The “All of Government” Strategy
President Biden has made it clear, on multiple occasions, that he intends to be “the most pro-union President . . . in American history.” Executive branch entities, including historically independent agencies, are clearly supporting the President’s objective.
For example, executive branch agencies are using numerous approaches to narrow the definition of independent contractor status for individual workers, thereby increasing the number of workers classified as “employees” and thus eligible for union representation. Proposals are also being pursued to broaden the joint employer doctrine, thereby increasing the number of business entities subject to class action litigation and union organizing activity. The Occupational Safety and Health Administration (OSHA) has proposed a rule to permit nonemployees, including union representatives, to “walk around” employer facilities during safety inspections, thereby exposing employers to increased union organizing activity. Project labor agreements (PLAs) are being required by various executive branch agencies for recipients of federal grant programs, increasing the leverage of unions over employers regarding union membership. There are a number of other examples of this “all of government” approach to increasing union density in the country, and such initiatives are expected to intensify during the remainder of this Administration’s term.
The Biden NLRB
At the epicenter of this coordinated approach by government agencies to increase union membership is the National Labor Relations Board (NLRB or Board). Over the last 24 months, the Biden NLRB has reversed over 110 years’ worth of Board precedent. Such decisions have been uniformly unfavorable to employers. Here are just a few examples of the recent significant changes in labor law by the Biden Board:
- Valley Hospital Medical Center II overruled 3 years of precedent on dues checkoff rules
- American Steel Construction overruled 5 years of precedent on bargaining unit size determinations
- Bexar County Performing Arts Center II overruled 3 years of precedent on access to employer property
- McLaren Macomb overruled 3 years of precedent on severance agreements
- Tesla overruled 3 years of precedent on dress codes and uniform policies
- Lion Elastomers overruled 3 years of precedent on offensive language and conduct in the workplace
- Thryv, Inc. established a new policy on remedies
- Stericycle, Inc. overruled 6 years of precedent on workplace rules and policies
- Cemex Construction Materials, LLC overruled 52 years of precedent on bargaining orders
- Intertape Polymer Corp. overruled 4 years of precedent on causation and the General Counsel’s burden
- Tecnocap LLC and Wendt Corporation together overruled 6 years of precedent on unilateral changes
- American Federation for Children, Inc. overruled 4 years of precedent on employee protests on behalf of nonemployees and the scope of protected concerted activity
- Miller Plastic Products overruled 4 years of precedent on the scope of protected concerted activity
- Atlanta Opera, Inc. overruled 4 years of precedent on independent contractor status
The Cemex Decision
One of the most controversial of the recent precedent-reversing decisions by the Board was its decision in the Cemex case. In Cemex, the Biden Board has provided unions with a road map of how to avoid secret ballot elections and force employees into union bargaining units. This decision has broad-based policy ramifications as it will significantly diminish the importance and number of secret ballot elections, which have been historically the preferred procedure for determining whether employees desire union representation.
Specifically, the Board in Cemex held that when a union makes a declaration that it has majority support of any grouping that it deems appropriate for collective bargaining, and it makes a request for recognition to an employer for such a unit, the employer has essentially three choices: (1) recognize the union and engage in collective bargaining; (2) file, within two weeks of the recognition request, an RM petition with the Board requesting an election; or (3) take no action and risk being found guilty of an unfair labor practice and required to bargain with the union making the majority declaration request. There are numerous legal and practical problems with this approach.
First, employers (and employees) are not permitted, as a general rule, to litigate or challenge a union’s claim that it has support from a majority of employees in the proposed bargaining unit. A union makes such claims based primarily on union authorization cards signed by employees and the union filing such cards with a regional office of the Board. Signatures on these cards can be obtained through pressure tactics that call into question their validity as a means of discerning employee sentiment and choice. In any event, authorization cards are obtained without an opportunity for all viewpoints to be heard regarding issues with respect to union representation. Further, this procedure can also permit employers and unions to reach “sweetheart” arrangements for union recognition and thereby bypass the desires of the previously unrepresented employees. Because of the lack of transparency in the process, it is virtually impossible for employers and employees to challenge a union’s assertion of majority support; the proof of this support is not publicly filed unless or until a case has reached a bargaining order litigation stage.
Second, even if an employer questions a union’s assertion of majority status and, pursuant to the requirements of Cemex, files an RM petition requesting an election, such an election is not guaranteed. A smaller employer may not be aware of this option at all, or it may miss the two-week filing window. Such a petition also can be blocked and dismissed altogether if the employer has been found by the Board to have committed an unfair labor practice; the Board’s recent decision in Stericycle makes it increasingly probable that an employer will be found guilty of an unfair labor practice, as it expands the definition of that phrase to include actions such as including civility requirements in employee handbooks. Indeed, in his dissent to the majority’s decision in Cemex, Member Kaplan articulated this very concern and noted that the Board has previously found certain workplace rules to be sufficient grounds for overturning the results of an election. In such situations, the Board could issue a bargaining order, and employees and employers would lose their opportunity to have a secret ballot election.
Third, even if the RM petition results in an election being held and the employees reject union representation, the election results could nevertheless be invalidated if the Board finds that an employer committed an unfair labor practice, which, as noted above, is increasingly probable. The Board then could issue a bargaining order invalidating the secret ballot election.
Fourth, the Board, pursuant to its Cemex decision, could also require an employer to bargain with the union if the employer makes no response to a union recognition request. Such a bargaining order obligation would be triggered by a Section 8(a)(5) failure to bargain charge.
Fifth, the loss of the opportunity for secret ballot elections as a result of the Cemex case is especially concerning because once a bargaining unit has been established, it almost always remains in place unless and until the location where the union is certified goes out of business. A recent study concluded that 94% of U.S. employees working under a union contract never had an opportunity to vote to determine whether they desired union representation in general or representation by the unions that were in place in their workplaces.
Finally, the Board and its General Counsel are apparently going to apply Cemex retroactively. Thus, a union that made a request for recognition prior to Cemex, where the employer refused to extend recognition, failed to file an RM petition for election, or failed to respond in any manner to the recognition request, could face a bargaining order from the Board if it has been found to have committed unfair labor practices. Retroactivity makes no sense in this context as a pre-Cemex employer would not have known of the Cemex requirements and the RM election option.
The Cemex decision is a “backdoor” approach by the Board to attempt to overrule the U.S. Supreme Court’s decisions in Linden Lumber and Gissel Packing Co. In Linden Lumber, the Supreme Court affirmed the Board’s position that employers could refuse to recognize unions based on declarations of majority support in a bargaining unit and insist on the union filing a petition with the Board for a secret ballot election. In Gissel, the Supreme Court held that before a bargaining order could be imposed upon an employer, there must be factual findings that the employer in question committed significant and egregious unfair labor practices that foreclosed the possibility of a fair election.
Because of this overruling effect, the Board may have significant trouble defending Cemex on appeal. Further, a majority of the circuit courts closely adhere to the exacting requirements of Gissel and require specific findings of fact that an employer engaged in sufficiently egregious activity before upholding the issuance of a bargaining order.
In summary, Cemex creates a significant risk for the continuation of secret ballot elections to determine union representation. Litigation is already occurring, however, regarding the application of this decision, and the court will ultimately determine the legality of Cemex.
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