Newly Created NLRB Rules Drastically Change The Process For Unions Seeking Recognition Of Most Private Sector Employees In The U.S. And Substantially Limits Employee Voting In Secret-Ballot Election

• Published date: 01 September 2023
• Subject Matter: Employment and HR, Employee Rights/ Labour Relations
• Law Firm: Sheppard Mullin Richter & Hampton
• Author: Bianca Rodriguez, Keahn Morris, John S. Bolesta, Jason W. Kearnaghan and James Hays

At the end of last week, the National Labor Relations Board (the "Board") issued two huge blows to employers that give significant advantages to unions and ease their ability to achieve status as a certified bargaining representative.

As we previously reported and discussed here, the General Counsel of the Board (the "General Counsel") sought reinstatement of union recognition without requiring the Board to hold a representation election. On August 25, 2023, the Board, through its decision in Cemex Const. Materials Pac. LLC, 372 NLRB No. 310 (Aug 25, 2023), created a new standard that essentially revived the dormant Joy Silk Mills doctrine with some modifications, thus allowing unions to achieve recognition as the certified bargaining representative of employees without requiring a formal NLRB secret-ballot election.

Additionally, on August 24, 2023, the Board issued a direct final rule which will reinstate many of the 2014 "quickie election" rules for representation cases that greatly accelerates the timeline for elections and makes it much easier for unions to organize.

In practice, if this new standard is not reversed by the federal courts, we expect most unions will organize by demanding immediate employer recognition or by virtue of NLRB determinations that the employer committed at least one unfair labor practice before an election was held, thereby nullifying the election results and declaring the union certified based on a pre-election claim of majority support.

These changes radically shift the legal landscape for companies addressing demands for recognition and organizing campaigns, and require significant proactive approaches to address the new reality for how unions will organize and win certifications going forward.

The Cemex Decision

In Cemex, the General Counsel asked that the Board overturn Linden Lumber Division, Summer & Co., 190 NLRB 718 (1971), revd. sub. nom. Truck Drivers Union Local No. 413 v. NLRB, 487 F.2d 1099 (D.C. Cir. 1973), revd. 419 U.S. 301 (1974) which allowed employers to lawfully reject a demand for recognition and require filing of a petition with the Board, and reinstate the standard from Joy Silk Mills Inc., 85 NLRB 1263 (1949), enfd. in relevant part, 185 F.2d 732 (D.C. Cir. 1950), cert denied 341 U.S. 914 (1951). Under the Joy Silk standard, an employer would be in violation of Section 8(a)(5) and 8(a)(1) by refusing to agree to bargain with a union who demanded recognition and contended that they had majority support absent good-faith doubt as to the union's majority status.

The Board, agreeing with the General Counsel that the current scheme for remedying an employer's unlawful refusal to recognize and bargain with the employees' designated bargaining representative is inadequate to safeguard the right to organize, overruled Linden Lumber. Instead of adopting the standard from Joy Silk as is, the Board announced a new framework that modifies Joy Silk for determining when an employer has unlawfully refused to recognize and bargain with a designated majority representative of its employees.

The New Cemex Standard and Obligations for Employers Presented With a Demand for Recognition

Under this new standard, when presented with a claim of majority support, an employer has two options:

1. Immediately grant recognition without any NLRB election; or
2. File its own NLRB petition seeking an election within 2 weeks of a union's demand for recognition in order to test the union's majority status or the appropriateness of the unit (assuming the union has not already filed a petition pursuant to Section 9(c)(1)(A)).

If the employer fails to take either step, the NLRB will order mandatory union recognition (with no NLRB election) unless the employer - in a later unfair labor practice (ULP) proceeding - proves that the union did not have majority support or that the claimed bargaining unit was inappropriate.

According to the Board, the filing of an employer's own NLRB petition pursuant to Section 9(c)(1)(B) will provide employers with the opportunity to challenge the union's majority status through a representation election if the Board, upon investigation and hearing, finds that a question of representation exists. Should an employer refuse to recognize the union and fail to promptly file a NLRB petition, a union still may file a 8(a)(5) refusal to bargain unfair labor practice charge against the employer and, if majority support in an appropriate unit is proven, the Board will find a 8(a)(5) violation for refusal to recognize and bargain and will issue a remedial bargaining order. The risk of a union filing an unfair labor practice charge for failure to act essentially creates an obligation that employers either (i) file a NLRB petition, or (ii) recognize and bargain with the union.

Most importantly, employers should...