Media Center

February 17, 2025
Publications

By Adam L. Santucci, Micah T. Saul, and Robert J. McAvoy

Introduction

The hits just kept coming from the National Labor Relations Board in 2024. The final year of the Biden board produced a flurry of decisions that kept labor practitioners on their toes. It seemed that each month, there was a major development or reversal of decades-old case law. Just when we thought 2023 was the high-water mark for labor, we flipped our calendars to 2024. Now, as we turn the page to 2025, we wanted to take a look back at the most significant developments in labor law from the past year.

Organized labor was busy. The board saw a 27 percent increase in elections compared to fiscal year 2023, up to a total of 1943 elections. Those elections were scheduled and held at breakneck speed under the board’s new (old) election rules, originally promulgated in 2023 and effective in 2024.

In addition, 2024 saw widespread strike activity throughout the U.S.

The board was busy, too. The board’s unfair labor practice charges increased significantly compared to the prior fiscal year. The board received a total of 393 unfair labor practice and representation cases, an increase of over 22 percent from the prior year. The board issued decisions in 144 of those unfair labor practice cases and 115 representation cases. The Regional Offices issued 635 complaints as well.

The board’s 2024 annual report indicated that since 2021, its annual case intake has increased by 47 percent to 24,566 cases in 2024.

All the filings left the board with a significant backlog at the end of its fiscal year in September of 2024, a trend that continued from the prior year. However, the board was also able to recover over $56.5 million on behalf of employees and worked to provide 1217 employees with an offer of reinstatement.

These are staggering figures.

Clearly, employees, both those working in unionized working environments and those working in non-union workplaces, have become more aware of the board’s mechanisms and complaint procedures.

Here, we summarize the key labor law developments from 2024 and then briefly highlight some changes we may see in 2025.

General Counsel Advice Memoranda

The board’s general counsel, Jennifer Abruzzo, issued several guidance memoranda throughout the year, outlining her aggressive, pro-labor agenda. Here, we summarize a few of the key memoranda from last year.

GC Memorandum 24-01, Guidance in Response to Inquiries about the Board’s Decision in Cemex Construction Materials Pacific, LLC

Last year, we reported on the board’s Cemex decision, which flipped the union organizing process on its head and handed organized labor its greatest since the passage of the National Labor Relations Act. Recall that under Cemex, Unions can demand recognition without any actual showing of majority status, and the employer must challenge that demand if it disagrees. See Cemex Construction Materials Pacific LLC, 372 NLRB No. 130 (2023). Any union purportedly having majority status can demand a bargaining order, setting aside the election results, should the employer engage in any objectionable conduct before a board-conducted election. Shortly after the issuance of that decision in August of 2023, the general counsel provided further guidance on its implementation.

GC Memo 24-01 clarified the new procedures under Cemex. Under Cemex, an employer confronted with a verbal or written demand for recognition may: 1) agree to recognize a union that enjoys majority support; 2) promptly file an RM petition to test the union’s majority support and/or challenge the appropriateness of the unit; or 3) await the processing of an RC petition previously filed.

The memo also provided guidance to the regions on seeking a Cemex bargaining order and when a traditional Gissel bargaining order should be sought. Specifically, the GC made clear that unfair labor practice(s) occurring before the filing of a petition, not just those occurring during the critical period, will also be considered when determining whether the election should be invalidated. The memorandum provided that an election will be set aside based on an employer’s critical period violations “unless the violations are so minimal or isolated that it is virtually impossible to conclude that the misconduct could have affected the election results.”

The GC memo also opined that the demand for recognitions need not be made on any particular officer or registered agent of the employer but only need be made on a person “acting as an agent of an employer.”  Further, it noted that a demand for recognition and to bargain “need not be made in any particular form, so long as the request clearly indicates a desire to negotiate and bargain on behalf of the employees in the appropriate unit.” The memo went even further, suggesting that a union’s demand for recognition may take many forms, including the filing of an RC petition as long as the union checks the request for recognition box on line 7a of the NLRB petition form, and may note in Section 7a of the form that the petition serves as its demand.

The GC memo confirmed the patent unfairness of Cemex, stating that “[a]n employer may ask to view evidence of majority support, but a union is not obligated to show it.”

The GC memo went on to outline the procedure that should be followed by unions if the employer refuses to recognize the union and fails to file the RM petition. Specifically, the general counsel directed labor unions to file a Section 8(a)(5) charge against the employer. The employer, in turn, would need to challenge the basis for its bargaining obligation.

