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UPDATE 1-Starbucks loses appeal over union election at Seattle store

(Adds Starbucks comment in paragraphs 5-6, background in paragraphs 7-9)

By Daniel Wiessner

April 24 (Reuters) - A U.S. appeals court on Wednesday rejected Starbucks' claims that an employee vote to unionize at the coffee company's flagship Seattle store was invalid because it was held via mail ballot during the COVID-19 pandemic.

A three-judge 9th U.S. Circuit Court of Appeals panel upheld a National Labor Relations Board decision that the company, which is facing a nationwide union organizing campaign, must recognize and bargain with the store's union, which represents nearly 100 workers.

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Starbucks claimed a labor board official who ordered the mail-ballot election in March 2022 used the wrong data to determine that an in-person election was unsafe due to an upward trend in COVID cases in the Seattle area at the time. Workers at the store voted 38-27 to unionize.

The 9th Circuit on Wednesday disagreed, finding that the official correctly applied a test the board adopted in 2020 for determining when a mail-ballot election was appropriate because of the pandemic.

Starbucks said in a statement it was reviewing the decision.

"Our focus continues to be on training and supporting our managers to ensure respect of our partners' rights to organize and on progressing negotiations towards ratified store contracts this year," the company said.

Workers at more than 420 of Starbucks' 9,000 U.S. stores have voted to unionize since 2021.

The company and Workers United, the union that represents Starbucks workers, began negotiations this week on what they called a

"foundational framework"

to guide union organizing and collective bargaining across the country.

The U.S. Supreme Court heard arguments on Tuesday in a separate appeal by Starbucks of a ruling requiring it to rehire seven employees at a Memphis cafe who were fired as they pursued unionization.

During the pandemic, most union elections were held via mail ballot, and the labor board is still ordering elections by mail in some cases.

Business groups and Republican lawmakers have criticized the labor board for continuing to shun in-person elections even as the pandemic subsided. They claim mail-ballot elections lower voter participation and jeopardize workers' rights to choose whether to be represented by a union.

In a 2020 decision involving hospital operator Aspirus, the labor board said that, among other factors, regional directors should look at the 14-day trend in local COVID cases in deciding how to administer a union election.

In Wednesday's case, Starbucks claimed that meant looking at the average rate of new cases each day over a 14-day period, and not the number of cases reported 14 days apart as the regional director had done.

The 9th Circuit decision noted that the labor board had not defined what a 14-day trend was or laid out a specific method for calculating it.

"Even if we credit Starbucks's approach ... our standard of review does not permit us to displace the NLRB's choice between two fairly conflicting views," Circuit Judge M. Margaret McKeown wrote for the court. (Reporting by Daniel Wiessner in Albany, New York; Editing by Leslie Adler and Richard Chang)