04/17/2026: Fifth Circuit Rejects Coercive Subpoena Standard
Board rejects argument to deduct unemployment benefits from damages.
Starbucks v. NLRB, 24-60500 (5th Circuit)
The Fifth Circuit vacated an NLRB order finding that Starbucks violated the NLRA by obtaining Board-issued subpoenas seeking information about protected union activity, holding that the Board applied the wrong legal standard to assess liability.
The dispute arose from a 2021 union organizing campaign at Starbucks’ La Quinta, California store. After the union won certification, Starbucks obtained subpoenas directed at two employee organizers, seeking communications related to union activity and documents provided to the Board. An administrative law judge revoked the subpoenas as overbroad. The Board then initiated a separate unfair labor practice proceeding over the subpoenas themselves, and both the ALJ and the Board found that obtaining them violated Section 8(a)(1) of the NLRA — applying the balancing test from National Telephone Directory Corp. as the governing liability standard.
The Fifth Circuit reversed. Under established Fifth Circuit precedent, the proper Section 8(a)(1) liability standard asks whether an employer’s conduct would “tend to be coercive” under the “totality of the circumstances.” The court held that National Telephone does not supply that standard — it is a discovery rule governing when subpoenas may be quashed based on confidentiality interests, balancing employees’ rights to keep protected activities private against an employer’s need for information to mount a defense. That balancing inquiry, the court explained, does not answer whether the employer’s conduct was coercive within the meaning of Section 8(a)(1).
The court rejected the Board’s argument that it had previously transformed National Telephone into a liability standard through Wright Electric, Inc., finding no such holding there. It similarly distinguished the Ninth Circuit’s decision in United Nurses Ass’ns of California v. NLRB, where that court found National Telephone was cited only for the general principle that union activity is protected from employer scrutiny — not as the governing test for liability, as the Board treated it here.
The court also flagged but declined to resolve what it called an “incongruity”: the Board itself issued the subpoenas at Starbucks’ request, included instructions explaining how recipients could petition for revocation, and then found that obtaining them was an unfair labor practice. The court left that question for the Board to address on remand, directing it to apply the totality-of-the-circumstances framework.
Significant Cases Cited
NLRB v. Brookwood Furniture, Div. of U.S. Indus., 701 F.2d 452 (5th Cir. 1983): Established the Fifth Circuit’s standard that Section 8(a)(1) liability turns on whether employer conduct would “tend to be coercive” under the totality of the circumstances.
National Telephone Directory Corp., 319 NLRB 420 (1995): Board decision establishing a discovery balancing rule for determining when employees may withhold information from employer subpoenas based on confidentiality of protected activity.
United Nurses Ass’ns of California v. NLRB, 871 F.3d 767 (9th Cir. 2017): Ninth Circuit decision upholding a Board finding that a quashed subpoena violated Section 8(a)(1), distinguished here because the Board cited National Telephone only for limited background principle rather than as the governing liability standard.
Bill Johnson’s Restaurants, Inc. v. NLRB, 461 U.S. 731 (1983): Supreme Court decision holding that prosecuting a baseless lawsuit with retaliatory intent against an employee’s Section 7 activity is an enjoinable unfair labor practice, cited by the Fifth Circuit in a footnote flagging unresolved questions about employer liability for Board-issued subpoenas.
Tesla, Inc. v. NLRB, 120 F.4th 433 (5th Cir. 2024): Recent Fifth Circuit en banc decision affirming that on remand following vacatur, the Board is free to reconsider the record and issue any decision supported by substantial evidence.
Village Plumbing & Heating NY Inc., 374 NLRB No. 96, 29-CA-289082 (Published Board Decision)
The Board denied the General Counsel’s motion for default judgment against a New York plumbing contractor, finding that factual disputes about whether four workers were properly offered reinstatement required a hearing rather than summary resolution.
The case arose from a 2023 informal settlement agreement resolving Section 8(a)(3) and (1) charges — discrimination against union-represented workers. The settlement required the Respondent to reinstate two employees (Pejkovic and McIntosh) and offer employment to two job applicants (Cotto and Squicciarini). When the four workers showed up at the Respondent’s offices on November 27, 2023, the date they had provided in advance, they were turned away. The Regional Director ultimately issued a complaint for breach of the settlement, and the General Counsel moved for default judgment, arguing noncompliance was undisputed.
