New NLRB Rules Favor Mandatory Union Recognition & Limit Employee Voting in Secret-Ballot Elections

The National Labor Relations Board drastically changed the process for unions seeking recognition of most private sector employees in the United States. Abandoning 50 years of established law, in Cemex Construction Materials Pacific (372 NLRB No. 130), the NLRB created new rules that will impose two types of mandatory union recognition bypassing or overriding the results of secret-ballot employee voting in NLRB-conducted elections. 

These changes radically shift the legal landscape for companies addressing demands for recognition and organizing campaigns and require significant, proactive approaches now to address the new reality for how unions will organize and win certifications going forward.

KEY TAKEAWAYS

• Cemex eliminates any requirement for unions to file a National Labor Relations Board (NLRB or the Board) election petition before an employer may be required to grant union recognition. Instead, a union can demand recognition based on a claim of majority support.
• Under the Cemex rules, if a union makes a claim of majority support, the employer must (1) immediately grant recognition without any NLRB election, or (2) file its own NLRB petition seeking an election. If the employer fails to take either step, the NLRB will order mandatory union recognition (with no NLRB election) unless the employer—in a later unfair labor practice (ULP) proceeding—proves that the union did not have majority support or that the claimed bargaining unit was inappropriate.
• Although the Cemex rules permit the employer to petition the NLRB for an election in response to a union recognition demand, virtually any unlawful conduct during the period preceding an election will prompt the Board to issue a mandatory “bargaining order” requiring union recognition.
• Cemex creates a new hair-trigger threshold that will prompt the Board to issue a mandatory “bargaining order” based on any unlawful conduct that sets aside an election, which dramatically changes the much higher threshold embraced in two US Supreme Court cases that validated the NLRB’s issuance of “bargaining orders” only when unlawful conduct made it “improbable” that a “fair election” can be held.

These new Cemex rules, when considered together with the Board’s recent return to the so-called “quickie election” standards that greatly accelerate the timeline for elections, make it much easier for unions to organize. In practice, if this new standard is not reversed by the federal courts, we expect most unions will organize by demanding immediate employer recognition or by virtue of NLRB determinations that the employer committed at least one ULP before an election was held, thereby nullifying the election results and declaring the union certified based on a pre-election claim of majority support.

THE NEW CEMEX RULES

Union Demand for Recognition

Cemex discusses authorization cards or “card check” as a method a union may use to demonstrate majority support when demanding recognition. However, there is nothing in the new Cemex rules that requires the use of authorization cards or any other specific method to establish majority support. Nothing in the Cemex decision prevents a union from demanding recognition based solely on a “claim” of having majority support.

Reliance by the NLRB on authorization cards would effectively adopt the long-sought-after “card check” recognition that labor unions greatly prefer and sought through legislative change in US Congress, most prominently with the Employee Free Choice Act in 2009 and most recently in the Protecting the Right to Organize (PRO) Act legislation. While those legislative efforts failed, the current NLRB has to a substantial degree embraced this rejected form of union recognition while theoretically preserving secret-ballot elections.

Employer Response to Union Demand for Recognition

When a union demands employer recognition by claiming to have obtained majority support among employees, the Board will now require an employer to either recognize the union or “promptly” file an RM petition to test the union’s majority status or the appropriateness of the unit. If the employer neither recognizes the union nor timely files the petition, the Board will find that the employer’s bargaining obligation has “matured” at the two-week mark following the union demand. The employer’s failure thereafter to engage in good faith bargaining with the union violates Section 8(a)(5) and (1).

Under the Board’s new process, an employer has three options when faced with a demand for recognition:

1. Immediately Recognize the Union. Under Cemex, a union’s claim of majority support is considered as reliable as an NLRB secret-ballot election, and the Board’s position is that employers must generally accept a union’s majority representation. The decision notes that an employer can still challenge the basis for its bargaining obligation (such as the validity of authorization cards or accuracy of a union’s claims) in the subsequently filed representation or ULP case, but the Board does not adequately address the conflict employers face in recognizing a union that potentially lacks majority support or in situations where unions obtain employee authorization cards based on coercion or misrepresentation. Under the well-established NLRB precedent, it is a separate ULP for an employer to recognize a non-majority union.
2. File an RM Election Petition Within Two Weeks. The Cemex decision now puts the burden of filing for an election squarely with the employer. Although a union may still file a petition, if it decides instead to demand recognition, it is now the employer’s obligation to seek an election within two weeks of the demand for recognition (absent unforeseen circumstances). Under this new procedure, the rights of employees to decide whether they want union representation through a secret ballot election are dependent on the employer’s actions rather than the union. It also is up to the employer, if it files the petition, to decide whether to use the Board’s election hearing process to challenge the alleged card check majority, thereby putting the burden on the employer—not the NLRB—to confirm the union’s initial majority status.[1]
3. Take No Action and Defend Against a Refusal-to-Bargain ULP. As mentioned above, faced with a union demand for recognition, an employer may choose to challenge the union’s claim through an RM petition and hearing process. But if no RM petition is timely filed, the employer’s obligation to recognize and bargain with the union will automatically become effective two weeks after the demand for recognition. The employer’s failure thereafter to bargain with the union will result in a ULP charge, which the employer can challenge in a case brought by the NLRB General Counsel. During that proceeding, the employer will have the right to challenge the basis for its purported bargaining obligation, if not already litigated in a representation case. But given barriers in discovering such evidence and then proving it in the NLRB’s adjudicatory process, employers should not expect a favorable forum or lenient standard of review for such challenges. An employer choosing this route also does so “at its peril” and can be held liable for any unilateral changes to terms and conditions of employment made after the union’s demand for recognition if the employer fails to rebut the union’s majority status claim with sufficient evidence of union coercion, manipulation, or other evidence that undermines the majority status claim.

