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NLRB Decisions Create a Catch 22 for Employers

Oct. 5, 2023
Union takeovers are becoming more difficult for employers to resist.

ANALYSIS & COMMENTARY

In a radical change from past precedent, two decisions rendered recently by the National Labor Relations Board (NLRB) are making it virtually impossible for an employer targeted by a union to be organized to find a way to resist those efforts.

On Aug. 25, the board handed down a decision in a case involving Cemex Construction Materials Pacific—a name likely to not soon be forgotten by employers facing organizing campaigns—which allows the NLRB to order an employer to recognize a union as a collective bargaining agent absent a secret-ballot vote by its employees.

The NLRB declared that it now can order the union be accepted as the employees’ representative during an election campaign if it finds the employer has committed an Unfair Labor Practice (ULP), which is now a much greater prospect because of another board decision.

That Cemex decision followed one announced by the board on Aug. 1, called Stericycle, that suddenly made illegal many long-standing employer work rules that were previously deemed acceptable. In that ruling, the board also declared that it will consider any ULP complaint filed by a worker regarding employer attempts to resist organizing to be presumed legitimate.

Combined with this work rules decision, Stericycle and Cemex end up creating a one-two punch making it virtually impossible for an employer to prevent being organized once targeted by a union.

Calling the Cemex decision “a game-changer,” Chad Horton, an attorney with the law firm of Shawe Rosenthal, predicted, “Inevitably, this decision will result in unions representing employees in far more cases where an employer has not voluntarily recognized the union and the union has not won a board-conducted election. Indeed, Cemex now provides an avenue for union representation premised solely on employer inaction following a demand for recognition even if the employer did not commit a single unfair labor practice.”

More damaging to employers is that the NLRB also has declared that Cemex will be applied retroactively, point out attorneys Jamie Rich, Lisa Lehmann Nichols and Joseph Vento of the Seyfarth Shaw firm.

“The new standard will be applied to any pending case where an employer refused to bargain upon a request for voluntary recognition, engaged in unfair labor practices during the critical period, and won the election, if the union can prove it had majority support at the time it requested recognition,” they explain. “The outcome in those cases may shed light on the types of unfair labor practices that do (or do not) result in a bargaining order.”

The NLRB also used the Cemex decision to make it much more difficult for employers to resist organizing by deliberately shortening the differing amounts of time they have to respond to unions. This can be crippling in certain circumstances because the enormous complexity of labor law and board regulations requires deployment of labor lawyers.

In fact, it could be argued that simply making it more difficult for employers to be capable of reasonably responding to these changes is a main motivating factor for the board majority in Cemex. For example, once a union presents a petition with the NLRB containing evidence that workers are interested in recognizing the union, the employer only has 14 days until the vote will be held.

The day before the board issued its Cemex decision, it also released a final rule in a separate proceeding dealing with appeals procedures that slashes the time allowed employers facing board hearings to act. That rule will go into effect on Dec. 26.

Under the new rule, a pre-election hearing will generally be scheduled to open eight calendar days from service of the notice of hearing as opposed to the current 14 business days. Previously, NLRB regional directors could postpone a hearing indefinitely under certain circumstances; now that has been limited to two days. An employer’s Statement of Position will be due to be filed by noon the business day before the opening of the pre-election hearing, thus the Statement of Position is due seven calendar days after service of the hearing notice. Previously it was due eight business days.

Making these shortened time frames even more worrisome for employers, Cemex allows a union to be recognized as the collective bargaining agent if it simply files a statement with the board declaring that a majority of the workers want the union, and if it submits cards signed by them to that effect.

Card Check Back From the Dead

This change represents an attempt by the board to impose a version of card check, the organizing method fervently sought by unions which years earlier had been considered political poison and a policy bridge too far by Democratic federal legislators.

The card check concept has a long history. In the early “aughts” unions sought federal legislation that would mandate the recognition of union representation at a worksite where a majority of workers signed cards agreeing to it. The prospect set off all sorts of alarm bells because the targeted workers would be without any reasonable expectation of privacy and would face the very real prospect of intimidation when being prevailed upon to sign the cards.

