On May 14, 2024, the United States District Court for the District of Massachusetts granted a petition for interim injunctive relief under Section 10(j) of the National Labor Relations Act (“NLRA”) that was filed by the Regional Director for Region One. Among other things, the court’s order required I.N.S.A, a cannabis company (the “Employer”) to: 1) immediately recognize and bargain collectively with United Food and Commercial Workers International Union, Local 1445 (the “Union”) as the collective bargaining representative of its employees even though a majority of workers voted against unionizing; and 2) rehire two pro-union employees who were terminated during the organizing campaign.
The ruling is significant as the underlying Administrative Law Judge (“ALJ”) decision in I.N.S.A. was one of the first ALJ decisions issuing a remedial bargaining order under the new National Labor Relations Board (“NLRB”) standard set forth in Cemex Const. Materials Pac. LLC, which is pending before the Ninth Circuit. For decades prior to Cemex, unions have been required to petition for and win secret ballot elections before employers must recognize and bargain with them. In the 1969 case NLRB v. Gissel Packaging Co, the U.S. Supreme Court upheld a narrow exception carved out by the NLRB in cases involving egregious unfair labor practices. However, in Cemex, the NLRB dramatically altered the process for unions to gain mandatory recognition without winning elections in cases where employers commit unfair labor practices, as we previously discussed here.
Background
In late 2021/early 2022, employees at I.N.S.A.’s Salem, Massachusetts store began efforts to organize that location, including setting up an employee group chat, and creating a link where employees could electronically sign authorization cards. By January 12, 2022, the Union had collected authorization cards from a majority of the store’s employees. On January 14, 2022, employees presented the I.N.S.A. store manager with a letter demanding recognition signed by all of the employees who had signed electronic authorization cards. I.N.S.A. did not respond to the letter and the Union filed a petition with the NLRB on January 18, 2022.
Between January and March 2022, I.N.S.A. disciplined and/or discharged several employees for violations of various company policies including: the attendance policy, policy requiring the door of the Cash Room to be closed, the food and beverage policy, the COVID mask usage policy, and for failure to report to work. Among the employees disciplined and/or discharged were those that were actively involved in the Union organization efforts including employees who were a part of the group that delivered the letter requesting recognition. Additionally, the Union alleged that the Employer had instructed employees not to discuss the organizing efforts while on the clock and on social media.
In April and May 2022, a secret ballot election was held via mail ballot election as a result of the Union’s petition. The ballots were sent out on April 15, 2022, and counted on May 9, 2022. At the time of the election, 38 employees were eligible to vote and a final revised tally of the ballots demonstrated that 11 votes were cast for the Union, 17 votes were cast against the Union, and there were 2 challenged ballots.
The Union accused the Employer of several unfair labor practices after receiving the letter demanding recognition from its employees, and the underlying ALJ decision in I.N.S.A., discussed here, found that the Employer violated Sections 8(a)(1), 8(a)(3), and 8(a)(5) of the NLRA and had engaged in the various unfair labor practices alleged by the Union during its organizing campaign. Despite the Union’s loss of the secret ballot election, the ALJ issued a bargaining order relying on Cemex. I.N.S.A. filed exceptions appealing the ALJ’s decision and that appeal is still pending before the NLRB.
10(j) Relief and the Regional Director’s Petition
Following the ALJ’s decision, the Regional Director filed a petition for interim injunctive relief in the United States District Court for the District of Massachusetts, pending the appeal, pursuant to Section 10(j) of the NLRA. Under Section 10(j), a Regional Director may petition a district court for interim injunctive relief including a restraining order while the NLRB’s final resolution of an unfair labor practice charge is pending. Here, the Regional Director sought an order that the Employer immediately recognize and bargain with the Union and rehire two pro-union employees who were terminated during the organizing campaign.
In the First Circuit, which includes the District of Massachusetts, a district court considering a Section 10(j) petition for temporary injunctive relief will consider: 1) whether there is “reasonable cause to believe” an employer violated the NLRA and 2) whether the temporary injunctive relief is “just and proper,” but will not decide the merits of the unfair labor practice claims. To evaluate whether there is “reasonable cause to believe” that an employer violated the NLRA, the court defers to the legal and factual determinations of the ALJ. To evaluate whether injunctive relief is “just and proper,” the Regional Director must satisfy the showing for a preliminary injunction, which is: 1) likelihood of success on the merits; 2) potential for irreparable injury in the absence of relief; 3) that such injury outweighs any harm preliminary relief would inflict; and 4) that preliminary relief is in the public interest.
I.N.S.A. argued that the Regional Director could not satisfy reasonable cause because the case depends entirely on the Cemex decision and that Cemex will likely be vacated, thus the case must fail and that the Regional Director delayed in petitioning for interim injunctive relief as she waited until after Cemex and until the ALJ issued a decision to petition for interim injunctive relief.
However, District Court Judge Myong Joun determined that, in the context of the ALJ decision, there was reasonable cause to believe that the Employer violated the NLRA. Joun also determined that the relief requested was just and proper given the ALJ’s conclusions were supported by the record, irreparable harm would be experienced by employees if injunctive relief is not issued, any harm the Employer might suffer is limited, and that the public interest would be served by ensuring the NLRA was furthered.
The granting of interim injunctive relief – despite the District Court’s acknowledgement that it is not for the Court to decide the merits of the unfair labor practice claims, in the form of a bargaining order – essentially affirms the ALJ decision. The District Court’s Order requires the Employer to bargain with the Union who lost the secret ballot election while the NLRB’s final disposition of the unfair labor practice charges is still pending and assumes that the Union would not have lost if the Employer had not engaged in the actions alleged by the charges.
Key Takeaways
The ALJ’s order in I.N.S.A. and subsequent 10(j) injunction by the District Court illustrates a critical aspect of Cemex that is often overlooked. In addition to the quick decision that employers must make when presented with a demand for recognition – i.e., deciding whether to voluntarily recognize or file an election petition – employers who choose the latter must exercise caution during the election period. Cemex dramatically changes how exclusive representation will attach and increases the likelihood that the NLRB will impose a bargaining order if the union loses the election. As a result of Cemex, any conduct engaged in by the employer in communicating its position to its employees on unionization will be subject to scrutiny as the union attempts to bypass the vote in favor of a NLRB-imposed bargaining obligation. Given the uptick of petitions for elections and unfair labor practice charges filed, the importance of the duty of employers to manage their workforce effectively and minimize the risk of remedial bargaining orders is critical.[1]
We will continue to monitor any new developments with respect to the Cemex decision and the NLRB’s final disposition of this case.
FOOTNOTES
[1] On April 9, 2024, the Office of Public Affairs of the NLRB reported that during the first six months of fiscal year 2024, election petitions have increased by 35% with 1,618 petitions being filed during this time compared to the 1,199 filed in the first half of fiscal year 2023. With respect to unfair labor practice charges during this time, NLRB field offices experienced a 7% increase to 10, 278 filed compared to 9,612 filed in the first half of fiscal year 2023.
