Legal Updates

NLRB Raises Stakes For Employers Faced With Union Requests For Voluntary Recognition

The National Labor Relations Board (the “NLRB” or “Board”) recently issued a decision, Cemex Construction Materials Pacific, LLC, 372 NLRB No. 130 (2023), reversing longstanding Board precedent regarding an employer’s obligations when presented with a union demand for recognition. The Board promulgated a new standard under which an unwary employer can easily run afoul of the National Labor Relations Act (“NLRA”) and may even be faced with a bargaining order in instances where one would not have been ordered before.

Union Demands For Recognition Pre-Cemex

Typically, a union seeking to organize a workplace asks employees to sign authorization cards signaling their desire to be represented by the union for collective bargaining purposes. If a union is successful in obtaining signed authorization cards from a majority of employees in the proposed bargaining unit, the union then requests that the employer voluntarily recognize the union as the employees’ bargaining representative.

Before Cemex, an employer’s obligations in this type of scenario were governed by the Board’s Linden Lumber standard, which had been in effect for more than 50 years. Under Linden Lumber, an employer confronted with a demand for union recognition could simply refuse to accept the proffered evidence of majority support of a union and take no action. It would then be up to the union to initiate filing a petition for a Board-supervised election.

In the lead-up to the election, if an employer committed unfair labor practices (“ULPs”), the NLRB typically would order a rerun election. If the unfair labor practices were found so egregious (e.g., firing union organizers) that they made a free and fair election impossible, then the NLRB had the option to issue a more extreme remedy such as a Gissel bargaining order, named for the 1969 Supreme Court decision in which this remedy was introduced. A Gissel bargaining order certifies a union and directs the employer to begin bargaining, even in the absence of a union election or after a union loses an election.

Background Facts

Cemex involved allegations that the employer, a ready-mix concrete distributor, committed unfair labor practices in connection with an election campaign involving a proposed unit of approximately 366 truck drivers and driver trainers. In November 2018, the union had obtained signed authorization cards from at least 207 employees designating the International Brotherhood of Teamsters as their exclusive bargaining representative. In the February 2019 election, however, the employees in the proposed bargaining unit voted against representation.

The union challenged the election, asserting that Cemex had engaged in unfair labor practices both during and after the election. After a hearing, an NLRB administrative law judge agreed, ordering a rerun election.

On review, the NLRB agreed with the administrative law judge, finding that Cemex had engaged in many instances of unfair labor practices to discourage employees from voting to unionize. These included threatening to close the plant or fire employees if the union prevailed, surveilling employees and interrogating them about their union activity, prohibiting employees from displaying pro-union paraphernalia, discharging a prominent union supporter, and hiring security guards in order to intimidate employees immediately before the election.

The NLRB concluded that even in the event of a rerun election, Cemex was likely to continue to engage in unfair labor practices. Thus, because a rerun election would not be free and fair, the NLRB instead issued an order that Cemex bargain with the union.

The NLRB did not stop there, however. Instead, at the NLRB General Counsel’s urging, it overruled Linden Lumber, adopting a new framework for how and when unions can seek recognition, and how and when employers may contest such a demand.

New Framework Under Cemex

Under the Board’s new standard, an employer confronted with a union demand for recognition has three options:

(1) Voluntarily agree to recognize the union as the employees’ bargaining representative and offer to bargain, thereby foregoing an election;

(2) File an “RM petition” for an election with the NLRB within two weeks of the union’s demand for recognition, to test the union’s majority support; or

(3) Take no action in response to the union’s demand for recognition. An employer that chooses this course does so at its own risk. If an employer takes no action for two weeks after receiving a demand for recognition, the union can file a ULP charge claiming that the employer unlawfully rejected its demand and refused to bargain. If, during the ULP proceeding, the employer does not prove that the union lacks majority support, the Board will find that the employer engaged in an unlawful refusal to bargain and issue a bargaining order.

Another important change made by Cemex pertains to actions taken by the employer during the “critical period” after the union has made a demand for recognition, but before an election has been held. Where before, the typical remedy for a ULP occurring during this period was to order a rerun election, the Cemex decision makes clear that the same ULP can now result in the NLRB dismissing the RM petition and issuing a bargaining order. Thus, the employer can be forced to bargain with a union that would have lost in a secret ballot election.

NLRB General Counsel Memorandum

Last month, the NLRB’s General Counsel released a guidance memorandum concerning the Cemex decision, which lays out several key practice points. In particular:
 

• The new standard will be retroactively applied to all pending cases (and, in fact, was retroactively applied to the employer in Cemex).
• When a demand for recognition is made, an employer can ask for evidence of majority support, but a union is not obligated to show it. Thus, an employer that believes the union is bluffing and declines to recognize the union acts at its peril.
• The General Counsel memorandum emphasizes that a verbal or written demand for recognition can be made to any person “acting as an agent of the employer.”
• The memorandum also notes that under the Board’s new standard, even a single ULP occurring during the critical period preceding an election may be sufficient to compel a bargaining order in lieu of an election, unless the violation is so minimal that it is practically impossible that it could have affected the election results.

Next Steps For Employers

In the wake of Cemex, there are a number of steps employers can take to prepare to respond to union demands for recognition, and to reduce their chances of being faced with such demands:
 

• Respond promptly to employee issues and concerns that might lead to unionizing efforts.
• Educate employees on their rights under the NLRA. It is often the case that unions obtain signed authorization cards from employees before the employer has any knowledge of organizing efforts. This makes it all the more important that employees understand that signing a union authorization card is not just an innocuous sign of support for the union, but can bring the union in as employees’ exclusive bargaining representative without an election;
• Ensure that managers and supervisors are trained to recognize verbal or written demands for recognition and to promptly report them to a central source.
• Be aware of the new timeline established by Cemex – an employer now has only two weeks to file an RM petition from when the union demands recognition, or risk the filing of a ULP charge.
• Train managers and supervisors on what types of actions are permitted and prohibited during the critical period leading up to an election. Given the Board’s statement that even a single ULP may be sufficient to cancel an election and trigger a bargaining order, unions may now be incentivized to file unfair labor practice charges over even minor issues, in the hope of obtaining a bargaining order and thus avoiding an election.

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If you have questions about your organization’s obligations in the wake of the Cemex decision, please feel free to contact one of our experienced labor lawyers.