Bargaining Order for Violations During Election

Cemex radically changes employer liability—and effectively extinguishes the employee right to vote in an NLRB secret-ballot election—if any conduct during the so-called “critical period” (between the filing of a petition and an election) is deemed unlawful. In the past, the Board would typically order a rerun election if an employer committed ULPs during the critical period. The Board will now almost always issue a bargaining order. Thus, in cases where the union has demonstrated majority support, the Board will set aside the election and automatically issue a bargaining order for virtually any ULP during the critical period.

Under established NLRB precedent, a ULP during the critical period will require overturning an election unless it is “virtually impossible” to conclude that the violation could have affected the results of the election.[2] Accordingly, under the Board’s new standard, a single unlawful statement or action could result in a bargaining order and no rerun election—and make the original petition and election results irrelevant, even if the union lost by a wide margin.

See our chart summarizing the changes made by the Cemex rules at the end of this LawFlash.

Legally Questionable Standard

For over 50 years, the Board has recognized—with approval from the Supreme Court—that an employer does not violate Section 8(a)(5) “solely upon the basis of its refusal to accept evidence of majority status other than the results of a Board election” and therefore could lawfully refuse to bargain in the face of a demand for recognition.[3] The Board has now overruled that regime and shifted the burden of filing representation petitions from unions to employers with the requirement that employers do so “promptly” or face a bargaining order.

Additionally, the Board has issued bargaining orders for over 50 years under the sound precedent of NLRB v. Gissel Packing Co.,[4] which allows for bargaining orders in cases where the violations are so egregious 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.”[5] It additionally requires that each bargaining order be based on a case-specific analysis, “tak[ing] into consideration the extensiveness of an employer’s unfair practices in terms of their past effect on election conditions and the likelihood of their recurrence in the future.”[6] The Board now sweeps that body of precedent away as well so it can issue bargaining orders at will, based on a single ULP.

PRACTICAL CONSIDERATIONS

Legal Challenges to the New Cemex Rules

As noted, there is well-established US Supreme Court precedent that—more than 50 years ago—rejected a requirement that employers file an NLRB petition seeking an election whenever unions demand recognition. Ironically, the Board in Cemex now adopts the same requirement. Additionally, the Board’s premise in Cemex that authorization cards can routinely be considered as proof of employee majority support has never been endorsed by the Supreme Court and has been rejected by numerous courts of appeals decisions. 

We anticipate that legal challenges to the Cemex decision will materialize in the coming months, with the overriding challenge to the decision premised on the effective jettison of NLRB elections as the standard method to determine union majority status and the reliance on card check despite repeated legislative failures to adopt this method for union certification.

Importance of Early Employee Education on Authorization Cards and Union Advances

Unions have often secured signed authorization cards from employees under the theme of “sign up and learn more” or “sign up to support an NLRB election”—without making clear that authorization cards could become an automatic basis for union recognition with no campaign and no election.

It is doubtful that unions will change their tactics with authorization cards going forward, even though the cards will have a much greater chance of serving as the evidence of majority support and a union certification. Employers have a much greater incentive now to proactively educate employees about authorization cards and the importance of understanding the consequences of signing them.

Immediate Recognition Demands and ‘Card Check’ Review

Employers that receive a demand for recognition from a union that alleges majority status should consider requesting that the union voluntarily share its evidence of majority support before the employer decides to reject the demand and/or file an RM petition. The Board has found such requests permissible. This early form of discovery as to the union’s support could be invaluable for employers in deciding what path to pursue—given the uncertainty as to when and how an employer could review such evidence as part of the RM petition or ULP challenge process.

