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NLRB Grants Labor Unions Superpowers in Organizing. Is it Game over for Employers?

August 29, 2023

The National Labor Relations Board issued a groundbreaking decision in Cemex Construction Materials Pacific, LLC that will likely leave employers reeling.  The Board cast aside over 50 years of established law, and created a new standard that will further tilt the playing field in favor of labor unions in the union election process.  The new standard will result in more bargaining orders, which will force employers to bargain with a union despite the employees’ preference to remain union free.

At the urging of its General Counsel, the Board overturned the rule it established in 1971 in a case known as Linden Lumber, which permitted an employer to refuse a union’s demand for voluntary recognition based upon a showing of cards signed by a majority of employees in the bargaining unit and, instead, insist upon a Board-conducted election in order to determine whether the employees actually wanted to be represented by the union. The Board’s decision in Linden Lumber was subsequently affirmed by the United States Supreme Court.

The Board’s decision in Cemex Construction Materials overrules Linden Lumber and replaces it with a new, pro-union standard.  Here is what the Board said:

Under the standard we adopt today, an employer violates Section 8(a)(5) and (1) by refusing to recognize, upon request, a union that has been designated as Section 9(a) representative by the majority of employees in an appropriate unit unless the employer promptly files a petition pursuant to Section 9(c)(1)(B) of the Act (an RM petition) to test the union’s majority status or the appropriateness of the unit, assuming that the union has not already filed a petition pursuant to Section 9(c)(1)(A).

We conclude that an employer confronted with a demand for recognition may, instead of agreeing to recognize the union, and without committing an 8(a)(5) violation, promptly file a petition pursuant to Section 9(c)(1)(B) to test the union’s majority support and/or challenge the appropriateness of the unit or may await the processing of a petition previously filed by the union.

Essentially, this means that if a union asserts that it has majority status, which is typically done by offering to demonstrate that a majority of employees in the proposed unit have signed union authorization cards, the employer must either recognize and bargain with the union or file a petition to request that the Board conduct an election.

But wait, there is more!

The Board went on to hold that if the employer commits an unfair labor practice that requires setting aside the election, the petition (whether filed by the employer or the union) will be dismissed, and the employer will be subject to a remedial bargaining order.  Previously, such an extraordinary measure, known as a Gissel bargaining order named after another SCOTUS case, required a showing of unfair labor practices during the pre-election period that were so egregious that a re-run election could not be conducted fairly.  In those limited circumstances, the Board would order the employer to bargain with the union even though the union had just lost the election.   In other cases where employers committed unfair labor practices during the pre-election period, the Board would require a re-run election.

Under this new standard, any unfair labor practices committed by an employer during the pre-election period will result in a bargaining order, unless the violations are so minimal that it is virtually impossible to conclude that they could have affected the election results.

As a result, employers presented with authorization cards signed by a majority of employees in an appropriate unit will be between a rock and a hard place, and will be forced to choose between recognizing and bargaining with the union, or filing a petition for election, knowing that most any unfair labor practice found to have occurred in the pre-election period will result in a bargaining order.

The Board did note that an employer that refuses to bargain without filing a petition may still challenge the basis for its bargaining obligation in a subsequently filed unfair labor practice case.  However, its refusal to bargain, and any subsequent unilateral changes it makes without bargaining are at its own risk.

In Cemex Construction, the Board concluded that: (1) the Respondent refused the Union’s request to bargain; (2) at a time when the Union had in fact been designated representative by a majority of employees; (3) in a concededly appropriate unit; and then (4) committed unfair labor practices requiring the election to be set aside, violating Section 8(a)(5) under the standard we announce today.

But wait, there is still more!

The Board held that its decision, setting aside decades of case law, would be applied retroactively.

What does this all mean?

Employers may begin to recognize and bargain with unions even without a valid union election.  Other employers may go through the election process without running an educational campaign.  That will likely result in more wins for unions.  And for those who do decide to educate employees, many of those employers will face bargaining orders.

The Board’s decision in Cemex Construction Materials and the new standard it creates will undoubtedly be appealed and the issue will likely make its way to the Supreme Court of the United States.  The ultimate fate of the Board’s new standard remains to be seen.

In the meantime, employers should take any indication of card signing activity very seriously.  Under this new standard, the best time to educate employees about what it might really mean to form a union (and what it does not mean) will be before the employer is presented with a showing of majority support.