The issue was so radioactive that in 2009, after the unions’ political clout and financial assistance helped get President Obama elected to his first term and helped create a Democratic super majority in Congress that passed the Obamacare legislation, not enough Democratic legislators could be rounded up to pass card check, which even many of them regarded as unfair and an invitation to intimidation.

That left union leaders angry and unhappy with their Democratic allies, which resulted in the Obama administration and Democratic legislators doing everything in their power to make up for the loss of card check in terms of embracing and advancing other pro-union policies.

Following Joe Biden’s election as President, an attempt was mounted once again in Congress to impose card check on employers as part of the first piece of major legislation, an enormous omnibus labor bill, but that legislation never made it to Biden’s desk.

In Cemex, the board’s majority vote of 4-1 to approve the policy change should come as no surprise (the dissenting vote came from the one remaining Republican member, Marvin E. Kaplan). The new policy was suggested to the board by NLRB General Counsel Jennifer Abruzzo. Her actions since she took office in 2021 have been marked by a notable acceleration of the NLRB’s change from being an broker of labor disputes to becoming an enforcer of unions’ interests and tilting the legal scales against employers.

Unlike other agencies, the NLRB general counsel plays an outsized leadership role and in many ways is more important than the five board members, including the chairman. While other regulatory bodies make policy through rulemakings and policy directives, the unique structure of the NLRB means it creates new policies primarily through development of a series of individual case decisions, such as Cemex.

(The board does occasionally choose to engage in the rulemaking process, but because of federal rulemaking public comment and other administrative requirements, policy changes then have to be put in place over a period of many months while the impact of the NLRB’s precedent-setting individual case decisions is immediate).

Those cases are developed at the regional level and by NLRB staff attorneys and administrative law judges and then passed up to the board in Washington on appeal. The cases are developed and selected by the general counsel, which shapes her leadership role. Abruzzo’s position is so important that during her tenure she made major several policy changes that only needed to be made public by enforcement guidance memos directed to the staff of the 26 regional offices under her direction.

As a result, it should come as no surprise that the policy change embraced by the board members in Cemex was taken up by the board expressly at Abruzzo’s recommendation made earlier this year.

What Should Employers Do?

The attorneys who have commented publicly on Cemex so far generally agree (as does the board’s lone Republican member Kaplan) that federal courts can be expected to eventually strike down the new standards. But if and when that happens is anyone’s guess. For now, it remains the law of the land.

Employer attorneys also agree this means that businesses that want to remain nonunion must act now to prepare for the new regulatory regime because it already is here.

Michael Lotito, Rachel Ring and Michelle Devlin, attorneys with the law firm of Littler Mendelson, recommend that employers:

· Know the new timeline and procedure. Employers should be aware that they have only two weeks to file an appeal from when the union demands recognition based on cards. An employer previously had no obligation to file a petition itself to remain a union-free workplace.

· Be prepared. Employers should be trained and prepared for an election at any time. Often unions obtain signed cards without the employer knowing about it. This means it is paramount as part of an employer’s preparedness plan to train employees about what it means to sign a union authorization card.

· Focus on compliance. The stakes for being found by NLRB officials to have violated the NLRA are much higher for employers now that the board has apparently replaced its previous practice of ordering re-run elections with bargaining orders.

· Employers should consider implementing training on the “dos and don’ts” during organizing and potential organizing to minimize the risk of incurring ULP charges that may result in a bargaining order.

· Keep in mind that the decision makes only a passing reference to an employer’s continued right to free speech under the NLRA in a footnote, which may indicate the kind of scrutiny employers will face concerning their pre-petition conduct.

· Employers will have to exercise caution in how they make use of their free speech right to campaign against the union because ULP charges filed by a union may be based on written and oral statements made before or during a campaign.

· As Kaplan’s dissent said, the practical impact of Cemex is that “even minor or less extensive unfair labor practices,” including even the mere maintenance of work rules that are considered overly broad under the Stericycle decision, could result in a bargaining order. Employers should review their handbooks and work rules for compliance with the new standards.

“Due to the current composition of the board, it does not appear that the trend of union-friendly decisions will end any time soon,” Lotito, Ring and Devlin explain. “Until the slow-moving appeal system considers the question, it appears that the Cemex decision must be considered the new normal in union organizing.”

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