NLRB Changes Standard for Lawful Employer Statements During Union Organizing Campaigns

The National Labor Relations Board (NLRB or the Board) issued its decision on November 8, 2024 in Siren Retail Corp. d/b/a Starbucks, which changes the test for determining what an employer may lawfully say during an organizing campaign. Overruling nearly 40 years of case law permitting employers to say that unionization would result in the loss of a direct relationship between employees and management, the NLRB says such statements will now be evaluated on a case-by-case basis under the Board’s test for potentially threatening or coercive language.

THE NLRB’S TRI-CAST STANDARD OVERRULED

For almost 40 years, the Board has evaluated the lawfulness of certain employer statements during union organizing campaigns under the standard in Tri-Cast Inc. [1] Employers were permitted to tell employees that unionization would eliminate employees’ ability to address workplace issues individually with management.

Tri-Cast was premised on the Board’s longstanding view that such employer campaign statements were not unlawful threats or coercion because the relationship that existed between the employer and employees would change once the employees chose union representation. Tri-Cast also reflected an evolution in the Board’s approach to campaign-related communications and a reduced role for the Board in policing ordinary campaign speech by employers and unions designed to persuade voters—speech that often does not cite to legal nuances or technicalities.

Since Tri-Cast was decided in 1985, employers have relied on this categorical approach to make statements to employees about the impact of unionization.

In overruling Tri-Cast, the Board found that the prior standard erred in “categorically immuniz[ing] employer campaign statements that, based on content and context, could reasonably be understood to threaten employees with the loss of an established workplace benefit.” [2] Employer campaign statements about a changed relationship with management, such as losing an “open door” with management, now will be reviewed on a case-by-case basis.

The Board majority concluded this approach will better protect employees’ rights without infringing on the employer’s protected speech under Section 8(c) of the National Labor Relations Act (the Act), which shields employer statements provided they contain “no threat of reprisal or force or promise of benefit.” [3] This case-by-case approach will apply prospectively in both representation and unfair labor practice cases. Under the Board’s new standard, employers are not permitted to make campaign statements that predict employees’ direct interaction with management will end if employees vote for unionization. Pointing to Section 9(a) of the Act, which extends exclusive representation rights to a recognized labor union, the Siren Retail Corp. d/b/a Starbucks, [4] decision holds that “the Act does not compel employers to end all direct interaction with individual employees over workplace issues if employees choose union representation.” [5]

That conclusion rests on the Section 9(a) proviso allowing for individuals or groups to “present grievances to their employer” without the union intervening, although the same text requires the union have “been given opportunity to be present at such adjustment.” [6] The Board majority thus explained that “[e]mployer statements that broadly predict that unionization will necessarily foreclose employees’ ability to address issues individually with their employer are not reasonable predictions about the legal consequences of unionization that follow from the Act.” [7]

EMPLOYER STATEMENTS NOW MUST BE ‘GROUNDED IN OBJECTIVE FACT’

Finding that the Act “reasonably requires employers to ground their predictions concerning the consequences of unionization in objective fact,” [8] the decision states predictions “must be carefully phrased on the basis of objective fact to convey an employer’s belief as to demonstrably probable consequences beyond his control.” [9]

The Starbucks Board majority decision practically means this: while the relationship between management and employees will necessarily change if employees unionize, due to the union’s exclusive representative status and bargaining obligations, the new relationship (at least legally) does not require any/all direct engagement with employees to end as a matter of law. [10]

Employer campaign communications now must reflect this legal nuance and not categorically state that management will be blocked from having any direct interaction with employees and/or that all workplace issues must be funneled through the union.

Statements that previously would have been legal under Tri-Cast that “broadly predict that unionization will necessarily foreclose employees’ ability to address issues individually with their employer” will no longer be legal under Starbucks. [11] On the other hand, employers statements that “merely” state that “when [employees] select a union to represent them, the relationship that existed between the employees and the employer will not be as before” generally remain lawful. [12]

STARBUCKS STATEMENTS FOUND LAWFUL BECAUSE THE NEW STANDARD IS PROSPECTIVE

In Starbucks, the company faced a petition for recognition at its Roastery in Seattle. During the campaign, management told its employees, among other things, that

If you want a union to represent you . . . you want to give your right to speak to leadership through a union, you’re going to check off ”yes” for the election. If you want to maintain a direct relationship with leadership, you’ll check off ”no.” [13]

A company representative also said, “[A] third party comes in and speaks for you.” [14] The administrative law judge found that, under Tri-Cast, these statements were legal. The Board upheld the administrative law judge, deciding to apply its new standard prospectively and not retroactively as the Board often does when changing its precedent.

STARBUCKS DISSENT TOOK ISSUE WITH PROCEDURAL POSTURE OF CASE

NLRB Member Marvin Kaplan dissented to overruling Tri-Cast. Member Kaplan argued that it was inappropriate to analyze Tri-Cast in the representation setting because the case came to the Board as an unfair labor practice case and that the Board has different standards for threatening conduct based on the type of case. [15]

Member Kaplan wrote that the decision to overturn Tri-Cast should be viewed as dicta—a statement by the majority that was not necessary to resolve the case. Member Kaplan also explained how the majority overstated the significance of the Section 9(a) proviso—calling the majority’s “near-complete reliance” on the proviso a “red herring.” [16]

TAKEAWAYS

In light of this decision effectively eliminating the categorical approach to employer statements regarding the changes in the employee relationship following unionization, it is recommended that employers take particular care when drafting and finalizing campaign messages. Common employer statements that were previously lawful may now be considered objectionable conduct and/or an unfair labor practice. Importantly, under the 2023 Cemex framework, most unfair labor practices provided grounds to void the election and automatically require the employer to recognize and bargain with the union without rerunning the election.

In light of the recent US presidential election results, there is the potential that a newly constituted Republican NLRB will eventually reverse this decision as part of the NLRB’s now-regular policy oscillations. Such a return to the Tri-Cast standard, however, may take several years or more, and employers facing union organizing campaigns in the meantime will be subject to potential election objections, unfair labor practice charges, and complaints over written and verbal statements previously lawful for at least 40 years.

Based on the Board’s Starbucks decision, employers faced with any active or potential union campaigns in the coming years should consider the following:

• Reviewing existing campaign communication materials and templates to ensure all statements are carefully phrased to meet the new standard.
• Avoiding campaign material that states in absolute terms that employees will lose any form of direct relationship with management if they unionize.
• Clarifying campaign material to reflect a more nuanced approach—that the relationship between employees and managers will change after unionization, and that any direct interaction going forward will be subject to possible union participation or otherwise be limited by the contract bargaining process.
• Aligning this updated legal standard with the organization’s broader employee and supervisor education on the reasons to prefer a direct, unfettered relationship with management over collective bargaining with a union.