On Friday, March 6, the U.S. Court of Appeals for the Sixth Circuit issued an opinion in the Brown-Forman case, holding by a two-to-one vote that the National Labor Relations Board’s (NLRB) Biden-era Cemex standard announcing a new framework for determining when employers are required to bargain with unions without a representation election is unlawful for procedural reasons.
In particular, the majority held that Cemex was an improper exercise of authority to promulgate a rule that had no bearing on the facts before the NLRB and that was instead designed to provide a standard (and deterrence) for future cases.
The case involves the well-known liquor distillery Brown-Forman in Kentucky. When employees there began discussing the possibility of seeking union representation from the International Brotherhood of Teamsters, the company implemented some pay increases and other improved benefits ahead of the union’s representation election, which the Teamsters lost by a vote of 45-14.
Following the loss, the Teamsters filed a challenge with the NLRB, and an administrative law judge ruled that Brown-Forman’s actions constituted an unfair labor practice (ULP). The judge recommended that the Board order the company to negotiate with the union based on the Supreme Court’s 1969 decision in NLRB v. Gissel Packing Co., which upheld the board's authority to remedy an employer's unfair labor practices by ordering the employer to recognize and bargain with a union, as well as the Board’s newer Cemex precedent.
For its part, the Board relied solely on its Cemex standard in ruling against the employer and expressly said it was doing so without relying on the Gissel decision. In its ruling, the Sixth Circuit said that was “an unlawful exercise of adjudicatory authority” and remanded the case back to the NLRB for further consideration.
Unfortunately, the majority stated several times that it was not reaching the substantive legality of Cemex, although it had several comments that suggested the majority thought Cemex raised significant concerns.
Nevertheless, the court’s ruling is positive news for the employer community. Hopefully, the new majority at the NLRB will carefully re-evaluate this issue and overturn the previous Board majority’s errant holding in Cemex, which upended over 50 years of well-settled labor law in favor of labor unions’ interests.
About the author
Sean P. Redmond
Sean P. Redmond is Vice President, Labor Policy at the U.S. Chamber of Commerce.
