Cementing Cemex: Solid Solutions to Employer Election Shenanigans
Liam Pembroke
Over the last few years, news about the administrative state has been generally disheartening for those who support strong administrative agencies. Cases like West Virginia v. EPA, Alabama Association of Realtors v. HHS, National Federation of Independent Business v. OSHA, and the imminent Loper Bright Enterprises v. Raimondo and SEC v. Jarkesy have significantly eroded and threaten to further erode agency power.[1] One such threatened agency is the National Labor Relations Board (NLRB). Established within the National Labor Relations Act in 1935, the NLRB governs the relationship between employees and employers in order to redress “the inequality of bargaining power between employees … and employers” that contributes to industrial strife burdening and affecting “the flow of commerce.”[2] Some powers within the NLRB purview are the authority to identify and punish unfair labor practices and authority over the process designating union representation.[3] It is that authority over representation designation that the Board exercised in Cemex Construction Materials Pacific, LLC, where the Board both issued a bargaining order and fundamentally altered the legal standards for such orders.[4]
As is currently in vogue, several parties have decided to challenge the constitutionality of the structure of the NLRB, arguing that the structure of the Board and ALJ division are constitutionally impermissible.[5] In this rather distressing moment for those of us who desire effective governance, there have been a few bright spots.[6] The Board has also been the bringer of some joy – last August they released the aforementioned decision and order governing a dispute regarding the unfair labor practices of Cemex Construction.[7] The Board determined first that, under the long standing Gissel Packing standard, Cemex Construction’s unfair labor practices were so substantial that they merited a bargaining order, an injunctive demand that they recognize and bargain with the selected employee representatives despite an unsuccessful election.[8] More significantly, the Board also revisited Gissel’s legal standard, substantially modifying if not completely overturning the historical tests upheld by the Supreme Court in 1969.[9]
For the substantive changes to the bargaining order analysis within Cemex to make sense, I must explain the prior regimes (please forgive me).[10][1] The NLRA does not demand that an election occur for a representative to be recognized.[11] In September, 1949 the NLRB ordered Joy Silk Mills to bargain with its employees selected union representation despite an election loss because there had been a showing of majority support through Union authorization cards, and Joy Silk’s unfair labor practices demonstrated a lack of good faith doubt as to majority status.[12] In November, 1950 DC Circuit modified and affirmed the NLRB order.[13] In its holding, the court found that the NLRB is empowered to issue bargaining orders where an “employer refuses to bargain collectively with a majority union” because otherwise “recalcitrant employers might be able by continued opposition to union membership indefinitely postpone performance of their statutory obligation [to bargain with majority recognized representation].”[14] The important legal implication was that, where there was not a good faith doubt as to majority status, an employer was obliged to recognize the union.[15][2]
The Supreme Court revised this analysis in NLRB v. Gissel Packing Company.[16] While not overturning the NLRB’s capacity to issue bargaining orders based on authorization cards,[17] the decision constrained when the NLRB could issue them. The Court, resolving a circuit split between the first and fourth circuits, determined that there are three categories of unfair labor practices in the run up to a union election where majority status was achieved by authorization cards: (1) “‘exceptional’ cases marked by ‘outrageous’ and ‘pervasive’ unfair labor practices” that have irreparably eroded the possibility of a free and reliable vote, (2) “less extraordinary cases marked by less pervasive practices” which nevertheless “undermine majority strength and impede the election process”, and (3) “minor or less extensive unfair labor practices”.[18] The first category merits a bargaining order per se, whilst the third category can never require a bargaining order.[19] The second category requires a fact analysis and a reasoned decision over whether the unfair labor practices have so tainted the process as to preclude a free and fair election and demand a bargaining order, or whether an injunction limiting employer actions and a redo of the election would sufficiently serve the purposes of the act and the interests of the employees. (CITE more).[20] The Gissel holding is either a formalized categorization of the good and bad faith doubt inquiry within Joy Silk,or a repudiation and establishment of a new inquiry focused on the same policy concerns.
Linden Lumber Division v. NLRB answered the lingering question over whether employers in doubt of majority status have an obligation to file an election petition with the NLRB to determine majority status.[21] The Court believed that Congress had not expressly created an affirmative duty for employers to file election petitions in order to challenge majority status shown by authorization cards, and in so doing found that the NLRB’s decision to remove that burden from employers (allowing them to simply do nothing upon card presentation) and place it on the employees and union was neither arbitrary, capricious, nor an abuse of discretion.[22] Employers after Linden Lumber were free to take no action when presented with an authorization card majority, and with that came the definitive end to the presumption of majority status upon authorization card showings. Until Cemex.
