Article contributed by Joseph Tangredi, Ellenoff Grossman & Schole LLP
The National Labor Relations Board (NLRB) made waves in the world of labor law with its recent landmark decision in CEMEX Construction Materials Pacific LLC (Cemex) and International Brotherhood of Teamsters.
The decision, issued on August 25, 2023, has ignited discussions about the potential transformation of union representation, setting the stage for significant implications for employers across all industries, particularly those that have heavy union activity, such as the hospitality industry.
The Cemex Construction Case
The Cemex Construction case centered on a group of approximately 366 Cemex Construction ready-mix cement truck drivers and trainers who, in 2019, voted against representation by the International Brotherhood of Teamsters. The vote was closely decided, with 179 rejecting the union and 166 in favor of union representation. Subsequently, the union alleged extensive unlawful conduct by the employer both before and after the election, which is a common tactic used by unions after a “no” vote. This led to the union’s call for another election and a demand for the employer to engage in bargaining. The NLRB ultimately ordered Cemex Construction to bargain with the Teamsters without another election being conducted.
NLRB’s New Framework
The Cemex Construction decision establishes a monumental shift in how unions are recognized by employers and the obligations of employers to bargain with them. Prior to this decision, unions that organize employees must obtain and subsequently present to employers signed union authorization cards and request recognition. Employers could decline recognition, preferring to rely on secret ballot elections as a more reliable measure of employee sentiment. If employers rejected recognition based on cards, the onus was on the union to petition the NLRB for a secret ballot election.
Now, post-Cemex Construction, employers will be in a far more burdensome position. In a dramatic shift, the Cemex decision requires employers to exercise one of two options when presented with signed authorization cards: i) recognize and bargain with the union; or, ii) petition the NLRB for a secret ballot election within a suggested 14-day window. Employers that fail to file a petition in that quick timeframe will result in the NLRB certifying the union based solely on the authorization cards. Furthermore, if the NLRB determines that the employer engaged in unfair labor practices during the election period, it can reject the election petition and certify the union based on signed authorization cards alone.
Impacts and Implications for Employers
The NLRB’s decision carries several profound implications for employers, especially those in industries that are susceptible to unionization:
- Reduced Control in Certification – Employers now have less control over the certification process, making it easier for unions to gain recognition through card check certification. This shift effectively empowers unions by removing some of the barriers to certification they previously faced and now placing them in the way of employers that want to challenge union certification, or avoid having to recognize a union, e.g., now employers, rather than the union, must file a NLRB petition to force a secret election.
- Increased Union Presence and Influence – Unions may find it easier to secure representation, even when employees have previously rejected unionization in secret-ballot elections. This will likely result in greater union organizing efforts, which could lead to greater financial costs due to increased wages and benefits required through a collective bargaining agreement.
- Increased Pressure for Fair Labor Practices – Employers must maintain strict adherence to labor laws and regulations to avoid allegations of unlawful conduct that could lead to recognition without an election. This includes fostering an environment of fair labor practices and clear communication with employees.
Recommendations Moving Forward
The hospitality industry is not immune to the implications of this decision. Even those employers in the industry that already have a union presence in their workplaces may see the union attempt to expand to other employees or business locations. Accordingly, employers must take steps to prepare for the potential impacts of the Cemex decision:
- Employee Relations – Employers must maintain open lines of communication with their workforce to address employee concerns effectively. This is especially crucial considering the increased potential for unionization.
- Legal Compliance – Employers should stay informed about evolving labor laws and ensure that their labor practices align with legal requirements. Compliance is essential to avoid allegations of unfair labor practices that may allow unions to circumvent the election process pursuant to the Cemex decision.
- Management Training – Employers must consider training their managers on employees’ rights under the NLRA and what conduct could improperly infringe on such rights. Unions will, now more than ever, be looking at the actions of employers for potential unfair labor practices, particularly before and during union elections.
The NLRB’s Cemex decision has ushered in a new era in union certification, with significant consequences for employers. Employers should be prepared for potential changes in labor dynamics and increased unionization efforts. Staying informed about evolving labor laws and maintaining proactive employee relations will be crucial in navigating this shifting landscape. Employers should consider consulting with legal experts and industry associations to stay up to date on developments.
Joseph Tangredi is an Associate at Ellenoff Grossman & Schole LLP in the firm’s Labor & Employment practice group. Joseph specializes in advising clients in the hospitality industry on labor and employment legal matters, and also defends his clients in labor arbitrations before the NLRB, and against wage/hour and discrimination claims brought in federal and state courts. Joseph Tangredi can be reached at JTangredi@egsllp.com or via phone at 212-370-1300.