Introduction

On May 14, 2024, the United States District Court of Massachusetts granted the National Labor Relations Board’s first petition for injunctive relief under the new framework announced last year in Cemex Construction Materials Pacific, LLC, 372 NLRB No. 130 (2023) and set aside the results of an election and issued a remedial bargaining order.

The Court’s decision demonstrates the severe ramifications that employers may face should they commit an unfair labor practice during an organizing campaign.

The NLRB’s Cemex Decision

On August 25, 2023, the NLRB issued its Cemex decision, establishing a new framework to determine when employers are required to bargain with unions. The NLRB held that when a union requests recognition because a majority of employees have designated the union as their representative, the employer must either recognize the union and bargain with it or promptly file a petition for the NLRB to conduct an election. However, if during the election process, an employer commits unfair labor practices, any employer-favorable election result must be set aside, and the Board will order the employer to recognize and bargain with the union retroactively from the date the union demanded recognition.

Small Employer Faced Organizational Drive

INSA is a Cannabis Dispensary company with multiple storefronts along the East Coast, including one location in Salem, Massachusetts. In December 2021, the United Food and Commercial Workers International Union (Union) began an organizing campaign at the Salem location, where there were 28 employees. 20 employees signed Union authorization cards and presented them to the employer along with a Demand for Recognition. The Company declined to recognize the Union, and four days later, the Union filed a petition for an election with the NLRB.

The Union lost the election and claimed before the NLRB that the employer engaged in unfair labor practices related to the election. The alleged conduct included prohibiting employees from discussing the Union or engaging in union activity during working hours, soliciting grievances and impliedly promising improved benefits and conditions of employment to employees if they refrained from union activity, disciplining or discriminating against employees involved in unionizing efforts more-so than non-union supporters, and refusing to recognize and bargain with the Union.

On September 21, 2023, less than a month after the NLRB’s Cemex ruling, the Administrative Law Judge (ALJ) assigned to the matter concluded that INSA engaged in unfair labor practices, issued several remedial actions and granted the bargaining order forcing the employer to negotiate with the Union. The Company appealed the decision to the NLRB, and the NLRB Regional Director went to court for a Petition seeking temporary injunctive relief while the appeal was pending.

Section 10(j) of the National Labor Relations Act (NLRA) authorizes the NLRB to seek temporary injunctions against employers and unions in federal district courts to stop unfair labor practices while a case is being litigated before an ALJ and the Board.

Massachusetts District Court Upholds ALJ’s Findings

The Court, heavily relying on the ALJ’s findings, determined that reasonable cause existed to believe the employer committed all of the alleged unfair labor practices, and further found that issuing the temporary injunction was just and proper because (1) the union was likely to succeed on the merits as to each alleged violation, (2) that the potential for irreparable harm existed in the absence of preliminary injunctive relief; (3) that the balance of equities tipped in the Union’s favor; and (4) that granting the injunction was in the public interest. Accordingly, the Court concluded that the union’s electoral defeat must be set aside and a remedial bargaining order issued pursuant to Cemex.

The Court gave short shrift to the employer’s argument that Cemex would likely be vacated by the federal courts.

What’s Next?

While Cemex may still be overturned by federal courts, the Massachusetts District Court’s decision is the first Court decision relying on Cemex. Employers in receipt of union authorization cards and demands for recognition must tread very carefully in their interactions with union-related activity at risk of having an election set aside and union representation appointed by default.