In Cemex, the Boardfound that the unfair labor practices of Cemex Construction and the “clear majority support” justified a category 2 Gissel bargaining order.[23] Though the Board could have stopped there, they decided to establish a new “framework” of responsibilities and obligations of employers when presented with authorization cards evidencing majority status that, when breached, would allow for a bargaining order.[24] Under the Board decision in Cemex, an employer violates their obligation to collectively bargain with employee representatives after the presentation of authorization cards unless the employer files an election petition with the Board challenging majority status or the appropriateness of the unit, or they volitionally recognize majority status.[25] However, unlike Joy Silk, this is a per se right to petition, rather than one which requires a showing of good faith doubt.[26] Though this is a departure from the Supreme Court approved standard in Linden Lumber, it should be found permissible because Linden Lumber only affirmed that the Board’s interpretation of the duties and obligations of employers in 1971 were not arbitrary and capricious or otherwise an abuse of discretion.[27]
Additionally, the Board’s decision in Cemex disavows the tiered categories of Gissel Packing. While the employer may still, by committing an unfair labor practice, challenge the unit appropriateness or other “basis for its bargaining obligation”, the Board included language questioning whether an election re-do can ever serve as a “truly adequate remedy” for unfair labor practices.[28] While up for interpretation, this can be interpreted, as the Board itself suggests, as a high risk game – if an employer wishes to challenge majority status on factual grounds they have [3] a new duty to petition for an election, and if an employer wishes to challenge the legal basis of their obligation to bargain (and majority status) they have[4] to commit an unfair labor practice (likely refusal to bargain) and rely on the subsequent NLRB adjudication proceedings to voice their objections.[29]
But [5] what unfair labor practices will merit this strong medicine? Would refusal to bargain alone, as it did under the Joy Silk standard, be enough to merit a bargaining order? The Board answered by declaring the categories and procedures of Gissel Packing “insufficient” and “persistent failures” in their goal of adequately enabling employee’s organizational rights within the adversarial but regulated relationship against employers.[30] Cemex declares bargaining orders “more readily available” than they were when Gissel and Linden Lumber governed by changing the question asked. Instead of analyzing whether a fair election could conceivably occur with some injunctive prescriptions constraining employer behavior the Board will now, when determining whether to issue a bargaining order, simply determine whether the unfair labor practices of the employer “frustrate a free, fair, and timely election.”[31] Cemex addresses the same core power imbalance and problem as Gissel, but it refutes both the core question and three-tiered categorical structure established in Gissel.
But what facts and employer unfair labor practices are the Board going to declare, or consistently find, frustrate a free, fair, and timely election? Conceivably, it could be interpreted as not so novel as to render Gissel analysis completely foreign. It also may mean that any findings of employer unfair labor practices, including a failure to file an election petition upon authorization card presentation, might enable the issuance of a bargaining order. General Counsel Abruzzo[6] [7] [8] ,[32] in a memo to the regional offices of the NLRB released last November, conveyed her belief that both an employer’s failure to respond to an authorization card showing (either with voluntary recognition or an election petition) or an employer’s subsequent unfair labor practices[33] after either an employer or employee election petition has been filed would enable the Board to issue a bargaining order.[34] In fact, Abruzzo believes that the Board will find that even non-serious (non-“hallmark”) unfair labor practices, even an individual unfair labor practice, can sustain a bargaining order.[35] If the Board were to rule as Abruzzo envisions, it would seem a radical departure from Gissel, where even a singular category of the three unfair labor practices could, if construed as having compromised the current election (though not compromising the integrity of a future election), sustain a bargaining order.
If the NLRB isn’t declared unconstitutional in the meantime, time will tell how exactly Cemex is applied, and how effective it is at the dual purposes of promoting labor’s free exercise of the right to organize and deterring employer’s from procedurally interfering and undermining such rights.[36] Administrative Law Judges within the NLRB have already issued bargaining orders under Cemex on the grounds that independent employer unfair labor practices undermined the integrity of union elections.[37][9] Additionally, there may be rulings under Cemex from ALJs and the Board regarding whether §8(a)(5) violations alone (that is, without additional unfair labor practices) merit bargaining orders, either before or after election petitions (and actual elections). Dartmouth has already made it clear that they intend to refuse to bargain with the elected representation for their basketball players.[38] It will be interesting to see whether any cases arise where a strong card majority is shown, the employees leave the burden on the employer to file an election petition, and the employer refuses to file such petition. Such a case would test whether General Counsel Abruzzo’s interpretation and guidance on the issue is correct.[39]
In [10] order to understand the efficacy of Cemex, we should pay attention to whether there is an increased frequency of bargaining orders under Cemex in comparison to the Gissel and Linden Lumber regime. While I could not find instances of Cemex orders where an employer simply refused to act on a card showing, it may be that employees recognize that, if they simultaneously petition for an election, they can immediately raise the stakes for employers. Additionally, if we see a decrease in bargaining orders or a decrease in elections, but a more substantial increase in voluntary recognition, we may also be justified in assuming that Cemex has been an improvement in comparison to Gissel and Linden Lumber. However, there are potential hurdles to such happy occasions. A new administration could result in a subsequent Board reversal, abandoning Cemex for something akin to the prior regime. Alternatively, the Supreme Court might declare the NLRB unconstitutional in structure. Finally, given this Court’s willingness to overturn longstanding precedent, the Court may determine that the Board’s interpretation that §9(a) implicitly allows majority status not only through elections and voluntary recognition, but also through bargaining orders, is not what the enacting Congress really had in mind. Let’s not be downers – for the moment, let’s enjoy this one little bright spot and hope that it helps employees exercise their rights in this country.
