NLRB Creates Two New Pathways to Card-Check Unionization

On August 25, 2023, the National Labor Relations Board (“NLRB” or “Board”) issued a decision in Cemex Construction Materials Pacific, LLC, 372 NLRB No. 130 (2023), a 100+ page decision creating a new framework for unions to seek representational status under the National Labor Relations Act (“NLRA” or “Act”).  The decision creates two new mechanisms for unions to represent workers via “card check” – and without conducting a secret-ballot election.

The first method for obtaining representational status is for the union to obtain “union authorization cards” from a majority of workers and demand recognition from the employer.  If the employer fails to act within 14 days of the union’s demand, then the NLRB will consider the employer to have waived its right to a secret-ballot election and, if the union truly represents a majority, then the employer will have violated the NLRA by failing to bargain with the union.  Under Cemex, employers can no longer sit idle if a union presents them with a demand for recognition and proof of majority status.

The second method for obtaining representational status is if the employer commits “any” unfair labor practice (“ULP”) that “requires setting aside the election.”  Under Cemex, the Board will order the employer to bargain with a union – even if the union lost the secret-ballot election – if the Board determines that the employer committed “any” ULP that invalidates the election.  Before Cemex, the Board would issue bargaining orders only in extreme cases of employer misconduct and only if the Board’s traditional remedies were found to be insufficient.

Background

The case involved a bargaining unit of approximately 366 ready-mix cement truck drivers and trainers in southern California and Las Vegas.  In December 2018, the Teamsters gathered union authorization cards signed by at least 207 drivers (or 57% of the unit) and demanded that the employer recognize the union.

As is typically the case, the employer ignored the union’s demand and the union eventually filed an election petition (called an “RC-petition”) with the NLRB.  A secret-ballot election was held in March 2019 and the drivers voted 179 to 166 against being represented by the Teamsters.

Following the election, the union challenged the election results and alleged that the employer engaged in substantial ULPs during the “critical period” of the organizing campaign.  After reviewing the evidence, the Board concluded that the employer “engaged in a large number of severe unfair labor practices and otherwise coercive conduct throughout the critical period.”

While a re-run election is the typical relief for ULPs, the Board concluded that a “Gissel bargaining order” was appropriate under the Supreme Court’s decision in NLRB v. Gissel Packing Co., 395 U.S. 575 (1969).  Under Gissel, the Board will issue a bargaining order if “the Board finds that the possibility of erasing the effects of past practices and of ensuring a fair election (or a fair rerun) by the use of traditional remedies, though present, is slight and that employee sentiment once expressed through cards would, on balance, be better protected by a bargaining order.”

Rather than simply issuing the Gissel bargaining order, the Board used the case as an opportunity to create two new mechanisms for unions to represent workers without a secret-ballot.  Each is described below.

Employers Can No Longer Ignore Union Demands for Recognition

In the past, if a union presented an employer with union cards signed by employees demonstrating that the union represented a majority of workers, the employer was well within its rights to ignore the union’s demand.  Instead, if the employer refused to voluntarily recognize the union, then the onus was on the union to file an election petition (called an “RC-petition”) with the NLRB in order to obtain a secret-ballot election.

In Cemex, the Board flipped the script.  Specifically, the Board held that employers have 2 weeks to file their own petition for an election (called an “RM-petition”) if a union presents it with signatures or union authorization cards from a majority of unit employees.  As the Board explained:

Under the standard we adopt today, an employer violates Section 8(a)(5) and (1) by refusing to recognize, upon request, a union that has been designated as Section 9(a) representative by the majority of employees in an appropriate unit unless the employer promptly[] files a petition pursuant to Section 9(c)(1)(B) of the Act (an RM petition) to test the union’s majority status or the appropriateness of the unit, assuming that the union has not already filed a petition pursuant to Section 9(c)(1)(A).[]

The Board noted that it will “normally interpret ‘promptly’ to require an employer to file its RM petition within 2 weeks of the union’s demand for recognition.”

Under Cemex, the burden is now on the employer to petition the NLRB for a secret ballot election by filing an election petition (called an “RM-petition”) with the NLRB.  If an employer fails to do so within 14 days, then the NLRB will find that the employer violated the NLRA by failing to bargain with the Union.  In fact, if the union files a ULP based on the employer’s refusal to recognize and bargain with the union, the NLRB will likely order the employer to begin collective bargaining.

“Any” ULP During Election Period May Result in a “Cemex Bargaining Order”

As noted above, the Board’s standard for issuing bargaining orders under the Supreme Court’s decision in Gissel was limited to unique circumstances where the employer engaged in substantial and pervasive ULPs during the critical period before the union election.  Indeed, courts reviewing such orders would require the Board to review the following factors: “(1) the employer’s unfair labor practices so undermined the Union’s majority that conducting a fair election would be unlikely; (2) the employer’s unlawful conduct was likely to continue; and (3) the ordinary remedies of back pay, reinstatement, and posting of notices would be inadequate to ensure a fair election.”

In Cemex, the Board held that it will order the employer to bargain with a union – even if the union lost the secret-ballot election – if the Board determines that the employer committed “any” ULP that “requires setting aside the election.”  According to the Board,

[I]f 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. . . .  If the employer commits unfair labor practices that invalidate the election, then the election necessarily fails to reflect the uncoerced choice of a majority of employees. In that situation, the Board will, instead, rely on the prior designation of a representative by the majority of employees by nonelection means, as expressly permitted by Section 9(a), and will issue an order requiring the employer to recognize and bargain with the union, from the date that the union demanded recognition from the employer.

In other words, under Cemex, the Board will recognize the union based on signed authorization cards – even if the union lost the election.

Having concluded that the employer violated the NLRA by “failing and refusing to recognize and bargain collectively with the Union . . . while engaging in [numerous ULPs that] undermined the Union’s support and prevented a fair rerun election,” the Board ordered the employer to “meet with the Union on request and bargain in good faith concerning the terms and conditions of employment of the bargaining unit employees, and, if an agreement is reached, embody such agreement in a signed contract.”

Retroactivity and Next Steps

The Board announced that it will apply its decision retroactively “to all pending cases in whatever stage.” In fact, BNA reports that one union has already requested a so-called “Cemex bargaining order” against Trader Joes based on alleged ULPs during the union election.

While the Cemex decision will certainly be appealed and the new paths to unionization will face judicial scrutiny, the decision is the “law of the land” as far as the NLRB is concerned unless or until it is overturned by the Supreme Court.

Bottom Line

The Board’s decision in Cemex creates two new pathways for unions to become the bargaining representative of employees without a union election.  While these new mechanisms will certainly be challenged, employers need to be prepared to respond to any union organizing campaign as well as any demand for bargaining based on the union’s claim that it represents a majority of employees.

Employers would be wise to engage experienced labor counsel to ensure that their rights (and employees’ rights) are preserved during the process.

We will continue to monitor this issue as it develops.