Labor Board Paves Way for Unions

The National Labor Relations Board (“NLRB”) recently handed unions a resounding victory by reviving a legal doctrine that allows them to represent employees without winning a formal election.

A New Framework Built on Old Principles

In 1949, the United States was in the early stages of a post-war economic expansion. The NLRB, still in its infancy, was adopting policies at a rapid pace aimed at encouraging collective bargaining. At the time, roughly 35% of the nation’s workforce belonged to a labor union, a figure that in the decades since has dwindled to about 6%. But that figure stands to increase, if the NLRB has its say.

On August 25, 2023, the NLRB announced its decision in Cemex Construction Materials Pacific (NLRB Case No. 28-CA-230115). In Cemex, the Board adopted a new framework for allowing unions to gain recognition for purposes of collective bargaining—even when the union fails to receive authorization through a formal vote.

Under the new approach, when a union requests recognition on the basis that a claimed majority of employees in an appropriate bargaining unit have designated the union as their representative, the employer must either (1) recognize and bargain with the union; or (2) promptly file a petition with the NLRB seeking a formal election.

The NLRB’s decision in Cemex hearkens back to a standard it set during the post-WWII economic boom. Under that approach, known as the Joy Silk doctrine, companies could be forced to recognize and bargain with unions claiming a majority of employee support, unless the company had a “good faith reason” to doubt that support.

Big Changes for Employers

The Joy Silk standard has been dormant for over 50 years, and its newfound relevance signals major changes for employers, particularly those whose workforces are not unionized.

For decades, secret ballot elections have been the preferred method of determining whether employees want to be recognized by a union. Under that common-sense approach, unions could gain recognition if they won the support of a majority of workers.

Now, however, unions may be able to bypass elections altogether by gathering informal support and simply demanding that employers recognize them. Under Cemex, employers faced with such demands will find themselves between a rock and a hard place, with their options limited to either (1) acquiescing to the union’s demand; or (2) “promptly” demanding a formal election.

Employers who push for an election can expect their actions to be scrutinized closely. Any perceived “unfair labor practices” during the so-called “critical period” before an election may cause the NLRB to set the election aside and issue an order requiringthe employer to recognize and bargain with the union.

Takeaways for Small Businesses

The NLRB’s decision in Cemex paves the way for unions to gain recognition as exclusive bargaining representatives without first having to win a fair election. In the context of union organizing campaigns, employers should consult with labor counsel at their earliest opportunity, particularly because once a union requests designation as the employees’ representative, employers’ options are limited, the time to act is short, and the consequences that accompany missteps are severe.