If the employer fails to challenge majority status adequately, a complaint will be issued, and if the board agrees, it will find that the employer violated the act by failing and refusing to recognize and bargain with the union as the employees’ designated collective-bargaining representative.

The GC memo also offered this final warning to employers: “employers act at their own peril in refusing to recognize and bargain and in making unilateral changes in employees’ terms and conditions of employment after such a demand is made.”

GC Memorandum 24-04, Securing Full Remedies for All Victims of Unlawful Conduct

GC memo 24-04 began by touting the various, often novel, forms of recovery obtained for employees allegedly discharged in violation of the act. This memorandum seemed like a victory lap of sorts and was certainly another warning to employers. The memo noted the various forms of recovery obtained by the regions in making whole remedies, including missed fund contributions, retirement-related payments and penalties for early retirement or missed vesting, and job search costs.

However, GC Abruzzo did not stop with make-whole remedies but went on to describe the importance of obtaining novel forms of recovery when other violations of the act have been alleged, such as unlawfully overbroad policies. GC Abruzzo encouraged the regions to obtain full make-whole remedies for all employees allegedly harmed as a result of an unlawful work rule, regardless of whether the employees were identified as part of the unfair labor practice investigation. This included a recission of all disciplinary penalties related to the allegedly unlawful policy or procedure. It was GC Abruzzo’s view that the recission of the work rule was not enough to remedy the alleged violation of the act and that more aggressive make-whole remedies must be sought.

GC 24-05, 10(j) Encouraging Field Offices to Seek Injunctive Relief Under Section 10(j)

After the United States Supreme Court issued a decision setting forth a uniform standard applicable to injunction petitions under Section 10(j) of the NLRA in Starbucks Corp. v. McKinney (discussed infra), GC Abruzzo reaffirmed her position that field offices should continue to seek injunctive relief when appropriate and stated the decision did not change that position.

GC Memorandum 25-01, Remedying the Harmful Effect of Non-Compete and “Stay or Pay” Provisions that Violate the National Labor Relations Act

In GC Memo 25-01, GC Abruzzo expanded on her position that the board should find most non-compete provisions unlawful and remedy the effects of non-competes on employees. She urged the board to provide affected employees with make-whole relief. Under her proposal, if an employee can establish that the employee was qualified for and discouraged from applying for or accepting an available job because of a non-compete provision, the employer should compensate the employee for the difference in pay and benefits. Additionally, employees who separated from the employer would be entitled to additional make-whole remedies such as relocation costs and/or payment for lost wages due to unemployment related to complying with a non-compete provision.

GC Abruzzo also argued that “stay-or-pay” provisions, which require employees to pay their employer if they separate from employment, are similarly unlawful under many circumstances. She advocated for a framework by which such provisions are presumed to be unlawful. An employer can rebut a presumption of unlawfulness by proving that the stay-or-pay provision advances a legitimate business interest and is narrowly tailored to minimize any infringement on an employee’s Section 7 rights. She argued that make-whole relief can be appropriate in similar forms and circumstances for stay-or-pay provisions as for non-compete provisions.

Rule Makings

The board has flip-flopped on many issues in the past several years. We have written about many of these issues, including detailing the different approaches taken by Republican and Democratic administrations. 2024 continued the pendulum swinging on key issues facing the board.

On July 26, 2024, the board issued a final rule, which rescinded a Trump-era rule that amended certain aspects of representation election procedures. The 2024 Rule returned to prior standards regarding the board’s blocking-charge policy and voluntary recognition bar, which had been in place before the 2020 Rule. We wrote about the 2020 Rule in our 2020 Year in Review. The 2024 Rule also eliminated a rule that required unions in the construction industry to show affirmative evidence of majority support to convert from an 8(f) to 9(a) relationship. The 2024 Rule became effective September 30, 2024.

Under the 2024 Rule, Regional Directors will again have the ability to delay an election indefinitely when an unfair labor practice charge is filed, as they did before the 2020 Rule. In practice, the 2024 Rule will allow an incumbent union to use a charge to delay a decertification election.

The rule also returned to the prior voluntary recognition bar law, which provides that an employer’s voluntary recognition of a union bars the filing of an election petition for between 6 months to one (1) year after the parties’ first bargaining session.

