KHVPF Insight
Labor Law Developments
In the last few months—as is common when party control changes—the National Labor Relations Board has been reinstating old standards and issuing new ones, all favorable to labor. Three of the most significant developments include (1) making it easier for workers to unionize without an election; (2) accelerating the pace of elections when required; and (3) increasing scrutiny of workplace rules—even for non-union employers.
Demands for Union Recognition and Bargaining Orders Galore: The NLRB, in Cemex Construction Materials Pacific (372 NLRB No. 130), upended more than 50 years of precedent by offering a new path to union recognition without the need for an election. According to Cemex, if a union claims to have majority support and demands recognition, an employer must either (1) voluntarily recognize the union, foregoing a Board-administered election or (2) file its own petition for an election within two weeks of the union’s demand. If an employer does neither, the union can file an unfair labor practice charge.
Cemex also expanded the use of bargaining orders—once an extraordinary remedy reserved for only the most serious of violations. If a union files an unfair labor practice charge as outlined above, the NLRB will issue a bargaining order unless the employer proves that the union lacks majority support or that the proposed bargaining unit is not appropriate. Further, if an employer commits any unfair labor practice after a union has demanded recognition, the Board can issue a bargaining order and cancel any pending election.
After Cemex, NLRB General Counsel Jennifer Abruzzo wasted no time in announcing her intent to broadly implement this new power. In a memorandum, Abruzzo announced (1) that Cemex applies retroactively to all pending cases; (2) that the union may demand recognition verbally or in writing to any person “acting as an agent of the employer;” and (3) that the union itself does not have to provide proof of majority support. At best, the employer and the union can hire a third party to review the evidence, but that third-party review will not extend the employer’s two-week deadline to petition for an election following a demand for recognition.
While Cemex has appealed the Board’s decision to the Ninth Circuit, in the meantime, employers should prepare to act quickly if they receive a demand for recognition.
Accelerated Elections: In addition to making it easier to bypass union elections altogether, the NLRB has issued a final rule, effective December 26, 2023, that significantly accelerates the speed with which a union election must occur after the filing of a petition. Under the new rule,
- Pre-election hearings will be held eight business days after the employer receives a notice of hearing, down from 14 business days previously;
- Regional Directors’ authority to postpone pre-election hearings will be limited to cases where a party shows “special” or “extraordinary” circumstances for postponement;
- Petitioners no longer need to respond to the respondents’ Statement of Position in writing; instead, they may now respond verbally at the start of the pre-election hearing; and
- Parties may no longer file post-hearing briefs, absent special permission from the Regional Director.
As a practical matter, these changes will give employers much less time to campaign against the union and prepare a response to an election petition. Employers should also expect that unions will increase organizing activities and election petitions in response to these rules.
Increased Scrutiny of Workplace Rules: Finally, the NLRB has expanded its scrutiny of workplace rules—including in non-unionized workplaces—for violations of the NLRA. In Stericycle, Inc., 372 NLRB No. 113, the Board announced that it will conduct a case-by-case analysis of the legality of workplace rules, and held that a rule or policy is deemed presumptively unlawful if it could chill employees’ exercise of Section 7 rights, even if (1) “a contrary, noncoercive interpretation of the rule is also reasonable,” and (2) the rule has never been interpreted or applied in an unlawful manner. The employer will then have the burden of showing that the rule advances a legitimate and substantial business interest and could not be replaced with a more narrowly-tailored version. At the same time, the Board did not explain what counts as a “legitimate and substantial interest” or how a rule could be narrowly tailored to that interest. This ambiguity opens the door to litigation over the merely hypothetical coercive effects of a wide range of workplace rules and policies.
Employers should carefully review all workplace rules, policies, and procedures with an eye towards their justifications and whether they can further tailored to serve those purposes. Additionally, they should monitor future decisions applying Stericycle to gain further insight into how the Board will define “legitimate and substantial” interests and “narrowly tailored” rules.
If the second half of 2023 was any indication, employers should expect more seismic shifts in labor law in the new year. They should not hesitate to seek advice and guidance from experienced labor lawyers as new developments arise.