PUBLICATIONS

Executive Summary: For nearly 90 years, whether employees desired union representation was determined through a secret ballot election administered by the National Labor Relations Board (NLRB or Board). Though the National Labor Relations Act (Act) permits the use of other means to establish a union’s majority support, the Board and courts have long recognized the “method that best protects employees’ freedom of choice and best ensures majority rule is a Board-conducted, secret ballot election.” After legislative efforts to replace secret ballot elections with “card check” recognition failed (see, e.g., the Employee Free Choice Act and the Protecting the Right to Organize Act), the unelected NLRB has effectively done so on its own.

Last week, the NLRB turned the law governing union elections on its head. On Thursday, August 24, 2023, the Board (re)issued Obama-era regulations to reduce, to the greatest degree practicable, the amount of time between a petition for election and the election. Then, on Friday, August 25, 2023, the Board issued its much-anticipated decision in Cemex Construction Materials Pacific, LLC, 372 NLRB No. 130 (2023), which overturned 50 years of precedent and fundamentally re-wrote the process by which private sector employees can unionize.

In tandem, these changes to union election law and procedure reflect a paradigm shift in the way the NLRB interprets and applies the Act. They echo the Board’s conscious decision to dis-incentivize carefully administered, democratic, secret ballot elections in favor of union representation through “card check” recognition or by way of a government mandated bargaining order. Where elections must be held (i.e., if an employer meets the deadline for requesting one), the Board prioritizes the speed by which a result can be achieved over all other considerations and bargaining orders over democratic outcomes.

The Cemex Holding Turns Fundamental Principles of Board Election Law on Their Head

The Board’s holding in Cemex compels an entirely new dynamic for the process by which private sector employees can unionize. Now, when a union claims majority support and demands recognition, an employer has three options: (1) recognize the union and commence bargaining without testing whether the union enjoys genuine majority support; (2) file a petition seeking an RM election within two weeks of the union’s demand for recognition; or (3) take no action at all and defend against a refusal to bargain unfair labor practice (ULP) charge filed as a result of the employer’s failure to accept the union’s demand for recognition. As outlined below, each of these three options is fraught with peril.

The first option reflects the Board’s view that a union demand for recognition represents a reliable measure of employee support and that an employer should ordinarily accept and immediately commence bargaining. Of course, this fails to recognize that employees often sign union authorization cards due to coercion or intimidation, based on misrepresentations, or without full knowledge of the ramifications of doing so. It also ignores the legal and practical limitations on an employer’s ability to confirm the union’s claim of majority support, and the legal peril an employer faces if it recognizes a union that lacks majority support under Section 8(a)(2) of the Act.

The second option, on its face, appears to protect access to Board-administered, secret ballot elections. It does not. If a union foregoes filing a petition and demands recognition, option two places the burden on the employer to file an RM petition and request an election within two weeks of receiving the union’s demand. If the employer neglects to request an election timely or chooses not to do so, employees lose their chance to determine whether they desire union representation through a secret ballot election. If an employer requests an election, the Board presumes the union’s majority support. Though an employer may challenge the union’s claim of majority status in a hearing, the employer bears the burden of proving the union lacks majority status with limited evidentiary or practical means to satisfy it. Most importantly, the Board’s aggressive new policy on bargaining orders means that any violation of the Act following the union’s demand–even one that historically would not be deemed to impact the outcome of an election–will result in the Board’s entry of a bargaining order.

The third option–doing nothing and defending a ULP for refusing to bargain–may be fraught with even greater peril. If an employer fails to take action after two weeks of the union’s demand to bargain, its bargaining obligation becomes effective, and its failure to commence bargaining with the union constitutes a violation of the Act. While the employer can challenge whether the union maintained majority support as an affirmative defense to the ULP, as with option two, above, it generally lacks the evidence and the means to obtain evidence necessary to sustain such a defense. In addition, an employer that chooses this option faces additional liability for any changes to the terms and conditions of employment it makes following an employer’s RM petition or the union’s demand unless it can prove the union lacked majority support.

