NLRB Forces Employer to Bargain with Union Despite Election Loss

In the most recent application of the National Labor Relations Board’s new Cemex framework, the NLRB ordered a Kentucky distillery to recognize and bargain with a union because it committed unfair labor practices during an election that the union ultimately lost. 

The case: The union attempted to organize employees at a Kentucky distillery. It eventually notified the employer that it had obtained signed authorization cards from a majority of employees and requested recognition. During the campaign, the employer instituted across-the-board wage increases and increased vacation eligibility. The employer also gave several employees bottles of bourbon a week before the election. The union claimed these actions unlawfully tainted the conduct of the election, while the employer maintained they were decisions made in the normal course of business. The union subsequently lost the election.

Cemex background: In August 2023, the Board issued a decision upending 70-plus years of labor law, and making it much easier for unions to organize workplaces without an election. Specifically, the Board established a new standard under which employers that commit unfair labor practices during a union election campaign will be required to recognize and bargain with that union if the union has previously showed majority support among employees. 

The decision: An administrative law judge found that the employer’s wage increases and bourbon distribution amounted to unfair labor practices because they unlawfully affected the results of the election. The ALJ found that the motivation for the employer’s actions was driven by the union’s organizing campaign and a desire to avoid unionization. Accordingly, under the Board’s new Cemex framework, the ALJ set aside the Union’s election loss and ordered the employer to recognize and bargain with the Union. 

Takeaways for employers: 

• The case shows how quickly an employer can go from union-free to finding itself at a bargaining table with a union that never even won an election in the first place. 
  
  
• The case also shows how almost any employer conduct in response to a union campaign can become an unfair labor practice in the eyes of the current Board and how, in turn, any unfair labor practice can force a union on an employer. 
  
  
• Employers must ensure that their frontline managers are aware of the new Cemex reality and are equipped with the tools to adequately and lawfully respond to union organizing activity in this new environment. 
  
  
• Constant communication between frontline management and labor relations teams and upper management is essential. Timelines for required employer responses under Cemex are extremely short – employers must be ready to respond as soon as possible. 

Unfair labor practice charges, election petitions continue uptick: Newly released data from the NLRB showed a continued increase in the number of unfair labor practice charges filed in the first half of FY2024, as well as the number of election petitions. 

• Unfair labor practice charges increased 7%, while election petitions skyrocketed to a 35% increase from the same period last year. 
  
  
• Notably, much of the petition increase was driven by petitions filed by employers as a result of the Board’s new Cemex framework which requires employers to file an election petition in response to a union’s showing of majority support and request for recognition.