In just two cases, Stericycle, Inc. and Cemex Construction Materials Pacific, LLC, the National Labor Relations Board has made it possible for an employer’s maintenance of an “overbroad” handbook policy to result in the establishment of a union without an election. While that statement may seem like hyperbole, it is not.  The cases, particularly Cemex, represent a seismic shift in federal labor law, and all employers should be taking note.

In Cemex, the Board overruled over 50 years of precedent to establish a new framework for when a union can represent employees without having an election. Under this new rule (just like the old rule), a union can request that the employer voluntarily recognize the union if a majority of the proposed bargaining unit has signed valid authorization cards.  Under the old rule, the employer could simply refuse and the Union had the obligation to go seek an election with the NLRB.  Now, under Cemex, once the Union seeks voluntary recognition, it is the employer’s obligation to file a petition seeking an election—known as an RM petition. At this point, there are three possible outcomes:

• The employer does not file an RM petition and does not dispute the union’s majority. In this scenario, the employer has recognized the union and must bargain.
• The employer does not file a timely RM petition, but it refuses to recognize the union. In this situation, the union will file a charge for failure to bargain and the employer can test the union’s claim of majority support through the ULP proceeding. But if the Board finds that the union had majority support, then the employer has violated the law.
• The employer files a timely RM petition to test the union’s basis of majority support through a representation election. In this scenario, a secret ballot election will be held to determine if the employees want to be represented by the union.

It is under this third scenario where an election is held that Cemex really changed the law.  Under the old rules, the Board would not order an employer to bargain with a union without an election unless it committed an “egregious” or “hallmark” unfair labor practice that made it impossible to have a fair election.  But, under the new standard, if the employer commits basically any unfair labor practice during the “critical period,” the election petition will be dismissed and the Board will order the employer to bargain with the union.  The only exception is if the ULP is “so minimal or isolated that it is virtually impossible to conclude that the misconduct could have affected the election results.” Cemex Construction Materials Pacific, LLC, 372 NLRB No. 130, *26 n.142 (2023). As the law stands now, the “critical period” is defined as the time between the filing of the petition for election and the election.

So, unless it is virtually impossible for the Board to conclude that an employer’s critical period ULP affected election results, the election will be set aside and the Board will order the employer to recognize the union. Ironically, that standard is virtually impossible to meet.

The risk of unionization without an election is compounded by Stericycle, Inc., 372 NLRB No. 113 (2023) which revised and modified the Obama-Board’s standard on work-rules. Now, the Board will consider a rule presumptively unlawful if it could be interpreted by someone who is “economically dependent” employee to limit employees’ Section 7 rights. This means that having any rule in a handbook that an economically dependent employee — rather than a “reasonable employee”—could interpret to restrict their right to unionize, strike, etc. would be a ULP. And if an employer maintains these rules at the time that a union voluntarily demands recognition, then it is all but certain that the Board would order the employer to bargain without an election.

In his partial dissent in Cemex, Board Member Kaplan made this very point, writing that:

[I]t is virtually impossible for an employer not to commit a critical-period unfair labor practice that would require setting aside the results of an election, which means it is virtually impossible for an employer’s RM petition not to be dismissed, for the employer not to be found to have violated Section 8(a)(5), and for a bargaining order not to issue.

Id., at *48.

Until more work-rule cases work their way through litigation, it is impossible to know which rules the NLRB will find to be unlawful.  But, one thing is certain: these cases make it easier than ever for unions to get in the door, even without being elected in.

Questions?
Contact the author Bridget McConville.