Key Takeaways

• The Ninth Circuit upheld a bargaining order against Cemex Construction Materials under the long-standing Gissel standard, finding that the employer’s “pervasive” unfair labor practices, including threats of plant closure, threats of job loss, and retaliatory discharge, were sufficient to warrant the order without reaching the newer Cemex standard.
• The court declined to rule on the validity of the NLRB’s 2023 Cemex Decision, which required employers faced with a recognition demand to decide within two weeks whether to accept recognition and bargain, or file a petition to test the union’s majority status through an election, and  also relaxed the standard for issuing bargaining orders based on employer misconduct during union election periods, leaving the legal challenge to that standard unresolved in the Ninth Circuit.
• The Cemex Decision remains good law, though the Cemex bargaining order standard was recently invalidated by the Sixth Circuit and is expected to be overruled by the current Republican-majority NLRB. This means that except with respect to the Cemex bargaining order standard solely for employers in Tennessee, Kentucky, Ohio, and Michigan, employers should continue to account for Cemex when facing union recognition demands.

For nearly three years now, the eyes of legal scholars, attorneys and employers alike have been on the United States Circuit Court of Appeals for the Ninth Circuit (Ninth Circuit), awaiting its decision on an appeal of the National Labor Relations Board’s (NLRB) decision in Cemex Construction Materials Pacific LLC (Cemex Decision). The Ninth Circuit has finally issued its decision – and completely sidestepped the issue which everyone was waiting to be addressed.

What Is the NLRB’s Cemex Standard for Bargaining Orders?

In 2023, the NLRB made several monumental, pro-union holdings, including a relaxed standard for bargaining orders, in Cemex Construction Materials Pacific LLC. Traditionally, when a union claims majority support and demands recognition, employers generally had the option to decline voluntary union recognition.  The union would then have to file a petition to have a secret-ballot election supervised by the NLRB.

Now under Cemex, an employer confronted with a recognition demand must decide within two weeks whether to (1) accept recognition and bargain, or (2) file itself a petition for an election to take place to test the union’s assertion of majority status. If the employer files the petition and then commits unfair labor practices that would warrant setting aside the election, the NLRB may order the employer to recognize and bargain with the union. Under the Supreme Court’s 1969 decision in Gissel, the NLRB issued a bargaining order only as a remedy for serious and material employer misconduct during a union election.

In these instances, the NLRB would determine whether its traditional remedy – ordering a new election – was sufficient or whether the employer’s unfair labor practices were so serious that they destroyed the chances for a fair election and thus necessitated a bargaining order – a directive from the NLRB requiring an employer to negotiate with a union for employee representation. Cemex dramatically relaxed the standard used by the NLRB to issue a bargaining order; in essence, under Cemex, the NLRB could issue a bargaining order based on less significant unfair labor practices by the employer during the election period before a union vote.

On What Basis Did Cemex Appeal the NLRB’s Bargaining Order to the Ninth Circuit?

Cemex Construction Materials Pacific LLC (Cemex Construction Materials) appealed the NLRB’s decision to the Ninth Circuit on several bases, including by arguing that the NLRB exceeded its authority when it relaxed the standard for bargaining orders.

In the underlying case, the NLRB found that Cemex Construction Materials committed roughly two dozen unfair labor practices in the run-up to an election that the International Brotherhood of Teamsters lost. As a result, the NLRB determined that a bargaining order was appropriate under either Gissel or the new standard, which it applied retroactively in the case. The NLRB then ordered Cemex Construction Materials to bargain with the Teamsters under both Gissel and Cemex.

How Did the Ninth Circuit Rule — And Why Did It Apply Gissel Instead of Cemex?

On appeal, the Ninth Circuit held that the “pervasive” unfair labor practices the NLRB found Cemex Construction Materials committed during and leading up to a 2019 union representation election were sufficient to warrant a bargaining order under Gissel. The Ninth Circuit made a point to note that it had previously enforced bargaining orders with less serious violations than those presented in this case, here considering the violations (threats of plant closure, threats of job loss and discipline and discharge of a prominent union supporter) as “hallmark” labor violations.

The Ninth Circuit stated that because a bargaining order was appropriate under Gissel, it need not address the Cemex Decision. Accordingly, it denied Cemex Construction Materials’ appeal.

Is the Cemex Standard Still Good Law? What Employers Should Do Now

It is not clear whether Cemex Construction Materials will appeal the decision of the appellate court, particularly since the Ninth Circuit completely sidestepped the Cemex Decision. Notably, the Sixth Circuit Court of Appeals recently invalidated the Cemex Decision, but only with respect to the Cemex bargaining order standard and did not address the other noted aspect of the Cemex Decision.

Moreover, the current NLRB, with a Republican majority, is expected to overrule Cemex sometime in the near future. However, for the time being, the Cemex Decision saga continues and except for with respect to bargaining orders in the Sixth Circuit (Tennessee, Kentucky, Ohio, Michigan), the Cemex Decision, including placing the burden on employers to petition for an election upon a receipt of a demand for recognition by a union, remains good law.