[1] West Virginia v. EPA, 142 S. Ct. 2587 (2022); Ala. Ass’n of Realtors v. Dept’t of Health & Hum. Servs., 141 S. Ct. 2485 (2021); Nat’l Fed’n of Indep. Bus. v. Dep’t. of Labor, Occupational Safety & Health Admin., 142 S. Ct. 661 (2022); Transcript of Oral Argument, Loper Bright Enters. v. Raimondo, No. 22-451 (U.S. Jan. 17, 2024); Transcript of Oral Argument, SEC v. Jarkesy, No. 22-859 (U.S. Nov. 29, 2023).
[2] National Labor Relations Act, 29 U.S.C. §151.
[3] Id. §§158, 159.
[4] Cemex Constr. Materials Pacific, LLC, 372 N.L.R.B. No. 130 (2023).
[5] Official Report of Proceedings, Trader Joe’s, 01-CA-296847 et. al. at 21-23 (NLRB Region 1 Subregion 34, Jan. 16, 2024) available at https://big.assets.huffingtonpost.com/athena/files/2024/01/26/65b42054e4b0d407294f1dcc.pdf; Julia Shapero, Amazon Becomes Latest Company to Argue US Labor Board is Unconstitutional, The Hill (Feb. 16, 2024), https://thehill.com/business/4473061-amazon-becomes-latest-company-to-argue-us-labor-board-is-unconstitutional/ ; Taylor Giorno & Julia Shapero, Corporate Giants Aim to Hobble National Labor Relations Board, The Hill (Feb. 28, 2024), https://thehill.com/business/4491063-corporate-giants-aim-to-hobble-national-labor-relations-board/ ; Seila Law v. Consumer Fin. Prot. Bureau,591 U.S. 197 (2020); Complaint for Declaratory and Injunctive Relief, Space Expl. Tech. Corp. v. NLRB, No. 24-CV-00001 (S.D. Tex. Jan. 4, 2024).
[6] For example, just this spring the first region of the NLRB allowed student athletes at Dartmouth to participate in a union election with other student employees by the end of February. The election has been held and the players elected representation convincingly, in a 13-2 vote. Decision and Direction of Election, Trustees of Dartmouth College, 01-RC-325633 (NLRB Region 01, Feb. 5, 2024), available at https://www.nlrb.gov/case/01-RC-325633. See also Trustees of Dartmouth College, 01-RC-325633 (NLRB Mar. 5, 2024) (Board denying Trustees of Dartmouth College’s request to review the Region 01 election order), available at https://www.nlEDTrb.gov/case/01-RC-325633 ; Santul Nerkar, Dartmouth Players are Employees who can Unionize, U.S. Official Says, N.Y. Times (Feb. 5, 2024); Andea Hsu, Dartmouth Men’s Basketball Team Votes to Unionize, Shaking Up College Sports, NPR: Business (Mar. 5, 2024, 2:39 PM) https://www.npr.org/2024/03/05/1235877656/ncaa-dartmouth-mens-basketball-union-election-nlrb.
[7] Cemex Constr. Materials Pacific, LLC, 372 N.L.R.B. No. 130 (2023).
[8] Id. at 19.
[9] Id. at 27-29.
[10] As Mandy Patinkin’s Inigo Montoya once said: “Let me explain. No, there is too much. Let me sum up.” The Princess Bride (Act II Communications, 1987).
[11] National Labor Relations Act, 29 U.S.C. §159 (“Representatives designated or selected for the purposes of collective bargaining by the majority of the employees in a unit appropriate for such purposes, shall be the exclusive representative of all the employees . . . .”)
[12] Joy Silk Mills, Inc., 85 N.L.R.B. 1263, 1265-66, 1270, 1273, 1288 (1949), 1949 WL 9302.
[13] Joy Silk Mills v. NLRB, 185 F. 2d 732, 745 (D.C. Cir. 1950) cert. denied 341 U.S. 913 (1951).
