NLRB Issues Game-Changing Decision for Union Organization Attempts

September 1, 2023 – On August 25, 2023, the NLRB announced new obligations and potential legal hazards for employers if they are presented with a demand for recognition by a union that claims to have the majority support of employees. The NLRB overruled a 52-year-old precedent in the process. The new case, Cemex Construction Materials Pacific, LLC, 372 NLRB No. 130 (Aug. 25, 2023) overruled Linden Lumber, 190 NLRB 718 (1971). Cemex presents two important changes for companies.

First, management can no longer refuse to recognize a union that claims to have a majority of support without potentially waiving subsequent rights to run their business in accord with past practices or otherwise without bargaining with the union. The classic example of a demand for recognition occurs when a union presents signed union cards for over 50% of the employee complement it seeks to represent. Under the old caselaw, the company could simply inform the union that it did not believe the union represented a true and uncoerced majority of the employees, thereby requiring the union to petition the NLRB to set an election (an RC petition). Now Cemex requires that the company either recognize the union or places the burden on the company to file a petition for an NLRB election (an RM petition) within 2 weeks of receiving the demand, unless the union already filed for an election before demanding recognition.

If the company does not file for an election, and also refuses to recognize and bargain, a union can file unfair labor practice charges alleging that any change to the terms and conditions of employment for the employees, or the overall refusal of the company to bargain for a contract is an unfair labor practice. Essentially, the only way for employees to now participate in a secret ballot vote to determine the selection of a bargaining representative after a union demands recognition with just over 50% support, is if the company files a petition for the election.

The second lesson of Cemex is the true hazard. Once a company refuses to recognize the union after the demand, and instead petitions the NLRB to run the secret ballot election, the NLRB has announced a heightened and dramatically more impactful remedy for any objectionable conduct by the company during the campaign before the secret ballot vote. In the past, if the employer committed isolated unfair labor practices the Board could overturn the vote and order a second election. Under the new Cemex case there will be no such rerun election. Instead, “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.” Cemex at p. 26. This means that any mistake in the employer’s campaign to advise employees of the practical effects and downsides of a union may result in the imposition of a mandatory bargaining order previously reserved for only the most egregious unfair labor practices committed by an employer in connection with a union certification election.

Finally, to compound the challenges facing employers in the organizing context, the NLRB published new “quickie” election rules on August 24, 2023, returning the election procedures to those put in place by a 2014 Board rule, then later rescinded, with the goal of shortening the time between when an employer (or the union) petitions for an election and the voting date. Once the new election rule goes into effect on December 26, 2023, an employer presented with a demand for recognition by a union may be left scrambling to share its own views on unionization with its employees during what will become a much shorter campaign period.

These changes highlight the need for employers to immediately seek expert legal advice whenever they become aware of union organizing at their workplaces or are faced with an overt claim by a union that they represent a majority of employees. Employers would also be well-advised to consider updated training of their managers and supervisors to ensure they are aware, among other things, of the types of unfair labor practices that could give rise to mandatory union recognition.

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