The National Labor Relations Board, by a 3 to 1 vote, has dramatically changed the playing field for employees seeking to exercise their Section 7 right to select a bargaining representative or to refrain from such. The decision allows employers only a 14-day window after a union demand for recognition to petition for an election. (Previously, employers could wait until the union petitioned for an election.)

Moreover, the decision allows the Board to use unfair labor practice proceedings to justify issuing an order for the employer to recognize and bargain with a union – forgoing an election altogether.

The Cemex decision

In Cemex Construction Materials Pacific, LLC, issued on August 25, the Board announced a largely-novel framework of rules for determining when an employer must bargain with a union without an election. Under the decision, when a union tells the employer that a majority of employees in an appropriate bargaining unit have designated the union as their representative and requests recognition on that basis, the employer must either (1) recognize and bargain with the union, or (2) file a petition for an election with the NLRB within 14 days of the demand.

But it will be easy for the union to block the second option. The union can allege, and the Board find, that the employer committed an unfair labor practice that would require setting aside an election, even if no election ever occurred. Rather than conduct a “re-run” election as a result of one or more such unfair labor practices, as has been the Board’s longstanding policy and practice, the Board will simply order the employer to recognize and bargain with the union. This is so even if the union claimed, but never had to prove through an election, its majority status with the employees to be represented.

As its rationale for this dramatic change, the Board majority said that the newly announced framework represented its effort to better effectuate employees’ right to bargain through their chosen representative, while acknowledging that employers have an option to pursue an election. In the Board’s opinion, “under the new standard we expect that employers seeking an election will be incentivized not to commit unfair labor practices in response to a union campaign, both before and after the filing of the election petition.” (Emphasis in original.)

In a statement released by the Board with the decision, Board Chairman Lauren M. McFerran was quoted as follows:

Today’s decision, along with the Board’s recently issued Final Rule on Representation, will strengthen the Board’s ability to provide workers across the country with a timely and fair process for seeking union representation. … The Cemex decision reaffirms that elections are not the only appropriate path for seeking union representation, while also ensuring that, when elections take place, they occur in a fair election environment. Under Cemex, an employer is free to use the Board’s election procedure, but is never free to abuse it—it's as simple as that.

Facts of Cemex

The facts of the Cemex case were as follows: The union demanded recognition based on union cards purportedly signed by 207 employees in a union-claimed bargaining unit of approximately 366 employees, or 57 percent of the employees in the unit. The employer refused the demand, and the union filed an election petition with the NLRB. Heated campaigns ensued. Eventually, the election took place, and the union lost, 179-166. The union then filed election objections and unfair labor practice charges with the Board.

After a hearing on the election objections and a ULP complaint, an Administrative Law Judge of the Board found multiple ULP violations and recommended a re-run election. Both the employer and the NLRB General Counsel filed exceptions.

On review of the ALJ’s recommended decision and order, the Board agreed that the employer had engaged in multiple unfair labor practices between the filing of the election petition and the election – the so-called “critical period.” The Board found violations of Sections 8(a)(1) and 8(a)(3) of the National Labor Relations Act, including threats by managers and labor consultants to close plants, threats of discipline, surveillance and interrogation of employees regarding protected activity, bans on employee communication with union organizers, hiring of security guards to intimidate employees, bans of pro-union paraphernalia, and disciplining and discharging a leading pro-union employee.

Based on the “hallmark” ULP violations during the critical period, the Board decided that a re-run election was not the appropriate remedy for the employer’s conduct. Instead, it issued a “bargaining order” against the employer, deciding that such an order was appropriate under the newly-announced framework, retroactively applied to the case. The Board noted that the employer would have been obligated also to bargain even under the more-demanding standard of the Supreme Court’s Gissel Packing Co. decision.

The Board’s three Democrats (Chairman McFerran, and Members Gwynne A. Wilcox and David M. Prouty), joined in the decision. Member Marvin E. Kaplan, the lone Republican on the Board, dissented in part. At this point, the employer may seek review of the decision in a federal appeals court or it may accept the Board’s decision.

Key points about Cemex

1. The Cemex decision creates a 14-day deadline for employers to file a petition for a Board-conducted election, running from the date that the union requests recognition. If the employer misses the deadline, it must recognize the union and bargain in good faith. Before Cemex, the employer could wait until the union petitioned for an election.
2. The decision’s mandatory process and new standard create an increased incentive for unions to pursue ULP allegations for any pre-election conduct by employers. That, in turn, could allow unions to halt elections that they fear they might lose for any reason, including lack of majority support. In many cases, unions may believe that they have better chances with the Board majority – especially the current Board – than with a majority of employees.
3. The current Board majority when given the opportunity can be expected to find that an employer (sometimes through labor consultants) engaged in ULPs.
4. The decision applies retroactively to all pending and future Board cases unless a court intervenes or a new NLRB standard is announced.

Ramifications for employers

The Cemex framework, when combined with the new regulations re-establishing the so-called “Ambush” or “Quickie Election Rule” that will become effective December 26, will force employers to be alert and ready to respond lawfully to union organizing and demands for recognition. All managers with human resources and labor relations responsibilities should be aware of the “rules of the road” now in play with this decision. Employers should undertake immediate and effective supervisor training, before any union is on the scene. Once organizing activity has begun, it may be too late. Demand letters from unions should be acted upon immediately. Stricter employer oversight of supervisor and consultant communications is likely to be warranted and necessary.

Thanks to smart phones, many management and employee interactions are being electronically recorded. Therefore, employers will want to carefully manage what they say, and may want to keep exact records of what was communicated and when on any union- or labor-related topic. Employers should also expect unions and their supporters to do all they can to selectively record statements that they think the NLRB might view as unlawful.

Further, we expect to see more situations where a union, seeing that an employer is gaining an advantage in a campaign, will use the ULP process to take the vote away. Employers should review their employee handbooks and policy manuals and revise as needed so that the policies pass muster under the NLRB’s recently announced Stericycle standard. Violations are likely to allow the Board to find that the employer committed ULPs that justify a bargaining order without an election.

In the near future, we expect to see more NLRB positions that are unfavorable to employers. These include bans on both (1) captive audience meetings and (2) one-on-one supervisor discussions with employees during working time (when the employee is essentially captive). In combination with the Cemex framework, this will result in more (and more sudden and reaching) union demands for recognition, more ULP allegations in election campaigns, more restrictions on employers’ means of communication, less informed employee-voter choice, and many more Board representation and ULP proceedings. In short, it will be harder not only for employers to win elections, but also for employees to even have elections in the first place.

We are hopeful that a court will review, and perhaps refuse to enforce, the Cemex decision. It is also possible that an injunction will be issued by a court to keep it from taking effect. However, court action will take time. For now, the Board majority – not the employees – has the votes that count.