The Board majority (Chairman Murphy and Member Mayer) denied the motion, holding that the General Counsel bears the burden of showing no genuine issue of material fact before default judgment may enter. The Respondent filed affidavits asserting that the workers arrived without tools, were improperly dressed, refused to provide current contact information, used profanity, and stated they would never work for the Respondent — conduct the Respondent claimed forfeited their reinstatement rights. The majority found those conflicting accounts sufficient to require a hearing, noting that whether alleged discriminatee misconduct meets the threshold to relieve a respondent of its reinstatement obligation is a factual question not resolvable on a summary record. The proceeding was remanded to Region 29 for a hearing before an ALJ limited to the question of whether the Respondent complied with the settlement agreement.
Member Prouty dissented, arguing no genuine factual dispute existed. In his view, the record conclusively established that the discriminatees appeared at the appointed time and place and were not reinstated — the only fact relevant to the breach inquiry. He characterized the Respondent’s justifications as pretextual, noting that the Respondent never advised the workers in advance where to report, what tools to bring, or what dress was required, and that the Respondent already possessed contact information for all four individuals. He would have granted default judgment.
Significant Cases Cited
ThyssenKrupp Stainless USA, LLC, 362 NLRB 621 (2015): The Board may deny a default judgment motion where genuine issues of material fact exist as to whether a settlement agreement was breached.
Vocell Bus Co., 357 NLRB 1730 (2011): Default or summary judgment is inappropriate where a factual dispute exists concerning noncompliance with a settlement agreement.
Hawaii Tribune-Herald, 356 NLRB 661 (2011): A respondent is generally relieved of its reinstatement obligation only in extraordinary circumstances, such as when a discriminatee has engaged in misconduct so flagrant as to render them unfit for further service.
Key Handling Systems, Inc., 361 NLRB No. 2 (2014): A decrease in business is not a legitimate defense to noncompliance with a settlement agreement’s reinstatement terms.
Timet, 251 NLRB 1180 (1980): Whether a discriminatee’s conduct meets the threshold to forfeit reinstatement rights is a factual determination not suited for summary resolution.
Dold Foods LLC, 374 NLRB No. 97, 14-RC-353703 (Published Board Decision)
A two-member Board majority denied the union’s request for review of a Regional Director decision setting aside a December 2024 representation election at a Wichita, Kansas food processing facility. The election, conducted under a Stipulated Election Agreement, produced a tally of 277 for and 266 against representation, with 11 void ballots — a margin exactly equal to the void ballot count.
The workforce includes a substantial number of employees whose first language is not English. The Regional Director sustained four employer objections, finding the election fatally compromised by: (1) a Swahili election notice containing a sample ballot missing the Swahili words for “yes” and “no”; (2) a Spanish election notice containing a sample ballot almost entirely in English, bearing only the Spanish word “muestra” (sample); (3) the use of English-only ballots without advising employees in the translated notices that actual ballots would not be in their language (contrary to NLRB Casehandling Manual guidance); and (4) the Region’s denial of the employer’s request for Swahili translators, despite advance notice that a substantial number of employees could not read or write in their own language and that all Board agents at the election were English-only speakers.
The Regional Director found these combined circumstances created “a high potential for voter confusion,” relying on the “laboratory conditions” standard from General Shoe Corp. and the closeness of the vote. She set aside the election and directed a rerun.
The majority denied review, declining to second-guess the Regional Director’s judgment. It distinguished prior cases — Superior Truss & Panel and Arthur Sarnow Candy — that denied objections related to the absence of translated ballots or interpreters, noting that those cases did not involve errors in the election notices themselves comparable to those here. The majority also emphasized the unusual number of void ballots.
Member Prouty dissented, arguing that review should be granted on two grounds. First, he contended the Regional Director applied the wrong legal standard: Board precedent requires evidence of actual voter confusion, not merely the “potential” or “likelihood” of confusion, to set aside an election. He read Superior Truss & Panel and Arthur Sarnow Candy as establishing this standard broadly, not just in cases involving a single type of alleged deficiency. Second, he argued the employer’s offer of proof was facially insufficient — it contained only a single, vague paragraph without identifying any witnesses, summarizing any anticipated testimony, or specifying how many voters were actually affected. Under Board rules and precedent, an offer of proof must be “reasonably specific in alleging facts which prima facie would warrant setting aside an election,” and he would have overruled the objections on that basis alone without reaching the merits.
