Federal Appeals Court Invalidates Key NLRB Union Organizing Standard

A federal appeals court has rejected a Biden-era National Labor Relations Board (NLRB) standard that expanded the conditions under which an employer must recognize a union.

In 2023, the NLRB issued a decision in the case of Cemex Construction Materials Pacific that established a new framework for union organizing. That decision effectively revived elements of the agency’s long-put-aside Joy Silk standard, including allowing unions to organize through a card-check process, in which organizers collect authorization cards from a majority of the bargaining unit instead of holding an NLRB-supervised secret-ballot election. Additionally, Cemex stated that if an employer who seeks an election is found to have committed any unfair labor practice, the NLRB would order the employer to recognize and bargain with the union regardless of election results.

The new standard prompted a wave of lawsuits from businesses. On March 6, the U.S. Court of Appeals for the 6th Circuit became the first federal appeals court to rule against the Cemex standard. The case, Brown-Forman Corp. v. NLRB, deals with an effort to unionize a Kentucky bourbon distillery. After management learned of employees’ intention to organize under the International Brotherhood of Teamsters, the company implemented a $4-per-hour pay raise, expanded merit-based salary increases, allowed more flexible vacation policies, and distributed bottles of bourbon to employees. Following those measures, the union lost the election.

The union then challenged the election results, arguing that the company’s actions constituted unfair labor practices. The NLRB agreed and issued a bargaining order based on the Cemex standard.

Although the 6th  Circuit upheld the findings that Brown-Forman committed unfair labor practices, it said the NLRB could not order the company to bargain with the union because it relied solely on Cemex rather than the previous Gissel standard, which considers bargaining orders as an extraordinary remedy appropriate only when employer misconduct is so severe that a fair election would be unlikely. Cemex is invalid, the court explained, because it is not derived from the facts of this specific case and, by treating it as a new standard, the board effectively engaged in rulemaking outside of the notice-and-comment process required by the Administrative Procedure Act.

While the legality of card check authorization was not part of this case, the court’s ruling against Cemex opens the door for further challenges from businesses.

Following the Brown-Forman ruling, the Coalition for a Democratic Workplace (CDW), a group of hundreds of organizations representing businesses, is urging the NLRB to issue a rule rescinding its Cemex decision and restore the previous framework for union representation procedures.

“The Cemex decision was contrary to the NLRA, Supreme Court precedent, and the basic tenets of workplace democracy,” CDW Chair Kristen Swearingen said. “It gave the board the authority to force a union on workers without a secret-ballot election based solely on unreliable authorization cards. Just a single, unintentional violation of the act could result in forced unionization. The mere existence of this decision chills constitutionally protected free speech.”