NLRB’s Aggressive Bargaining Order Framework Rejected by Sixth Circuit as Agency Overreach

Quick Hits

• The Sixth Circuit declined to enforce the NLRB’s 2023 Cemex standard, which allowed bargaining orders based on unfair labor practices without regard for the results of secret-ballot elections.
• The court reasoned that the Board engaged in improper rulemaking disguised as adjudication.
• The court emphasized that the Board overstepped its authority by disregarding the longstanding preference for secret-ballot elections “as the barometer of a union’s support among employees.”
• The traditional Gissel standard for bargaining orders remains valid law nationwide; employers that commit serious unfair labor practices may still be ordered to bargain when a fair re-run election is not possible.

The Cemex Framework

The Cemex standard, which stems from a 2023 Board decision, changed union organizing law in two significant ways.

First, it accelerated the process for extending recognition or going to an election. When a union demands recognition based on signed authorization cards, employers must either recognize the union or file an RM petition seeking an election within approximately two weeks. Failure to file could itself constitute an unfair labor practice. The Sixth Circuit did not address this portion of the Cemex decision.

Second—and more consequentially—Cemex transformed the remedy for employer misconduct leading up to the election. Under prior precedent, if employer unfair labor practices affected the outcome of an election, the Board would typically order a rerun election after implementing traditional remedies, such as a notice posting, rescinding discipline, and make-whole remedies when warranted. The Board could issue bargaining orders under the longstanding Gissel doctrine—stemming from a 1969 Supreme Court of the United States decision—but it was reserved for extreme cases where a fair rerun election was virtually impossible.

Under Cemex, by contrast, any unfair labor practice serious enough to require setting an election aside could, in most cases, result in an automatic bargaining order—regardless of how minor the infraction or how many employees voted against a union. The union need only show it had majority card support when it demanded recognition.

The Brown-Forman Case

In Brown-Forman Corp., the Sixth Circuit issued a 2–1 decision in which it upheld the Board’s findings of several pre-election unfair labor practices, but declined to enforce the bargaining order because it was based “solely” on the Cemex standard.

The case arose from a union organizing campaign at one of the employer’s distilleries in Kentucky. According to the NLRB, after learning that the union had obtained authorization cards from a majority of employees, the company announced a $4 hourly wage increase and other benefits changes, then implemented the wage increase and gave employees a bottle of bourbon. The union lost decisively, 14 to 45.

An administrative law judge (ALJ) reviewed the case and found several unfair labor practices. As a remedy, the ALJ recommended a bargaining order under both the traditional Gissel standard and the new and less stringent Cemex standard. In the administrative appeal, the Board adopted only the Cemex rationale, declining to rely on Gissel.

The Sixth Circuit’s Rejection of Cemex

The Sixth Circuit identified multiple defects with how the Board created and applied the new Cemex standard. The court relied on the Supreme Court’s 2024 decision in Loper Bright Enterprises v. Raimondo, emphasizing that courts must “exercise independent judgment in deciding whether [the Board] acted within its statutory authority” and determine “the boundaries of the delegated authority.”

Because the Cemex standard is a new rule of general applicability and was not created to resolve any dispute in the Brown-Forman case, the court emphasized that the Board had improperly adopted the Cemex framework in an adjudication and not in a rulemaking. The court expressed concern that the standard was based on “decades of experience” across many cases—not the facts of the dispute before the Board, and that it “was not created as a means to resolve the parties’ dispute or undo the effects of the parties’ violative conduct” (given that the Board had already resolved the case using Gissel), but instead to deter future unfair labor practices.

The court expressed equal concern with substantive defects in how the new standard operated. The court explained that bargaining orders are an “extraordinary remedy” that should not be imposed through a “non-case-specific hard-and-fast rule.” The court also found it significant that the Board so easily bypassed the “preference for secret-ballot elections as the barometer of a union’s support among employees,” because “[t]he Board did not analyze whether a fair future election could occur.”

Sixth Circuit Judge Andre Mathis dissented, arguing that the U.S. Congress has provided the NLRB with “both rulemaking and adjudicative authority” that it can decide which to use and that the NLRB “properly exercised its authority when it adjudicated the Cemex standard.” Since the NLRB properly exercised that authority, Judge Mathis stated that he would have denied the employer’s petition for review and enforced the Board’s decision and order.

The Sixth Circuit remanded the case to the Board for further proceedings consistent with its opinion. How the Board proceeds on remand—including whether to revisit any prior precedent—remains an open question.

What the Ruling Means for Employers

The Sixth Circuit’s ruling directly applies only within the Sixth Circuit, which encompasses Kentucky, Michigan, Ohio, and Tennessee. Outside the Sixth Circuit, Cemex remains binding Board precedent—though that may change if other circuits follow suit, if NLRB enforcement priorities change, or if a reconstituted Republican-majority Board issues a reversal.

Whether Cemex survives or not, unfair labor practices during union organizing drives have always been prohibited and can expose employers to significant legal and practical risks. Authorization cards remain central to the organizing process, and when a union demands recognition based on majority card support, time is of the essence. Employers may want to be prepared to respond promptly—potentially by filing an RM petition within two weeks—and ensure that supervisors understand the legal boundaries of their statements and conduct.

Ogletree Deakins’ Traditional Labor Relations Practice Group will continue to monitor developments and will provide updates on the Traditional Labor Relations blog as additional information becomes available.

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