The U.S. Court of Appeals for the Fifth Circuit, in a ruling issued Sept. 4, declined to enforce the three challenged findings but upheld a fourth involving a manager’s statement to a pregnant employee that benefits could not be guaranteed if workers pursued unionization.

The decision reduces Starbucks’ exposure in the Wichita dispute while reinforcing limits on what employers can tell workers about the potential consequences of union organizing.

Court overturns three NLRB findings

The dispute arose from union organizing at Starbucks’ North Amidon Avenue store in Wichita in 2022.

The NLRB had determined that Starbucks unlawfully threatened employees with loss of benefits, created an impression that union activity was being monitored, and linked changes to hiring and store hours to the organizing campaign.

The Fifth Circuit upheld only the benefits-related finding. It concluded that the NLRB lacked substantial evidence for its determinations concerning reduced operating hours, the closure of the hiring portal and alleged surveillance.

Benefits threat remains a violation

The court upheld the finding involving Maia Cuellar-Serafini, who was pregnant when she spoke with store manager Carmella Neri.

According to the court record, Neri discussed Starbucks benefits with Cuellar-Serafini before saying that benefits could not be guaranteed if she was interested in organizing. The Fifth Circuit found the statement could reasonably be understood as a threat that union activity could affect employee benefits.

The court noted that employers may communicate predictions about the economic consequences of unionization, but such statements must be based on objective facts and cannot become threats of retaliation.

Store-hours allegation rejected

The appeals court disagreed with the NLRB’s conclusion that Starbucks unlawfully attributed reduced store hours to union activity.

The Wichita store had faced staffing shortages, prompting its manager to reduce operating hours. When an employee questioned the change, the manager said it was intended to ease pressure that the union had placed on employees.

The Fifth Circuit found that statement insufficient to establish a threat of reprisal for exercising federally protected labor rights.

Hiring-portal finding overturned

The court also rejected the NLRB’s finding involving Starbucks’ online hiring portal.

An employee had learned that customers were experiencing problems accessing the company’s online application system. Testimony cited in the court opinion indicated that an assistant manager said the hiring portal had been closed because of unionization efforts.

The Fifth Circuit nevertheless found the NLRB’s reasoning inadequate to establish an unlawful threat against existing employees. The court said the hiring decision was too removed from employees’ existing terms and conditions of employment to support the board’s conclusion.

Court finds surveillance evidence insufficient

The Fifth Circuit also overturned the NLRB’s finding that Starbucks created an impression that employees’ union activities were being monitored.

The board had relied in part on statements from Neri indicating that she knew about organizing discussions at the store and elsewhere in the district.

The appeals court said those remarks showed general awareness of union activity but did not establish that management was monitoring specific union meetings or organizing efforts.

Ruling defines limits of employer speech

The decision examined the boundary between protected employer speech and unlawful conduct during union campaigns.

The Fifth Circuit cited Section 8(c) of the National Labor Relations Act, which protects employers’ expression of views and opinions about unionization when those communications do not contain threats of reprisal, force or unlawful promises of benefits.

At the same time, the court held that statements reasonably understood by employees as threats of economic retaliation for supporting a union can violate federal labor law.

That distinction was central to the court’s decision to preserve the benefits-related violation while overturning the other three findings.

Second recent Starbucks ruling

The Fifth Circuit decision follows another appellate ruling involving Starbucks and union activity.

Two days earlier, the Second Circuit overturned an NLRB finding concerning Starbucks employees at the company’s Manhattan Meatpacking District location. That dispute involved restrictions on union-supporting T-shirts and multiple union pins.

The Second Circuit found that the labor board had not adequately balanced Starbucks’ interest in its store image against employees’ rights to promote unionization.

The two cases involve separate disputes, but both rulings represent setbacks for the NLRB’s positions in Starbucks labor cases.

Broader union dispute continues

The Fifth Circuit ruling does not resolve Starbucks’ wider conflict with organized labor.

Workers at more than 700 Starbucks locations have voted to unionize, while employees have filed hundreds of complaints with the NLRB alleging unfair labor practices. Starbucks has disputed many of those allegations.

The company therefore continues to face labor disputes nationally despite the recent appellate victories narrowing findings in individual cases.

