As we recently discussed, the National Labor Relation Board’s (“NLRB”) monumental ruling in Cemex Construction Materials Pacific, LLC, 327 NLRB No. 130 (2023), is going to have a significant impact on the manner in which employers may respond to union organizing efforts.  As the Board 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:  Recognize and bargain with the union, or file a RM-Petition, which initiating 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.

On September 21, 2023, an administrative law judge based in Massachusetts ordered a Massachusetts company that operates several cannabis companies to immediately recognize and bargain with a union composed of employees at one of its locations. The order appears to be the first time that an administrative law judge has used the National Labor Relation Board’s (“NLRB”) ruling in Cemex Construction Materials Pacific, LLC, 327 NLRB No. 130 (2023), 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.

As we previously reported, on August 29, 2023, the Board’s decision in Cemex overturned years of precedent, and made it easier for unions to establish representation. In Cemex,the Board noted that if union shows majority support and sends a demand letter for representation, employers have two weeks only to file a petition to test if the union has majority status. However, if the union establishes that unfair labor practices occurred that require the results of the election to be set aside, then the Board may issue a remedial bargaining order to require an employer to recognize and bargain with a union. Furthermore, the NLRB held that Cemex applies retroactively.

In this case, I.N.S.A. Inc., the cannabis company received a letter signed by 20 out of the 28 employees at one of the company’s stores, demanding that the company recognize and bargain with the union. The union then petitioned for an election, which it lost. However, the employer was accused of a number of unfair labor practices during the run-up to the election. Upon investigation, a Regional Director determined that the alleged conduct could constitute grounds for overturning the election’s result, and set a hearing date. After the hearing, but before a decision was issued, the NLRB issued Cemex. In response, the ALJ ordered for supplemental briefing to occur in light of Cemex.

The ALJ held that overturning the results of the election, and issuing a remedial bargaining order were appropriate in this case because the following factors were present: (1) the employer refused the union’s request to bargain; (2) at a time when the union had in fact been designated as representative by a majority of employees; (3) in an appropriate unit; and (4) the employer committed unfair labor practices requiring the election to be set aside.

Specifically, the cannabis company discharged both the lead union organizer and a vocal union supporter for minor disciplinary violations, shortly after the union presented the company with its demand letter. The ALJ held that this conduct “clearly was intended to send a message to the other Unit employees who supported or were contemplating supporting the Union that such support could result in their discipline or discharge” and “irreparably harm[ed] the organizing effort and undermine[d] the integrity of the election process.”

Thus, according to the ALJ, the appropriate result under Cemex was to overturn the results of the election and issue a remedial bargaining order.

Takeaways

The order in I.N.S.A. Inc. illustrates one aspect of the Cemex ruling that might be overlooked.  In addition to the quick decision that employers must now make when presented with a demand for recognition—i.e., deciding whether to voluntarily recognize or file an election petition—employers who choose the latter must act cautiously during this election period.  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 victories during the election and issuing Gissel bargaining orders.  Indeed, while such orders had rarely been issued before, that may not be the case under Cemex going forward. 

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Photo of Mark Theodore Mark Theodore

Mark Theodore is a partner in the Labor & Employment Law Department. He has devoted his practice almost exclusively to representing management in all aspects of traditional labor law matters throughout the U.S. He is Co-Chair of Proskauer’s Labor-Management and Collective Bargaining Practice…

Mark Theodore is a partner in the Labor & Employment Law Department. He has devoted his practice almost exclusively to representing management in all aspects of traditional labor law matters throughout the U.S. He is Co-Chair of Proskauer’s Labor-Management and Collective Bargaining Practice Group.

Some recent highlights of his career include:

  • Successfully defended client against allegations that it had terminated a union supporter and isolated another. T-Mobile USA, Inc., 365 NLRB No. 15 (2017).
  • Successfully appealed NLRB findings that certain of client’s written policies violated the National Labor Relations Actions Act.  T-Mobile USA, Inc., 363 NLRB No. 171 (2016), enf’d in part, rev’d in part 865 F.3d 265 (5th Cir. 2017).
  • Represented major utility in NLRB proceedings related to organizing of planners.  Secured utility-wide bargaining unit. Bargained on behalf of grocery chain.  After negotiations reached an impasse, guided the company through lawful implementation of five year collective bargaining agreement.
  • Coordinated employer response in numerous strike situations including a work stoppage across 14 western states of the client’s operations.

