In a landmark ruling on August 25, 2023, the National Labor Relations Board (NLRB) announced a new framework for determining when employers are required to bargain with unions without a vote among the employees to decide whether they want to be represented. In doing so, the NLRB overturned over 50 years of court and NLRB precedent, creating a process that puts employers at a significant disadvantage. This decision is particularly significant for non-union employers because it makes it easier for unions to organize unrepresented employees, and it contains traps for the unwary employer.

Previously, when a union approached an employer with a demand to be recognized as the representative of its employees, the employer could refuse that request. The union would then need to file a petition with the NLRB for a secret ballot election among the employees to determine whether a majority wanted to be represented by the union, putting the onus on the union to file a petition with the NLRB and prevail in a secret ballot election to become the certified representative of the employees. 

In Cemex Construction Material Pacific (Cemex), 372 NLRB No. 130 (2023), the NLRB upended that process and announced a new framework. Under the Cemex standard, when a union presents an employer with a demand to be recognized, the employer must either (i) recognize the union as the employee representative without an election and bargain with it over wages, hours, and other terms and conditions of employment; or (ii) promptly (i.e., within two weeks of receiving the union’s demand) file with the NLRB an RM petition for an election to test the union’s majority status or the appropriateness of the proposed bargaining unit (unless the union has filed its own petition for an election). If an employer fails to take either of these steps within two weeks of receiving the union’s demand, the union may file an unfair labor practice charge with the NLRB, and if it establishes majority support in that unfair labor practice proceeding (presumably through union authorization cards), the NLRB will issue a bargaining order requiring the employer to recognize and bargain with the union without an election.

In an even more significant change from existing precedent, the NLRB also ruled that if an election is held and the employer commits even a single unfair labor practice that would require setting aside the election, the NLRB will issue a remedial bargaining order requiring the employer to recognize and bargain with the union rather than requiring a re-run election. Previously, bargaining orders were an extreme remedy reserved for the most egregious unfair labor practices where the possibility of ensuring a fair re-run election is slight.  Now, as noted by NLRB Member Marvin E. Kaplan in his dissent in Cemex, any unfair labor practice committed during the critical period leading up to the election will result in a bargaining order unless it is “virtually impossible to conclude that [it] could have affected the results of the election.”     

The new Cemex standard will be applied retroactively “to all pending cases in whatever stage unless retroactive application would work a manifest injustice.” It will result in increased organizing of previously unrepresented employees based solely on union authorization cards and without an election, which had been the preferred method of the NLRB for determining employee interest for over 50 years.

The burden on employers by the Cemex decision is compounded by another change the NLRB recently made to the rules for NLRB elections. On August 24, 2023, the NLRB issued a new rule for elections to take effect December 26, 2023 that reinstates the “quickie” election rules that were in place prior to the Trump administration. Among other things, these rules shorten the time between the filing of a petition and the  election, placing employers at a further disadvantage when responding to a union organizing campaign by reducing the time for employers to get their message concerning unionization to employees.  

It is likely the new Cemex standard will be challenged in the courts. However, the outcome of such litigation is uncertain and may be years away. As a result, employers need to take steps immediately to deal with the impacts of Cemex and the NLRB’s reinstated “quickie” election rules.

Key Takeaways and Practical Steps for Employers

Employers should take the following steps now to respond to the Cemex decision:

• Train supervisors and managers on the Cemex two-week timeline to act. Otherwise, an employer may miss the window to file an RM petition and inadvertently end up with a bargaining order. Significantly, Cemex does not specify the form a demand for recognition must take, and there is no requirement that the union must inform the employer that it must act within two weeks if it desires to have the outcome determined by a secret ballot election. 
• Train supervisors and managers on the do’s and don’ts of what they can and cannot say or do in the context of a union organizing campaign due to the risk that a single unfair labor practice during the critical period leading up to an election may result in a bargaining order.
• Immediately review existing employee handbooks and work rules to make sure they comply with the standard announced in Stericycle, Inc., 372 NLRB No. 113 (2023), for when an overbroad rule constitutes an unfair labor practice.
• Train supervisors and managers on ways to promote employee engagement without committing unfair labor practices to help diminish the likelihood of employees signing union authorization cards in the first place.
• Consider educating employees on the significance of union authorization cards. Unions often solicit signatures without fully explaining that authorization cards may be used to obtain a bargaining order. It is not unusual for unions to obtain signatures on authorization cards, claiming the cards are for purposes of obtaining more information or to secure an election.

The Cemex decision is perhaps the most significant development in the NLRB’s recent trend of pro-union decisions.  It substantially increases the possibility of non-unionized employees becoming unionized without the benefit of a secret ballot election to determine employee sentiment. Employers who receive a demand for recognition should swiftly engage experienced labor counsel to determine next steps.