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NLRB's Cemex Decision: Not Exactly Card Check, but Awfully Close

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On August 25, 2023, the National Labor Relations Board (NLRB) released its highly anticipated decision in Cemex Construction Materials Pacific.

Logo for the National Labor Relations Board (NLRB)
Logo for the National Labor Relations Board (NLRB)

Cemex (Case No. 28-CA-230115) involved allegations that the employer committed unfair labor practices (ULPs) before, during, and after the "critical period" of an election campaign, when the union had signed authorization cards from a majority of the bargaining unit. The Cemex decision does two key things: (i)institutes a new modified Joy Silk doctrine that facilitates card check recognition; and (ii)lowers the threshold for when the NLRB will issue a bargaining order without holding an election.

The NLRB previously indicated it would look to revive the 1948 Joy Silk doctrine. Joy Silk required employers to recognize and bargain with the union where the union showed it had a majority of signed authorization cards, unless the employer had a "good faith doubt" as to the authenticity of the cards and the veracity of the claimed support for the union. While Cemex is not an outright embrace of the 50-years-dormant Joy Silk doctrine, practically speaking the NLRB came close to re-instituting "de facto" authorization of a bargaining unit without an election.

Critically, the majority in Cemex lowered the threshold for the NLRB to issue a bargaining order rather than re-run the election when it finds the employer committed ULPs during the critical period. Previously, Gissel bargaining orders were an extraordinary remedy reserved for cases where an employer committed egregious, or "hallmark" violations, that made a free and fair election impossible. Until now, secret ballot elections have been the preferred method for determining whether employees want to have a union represent them or not.

The majority in Cemex stated that the decision's new framework is necessary to rectify the impact of ULPs committed during elections by employers, which prevent free and "untrammeled" choice of employees to choose a bargaining representative (or not). "It is our considered view that our new standard will more effectively disincentivize employers from committing unfair labor practices prior to an election."The dissent criticizes the majority's contradictory approach: while the NLRB cannot overrule Supreme Court or federal circuit court precedent, it is nonetheless "establishing a new standard that, in many cases, is going to result in lengthy litigation over an alleged violation that will never survive judicial review."

The New Standard — Joy Silk Modified

In Cemex, the NLRB laid out its new standard for recognizing a union when the union presents a majority of signed cards to the employer. The NLRB explicitly overruled Linden Lumber, which abandoned the Joy Silk doctrine, permitted employers to reject authorization cards as proof of majority support and required the union to file an election petition. Linden Lumber, affirmed by the Supreme Court, has been the standard for 52 years.

Under the new standard, should a union present an employer with a demand for recognition and authorization cards signed by a majority of employees, an employer must either (i)recognize the union as the bargaining representative; or (ii)"promptly" file an RM petition for an election to test the union's majority status or the appropriateness of the proposed bargaining unit, assuming the union has not already filed its own election petition. The NLRB defines "promptly" as within two weeks of the union's demand for recognition. Notably, and in a departure from the Joy Silk doctrine, the employer can file the RM petition without a "good faith" doubt regarding the veracity of the cards.

No More Re-run Elections. A Single Violation, No Matter How Slight, May Now Result in a Bargaining Order

Should the employer commit any violation of the NLRA during the election's "critical period," the NLRB may dismiss the RM petition (i.e., throw out the election results) and issue a bargaining order, requiring the employer to bargain with the union. Bargaining orders will be issued in lieu of rerun elections "if the NLRB finds the possibility of erasing the effects of past practices and of ensuring a fair election (or fair re-run) by the use of traditional remedies... is slight and that employee sentiment once expressed through cards would, on balance, be better protected by a bargaining order."

The NLRB stated it will rely on the "current factors" it uses to determine whether an election should be set aside due to ULPs committed by an employer, including: (i)the number and severity of ULPs and the proximity of the same to the timing of the election; (ii)the size of the unit and margin of the vote; and (iii)the number of employees the misconduct reached.

Should an employer refuse to recognize and bargain with the union upon being presented cards and also fail to timely file an RM petition, a union may file a ULP for refusing to bargain with the union. That will result in issuance of a bargaining order.

ULPs in Cemex

The NLRB described the alleged ULPs committed by the employer both before, during, and after the election that warranted the remedy of a Gissel bargaining order, including:

  • threatening drivers with discipline (including termination) for placing pro-union stickers on their hard hats;
  • instructing employees not to talk to union organizers or union-friendly employees on "Company time";
  • threatening closure or movement of a plant; and
  • using fliers, documents and messages which contained misrepresentations regarding consequences of strikes and impacts of strikes.