The rule also requires a return to the board’s application of the voluntary recognition and contract bars in the construction industry. In the construction industry, Section 8(f) of the act allows employers and unions to form a collective bargaining relationship through what is often called “pre-hire” agreements, which do not require a union election or even evidence of majority support. Employers in 8(f) relationships could withdraw recognition from the union after the expiration of the collective bargaining agreement. However, under traditional Section 9(a) bargaining relationships, where majority support has been established, employers are obligated to continue negotiating after the expiration of a CBA.

Now, a union can convert a Section 8(f) agreement with a construction industry employer to a Section 9(a) agreement through contract language alone.

A Summary of the Board’s Significant Decisions

With a majority of Democratic members in place, it was widely expected that the board would reverse decisions issued by the board during the Trump Administration. In large part, that expectation became a reality in 2022. Not only did the democratically-controlled board reverse Trump-era decisions, but in some instances, it also created some new, historically unrecognizable standards. Some of the decisions most impactful to employers are discussed here.

Board Limits Unilateral Changes During Contract Hiatus and First Contract Bargaining

In August of 2023, the board issued two decisions in Wendt Corp., 372 NLRB 135 (2023) and Tecnocap LLC, 372 NLRB No. 136 (2023), establishing that unilateral changes during bargaining which rely on past practice must be “fixed by an established formula containing variables beyond the employer’s immediate influence” and result from “nondiscretionary standards and guidelines.” Wendt, at *5-6. The board held that past practices can only permit unilateral changes “when the employer proves its action is consistent with a long-standing past practice and is not informed by a large measure of discretion.” Tecnocap, at *1. These decisions overruled the board’s previous decision in Raytheon Network Centric Sys., 365 NLRB No. 61 (2017) to the extent that that decision had permitted discretionary unilateral changes that were “similar kind and degree” to an employer’s past practice or that were made in reliance on a management rights clause in an expired collective bargaining agreement.

In Wendt, an employer negotiating a first contract had relied upon past practice of instituting layoffs during downturns to avoid bargaining over temporary layoffs. The board held that unilateral changes can only be made when “the employer has shown the conduct is consistent with a long-standing past practice and is not informed by a large measure of discretion.” The board found the layoffs had been “entirely discretionary” because they were conducted without reference to any definite criteria or guidelines and, therefore, were unlawful unilateral changes.

In Tecnocap, the employer had relied on a management rights clause in an expired collective bargaining agreement to change the length of employee shifts while negotiating a successor contract. The board first applied the Wendt standard to conclude that the change was not fixed by an established formula based on nondiscretionary standards and guidelines. Then, the board held that the employer could not rely on a past practice developed under a management rights clause under an expired collective bargaining agreement, stating that a management rights clause serves as a union’s waiver of its right to bargain over certain terms and conditions only for the duration of the collective bargaining agreement.

Board Restores Protections for Employees Who Advocate for Non-Employees

Also, in August of 2023, in American Federation for Children, Inc., 372 NLRB No. 137 (2023), the board overruled another Trump-era ruling that the concept of “mutual aid or protection” did not include employees helping non-employees. In Amnesty International, 368 NLRB No. 112 (2019), the board had held that activity advocating only for non-employees did not constitute activity for “mutual aid or protection” and, therefore, was not protected activity under Section 7 of the NLRA. American Federation reversed that holding.

In American Federation, an employee had advocated for the reinstatement of a former employee who became ineligible to work in the United States. The employee stated that the manager who refused to re-hire the employee was anti-immigrant and racist. After conducting an investigation, the employer determined that the employee’s allegations could not be supported and decided to terminate the employee for creating a “toxic atmosphere,” which led to the employee’s resignation. The board found that the employee’s actions constituted protected activity. The board reasoned that under the “solidarity principle,” efforts by employees to aid or advocate for non-employees can benefit the employees by improving their own working conditions or by leading the non-employees to return the favor later.

Board Details Potential Remedies for Repeated or Egregious Conduct

In Noah’s Ark Processors, LLC d/b/a WR Reserve, 372 NLRB No. 80 (2023), the board held that when unfair labor practice violations justify a “broad” cease-and-desist order—often ordered in cases where an employer has engaged in repeated violations or egregious misconduct—the board should consider a list of additional remedies in connection with its authority to exercise remedial discretion.