Significant Cases Cited
General Shoe Corp., 77 NLRB 124 (1948): Established the “laboratory conditions” doctrine requiring the Board to maintain near-ideal conditions in representation elections to determine employees’ uninhibited desires.
Superior Truss & Panel, Inc., 334 NLRB 916 (2001): Board adopted a hearing officer’s finding that neither a failure to provide translated ballots nor deficiencies in translated notices — absent evidence of actual voter confusion — warranted setting aside an election.
Arthur Sarnow Candy, 311 NLRB 1137 (1993), enfd. 40 F.3d 552 (2d Cir. 1994): Board upheld a regional director’s conclusion that absence of an interpreter did not warrant setting aside an election where no evidence showed any eligible voter was confused or unable to make an informed choice.
Jacmar Food Service Distribution, 365 NLRB 271 (2017): Established that an objecting party’s offer of proof must furnish evidence or descriptions of evidence that, if credited at a post-election hearing, would warrant setting aside the election.
Lockheed Martin Corp., 331 NLRB 852 (2000): Articulated the standard that representation elections are not lightly set aside, and that the burden on a party seeking to overturn a Board-supervised election is a heavy one.
RRI West Management, LLC, an Affiliate of the Westmont Hospitality Group, D/B/a Red Roof Plus+ San A, 374 NLRB No. 98, 16-CA-278283 (Published Board Decision)
The Board adopted an ALJ’s findings that a San Antonio hotel violated Section 8(a)(1) by discharging sales representative Diandra Diaz and by directing her to stop counseling coworkers about workplace concerns.
Diaz, a former assistant general manager reassigned to a sales role, raised COVID-related concerns with management and advised coworkers about quarantine and testing in early January 2021. Management then began deliberating internally about how to frame a termination, with an HR vice president suggesting the discharge could be “chalk[ed] up” to a 90-day probationary period. The ALJ found that sequence, analyzed under the Wright Line burden-shifting framework, established that Diaz’s protected concerted activity was the primary — and likely only — motive for her discharge, with the performance rationale entirely pretextual. The Board affirmed those findings and the separate violation based on the directive to stop counseling employees, substituting reliance on GC Exhs. 2 and 3 for the ALJ’s inadvertent citation to GC Exh. 5.
On remedy, the Board rejected the employer’s argument that Diaz’s backpay should be offset by unemployment compensation she received through Texas’s employer chargebacks program. Relying on NLRB v. Gullett Gin Co., the Board reaffirmed its longstanding policy against such deductions, reasoning that an employer’s mode of participation in a state unemployment program is a matter of state public policy outside the Board’s concern. The Board also amended the remedy to include make-whole relief for direct and foreseeable pecuniary harms under Thryv, Inc. Chairman Murphy and Member Mayer noted openness to reconsidering Thryv but applied it in the absence of a three-member majority to overrule it.
Significant Cases Cited
Wright Line, 251 NLRB 1083 (1980): Established the burden-shifting framework for mixed-motive discharge cases, requiring the General Counsel to show protected activity was a motivating factor before the burden shifts to the employer to prove it would have acted the same regardless.
NLRB v. Gullett Gin Co., 340 U.S. 361 (1951): Supreme Court decision holding that the Board has discretionary authority to exclude unemployment compensation from backpay calculations, as such payments serve state public policy rather than any obligation of the employer.
Thryv, Inc., 372 NLRB No. 22 (2022): Expanded the make-whole remedy to cover direct and foreseeable pecuniary harms beyond lost wages, including search-for-work and interim employment expenses.
Myers Industries, 268 NLRB 493 (1984): Defined protected “concerted activity” under Section 7 to include a single employee enlisting coworkers in mutual aid and protection.
Standard Dry Wall Products, 91 NLRB 544 (1950): Established the Board’s deferential standard for reviewing ALJ credibility determinations, requiring clear preponderance of evidence to overturn them.