One violation remains

The Fifth Circuit did not completely clear Starbucks in the Wichita case.

The court ordered enforcement of the NLRB’s determination involving Cuellar-Serafini, finding that the statement concerning employee benefits amounted to an unlawful threat of reprisal.

The ruling leaves Starbucks with one confirmed labor-law violation in the case while overturning the three other findings challenged on appeal.

Business and labor implications

The decision substantially reduces the NLRB findings against Starbucks arising from the Wichita organizing campaign and provides further guidance on how federal labor law distinguishes protected employer speech from unlawful threats.

For employers, the ruling underscores that discussing potential effects of unionization does not automatically violate federal law, but statements suggesting employees could lose existing benefits because of organizing activity can cross that line.

For Starbucks, the immediate legal outcome is favorable, although the company’s broader dispute with organized labor remains ongoing.

Reporting Credit: This report is based on records from the U.S. Court of Appeals for the Fifth Circuit and the National Labor Relations Board.

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Talwani issued a preliminary injunction Friday, replacing a temporary order that had blocked the requirements through Sept. 10. The ruling leaves existing procedures in place as states move further into preparations for the Nov. 3 midterm elections.

The timing has increased the significance of the dispute. North Carolina began sending its first mail ballots Friday, according to the supplied material, with other states expected to begin ballot distribution soon afterward.

The court fight centers on whether the president and federal agencies can impose new requirements affecting how states administer mail voting.

Ballot Distribution Adds Urgency to Legal Dispute

Election officials face increasingly limited time to prepare ballots and related voting systems before Election Day.

The legal challenge has focused in part on the practical consequences of requiring states to alter ballot materials or mail-voting procedures after election preparations have already begun.

The U.S. Court of Appeals for the First Circuit previously noted that several states had already purchased mail-ballot envelopes that would not comply with requirements contemplated under Trump’s order, according to the supplied material.

The appeals court also cited the potential for voter confusion and disenfranchisement if the requirements were implemented for the affected elections.

Trump Order Called for Expanded Federal Role

The dispute stems from Trump’s March executive order directing federal agencies to take a greater role in matters related to the administration of federal elections.

According to the supplied material, the order directed the Postal Service to develop requirements for mail-in and absentee ballots, including specifications for ballot envelopes and systems intended to identify voters eligible to receive ballots.

The order also directed federal agencies to develop citizenship lists and instructed the Justice Department to prioritize certain election-related investigations and prosecutions.

The First Circuit characterized the order as creating substantial new federal involvement in state election administration.

The Postal Service’s proposed requirements would require states to use specified envelope designs and provide state-specific lists of voters participating in mail voting. Under the proposed system, ballots that did not meet the requirements could face problems moving through the postal system.

States Challenge Executive Authority

The states challenging the order argue that the Constitution gives them a central role in administering elections and that the executive branch cannot unilaterally impose the changes described in the order.

The First Circuit previously upheld the district court’s decision blocking key portions of the order for the plaintiff states after finding that the federal government had not established grounds to stay the injunction pending appeal.

The administration maintains that the measures are intended to strengthen election integrity and prevent improperly mailed ballots. It also argues that the actions fall within federal authority over the postal system and election integrity.

The challengers contend that the executive branch is attempting to exercise authority belonging to Congress or the states.

Supreme Court Has Already Reviewed Earlier Stage

The dispute has previously reached the U.S. Supreme Court.

According to the supplied material, the Supreme Court rejected an earlier injunction on procedural grounds, finding that the legal challenge at that stage was premature without resolving the underlying constitutional questions.

After the Postal Service finalized its rules, the challengers returned to court.

The administration has again sought higher-court review in an effort to put the requirements into effect before the election, according to the supplied material.

Existing Mail-Voting Procedures Remain in Place

Talwani’s preliminary injunction does not determine whether the Postal Service requirements are ultimately lawful. Instead, it prevents their implementation while the underlying litigation proceeds.

For now, voters in the affected states will continue to use existing mail-voting procedures.

The case remains a broader test of the division of authority between federal institutions and the states in administering elections. The Constitution gives Congress authority to regulate the times, places and manner of congressional elections, while states traditionally administer elections.

