Cemex Alert! Employer Ordered to Bargain Despite Winning Its Union Election

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In our August 28, 2023 E-lert, we warned employers that the National Labor Relations Board’s decision in Cemex Construction Materials Pacific would be game-changing. One of the key points of that decision is that if the employer files a petition for election in response to a request for recognition but commits an unfair labor practice, the petition may be dismissed and the employer ordered to recognize and bargain with the union. And now that has happened.

The Cemex Decision. The NLRB held that if a union requests voluntary recognition, an employer has two weeks from the demand for recognition to either (1) voluntarily recognize the union as the bargaining representative in the unit sought by the union, or (2) file an RM petition (employer-filed petition) with the NLRB. If the employer does not file, the NLRB will hold that it has waived its right to demand an election and will order the employer to bargain with the union.

Additionally, the NLRB also held that if an unfair labor practice is committed following the demand for recognition, the NLRB will impose on the employer an order to bargain with the union – even if the employees have voted against unionization in the secret-ballot election – unless the unfair labor practice is “so minimal or isolated that it is virtually impossible to conclude that the misconduct could have affected the election results.”

Background of the Case. In I.N.S.A. Inc., the employer received a letter signed by the majority of employees demanding union recognition and bargaining. The union then petitioned for an election, which it eventually lost. But in the interim, the employer engaged in unlawful/objectionable conduct, including:

  • soliciting employee grievances, and promising employees increased benefits and improved terms and conditions of employment if they refrained from supporting the Union;
  • restricting employees from talking about unions while allowing employees to discuss other, non-work-related topics;
  • discriminatorily enforcing work rules and policies, disciplining and discharging employees because they engaged in union activities.

The ALJ’s Decision. An Administrative Law Judge of the NLRB found that the employer had violated the National Labor Relations Act as described above. It determined that the employer’s conduct meant that there was only a slight possibility that a rerun election would be fair, and given that a majority of employees had signed on to the demand letter, a bargaining order was warranted.

It is worth noting that the union also charged the employer with other allegedly improper conduct, including holding mandatory meetings to discourage union support, having high-level officials visit the location to create an impression of surveillance, threatening adverse consequences if the union won the election, informing employees that they would not receive performance evaluations and wage increases until after the election, and implementing wage increases after the election. The ALJ found that either the conduct was not, in fact, a violation of the Act or that it did not actually occur as alleged.

Lessons for Employers. This case poses as a stark reminder to employers that the rules around unionization have changed dramatically in favor of the unions. Much of the conduct alleged by the union may seem to be a reasonable or understandable reaction by an employer to a demand for recognition – but may actually cross the line to constitute an unfair labor practice, with severe consequences. And even if the conduct is not actually illegal, it seems that unions are willing to try to characterize it as such. This is particularly concerning because the NLRB is aggressively revamping its standards such that conduct that was previously deemed legal may be found illegal in the future. It is therefore critically important for employers who face a demand for recognition, or even suspect that union organizing may be occurring prior to such a demand, to consult with experienced labor counsel before taking any action in response.