Examples of remedies the board discussed in the Noah’s Ark decision include adding a more comprehensive explanation of rights to the remedial order, requiring reading and distribution of the notice and explanation of rights to employees, mailing the notice/explanation to employees’ homes, requiring a person who bears significant responsibility in the organization to sign the notice, publishing the notice in local publications, requiring the notice/explanation be posted for an extended period of time, visitation by the board to ensure compliance and reimbursement of the union’s bargaining expenses including making whole lost wages for attending bargaining sessions.

Board Issues New Decision on Zipper Clauses

In January of 2024, the board issued a decision in Twinbrook OpCo LLC, 373 NLRB No. 6, where it noted that its own general counsel mislabeled an integration clause a zipper clause. Although the two terms are often used interchangeably, the board explained that an integration clause “’exclud[es] from coverage any external agreements not made an explicit part of the parties’ collective bargaining agreement,’” but a zipper clause states “that the parties have had the opportunity to bargain over all mandatory subjects of bargaining and that they waive their right to bargain over such matters during the term of the agreement.”

Twinbrook purchased a skilled nursing facility and offered its employees continued employment at the same rate of pay. Then, Twinbrook continued the prior owner’s practice of paying bargaining unit employees a shift differential for working second or third shifts. The company even increased the amount of that shift differential without notifying the union that represented those employees or giving the union an opportunity to bargain over the change. Eventually, Twinbrook and the union agreed upon terms for their own CBA, which (a) did not include any reference to a shift differential; (b) provided that no employee’s rate would be lowered; and (c) contained an integration clause that provided:

This agreement represents the entire understanding between the parties, and there are no agreements, conditions, or understandings, either oral or written, other than those set forth herein. It is further agreed that no amendment, change, modification, or addition to this agreement shall be binding upon either party hereto unless reduced to writing and signed by both of the parties.

Twinbrook paid that increased shift differential for the first pay period covered by the new CBA before discontinuing the practice entirely without notifying the union.

The union filed an unfair labor practice charge, asserting that the company violated Section 8(a)(1) and (5) of the act when it ceased making the shift differential payments without providing the union with notice and the opportunity to bargain. The board sided with the union, holding that (1) the CBA did not authorize the company to eliminate shift differential payments unilaterally and (2) the union did not waive its right to bargain over the termination of those payments. According to the board, the integration clause was not a clear and unmistakable waiver of the union’s right to bargain over a change in a mandatory subject of bargaining.

Board Rules that Wearing BLM Markings Can Be Protected Activity Under the NLRA

On February 21, 2024, the board issued a decision finding that Home Depot violated Section 8(a)(1) of the National Labor Relations Act (“act”) by using Home Depot’s dress code to require an employee to remove the acronym “BLM,” an initialism for “Black Lives Matter,” from the employee’s work uniform. The decision was the latest in a run of board decisions that employers should consider when applying workplace policies.

The board reversed an Administrative Law Judge (“ALJ”)’s holding that Home Depot did not violate the act because “BLM” does not have an “objective, and sufficiently direct, relationship to terms and conditions of employment.” The act protects employees engaging in concerted activities, which is an activity taken by two or more employees for the purpose of mutual aid or protection.

For several months, employees at the Home Depot store allegedly raised concerns to management about racially discriminatory behavior in the workplace. The board deemed these concerns protected concerted activity. Management informed the employee that the BLM insignia on their orange apron violated the dress code after the employee sent an email to management requesting a more open dialogue regarding racial issues. The dress code and apron policy stated that the work apron is “not an appropriate place to promote or display religious beliefs, causes or political messages unrelated to workplace matters.” The employee refused to remove the insignia. After management conditioned the employee’s return to work on removing the initials, the employee resigned rather than accept the condition. The board concluded that these events amounted to a constructive discharge.

According to the board, the employee’s refusal to remove the BLM marking was a “logical outgrowth” of the employee’s protected concerted activities because the employee had specifically linked the BLM marking to showing support for coworkers in connection with group complaints.

The board did not find any special circumstances justifying Home Depot’s interference with the employee’s right to display the BLM insignia. Such justifying circumstances might include employee safety, damage to machinery or products, exacerbation of employee dissension, or unreasonable interference with the employer’s public image.

Although there was no allegation or finding that the dress code policy limiting political messages was facially unlawful, the board found that Home Depot violated the act “by applying its facially neutral dress code and apron policy to restrict Section 7 activity.”

The board ordered Home Depot to, among other things, cease and desist from prohibiting employees from engaging in protected concerted activities, reinstate the employee with backpay for lost earnings and benefits as well as compensation for other direct or foreseeable pecuniary harms, and post notice of the decision at the store where the employee had worked.

