One Strike, You’re Out: NLRB Overturns Decades of Precedent, Institutes Mandatory Bargaining for Employers That Commit Unfair Labor Practices in Union Election Process

In Cemex, a majority of the current Biden Board adopted a new standard. Going forward, an employer confronted with a labor union’s demand for voluntary recognition with respect to a proposed bargaining unit has two options: (1) accede to the union’s demand and commence bargaining; or (2) file a so-called “RM petition” with the Board for an election to “test” whether or not a majority of the employees actually want the union to serve as their representative. Cemex thus flips the script, requiring the employer, as opposed to the union, to initiate the Board’s election processes in order to disprove the union’s claim of majority status.

More troubling, Cemex hangs the sword of Damocles over employers who refuse union demands for voluntary recognition, opting instead to confirm their employees’ free choice on the matter of unionization. Specifically, the Board majority ruled that in cases where an employer petitions for an election, if the employer then “commits an unfair labor practice that requires setting aside the election, the petition … will be dismissed, and the employer will be subject to a remedial bargaining order.” In other words, employers who invoke the Board’s election procedures do so at their absolute peril. Any subsequent unfair labor practices that previously would have led to a re-run election will now instead be remedied by an affirmative order that the employer recognize the union without an election and commence bargaining with the union as the employees’ representative.

New Bargaining Order Standard

In this regard, Cemex also upends the Board’s traditional Gissel standard, under which a bargaining order is considered appropriate only in the most extreme cases—where the employer’s unlawful conduct is so egregious as to make a fair re-run election impossible. Now again under Cemex, the script, and the presumption, is flipped. Under the Board’s new standard, a bargaining order may issue whenever the employer violates the Act during the “critical period” between the filing of an election petition and the election unless the violations are “so minimal or isolated that it is virtually impossible to conclude that the misconduct could have affected the election results.” The Board will consider “all relevant factors, including the number of violations, their severity, the extent of dissemination, the size of the unit, the closeness of the election, … the proximity of the conduct to the election date, and the number of unit employees affected” in considering whether to issue a bargaining order.

The Board majority justified this change by stating: “the application of the Gissel standard has resulted in persistent failures to enable employees to win timely representation despite having properly designated a union to represent them, and thereby satisfying the Act’s requirement for recognition.” The Board further claimed its new standard will “deter employer misbehavior in the period before a Board election.”

In dissent, Member Marvin E. Kaplan called the new standards “unsound as a matter of policy and unenforceable as a matter of law.” He specifically highlighted the new standards’ anti-democratic effects and predicted “many more card-based bargaining orders and far fewer representation elections” going forward.

While Member Kaplan may be correct in his dim view of the majority ruling, it is worth noting that the Board’s General Counsel had pressed the Board to go even further. The General Counsel proposed a return to the Board’s 1948 Joy Silk doctrine, under which an employer that refuses a union’s demand for recognition can be forced to bargain with the union unless it maintains a “good faith doubt” about the union’s majority support. The Board majority stopped short of reinstating Joy Silk, but it remains to be seen whether the new Cemex standard provides any meaningful distinction.

Employers faced with a labor union’s demand for voluntary recognition are cautioned to tread carefully when seeking an election to confirm the union’s majority status. Missteps during the election process are now more likely to lead to an automatic win for the union, and an order to recognize and bargain with the union even in the absence of confirmed employee support. ArentFox Schiff’s Labor & Employment and OSHA team has extensive experience counseling employers in organizing campaigns and other labor disputes.