Companies Brace as Unions Jump on Labor Board’s Recognition Test

Employers should expect increased litigation at the National Labor Relations Board as unions take advantage of a new, lower standard for getting an order to bargain.

Under the board’s new Cemex doctrine, companies could be hit with bargaining orders if they fail to recognize a union or commit “even one” unfair labor practice in the run-up to a representation election, NLRB General Counsel Jennifer Abruzzo has warned.

The Nov. 2 guidance provides an incentive for unions to file more unfair labor practice charges alleging labor law violations that previously wouldn’t have resulted in remedial board orders, attorneys say.

“Abruzzo reinforcing that a single ULP is enough to trigger a bargaining order is leaving employers feeling pretty scared I think,” said Ryan Krone, a management-side attorney with Akerman LLP. “If any of the charges stick, then the union gets a bargaining order out of it. It seems like she’s just asking for that kind of thinking,” he said of Abruzzo.

Employers already worried about the scope of the NLRB’s new precedent in Cemex Construction Materials Pacific LLC now have even more cause for concern, Krone said.

Those fears may be founded, as unions see more opportunities to force companies to the bargaining table.

Cemex gives unions the green light to file more charges against companies and grants them more leverage during organizing drives, said Seth Goldstein of Julien, Mirer, Singla & Goldstein PLLC.

Before the decision, it wasn’t always worth it for unions to file charges over smaller, “garden variety” allegations, said Goldstein, who represents the Trader Joe’s Union and Amazon Labor Union. But now unions will be re-evaluating elections from the past six months to see if they can get bargaining orders under the new standard, he said.

“This means that a lot of these elections that unions thought they lost are going to be flipped over and they’re going to get recognition,” he said. “This is huge. It’s a fundamental change in the board’s role and it will hopefully make employers not so comfortable violating the law anymore.”

‘Putting Its Foot Down’

Cemex, issued in August, overturned the 1971 Linden Lumber doctrine that allowed employers to refuse to accept a union’s evidence of majority support.

But it also signaled a shift away from Gissel bargaining orders, which were issued when “hallmark” unfair labor practices, like the threat of store closure or firing organizers, imperiled a future fair election—a remedy that the US Supreme Court endorsed in its 1969 decision in NLRB v. Gissel Packing Co.

The new standard, which has been appealed, requires employers to recognize a new union upon a showing of majority support or file a petition for an election within two weeks of a union asking for recognition. Failure to meet that deadline will result in an order to recognize and bargain with the union.

In her memo, Abruzzo added that an employer that commits any labor law violations—even non-hallmark violations—that could affect an election’s result will open itself to bargaining orders from the agency.

The board is “putting its foot down” with the Cemex standard by beefing up punishments for employers found to be illegally interfering with elections, said Anne Marie Lofaso, a labor law professor at West Virginia University and former NLRB attorney.

“If an employer gets upset with that, then what they’re saying is that they want to be able to violate the law with impunity,” she said. “Companies are used to breaking the law and getting away with it. If you don’t like the law, then go lobby Congress or something.”

NLRB administrative law judges already have handed down Cemex bargaining orders in at least two cases.

One was issued to cannabis retailer I.N.S.A Inc. after an administrative law judge found that the company illegally fired several union organizers. The other was part of a settlement with another cannabis company that agreed to pay $145,000 and bargain with the the United Food and Commercial Workers International Union to resolve dozens of ULP charges.

More Training

Many companies will likely try to train managers and supervisors more about how to respond if workers ask for voluntary recognition and what to do in the lead-up to an election. Cemex could allow for a bargaining order based on violations that include interrogation or surveillance, and training could be vital to preventing supervisors from unknowingly committing one of these legal infractions, Krone said.

“Employers have always been training supervisors on what the do’s and don’t’s are in a union campaign, but the stakes of that are so much higher now because it could only take one to get you hit with that bargaining order,” he said. “One slip up could have such a huge impact on the company.”

Some companies may implement trainings right away, while others may choose to wait to see how the NLRB rules on requests for Cemex bargaining orders in other cases, Krone said. There are still many uncertainties about how the new precedent will play out, especially in terms of what types of ULPs might prompt a bargaining order, he said.

But Lofaso said it’s going to take time to figure out how far the board is willing to push its new doctrine and how the federal courts might respond if and when orders get appealed.

“I don’t think the courts would uphold a bargaining order for a single ULP unless it was something serious like an illegal firing,” she said. “I can’t see the board or the courts being receptive to an order for something like accidental surveillance or something less significant, but we’ll see.”

The new standard still departs from Gissel, which required numerous “hallmark violations” of the law to impose a bargaining order. “With Cemex, they can take into consideration a lot of things. They aren’t stuck in the ‘hallmark violations’ standard anymore,” Lofaso said.

That means employers shouldn’t take the risk of a Cemex bargaining order lightly, said management-side attorney David Pryzbylski of Barnes & Thornburg LLP.

“If you even had one instance of one supervisor interrogating one worker out of 1,000 people in a bargaining unit, a pure reading of Cemex would tell you that’s objectionable conduct that would be sufficient for a bargaining order,” he said. “But ultimately, that’s for the board to decide.”