Board Returns to Clear and Unmistakable Waiver Standard

On December 10, 2024, the board issued a decision in Endurance Environmental Solutions, LLC that restored the “clear and unmistakable” waiver standard for evaluating an employer’s contractual defense to an allegation that the employer unilaterally changed the terms and conditions of employment for bargaining unit members. Endurance overruled MV Transportation, Inc., 368 NLRB No. 66 (2019), in which an earlier board had adopted the “contract coverage” test, which made it easier for employers to assert the contractual privilege defense.

The board argued that the “clear and unmistakable waiver” standard better promotes the goals of the act by “encouraging the practice and procedure of collective bargaining.” The board also held that this standard, which had long been in place before 2019, better achieves consistency with Supreme Court and board precedent.

The clear and unmistakable standard provides that an employer has an obligation to bargain over changes to wages and working conditions unless the union expressly yields its right to bargain over an employer’s decision.”

Board Reverses Decades of Precedent and Hols Employers Cannot Advise Employee Regarding the Consequences of Unionization

On November 8, 2024, the board overturned a long-standing precedent, which had made clear that employers could make statements regarding the consequences of unionization on the relationship between employees and their during union campaigns prior to a union election. Instead, the board will analyze whether such remarks constitute threats or coercion on a case-by-case basis, which means that employers make such comments at their peril.

In Siren Retail Corp., 373 NLRB No. 135, the board held that employers may violate the act by making statements to employees during union campaigns regarding the consequences of unionization. Such comments may include the employer’s inability to communicate with employees directly on issues concerning the terms and conditions of employment and the need to work through the union rather than employees to address employee concerns. Prior to Siren, these were clearly lawful and true statements that employers often made during a campaign. Siren reversed Tri-Cast, Inc., 274 NLRB 377 (1985), which deemed such statements categorically lawful.

In Siren, the board held that Tri-Cast’s conclusion that manager statements concerning the relationship between employees and the employer following unionization were categorically lawful was wrong. The board found instead that such statements should be analyzed on a case-by-case basis. The board went on to find that for such statements to be lawful, the employer’s comments must be “carefully phrased on the basis of objective fact” and that some statements about the impact of unionization may constitute threats of retaliation and coercion.

Employers facing a union campaign must now decide whether they will make statements regarding the impact of unionization, and if so, they must work to ensure that such statements are grounded in fact.

Brooklyn Regional Office Reaches Settlement Agreement Regarding Stay-or-Pay Contracts

In Maxwell Plumb Mechanical Corp., 29-CA-322703 (Nov. 5, 2024), Region 29-Brooklyn obtained a settlement agreement with an employer who had charges filed against it for requiring employees to sign “training repayment agreement provisions,” which the board stated constituted unlawful “stay-or-pay” contracts. The employees had been required to repay the company’s training costs if they quit within a specific timeframe. The board required the employer to reinstate three employees and make them whole by paying $81,000, cease requiring employees to reimburse the employer for training costs and require supervisors and managers to attend training on employee rights. The settlement was in alignment with GC Abruzzo’s GC Memo 25-01, discussed supra.

Board Decisions on Appeal

Over the course of 2024, federal appellate courts issued impactful decisions on cases that originated before the National Labor Relations Board. A summary of several of these decisions is below.

Supreme Court Decisions

The Supreme Court handed down two (2) decisions in 2024 that are likely to have a significant impact on the labor relations space. Both decisions will likely benefit employers, as they impose higher burdens on the board in injunction cases and limit its influence on federal court appeals of board decisions.

Starbucks Corp. v. McKinney: A Unified Standard for Evaluating Injunctive Relief Under the Act.

The National Labor Relations Act provides many remedies to address violations of its provisions. One such remedy is injunctive relief pursuant to Section 10(j) of the act. That Section authorizes federal district courts to grant temporary injunctive relief, primarily to restore the status quo that existed before an employer allegedly committed an unfair labor practice. The board often utilizes injunctive relief to preserve the status quo when an employer makes impermissible, unilateral changes to unionized employees’ working conditions without bargaining and when employers take such action during organizing campaigns.