Employer Challenges to Claims of Majority and Recognition Demands

Misrepresentation by union organizers about the purpose of a union authorization card legally invalidates the card. If employees tell their employer that they were confused at what they signed or misunderstood the purpose of the card, signed the card a long time ago (e.g., more than 12 months), or revoked the card, employers can use this to contest the authenticity of the cards and the claim of majority status.  

Likewise, other questions underlying the union’s demand for recognition—including whether the union actually possessed valid authorization cards for a majority of employees given employee turnover or changes in the unit size and scope claimed by the union—serves as a legitimate basis for employers to challenge claims of majority status whether through the RM petition process or a Section 8(a)(5) ULP adjudication. But employers should anticipate union and NLRB challenges to securing and presenting such evidence given the expansive reach of the NLRB’s interrogation and surveillance bans for any/all forms of Section 7 activity, as well as the general confidentiality of signed cards not shared by the union.

The NLRB will have to adopt new or updated standards for assessing card validity and dealing with employer challenges in representation and ULP cases given that cards, for decades, were only used at the NLRB to trigger the election process using the 30%+ support threshold or rare Gissel bargaining orders—and not as the common evidentiary basis to issue a certification. Employers also may have greater reason now to file ULP charges against labor unions for their conduct in securing authorization cards or campaigning.[7]

Avoiding ULPs During an RM Election

For companies that follow the RM election petition route, avoiding a ULP will be critical to evading an automatic bargaining order after the election even if the union loses. While the types of violations found in Cemex would have always led to the invalidation of an election (e.g., threats of plant closure, discipline and discharge of union supporters, surveillance and interrogation), recent NLRB pronouncements greatly increase employers’ risk of ULPs.

For example, several recent Board decisions and General Counsel interpretations make employers’ rules, policies, and handbook revisions presumptively unlawful.[8] And the General Counsel has announced new limits on employers’ free speech rights, such as captive-audience speeches and other employer communications most often occurring during a union election. These activities—which until recently would not have resulted in a ULP charge—may now be a violation that could threaten the validity of an election and result in a subsequent bargaining order. If an employer decides to file an RM petition and wishes for the election results to be determinative of the union’s certification rights, careful review of all employment documents (policies and handbooks) is recommended and any campaign activity beyond sharing voluntary, written communications edited by labor relations counsel could provide a basis to challenge and void the election results—thereby certifying the union via the original majority status claim.

Employer Selection of Appropriate Bargaining Unit

Under the Board’s Cemex procedure, the employer must initiate the RM petition for an election. This permits the employer to define what it regards as the appropriate unit in response to the union’s recognition demand and purported unit description. The union will be able to contest the employer’s unit in the pre-election proceedings, but it will be forced to show why the unit, as petitioned for by the employer, is not an appropriate unit. And under the recent American Steel decision,[9] the Board is bound to accept the petitioned-for unit if it is “an” appropriate one even if other units would also be appropriate.

In Cemex, the Board majority stated that the employer, after filing an election petition, may “challenge the appropriateness of the unit” as well as whether the union has “majority support.” While it is unclear how this will play out in an RM petition process, the potential for employers’ initial selection of an appropriate unit on the RM petition form could provide employers with the opportunity to counter union attempts to gerrymander unit configurations under the Board’s new microunit standard.

Does Cemex Reject the General Counsel’s Claimed Employer Speech Restrictions?

Absent evidence that employees in Cemex were required to attend mandatory meetings, the Board majority in Cemex declined to directly rule on the General Counsel’s claims that employer workplace discussions on paid time are inherently unlawful. However, the Cemex Board majority stated that, regardless of whether an employer petitions for an election after a union demands recognition, the employer “is fully free . . . consistent with Section 8(c), to express to its employees its views, arguments, or opinions on the question of representation, so long as such expressions contain no threat of reprisal or force or promise of benefit.”[10]

This observation appears to be contrary to the General Counsel’s theory that employer discussions during paid time are presumed to be mandatory and are inherently unlawful, even if they do not contain any threat or promise. Nonetheless, the General Counsel continues to pursue this theory in a large number of charges and complaints pending in different NLRB proceedings.

New (Old) Quickie Election Rule

The Board’s newly announced rule will return to expedited election timelines and will mean less time for employers to prepare for a union election if a petition is filed. The rule, which is effective December 26, 2023, should be considered when deciding how to respond to a union demand for recognition.

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The Board’s Cemex decision is a watershed moment in US labor-management relations law. While it often is said that NLRB decisions require careful consideration by private sector employers covered by the National Labor Relations Act, this decision is of a different magnitude and impact. Employers would be well advised to immediately consider and engage on what the decision means for their organizations—and how they plan to respond.

Cemex Rules: Summary of Changes

Employers and employees will find the new rules in Cemex to be dramatic changes that will result in mandatory union recognition in a large number of cases with no employee voting in NLRB-conducted secret ballot elections.