The Cemex holding also fundamentally changes the Board’s threshold for issuing a bargaining order–i.e., an order compelling an employer to recognize and bargain with a labor organization irrespective of the outcome of an election. Under the Board’s new test, it will issue a bargaining order unless it is “virtually impossible” to conclude that the challenged conduct occurring during the critical period preceding an election could have impacted the result. This means a single stray remark could justify overturning an election result rejecting union representation by a lopsided margin. What’s worse, under its recent decision in Stericycle, Inc., 372 NLRB No. 113 (2023), the Board’s pedantic reading of an otherwise neutral handbook policy maintained during the critical period could justify imposing a bargaining order, even if the rule was not applied to unit employees during the critical time period.

The Board’s holding in Cemex will certainly garner a robust challenge in the federal courts. As Member Kaplan capably noted in his well-articulated dissent, the Cemex holding will likely face judicial scrutiny relating to the Board’s questionable rationale for departing from its prior standards. Moreover, courts will indubitably scrutinize whether the Board’s holding conflicts with the Supreme Court’s holding in NLRB v. Gissel Packing Co., 395 US 575 (1969). In Gissel, the Supreme Court placed strict limits on the Board’s use of bargaining orders to remedy unfair labor practices and objectionable conduct impacting the outcome of an election in lieu of ordering re-run elections. Cemex treats the Supreme Court’s holding as entirely irrelevant to its adoption of a new standard that permits the issuance of punitive bargaining orders for conduct that previously would not have justified a second election, let alone a bargaining order.

But Wait – There’s More…Restoration of the 2014 Election Rules

The NLRB’s final rule regarding representation-case procedures gives employers less opportunity to resolve disputes concerning voting unit scope and eligibility prior to an election, ensures employees have less time to consider whether they desire union representation, delays the resolution of objections to most questions concerning unit composition and scope until after the election, and shortens the time for an employer to submit its statement of position on contested issues while eliminating any requirement for a petitioning union to provide its position on such matters before the pre-election hearing. As the Board concedes, its “new” election rules reflect nothing more than a return to Obama-era procedures that had been amended in 2019 to permit parties additional time to comply with various pre-election requirements, to clarify and reinstate some procedures designed to ensure the opportunity for pre-election resolution of unit scope and voter eligibility issues and to implement other changes to better balance the expeditious processing of questions of representation with the efficient, fair, and accurate resolution of questions of representation. The net effect of the Board’s new regulations is reflected in the chart below:

Aside from significantly reducing the amount of time between the filing of a petition and the administration of an election, the re-implementation of these rules injects uncertainty into the election process. In many cases, elections will be conducted without a definitive determination as to which employees comprise the voting unit, which employees are deemed supervisors under the Act, and which employees hold positions making them ineligible to vote (e.g., managers, guards, confidential employees, etc.). Such issues will be determined after the election is held and only if the outcome of the election requires such a ruling.

The Board’s disinclination to determine employees’ supervisory status before an election is particularly problematic. The test to determine whether a particular employee is a supervisor not covered by the Act or an employee (albeit one with some higher level of responsibility) covered by the Act is extremely fact intensive, and determinations applying the Board’s test are notoriously inconsistent. Supervisors’ actions and statements bind the employer and can form the basis of unfair labor practices. If supervisory status is not defined before the election, an employer lacks sufficient certainty to effectively police conduct that may violate the Act. This is no trifling matter, given the Board’s holding in Cemex. A stray remark from an employee whose supervisory status was not resolved prior to the election could justify nullifying an election result and the imposition of a bargaining order.

These regulatory changes, in combination with the Board’s holding in Cemex, reflect the Board’s effort to stack the deck for organized labor, ignoring the statutory right of employees to refrain from engaging in union organizing activity.