[14] Id. at 741, 744. The court discussed the good faith requirement in greater depth at 741, where they noted that “[t]he Act provides for election proceedings in order to provide a mechanism whereby an employer acting in good faith may secure a determination [of majority status]” but that this mechanism was not “a procedural device by which [the employer] may secure the time necessary to defeat efforts toward [union organization].”
[15] See NLRB v. Gissel Packing Co., 395 U.S. 575, 592 (1969) (“[t]he traditional approach utilized . . . has been known as the Joy Silk doctrine. . . . Under that rule, an employer could lawfully refuse to bargain with a union claiming representative status through . . . cards if he had a ‘good faith doubt’ as to the union’s majority status.”)
[16] 395 U.S. 575 (1969).
[17] Id. at 600, 602 (noting that, while elections are “generally the most satisfactory – indeed the preferred – method of [determining majority status] . . . [that] does not mean that cards are thereby rendered totally invalid”, and that “[i]n short, we hold that the 1947 amendments did not restrict an employer’s duty to bargain under §8(a)(5) solely to those unions whose representative status is certified after a Board election).
[18] Id. at 613-615.
[19] See id.
[20] See id.
[21] 419 U.S. 301, 307 (1974) (“[t]he question remains – should the burden be on the union to ask for an election or should it be the responsibility of the employer?”).
[22] Id. at 307, 310.
[23] See Cemex Constr. Materials Pacific, LLC, 372 N.L.R.B. 130 at 14-19 (2023) (laying out the support for a bargaining order under traditional Gissel Packing Co. analysis, indicating the analysis needed under category 2).
[24] Id. at 25.
[25] Id. at 25 (“an employer violates Section 8(a)(5) and (1) by refusing to recognize, upon request, a union that has been designated … representative by the majority of employees … unless the employer promptly files a petition pursuant to Section 9(c)(1)(A) . . . .”)
[26] Id. at 29 (“our standard does not rely on an employer’s ‘good faith doubt’ … [r]ather, the employer is free to seek a Board election”). However, it should be noted that under Joy Silk an unfair labor practice by an employer would evidence a lack of good faith doubt and could merit a bargaining order, which, in some ways, is very much like the bargaining order demand in Cemex (later discussed infra at footnote 30).
[27] Id. at 25 (“we hereby overrule Linden Lumber”). See also Linden Lumber Div., Summer & Co. v. NLRB, 419 U.S. 301, 309-10 (1974); Linden Lumber Div., Summer & Co., 190 N.L.R.B. 718 (1971), 1971 WL 32386.
[28] Cemex Constr. Materials Pacific, LLC, 372 N.L.R.B. 130 at 26.
[29] Id. at 26 (“[employers] refusal to bargain, and any subsequent unilateral changes it makes without first providing the … [employee] representative with notice and an opportunity to bargain, is at [the employers] peril.”)
[30] Id. at 27.
[31] Id. at 27-28.
[32] Jennifer Abruzzo is the presidentially appointed General Counsel of the National Labor Relations Board (a position distinct from the Board, responsible for coordinating, advising and supervising the regional offices). About NLRB: General Counsel, NLRB, (last visited Apr. 1, 2024, 12:29 PM), https://www.nlrb.gov/bio/general-counsel.
[33] NLRB Off. of the Gen. Couns., Memorandum GC 24-01, Guidance in Response to Inquiries about the Board’s Decision in Cemex Construction Materials Pacific, LLC., 4 (2023) (so long as said unfair labor practice(s) “renders a recent orpending election a less reliable indicator of current employee [union support].”).
[34] Id. at 3-4.
[35] Id. at 5.
[36] See Cemex Constr. Materials Pacific, LLC, 372 NLRB No. 130 at 17 (citing NLRB v. Gissel Packing Co., 395 U.S. 575, 614 (1969)).
[37] See, e.g., 3 Corners L.L.C., 28-CA-273948, 2023 WL 6226274 (NLRB Div. of Judges Sept. 25, 2023) (2023); Big Green Respondent, 27-CA-276068, 2023 WL 8873718 (NLRB Div. of Judges Dec. 20, 2023); I.N.S.A., Inc., 01-CA-290558, 2023 WL 6194144 (NLRB Div. of Judges Sept. 21, 2023).
[38] Parker Purifoy, Dartmouth Refuses to Bargain with Unionized Basketball Team, Bloomberg Law (Mar. 19, 2024, 12:42 PM), https://news.bloomberglaw.com/daily-labor-report/dartmouth-refuses-to-bargain-with-mens-basketball-team-union (By refusing to bargain, Dartmouth Trustees create a mechanism to appeal the election on other grounds like unit appropriateness. However, it is obvious that, where a fair election shows a majority as strong as the Dartmouth basketball team enjoys, the Board would merely be enforcing the actual election result.).
[39] NLRB Off. of the Gen. Couns., supra note 33, at 3-4 (where General Counsel Abruzzo issued guidance that such conditions could merit a bargaining order).