In Starbucks Corp. v. McKinney, 602 U.S. 339 (2024), the Supreme Court examined the board’s burden to obtain injunctive relief under Section 10(j). Starbucks employees were in the midst of a union organizing campaign and invited local news media to visit the store where they worked (after hours) to promote the organizing effort. Starbucks fired several employees involved in the media event for violating company policy. The employees filed an unfair labor practice charge, alleging that Starbucks retaliated against them for exercising their rights under the act.

The board’s Regional Director filed a petition against Starbucks seeking, in part, a preliminary injunction that would require the company to reinstate the terminated employees. The District Court applied a two-part test to determine whether to grant the injunctive relief sought. That test, as described in McKinney v. Ozburn-Hessey Logistics, LLC, 875 F.3d 333 (6^th Cir. 2017), asks whether “there is reasonable cause to believe that unfair labor practices have occurred” and whether injunctive relief is “just and proper.” The Sixth Circuit upheld the District Court’s decision to grant the injunctive relief sought by the board. Starbucks appealed to the Supreme Court.

On appeal, the Supreme Court noted that while the Sixth Circuit applied the McKinney v. Ozburn-Hessey Logistics standard to evaluate the petition for injunctive relief, other circuits applied a four-part test found in Winter v. Natural Resources Defense Council, Inc., 55 U.S. 7 (2008). That standard requires a plaintiff (in this case, the board) to “make a clear showing that (1) he is likely to succeed on the merits; (2) that he is likely to suffer irreparable harm in the absence of preliminary relief, (3) that the balance of equities tips in his favor, and (4) that an injunction is in the public interest.” This standard is much more employer-friendly in the context of a board petition for injunctive relief, as the board bears the burden of proving each of these elements before injunctive relief is granted.

In Starbucks Corp. v. McKinney, the Supreme Court resolved the circuit split by finding that the four-part test found in Winter is the appropriate standard by which injunctive relief may be granted under Section 10(j). The Supreme Court did not rule on the merits of the underlying case and instead remanded the matter to the Sixth Circuit for application of the appropriate standard to evaluate the board’s request for injunctive relief – i.e., the four-part Winter test.

More broadly, the Supreme Court’s ruling in Starbucks Corp. v. McKinney is significant for employers. Prior to this decision, the board could obtain injunctive relief by making a much simpler showing that an unfair labor practice likely occurred and that an injunction was just and proper. Now, the board must meet a much more stringent standard before obtaining injunctive relief against employers in federal court.

Hosp. Menonita de Guayama, Inc. v. Nat’l Labor Relations Bd.: How Much Deference Will Courts Afford to the NLRB in a Post-Chevron World?

The Supreme Court sent shockwaves through the administrative law universe with its June 28, 2024, ruling in Loper Bright Enterprises v. Raimondo, 603 U.S. 369 (2024). In that case, the court overruled forty years of judicial precedent established under Chevron, USA, Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837 (1984). Chevron required courts to defer to federal administrative agencies’ reasonable interpretations of ambiguities in federal laws. For decades, this was colloquially referred to as “Chevron deference.”

Under this standard, when courts were asked to decide legal matters that were subject to agency enforcement and interpretation (in the employment realm, think board, Equal Employment Opportunity Commission, Occupational Safety and Health Administration, etc.), the courts were required to defer to those agencies’ reasonable interpretation and application of areas of the law that were statutorily ambiguous. In Loper Bright, the Supreme Court held that courts must no longer totally defer to agency interpretation of statutory ambiguities. Instead, courts must apply their own construction of the law without following the lead of administrative agencies.

Shortly after Loper Bright, the D.C. Circuit heard an employer’s appeal in Hosp. Menonita de Guayama, Inc. v. Nat’l Labor Relations Bd., 94 F.4th 1 (D.C. Cir. 2024). At issue in the case was the board’s successor-bar doctrine. This rule precludes a new employer from withdrawing recognition from an incumbent union for at least six (6) months after it assumes control of a business from a predecessor.

In upholding the lower court’s decision (which was favorable to the board and union), the D.C. Circuit reasoned that the lower court’s decision was appropriate because administrative agencies are “free to change their existing policies as long as they provide a reasoned explanation for the change” and the “board acted reasonably” in the case. In other words, the D.C. Circuit applied Chevron deference after Chevron was overruled.

The employer took the matter to the Supreme Court, which promptly vacated the D.C. Circuit’s ruling on December 16, 2024. The Supreme Court remanded the case for proceeding in accordance with Loper Bright.

