc. These are (1) there is a likelihood of success on the merits; (2) there is a likelihood of irreparable harm in the absence of preliminary relief; (3) the balance of equities tips in its favor; and (4) an injunction is in the public interest. Nothing in the NLRA displaces the presumption that traditional equitable principles govern. The NLRB remains free to develop its own record and reach its own legal conclusions in its administrative proceedings. But when it goes into court, it must play by court’s rules. Deference to what is “nothing more than an agency’s convenient litigating position” is “entirely inappropriate.”

The Starbucks decision hearkens back to AMG Capital Mgmt., LLC v. FTC, (2021) in which the Court reined in the FTC, holding that it lacked the statutory power to seek restitutionary (money) damages in preliminary proceedings. And it may foreshadow the Court’s imminent ruling in Loper Bright Enterprises v. Raimondo, where it has been asked to decide whether courts must defer to the National Marine Fisheries Service when it claims its regulatory power extends to requiring commercial fishing boats to pay the salaries of compulsory on-board monitors.

After decades of deference, the Court seems determined to restrain the energies of the famously “headless Fourth Branch.” By lobbing the ball back into Congress’ court to delimit the regulatory and enforcement powers of federal agencies, the Supreme Court, like a traffic cop, is reminding the other branches of government to stay in their lane.

Note from the Editor: The Federalist Society takes no positions on particular legal and public policy matters. Any expressions of opinion are those of the author. We welcome responses to the views presented here. To join the debate, please email us at [email protected].