Mark has extensive experience representing employers in all matters before the NLRB, including representation petitions, jurisdictional disputes and the handling of unfair labor practice charges from the date they are filed through trial and appeal. Mark has acted as lead negotiator for dozens of major companies in a variety of industries, including national, multi-unit, multi-location, multi-employer and multi-union bargaining. Mark has handled lockout and strike situations, coordinating the clients efforts.

In addition, Mark has handled hundreds of arbitrations involving virtually every area of dispute, including contract interest arbitration, contract interpretation, just cause termination/discipline, benefits, pay rates, and hours of work.

Photo of Joshua Fox Joshua Fox

Joshua S. Fox is a senior counsel in the Labor & Employment Law Department and a member of the Sports, Labor-Management Relations, Class and Collective Actions and Wage and Hour Groups.

As a member of the Sports Law Group, Josh has represented several…

Joshua S. Fox is a senior counsel in the Labor & Employment Law Department and a member of the Sports, Labor-Management Relations, Class and Collective Actions and Wage and Hour Groups.

As a member of the Sports Law Group, Josh has represented several Major League Baseball Clubs in all aspects of the salary arbitration process, including the Miami Marlins, Boston Red Sox, Los Angeles Dodgers, Kansas City Royals, San Francisco Giants, Tampa Bay Rays and Toronto Blue Jays. In particular, Josh successfully represented the Miami Marlins in their case against All-Star Catcher J.T. Realmuto, which was a significant club victory in salary arbitration. Josh also represents Major League Baseball and its clubs in ongoing litigation brought by current and former minor league players who allege minimum wage and overtime violations. Josh participated on the team that successfully defended Major League Baseball in a wage-and-hour lawsuit brought by a former volunteer for the 2013 All-Star FanFest, who alleged minimum wage violations under federal and state law. The lawsuit was dismissed by the federal district court, and was affirmed by the U.S. Court of Appeals for the Second Circuit.

Josh also has extensive experience representing professional sports leagues and teams in grievance arbitration proceedings, including playing a vital role in all aspects of the grievance challenging the suspension for use of performance-enhancing drugs of then-New York Yankees third baseman Alex Rodriguez. Josh also has counseled NHL Clubs and served on the trial teams for grievances alleging violations of the collective bargaining agreement, including cases involving use of performance-enhancing substances, domestic violence issues, and supplementary discipline for on-ice conduct. He has played a key role in representing professional sports leagues in all aspects of their collective bargaining negotiations with players and officials, including the Major League Baseball, National Hockey League, the National Football League, Major League Soccer, the Professional Referee Organization, and the National Basketball Association,.

In addition, Josh has extensive experience representing clients in the performing arts industry, including the New York City Ballet, New York City Opera, Big Apple Circus, among many others, in collective bargaining negotiations with performers and musicians, the administration of their collective bargaining agreements, and in grievance arbitrations.

Josh also represents a diverse range of clients, including real estate developers and contractors, pipe line contractors, hospitals, hotels, manufacturers and public employers, in collective bargaining, counseling on general employment matters and proceedings before the National Labor Relations Board, New York State Public Employment Relations Board and arbitrators.

Josh has also recently served as an adjunct professor at Cornell University’s School of Industrial Labor Relations for the past two years, teaching a course regarding Major League Baseball salary arbitration.

Prior to joining Proskauer, Josh worked for a year and a half at the National Hockey League, where he was involved in all labor and employment matters, including preparations for collective bargaining, grievance arbitration, contract drafting and reviewing and employment counseling. Josh also interned in the labor relations department of Major League Baseball and at Region 2 of the National Labor Relations Board. He was a member of the Brooklyn Law Review and the Appellate Moot Court Honor Society and served as president of the Brooklyn Entertainment and Sports Law Society.