The union lost the election by a margin of seven votes, with a very high voter turnout. The NLRB reasoned that the cumulative impact of the ULPs prevented a full and fair election, resulting in the Gissel bargaining order instead of an election re-run: "Simply requiring the Respondent to refrain from future threats and other coercive conduct... and to post a notice, while remedially necessary, would not, in our view, be sufficient to dispel the coercive atmosphere the Respondent has carefully cultivated here."

The NLRB went on to explain that the employer's continued unfair labor practices after the election also contributed to its decision to issue a Gissel order, as it "suggests that the Respondent would likely meet a renewed organizing effort with further unfair labor practices tending to make a fair re-run election unlikely."

The NLRB quickly dispensed with the employer's arguments that there should be a re-run election rather than a bargaining order. The NLRB decided that neither the passage of time (over two years) nor a change in management would permit the employees to make a free choice of union representative should the election be re-run. The NLRB reasoned that "many" employees remained from the first election and would have "remembered or discussed" the prior union activity and the company's reactions to it, preventing full and free employee participation.

Retroactive Application

Going forward, Cemex may be applied retroactively "to all pending cases in whatever stage unless retroactive application would work a manifest injustice." The NLRB defended retroactive applicability of the decision, stating: "[A]ny harm to the interest of employers who might have relied on the prior framework for imposing bargaining orders is outweighed by the clear harm to the achievement of the Act's policies by continuing to apply the prior standard in cases involving serious misconduct prior to a NLRB-conducted election."

Dissent: The Majority Decision Negatively Impacts Employee Free Choice Enshrined in the Act

In addition to describing much of the decision as unenforceable dicta, lone dissenter Marvin Kaplan criticized the majority for trampling on employee free choice: "The right of citizens to vote in a secret-ballot election is the very cornerstone of American democracy, and the right of employees to vote in a secret-ballot representation election is foundational to the system of workplace democracy created by the act." Further criticizing the majority opinion, Kaplan pointed out: "[U]nder the majority's purported standard, employees' right to a secret-ballot election hinges on whether or not an employer successfully anticipates and avoids all actions that could be viewed as violations of the Act. An employee's right to a secret-ballot election should not be conditioned on employer perfection."

Kaplan also noted that the decision conflicts with basic principles of well-established law and Supreme Court precedent on multiple fronts, not only with the explicit overruling of Linden Lumber, but also with the Supreme Court's decision in Gissel. Kaplan asserted that the NLRB has effectively implemented a "zero-tolerance standard" that "will not withstand appellate scrutiny."

Practical Takeaways for Employers

It is uncertain if Cemex will be appealed to federal court, but as the dissent noted, litigation is likely to proliferate concerning the application of Cemex to cases in the past, present, and future. For now, some immediate action steps employers can take to manage the impact of Cemex and address the drastic change in remedial measures include:

  • Know the new timeline and procedure. Employers should be aware that they have only two weeks to file an RM petition from when the union demands recognition based on cards. An employer previously had no obligation to file a petition itself to remain a union-free workplace. In many cases, a union might file a petition sooner to start the election clock. Compounding the lightning-fast speed of elections, the NLRB promulgated new election rules effective December 26, 2023, that shorten the current election timeline.
  • Be prepared. Employers should be trained and prepared for an election at any time. Often unions obtain signed cards without the employer knowing about it. This means it is paramount as part of an employer's preparedness plan to train employees about what it means to sign a union authorization card.
  • Focus on compliance. The stakes for violating the NLRA are much higher for employers now that the NLRB has apparently replaced the re-run elections with bargaining orders.
    • Employers should consider implementing training on the "dos and don'ts" during organizing and potential organizing to minimize the risk of ULP charges that may result in a bargaining order.
    • The decision makes only a passing reference in a footnote to an employer's continued right to free speech under Section 8(c) of the Act, which may indicate something about the scrutiny employers will face concerning their pre-petition conduct. Employers will have to exercise caution in how they exercise their free speech right to campaign, as ULP charges filed by a union may be based on written and/or oral materials made before or during a campaign.
    • As the dissent pointed out, the practical impact of Cemex is that "even minor or less extensive unfair labor practices," including even the mere maintenance of overbroad work rules (as exemplified in the recently issued Stericycle decision) could result in a bargaining order. Employers should review their handbooks and work rules for compliance.

Notably, Cemex did not directly disturb current case law allowing employers to conduct mandatory employer-sponsored meetings. However, this is another area where the NLRB GC Office indicates it seeks to overturn precedent in order to ban and/or reduce the ability of employers to hold these meetings by declaring the act of doing so a ULP.

Due to the current composition of the NLRB, it does not appear that the trend of union-friendly decisions will end any time soon. Until the slow-moving appeal system considers the question, it appears that the Cemex decision must be considered the new normal in union organizing.

Posted In: National Labor Relations Act (NLRA); National Labor Relations Board (NLRB); U.S. Supreme Court

Want to know more? Read the full article by at Littler Mendelson

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