Of the Board’s recent decisions, two that were decided in August demand the attention of union and non-union employers alike. First, in Stericycle, Inc., the Board rewrote the legal test for evaluating whether employer workplace policies unlawfully restrict employees’ rights under the National Labor Relations Act (NLRA). And second, Cemex Construction Materials Pacific, Inc., particularly when considered alongside the Board’s new Final Rule regarding representation election procedures, creates two new hazards for employers during union organizing campaigns. In light of these changes, Employers are well advised to review closely their workplace policies and any unionized workplace work rules, as well as evaluate existing or proactively implement union avoidance strategies including supervisor and manager training on the new legal landscape.
Stericycle: Heightened Scrutiny of Employer Workplace Policies
The Board’s headline-making August 2 Stericycle decision created a new, and convoluted, standard for determining whether workplace policies unlawfully restrict employees’ NLRA rights. Section 7 of the NLRA protects employee rights to “engage in…concerted activities for the purpose of collective bargaining or other mutual aid or protection.” The NLRA prohibits employers, whether unionized or not, from taking actions or enforcing policies and work rules that tend to chill employees’ exercise of Section 7 rights (e.g., restrictions on discussion of compensation, surveilling the activities of pro-union employees, etc.).
Under the previous standard, if the Board found that a workplace rule served an important business justification and carried minimal risk of infringing on employees’ rights, the rule was always lawful, regardless of employees’ subjective perceptions or whether there were less restrictive ways for the employer to meet its business needs. The Board previously upheld a variety of common workplace rules under this standard, including rules prohibiting the use of recording devices in the workplace, restricting employees’ social media activity, and requiring workplace investigation confidentiality.
Following Stericycle, the Board evaluates work rules from an employee’s perspective. Under Stericycle, if the Board finds that a “reasonable employee” could reasonably perceive a rule to restrict the exercise of Section 7 rights (even if there are other reasonable interpretations), the rule is presumptively unlawful. To rebut this presumption, employers must show that the rule furthers a “legitimate and substantial” business interest and that there are no less restrictive ways to advance its interest.
Under Stericycle, if any employee could conceivably interpret any work rule as interfering with NLRA rights, the employer must justify the rule or face liability. All employers, whether unionized or not, should review handbooks and workplace policies in light of this new heightened level of Board scrutiny.
Cemex: New Traps for Employers During Representation Elections
After Stericycle, the Board kept its foot on the gas with its release of Cemex. In Cemex, the Board created two new ways to foist liability onto employers who oppose union organizing. Particularly when considered with the newly accelerated timeline for representation elections the Board recently implemented by rulemaking, Cemex increases employers’ vulnerability to union organizing efforts.
Under existing NLRA rules, a union must have majority employee support to become their legal representative. To obtain a Board-conducted secret ballot election, a union needs at least a 30% “showing of interest” — typically through employee-signed authorization cards. If a majority of employees vote for the union during an NLRB-run election, the union becomes the exclusive representative, and the employer must recognize and bargain with it. However, before requesting such an election, a union with majority support can choose to request that the employer voluntarily recognize it. If the employer does so, then the union becomes the employees’ exclusive representative without an election; if not, the union can seek a secret-ballot election, long deemed the most accurate way to determine employee union support.
In the runup to NLRB elections — the “critical period” — employers are prohibited from interfering with employees’ freedom to vote for or against union representation. For more than half a century, if an employer unlawfully interfered with employee choice during the critical period, the Board’s go-to remedy was to hold a rerun election. Only in the most extreme cases where employer actions were so severe that a fair election was impossible, has the Board directed the employer to recognize and bargain with the union without an election by issuing a “bargaining order.”
In Cemex, the Board altered this longstanding framework in two ways, both of which favor union organizing. First, whereas employers could previously decline to voluntarily recognize a union without further action, employers now have an affirmative obligation to “promptly” (i.e., within “two weeks”) ask the Board for a secret-ballot election. Employers who do not do so after a union seeks voluntary recognition violate the NLRA. The Board determines (by reviewing authorization cards) that the union had majority support. With this procedural change, the Board opens the door to fewer secret ballot elections, more union certifications through the union-controlled authorization card process and puts the legal burden on employers to ask for elections in the first instance.
Second, whereas unlawful employer interference during the “critical period” previously resulted in a rerun election unless the employer had a history of multiple egregious violations, under Cemex, unlawful employer critical period conduct will always result in a Board-issued bargaining order, unless the Board deems it “virtually impossible” that the conduct affected the election integrity. By any standard, Cemex undermines employees’ fundamental right to vote for or against a union in a secret ballot election. The Board’s new process under Cemex clearly makes it easier for unions to secure certification (and dues payments) with no employee vote.
Final Rule Regarding Representation Elections: Quicker Quickie Elections
Further amplifying the impact of Cemex is the Board’s recent release of a new Board Rule that significantly shortens the representation election timeline (if they occur at all). Under the old rule, the entire representation election process generally unfolded over the span of several weeks. The new Rule, effective December 23, 2023, crams the entire process into as few as two weeks, making it difficult, if not impossible, for employers to exercise their legal right to educate employees about the risks associated with unions.
The new Rule accelerates nearly every stage of the election process and imposes new constraints on employers’ ability to present the other side of the story. In particular, it: shortens the period from the filing of a representation petition to a representation hearing from 14 to eight days; makes it nearly impossible to postpone a hearing; reduces an employer’s time to file a written statement from five to three days; relieves unions of the obligation to reveal its arguments prior to the hearing; and further narrows the topics that the Board will address in a pre-election hearing. Perhaps most importantly, the new rule reduces the time from petition to election from the current 20 or more days to perhaps as few as 10 days — giving an employer just over a week to counter months of union organizing rhetoric.
This hyper-accelerated representation timeline will transform the election process (which was never leisurely) into a frenetic, all-hands-on-deck situation in which any employer misstep is likely to result in union recognition without an election under Cemex. Moreover, Stericycle’s new subjective standard for evaluating workplace policies increases the risk that the Board will find that an employer policy (that may have been adopted long before a union was attempting to organize) has the effect of precluding a fair election and the risk of a bargaining order without an election.
While we expect court challenges to Stericycle, Cemex, and the new representation election rules, pending that potentially years-long process or a political change to the NLRB’s composition, it is more important than ever for nonunion employers to consider implementing prophylactic union-avoidance strategies. All employers, unionized or not, should also review and update existing work policies and handbooks knowing that the NLRB will scrutinize any rule under a standard that disfavors employers.
For practical advice about specific union-avoidance strategies you can implement in your workplace, workplace policies, NLRA risk abatement, or for any other questions you may have, we encourage you to reach out to any of our attorneys.
KWW attorneys Olivia Hochschwender and Pat Hoban have two upcoming workshops on these National Labor Relations Board developments. They will present an HR InsideOut “NLRB Developments: Not Good News for Employers” on Dec. 6 in-person at K|W|W’s HR Training Center. On Dec. 14 they will host a virtual HR ShopTalk “Are you Ready for a (“Quickie”) Union Election?” Employers can sign up for these courtesy workshops through the KWW website: kwwlaborlaw.com
Here at K|W|W, your workforce is our priority.