The Fifth Circuit Court of Appeals recently ruled on a case involving Starbucks and the National Labor Relations Board (NLRB), impacting the company's treatment of employees involved in union activities. The court's decision, filed on May 14, 2026, vacated the NLRB's earlier ruling regarding the termination of an employee, James Schenk, and sent the case back for further consideration. This ruling is significant as it addresses the balance between employee rights and employer authority in the context of unionization.

The case, identified by docket number 24-60649, arose from incidents at two Starbucks locations in upstate New York. Employees began unionizing efforts in the spring of 2022, which led to disputes over employee treatment and disciplinary actions. The court's ruling affects not only Starbucks but also sets a precedent for how similar cases may be handled in the future.

Starbucks Corporation was the petitioner in this case, contesting the NLRB's findings. The NLRB, a federal agency that enforces labor laws in relation to collective bargaining and unfair labor practices, was the respondent. The dispute originated from the termination of Schenk, a shift supervisor at the Latham store, who was fired after multiple infractions, including using inappropriate language about a coworker. At the Stuyvesant store, employees reported that the district manager increased her presence during the union campaign, which raised concerns about surveillance.

Initially, an Administrative Law Judge (ALJ) found that Starbucks did not violate labor laws by terminating Schenk. However, the NLRB disagreed, concluding that Schenk's termination was related to his union activities. The NLRB filed a complaint against Starbucks, which prompted the company to seek a review from the Fifth Circuit Court.

The court's ruling focused on the NLRB's handling of evidence regarding Schenk's termination. The judges noted that the Board did not adequately consider contradictory evidence, particularly concerning the severity of Schenk's infractions compared to other employees. The court stated, "The Board’s decision did not sufficiently address evidence that no other employee had used such extreme profanity targeted at coworkers." This lack of consideration led the court to vacate the NLRB's decision and remand the case for further proceedings.

Judge James E. Graves, Jr., along with Judges Stewart and Oldham, emphasized the importance of thorough evaluation of evidence in labor disputes. The court pointed out that the NLRB must grapple with all portions of the record, including those that contradict its conclusions. The ruling highlights the need for fair and balanced adjudication in labor cases, particularly when employee rights are at stake.

The impact of this ruling extends beyond Starbucks. It reinforces the principle that employers must provide justifiable reasons for disciplinary actions, especially when those actions may be perceived as retaliatory against employees engaged in union activities. This decision may influence how other companies handle similar situations, ensuring that employee rights are respected during unionization efforts.

Moving forward, the case will return to the NLRB for further examination of the evidence surrounding Schenk's termination. The Board will need to address the concerns raised by the Fifth Circuit Court and ensure a fair assessment of the facts. This ruling opens the door for potential changes in how labor disputes are resolved, particularly in cases involving union activities.

As of now, there is no indication that this case will be appealed further. However, the outcome of the NLRB's reevaluation may lead to additional legal challenges depending on how the agency responds to the Fifth Circuit's directives. The ruling serves as a reminder of the complexities involved in labor relations and the ongoing dialogue between employee rights and employer authority.