Recent NLRB Rulemaking and Cemex Decision Spark Important Change in Union Elections and Recognition Resulting in Significant Consequences for Employers

In moves that jeopardize employers’ ability to lawfully and effectively oppose unionization efforts, the National Labor Relations Board (NLRB), which is currently comprised of a majority of members appointed by President Biden, reinstated the 2014 Obama-era pro-union election rules (2014 Rules) and issued a landmark pro-union decision reversing longstanding legal precedents related to union recognition and secret-ballot elections. This bulletin outlines what companies need to know.

Pro-Labor Final Rule Makes Union Elections Faster — And Easier for Unions To Win — By Diminishing Employers’ Procedural Rights

In a Final Rule issued Aug. 24, 2023, the NLRB revived the 2014 “ambush” or “quickie” election rules, which made elections easier for unions to win by: (i) hastening the pre-election hearing process, (ii) requiring employers to distribute election information to employees sooner, (iii) deferring individual eligibility and inclusion issues until after an election, (iv) restricting parties’ ability to file post-hearing briefs, and (v) requiring regional directors to schedule elections for “the earliest date practicable” following a decision and direction of election. The Final Rule replaces the current, employer-friendly 2019 Trump-era election rules (2019 Rules), which afford employers greater pre-election due process rights in representation cases.

The 2019 Rules provided parties with (i) more time to comply with certain pre-election requirements, (ii) refined and restored procedures for pre-election litigation to resolve unit scope and voter eligibility issues, (iii) broadened regional directors’ and hearing officers’ authority to grant deadline extensions, and (iv) other changes to better balance employers’ procedural rights with the interest of expeditiously processing elections. The chart below summarizes critical distinctions between the 2019 Rules and the new 2023 NLRB election rules (New Rules):

Topic 2019 Rules  New Rules
Scheduling of Pre-Election Hearing Generally to be scheduled for 14 business days after the regional director issues the Notice of Hearing. The pre-election hearing will generally be scheduled to open eight calendar days from the service of the Notice of Hearing.
Discretion to Postpone Pre-Election Hearing Regional directors have the discretion to postpone a pre-election hearing for as long as deemed proper upon showing of good cause. Regional directors have the discretion to postpone a pre-election hearing for up to two business days upon request of a party showing special circumstances and for more than two business days upon request of a party showing extraordinary circumstances.
Timing for Filing Non-Petitioning Party’s Statement of Position A non-petitioning party’s Statement of Position is due to be filed eight business days (or 10 calendar days) after service of the Notice of Hearing. A non-petitioning party’s Statement of Position responding to the petition generally will be due by noon the business day before the opening of the pre-election hearing. The pre-election hearing will normally open eight calendar days after service of the Notice of Hearing so this is normally seven calendar days after service of the Notice of Hearing.
Discretion to Postpone Due Date for Statement of Position Regional directors have the discretion to postpone the due date for as long as deemed proper upon request of a party showing good cause. Regional directors have the discretion to postpone the due date for the filing of a Statement of Position for up to two business days upon request of a party showing special circumstances and for more than two business days upon request of a party showing extraordinary circumstances.
Petitioner’s Response to Issues Raised in Non-Petitioning Party’s Statement of Position The petitioning party is required to file and serve a Statement of Position addressing issues raised by any non-petitioning party in a Statement of Position by noon three business days before the pre-election hearing is scheduled to open. A petitioner is required to respond orally to the non-petitioning party’s Statement of Position at the start of the pre-election hearing.
Timing for Employer To Post and Distribute Notice of Petition Employers are required to post and distribute the Notice of Petition for Election within five business days after service of the Notice of Hearing. An employer has two business days after service of the Notice of Hearing to post the Notice of Petition for Election in conspicuous places in the workplace and to electronically distribute it to employees if the employer customarily communicates with its employees electronically.
Litigating Disputes Concerning Unit Scope and Voter Eligibility at Pre-Election Hearing Parties are permitted to litigate disputes concerning unit scope and voter eligibility — including issues of supervisory status — at the pre-election hearing, which are to be resolved by the regional director before directing an election. Disputes concerning individuals’ eligibility to vote or inclusion in an appropriate unit ordinarily do not need to be litigated or resolved prior to an election, and regional directors have the authority to exclude evidence that is not relevant to determining whether there is a question of representation.
Post-Hearing Briefs Parties are entitled to file briefs up to five business days following the close of a pre- or post-election hearing, with an extension of an additional 10 business days available upon a showing of good cause. Parties may file post-hearing briefs with the regional director only with the regional director’s special permission (following pre-election hearings) or hearing officer only with the officer’s special permission (following post-election hearings) and within the time and addressing only the subjects permitted by the regional director or hearing officer, respectively.
Regional Directors’ Discretion To Issue a Notice of Election After Issuing a Direction of Election Regional directors have considerable discretion to issue a Notice of Election after issuing a direction of election. Regional directors ordinarily should specify the election details — (the type, date(s), time(s), and location(s) of the election and the eligibility period — in the decision and direction of the election and should ordinarily simultaneously transmit the Notice of Election with the decision and direction of election.
Timing for Regional Directors To Schedule Elections Regional directors are not permitted to schedule an election until the 20th business day after the date the direction of election is issued. Regional directors shall schedule elections for “the earliest date practicable” after issuance of a decision and direction of election.

