New England Biz Law Update
The 9th U.S. Circuit Court of Appeals recently heard oral arguments in a case concerning a National Labor Relations Board (NLRB) decision that changes how employers are required to respond to union organizing efforts.
In 2023, the NLRB overruled prior legal precedents in Cemex Construction Materials Pacific, LLC and introduced a new standard. Under that standard, if a union shows majority support among workers and asks the employer for recognition, the employer has two weeks to either recognize the union or file a petition with the NLRB to contest the union’s majority status.
Further, if the employer commits unfair labor practices during a union election, the new Cemex framework also allows the NLRB to dismiss the petition and issue a bargaining order, compelling the employer to negotiate with the union without holding an election. This is a departure from previous rules which allowed such bargaining orders only under more severe conditions.
In its challenge, Cemex argued that the NLRB exceeded its power under the National Labor Relations Act and that the decision conflicts with the U.S, Supreme Court’s 1969 decision in NLRB v. Gissel Packing.
The NLRB urged the court to uphold its decision, arguing that the previous standard encouraged employers to commit unfair labor practices, as employers typically fare better during a rerun election.
The 9th Circuit’s decision will be the first judicial review of the Board’s Cemex standard.
Judges appear split
During the oral arguments, Judges Jennifer Sung and Gabriel Sanchez seemed inclined to support the NLRB’s decision, questioning whether the new rule was necessary but also suggesting that it could be permissible.
But Judge Richard Clifton expressed skepticism, particularly about whether the NLRB had the authority to implement the new standard without going through a formal rulemaking process.
If the 9th Circuit sides with Cemex, it could limit the NLRB’s ability to enforce its new standard, though the decision may eventually head to the Supreme Court for a final say. But even if the Cemex decision is reversed, the NLRB might continue to apply this new framework in other cases until further legal rulings challenge its approach.
