NLRB Decision Paves Path to Imposing Unions on Employers and Their Employees

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The National Labor Relations Board (the “Board” or “NLRB”) issued a decision in Cemex Construction Materials Pacific on August 25, 2023 that will allow it to order collective bargaining without a secret-ballot election or voluntary recognition.

Key Points

  • Failure to Respond to a Demand for Recognition Can Result in a Bargaining Order: 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. An employer may file the RM petition if it wishes to challenge the appropriateness of the unit sought by the union or if the employer simply wants the opportunity for employees to vote on the question of union representation in a secret-ballot election. If the employer does not file, the NLRB will hold that it has waived its right to demand an election in the unit sought by the union and will order the employer to bargain with the union.
  • Consequences of Committing an Unfair Labor Practice Following Demand for Recognition: If the employer files an RM petition but commits an unfair labor practice, which would require the setting aside of an election, the RM petition will be dismissed, and the employer will be subject to a remedial bargaining order. In other words, if an unfair labor practice is committed following the demand for recognition, the Board 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.”

If the employer commits an unfair labor practice following a union demand for recognition, the Board will review authorization cards to determine whether a majority of employees in the unit signed authorization cards as of the date the union demanded voluntary recognition. If so, a bargaining order will issue. Not only will the employer then be required to bargain with the union, but all unilateral changes made by the employer since the date of the demand for recognition will be made at the employer’s peril and can result in the Board determining that the unilateral changes also violated the NLRA. Such changes could reasonably include new work rules and discretionary wage increases, which would have to be rescinded if unilaterally implemented without bargaining with the union.

  • Doing Nothing in the Aftermath of Demand for Recognition is Risky: If an employer receives a demand for voluntary recognition and does nothing – i.e., does not extend voluntary recognition or fails to file an RM petition within 2 weeks – the union may file an unfair labor charge alleging a refusal to bargain, in violation of Section 8(a)(5) of the NLRA. The employer may then challenge the appropriateness of the unit sought in that forum, but, if unsuccessful, will have effectively waived its right to require a secret-ballot election in the unit the union seeks to represent. Thus, if the employer fails to voluntarily recognize the union or file an RM petition within two weeks, and subsequently fails to convince the Board that the unit sought is not an appropriate unit, the Board will issue a bargaining order.

Silver Linings

As bad as this decision is for employers, it could have been even worse. The Board passed on two requests of the General Counsel to overturn decades of Board law relating to an employer’s right to meet with employees regarding the subject of unionization and express the employer’s opinion on the subject without resorting to threats or promises of benefits.

First, the Board refused the General Counsel’s request to find that employer-mandated meetings addressing the topic of unionization violate Section 8(a)(1) of the NLRA – in this case. But the instant decision was steeped in procedural technicalities and the Board noted that the General Counsel failed to allege or litigate the issue and, as a factual matter, the record did not disclose whether employees were required to attend such meetings. But the General Counsel has alleged and litigated this issue in other matters, so the issue is very likely to be addressed in another matter pending before the Board.

Second, the General Counsel sought an overruling of the Board’s nearly 40-year-old decision in Tri-Cast, which permitted employers to make statements during organizing campaigns that unionization would change the employee-management relationship, that employees would have to go through the Union instead of directly to management, that employees would lose their ability to deal directly with supervisors, and that unionization could harm the employee-supervisor relationship. The Board declined to do so “in this case.” Once again, while that decision is welcomed by employers, the victory may be short-lived.

Employer Takeaways

Following the Board’s decision in Cemex, employers should be prepared to take several steps to ensure that it does not unwittingly allow for a union to represent its employees without employees having the ability to vote in a secret-ballot election. Here are just a few considerations:

  • Train Employees Early Regarding the Risk of Signing an Authorization Card: Many employers wait until they hear rumors or early evidence of union activity before broaching the topic of union authorization cards with employees. The Cemex decision should alter that way of thinking. Unions can now quietly seek majority support through unionization, demand recognition and hope that an employer commits virtually any unfair labor practice following the demand for recognition. If that scenario occurs, the Board will issue a bargaining order without requiring the union to win a Board-conducted election. It is now imperative for employers to ensure that a union never obtains majority support through authorization cards given that such a majority – when coupled with almost any unfair labor practice – will be the trigger for a bargaining order. Thus, employers should train employees that signing an authorization card will now, more than at any point in the last 50 years, result in a union being imposed upon a group of employees even without a secret-ballot election.
  • Require Quick Internal Reporting of a Demand for Recognition: The employer is on the clock the moment a union issues a demand for voluntary recognition. At that point, the employer has just two weeks to either recognize the union or file an RM petition with the NLRB. Failing to do either will result in the union filing an unfair labor practice charge alleging an unlawful refusal to bargain, narrowing the employer’s options to a longshot argument that the unit is not appropriate or that the union cannot demonstrate that a majority of the unit has signed valid authorization cards (which is very difficult for an employer to establish). Employers should ensure that supervisors and managers at all levels immediately report when a union has demanded recognition so that the employer can maximize the time it has to consider its legal options and confer with labor counsel.
  • Compliance With the NLRA is Imperative: Cemex is clear: an employer’s commission of unfair labor practices following a demand for recognition or a union’s filing of a representation petition will result in a Board order that the employer must bargain with the union, unless the unfair labor practices are “minimal or isolated” such that the misconduct could not have affected the results of an election. Conduct of supervisors at every level of the employer’s operation can and will be imputed to the employer. Accordingly, employers must ensure that supervisors and managers at all levels are trained to comply with the nuances of the NLRA, particularly as it relates to what employers can and cannot say and do during a union organizing campaign. But while training supervisors is necessary, it is not sufficient. Employers should also review its policies and employee handbook to ensure that its work rules do not violate the NLRA under the framework recently announced in Stericycle, Inc.

Conclusion

This decision is a game-changer. Inevitably, this decision will result in unions representing employees in far more cases where an employer has not voluntarily recognized the union and the union has not won a Board-conducted election. Indeed, Cemex now provides an avenue for union representation premised solely on employer inaction following a demand for recognition even if the employer did not commit a single unfair labor practice.

We will keep you updated regarding developments and application of this union-friendly decision to pending and new cases. In the interim, if you have any questions regarding your rights and obligations before or after a union demand for recognition, you should contact experienced labor counsel.