Notably, the NLRB implemented these changes by direct rulemaking, bypassing the traditional notice-and-comment procedure, which may expose the Final Rule to legal challenge. In defense of this tactic, the NLRB argues that it is simply revoking the provisions from the 2019 Rules and reinstating the earlier 2014 Rules. Unless this Final Rule is challenged, employers should plan to defend against these “ambush elections” once the Final Rule takes effect on Dec. 26, 2023.

The NLRB Issues a Landmark Decision That Signals a Major Shift in Union Recognition and the Conduct of Secret-Ballot Elections

In a drastic departure from five decades of established legal precedent, the NLRB in Cemex Construction Materials Pacific, LLC, 372 NLRB No. 130 (Aug. 25, 2023) created a new framework for determining when an employer is required by Sections 9(a) and 8(a)(5) of the National Labor Relations Act (NLRA) to bargain with a union without a secret-ballot election. This decision also details the circumstances when the NLRB will issue an affirmative bargaining order remedy.

Since its 1971 decision in Linden Lumber Division, Summer & Co., 190 NLRB 718 (1971), the NLRB has held that employers do not violate Section 8(a)(5) “solely [by refusing] to accept evidence of majority status other than the results of a Board election,” allowing employers to lawfully refuse to bargain with a union demanding recognition. The NLRB expressly overruled Linden Lumber in Cemex.

Under the new Cemex framework, when a union claiming to have support from a majority of employees — typically shown through authorization cards — within an appropriate bargaining unit demands employer recognition, to avoid potentially violating the NLRA, the employer must either recognize the union or file a petition of its own requesting an election within two weeks of the union’s demand for recognition to test the union’s majority status or appropriateness of the bargaining unit. The Cemex standard now places the burden on the employer — not the union — to initiate a secret-ballot election and challenge a purported card majority.

The NLRB in Cemex also acknowledges a third — and potentially risky — option for employers when a union demands recognition, which is to neither recognize the union nor timely file an RM Petition, permitting the union to file an unfair labor practice charge to prove majority support in an appropriate unit. If the union is successful, the NLRB will find that the employer violated Section 8(a)(5) and issue a remedial bargaining order, and the employer’s bargaining obligation will attach retroactively to the date the union initially demanded recognition. The NLRB warns employers that refusing to bargain and implementing unilateral changes while a charge is pending “is at its peril,” indicating that the NLRB will not look favorably upon employers that choose to pursue this third option.

Cemex also makes a significant change to when the NLRB may issue remedial bargaining orders. At the direction of the U.S. Supreme Court in NLRB v. Gissel Packaging Co., 395 U.S. 575 (1969), the NLRB has, for more than half of a century, only issued remedial bargaining orders in extremely rare circumstances.  Such circumstances arose when a union proved that: (i) it held majority support at some point; (ii) the employer’s unfair labor practices decreased the employees’ support of the union; and either (iii)(a) there was an “exceptional” set of facts “marked by ‘outrageous’ and ‘pervasive’ unfair labor practices”; or (b) there was a “less extraordinary” set of facts “marked by less pervasive practices which nonetheless still had a tendency to undermine majority strength and impede the election processes. Cemex strays from the Gissel test and holds that any unfair labor practices an employer commits during the “critical period” — between the filing of a petition and the election — sufficient to set aside an election will result in the NLRB dismissing the petition and issuing the employer a remedial bargaining order, representing an extreme change in the law. The NLRB recognizes an exceedingly narrow exception to this new rule that it will not issue remedial bargaining orders for violations that “are so minimal or isolated that it is virtually impossible to conclude that the misconduct could have affected the election results.”

The NLRB applies the new Cemex rules retroactively to all pending cases at any stage.

Employer Takeaways

Based on unions’ new ability to demand recognition from employers by claiming majority support under Cemex — and because of the harsh remedies for violations during the organizing process — it is now more critical than ever for employers to educate employees on the implications of signing a union authorization card and to train supervisors at all levels of (i) the rules placed on them by the NLRB and (ii) how to spot organizing activity in the workplace. Before Cemex, the NLRB accepted union authorization cards as proof of majority support only in rare cases; now, these cards will likely serve as the primary method for a union to prove its majority support. It is also important to note that Cemex does not prevent unions from establishing majority support by other methods aside from authorization cards; however, given the NLRB’s directive in Cemex, there is no downside for unions to demand recognition early in the organizing process.

Although it is well-established law that union organizers’ misrepresentations about the nature and purpose of an authorization card invalidate the cards, instead of outright refusing to comply with a union’s demand for recognition, employers under the Cemex framework must now present such evidence to the NLRB after filing an RM Petition or during unfair labor practice proceedings. Furthermore, employers must acquire this evidence without unlawfully interrogating or surveilling employees and committing a critical-period violation, which may now cause the NLRB to set aside the election and issue a remedial bargaining order.

Employers can expect unions to demand recognition rather than file representation election (RC) Petitions for secret-ballot elections in the wake of Cemex. However, if a union does file an RC Petition (or an employer-filed RM Petitions filed in response to a demand for recognition), employers must keep in mind the new “ambush election” rules that become effective Dec. 26, 2023.

Taft’s Employment and Labor Relations attorneys will monitor developments stemming from the Cemex decision and the new secret-ballot elections Final Rule, including any legal challenges opposing these moves from the NLRB.

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