A legal sea change for union organizing

Recording Vice President's report

Volume 123, No. 9October, 2023

Harvey S. Mars, Esq.

In this month’s Recording Vice President’s report, I review a NLRB decision, memorandum and regulation it recently issued that are highly favorable to organized labor and that, at least for the time being, create fertile ground for union organizing campaigns and negotiation. These decisions represent a sea change in the legal landscape pertaining to union representation proceedings as well as a radical shift in the labor board’s approach to how employees can obtain representational rights. Every union member should be aware of these monumental rulings. They have the potential of catapulting union representation to a level not seen since the enactment of the National Labor Relations Act in 1935.

First, on August 25, 2023, the NLRB issued a landmark decision (Cemex Construction Materials Pacific, LLC and International Brotherhood of Teamsters, 372 NLRB No. 130) that completely revises the process by which a union can obtain status as the legally recognized exclusive bargaining representative of employees seeking union representation and bargaining rights. In this decision, the NLRB held for the first time that a union must be recognized by an employer once the union requests recognition on the basis that a majority of employees in an appropriate bargaining unit have designated that union as their exclusive bargaining representative. As a result of this holding, recognition can now be accomplished simply by presenting an employer with a majority of signed union authorization cards from the proposed bargaining unit. This is as close to the formal card check process that was incorporated into the Protecting the Right to Organize Act (PRO Act) that Congress has been unable to enact. For more information on the PRO Act see my March 2021 legal column. The NLRB has issued a press release regarding Cemex that describes its impact in non-legalistic terms.

As a result of this holding, it is now no longer necessary for a union to file a representation petition to achieve recognition as a bargaining representative. Representation petitions and union elections are now optional. Recognition must automatically be granted if majority status (meaning a majority of the unit have signed cards authorizing the union as their bargaining agent) is declared.  The burden then shifts to the employer to respond. Under the Cemex framework, if an employer is presented with a demand for recognition based upon a union’s majority status, it must do one of three things. It can either:

  1. Recognize the union and commence bargaining.
  2. Promptly file an RM (management) petition challenging the union’s majority status.
  3. Refuse to bargain and force the union to prove majority status in an unfair labor practice proceeding.

As a practical matter, the first option is the most practical and least costly for employers. Rather than engaging in time consuming expensive litigation, it is easier for an employer to commence bargaining to see if a deal can be achieved. As a result, we can anticipate an influx of new collective bargaining agreements and bargaining units across a wide spectrum of industries.

In contrast, the third option seems to be a futile one since it would be easy enough for a union to prove that it had majority support by producing the original signed cards to the NLRB it has obtained from the proposed bargaining unit. Once this process is completed, the union will obtain a bargaining order from the NLRB that will compel the employer to bargain in good faith. This response would only be effective if the employer knew for a fact that the union did not truly have majority support.

Finally, if management chooses the second option, then they must file a representation petition within the required time frame or be compelled to bargain. The burden is no longer on the union to file a petition, as has been the case since the Trump Labor Board repealed the 2014 regulations enacted by the Obama Board. Further, by administrative order issued in August of 2023, the NLRB has reverted back to its 2014 streamlined election process so that elections can again be quick and efficient and without prolonged litigation. Information regarding the proposed bargaining unit can again be disseminated to employees quickly. The NLRB has also issued a press release detailing these regulations.

Cemex also makes it easier for employees to achieve a bargaining order in the context of representational election proceedings. Under prior board precedent, if unfair labor practices were committed while a representation petition was pending, the NLRB would order a re-run election. Oftentimes the damage to bargaining unit solidarity caused by the unfair labor practices would result in a union losing a re-run election. Many unions abandoned the organizing drive as a result, even if a re-run election were ordered.

In Cemex, the NLRB held that if an employer commits any unfair labor practice during the pendency of an RM petition (threats, coercion, interrogation, surveillance, etc.) its petition would be dismissed, and a bargaining order would be issued. This disincentivizes employers from engaging in unfair labor practices after a representation petition is filed and will serve to prompt a much fairer election process.

Finally, in April 2022, the NLRB’s Office of General Counsel issued an Advice Memorandum (an opinion on how a regional office should rule on a specific issue), that held that the NLRB should expand the scope of the circumstances that would warrant disclosure of an employer’s financial status. Under current precedent, a union can obtain an employer’s financial information only if the employer declared an inability to pay a union’s economic demand. Thus, if an employer refused such a demand saying that they had not budgeted for a wage increase, a union could not obtain the employer’s financial data.

Under the shift in the law that the NLRB is advocating, a union would be entitled to economic data under a much wider variety of circumstances. For instance, a statement by an employer that an economic bargaining demand would, if accepted, place that employer at a competitive disadvantage relative to other employers would then trigger that employer’s obligation to open their books to the union. If this precept becomes the law (which we can anticipate is likely since the NLRB is recommending this legal shift) it will enhance the utility of union information requests for financial information during collective bargaining.

These new rulings have the potential to breathe new life into union organizing drives. Local 802 hopes to utilize them to the fullest extent possible.