The First Circuit said Trump’s order represented an unprecedented level of federal involvement in state election administration, according to the supplied material.

With states already preparing and distributing ballots, the legal timetable is becoming increasingly compressed. Any further effort to implement the requirements before Election Day would occur as election officials continue preparing ballots, systems, procedures and voter communications under existing rules.

Reporting Credit: This report is based on information attributed in the supplied material to the U.S. District Court for the District of Massachusetts, the U.S. Court of Appeals for the First Circuit, the U.S. Postal Service and the Executive Office of the President.

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In a statement on social media, Habba called the ruling political. She said she would resign “to protect the stability and integrity” of the office. At the same time, she stressed that the administration would continue its appeal and that her compliance should not be read as surrender.

Her exit draws attention to the limits of temporary federal appointments and to the Senate’s power to confirm U.S. attorneys. Those posts carry broad authority over federal criminal and civil enforcement.

Temporary appointment at the center of dispute

Habba, 41, took office in March as acting U.S. attorney for the District of New Jersey. The position oversees major federal prosecutions and represents the government in civil cases.

Federal law allows the attorney general or district judges to appoint interim U.S. attorneys for limited periods when no Senate-confirmed nominee is in place. New Jersey’s two Democratic senators signaled they would oppose her confirmation, blocking a permanent appointment under long-standing Senate practice.

Earlier this month, the U.S. Court of Appeals for the Third Circuit ruled that Habba could not continue in the role. The court wrote that New Jersey residents and career staff in the office “deserve some clarity and stability.”

The legal fight created uncertainty in the state’s federal courts. Lawyers questioned whether prosecutions filed during her tenure might face challenges. No broad dismissals have been reported in New Jersey, but similar disputes elsewhere have disrupted pending cases.

Political profile and legal background

Before joining the Justice Department, Habba worked as a partner at a small New Jersey law firm. She became one of President Donald Trump’s most visible legal defenders. She represented him in civil cases and appeared frequently on cable news programs.

Critics pointed to her lack of prosecutorial experience and described her appointment as political. During her tenure, she filed a trespassing charge against Newark’s mayor linked to a visit to an immigration detention center; prosecutors later dropped that charge. She also charged Democratic Representative LaMonica McIver with assaulting a federal agent during the same incident. McIver denies wrongdoing, and the case remains pending.

Speaking at the White House, Trump called the resignation a “sad situation.” He criticized Senate traditions that allow home-state senators to block nominees. He suggested the administration may continue relying on short-term appointments if confirmations stall.

Wider challenges to interim prosecutors

Habba’s case forms part of a broader pattern. Courts have questioned several acting U.S. attorneys appointed during Trump’s current term.

In eastern Virginia, a judge dismissed criminal cases against former FBI Director James Comey and New York Attorney General Letitia James. The judge ruled that the interim prosecutor who filed the charges lacked lawful authority. In Nevada and Southern California, federal judges also disqualified acting U.S. attorneys Sigal Chattah and Bill Essayli after finding they exceeded statutory time limits.

In northern New York, a federal judge recently heard arguments from Letitia James that the administration improperly appointed John Sarcone as acting U.S. attorney in that district.

Attorney General Pam Bondi said Habba will stay at the Justice Department as a senior adviser. Bondi vowed to challenge the court decisions and argued that judges should not override the president’s choices for federal prosecutors.

“These judges should not be able to countermand the President’s choice of attorneys entrusted with carrying out the executive branch’s core responsibility of prosecuting crime,” Bondi said.

Ongoing legal and institutional questions

The dispute highlights a narrow but important area of federal law. Presidents can fill vacancies with acting officials, but statutes set firm time limits. Courts can review whether those limits have been respected.

When judges find violations, active prosecutions may face delays or dismissal. That risk raises practical concerns for defendants, victims and career prosecutors alike. It also sharpens the constitutional debate over the balance of power among the White House, Congress and the judiciary.

For now, three Justice Department lawyers will divide Habba’s former duties in New Jersey. Appeals are still underway, and further rulings could follow.

Her resignation restores short-term clarity to the office. The broader contest over interim appointments, however, remains unresolved.

Source: AP News – Trump’s former lawyer Alina Habba resigns as top federal prosecutor in New Jersey

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