As we previously reported and discussed here, the Cemex Construction Materials Pacific, LLC ruling has dramatically changed the threshold that will prompt the National Labor Relation Board ("NLRB") to issue mandatory bargaining orders and is going to have a significant impact on the manner in which employers may respond to union organizing efforts. As the NLRB held in Cemex, if a union demands voluntary recognition based on a showing of majority support, the employer has two choices, which it must exercise within two weeks: (i) recognize and bargain with the union, or (ii) file a RM-Petition to initiate the NLRB conducting a secret ballot election. If the employer chooses the latter, and commits an unfair labor practice during the election period, the NLRB likely will require the employer to recognize and bargain with the union.
In I.N.S.A., Inc., an administrative law judge relied on Cemex, and concluded that the Company engaged in unfair labor practices and therefore must recognize and bargain with the union. The decision appears to be the first time that an administrative law judge has used the NLRB ruling in Cemex, to require an employer to recognize and bargain with a union, after the employer was found to have committed unfair labor practices in the run-up to an election.
In I.N.S.A., Inc., the Company received a letter signed by 20 of its 28 employees demanding that the company recognize and bargain with the union. Shortly thereafter, the union petitioned for an election and lost. Although the union lost the election, the employer was accused of violating several unfair labor practices after receiving the letter demanding recognition from its employees.
After reviewing the record, the judge concluded that the Company refused the union's request to bargain and committed unfair labor practices, including discharging and disciplining employees only after it received the demand letter. Despite the Company's argument that its conduct was justified because employees had violated Company policy, the administrative law judge found that the Company's conduct "irreparably harm[ed] the organizing effort and undermine[d] the integrity of the election process" because the Company did not previously enforce the policies the employees allegedly violated. Further, the judge found that the Company violated section 8(a)(1) when it prohibited its employees from discussing the union during working hours but allowed them to discuss other non-work related topics like entertainment or the news.
As a result of the Company's unfair labor practices, the judge found that under Cemex, the results of the election must be overturned and that the Company must immediately recognize and bargain with the union.
Key Takeaways
Once an employer receives a demand for recognition, it should immediately reach out to counsel. I.N.S.A., Inc. demonstrates that an employer's actions during this time are critical. The holding and rationale in Cemex appear to broaden the types of unfair labor practices and employer conduct that could lead to setting aside employer election wins and issuing Gissel bargaining orders. While such orders have been rarely issued prior to Cemex, that will likely not be the case moving forward. We will continue monitoring developments on how Cemex is applied to employers and will provide updates as new information becomes available.
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