Hosp. Menonita de Guayama, Inc. is a case to follow carefully. It will be interesting to see how the D.C. Circuit addresses the issue without deferring to the NLRB under the now-overruled Chevron. The court might accord some level of deference to the board, or it may proceed solely on its own interpretation of the act. This is sure to be one of many cases that will flesh out the question of how much deference, if any, courts afford to board interpretations (and those other federal administrative agencies) of the law in a post-Chevron world.

Federal Circuit Court Decisions

Lion Elastomers, LLC v. Nat’l Labor Relations Bd.: The Fifth Circuit Forces the Board to Play by The Rules

This case originated before the National Labor Relations Board in 2017 after the employer terminated an employee who berated his boss with an aggressive, expletive-filled tirade while allegedly engaging in activity protected by the act. The employee’s union filed an unfair labor practice charge, challenging the discharge as unlawful retaliation based on the employee’s engagement in protected conduct. The employer argued that the explicit and aggressive nature of the employee’s tirade caused it to lose protection under the act. The board agreed with the union.

While this dispute was working its way through the board, it changed the standard by which it determines when an employee’s misconduct causes otherwise protected activity to fall outside the scope of Section 7 of the act. Until 2020, the board applied a four-factor test to address the question. The test, known as the Atlantic Steel standard, considers: “(1) the place of the discussion; (2) the subject matter of the discussion; (3) the nature of the employee’s outburst; and (4) whether the outburst was, in any way, provoked by an employer’s unfair labor practice.”

However, in 2020, under the first Trump administration, the board stepped away from this test in General Motors. The Atlantic Steel standard was supplanted by returning to the Wright Line standard for evaluating whether an employee’s misconduct in exercising Section 7 rights could be subject to discipline. The Wright Line approach establishes a burden-shifting framework. First, the board must show that an employer disciplined an employee for engaging in an activity protected by Section 7. Then, an employer can rebut that showing by demonstrating it would have taken the same action regardless of Section 7 activity. Employers welcomed the General Motors decision because it offered a more even balance between employees’ rights to engage in protected activity and employers’ ability to prohibit abusive workplace conduct consistently.

Against this backdrop, while the employer’s appeal was pending in Lion Elastomers, the board asked the Fifth Circuit to remand the case to the board so that it could apply the new General Motors framework to the matter. The Fifth Circuit remanded the case, instructing the board to apply General Motors. After remand to the board, the employer requested to file a brief with the board, arguing the case under the General Motors standard. The board denied the employer’s request. Then, it issued a separate decision overturning General Motors and returning to the Atlantic Steel standard, and Atlantic Steel was re-applied to the charge against Lion Elastomers.

The employer appealed again. This time, the Fifth Circuit took the board to task for its handling of the matter in its July 2024 decision. Lion Elastomers, LLC v. Nat’l Labor Relations Bd., 108 F.4th 252 (5^th Cir. 2024). The court found that the board’s request to remand the case for analysis under General Motors, only to overturn General Motors and re-apply Atlantic Steel, was a “bait-and-switch.” The court reasoned that if the board wanted to defend the Atlantic Steel standard, it should not have requested remand from the original appeal and instead should have stood firm on its application of that test. It noted that “by granting the NLRB’s motion for a voluntary remand, this court decided that the NLRB was to apply General Motors to this case.” The case was again remanded to the board with explicit instructions on how to apply General Motors.

Lion Elastomers is a victory for employers in that it reaffirms their right to due process in matters pending before the board and reminds the board that it does not have unfettered discretion to pick and choose the law it applies to a given case. It should be noted, however, that the Fifth Circuit’s opinion in Lion Elastomers does not require the application of the more employer-friendly General Motors standard in all Section 7 cases involving employee misconduct going forward. The Fifth Circuit made it clear that its directive for the board to follow General Motors applied only to this specific case. However, with the second Trump administration recently taking office, there is hope that the board will again reverse course and reinstitute General Motors as the standard for evaluating these cases.

Coreslab Structures (Tulsa), Inc. v. Nat’l Labor Relations Bd.: Tenth Circuit Hands Employers a Mixed Bag

Between 2004 and 2019, a group of employees at Coreslab Structures Tulsa, Oklahoma facility were members of a labor union. The collective bargaining agreements between the union and employer required the employer to, among other things, make contributions to a union pension fund. Allegedly unbeknownst to the union, the employer failed to make full pension contributions sometime around 2016. Thereafter, the union audited its pension plan and claimed that the employer owed $120,000 in back contributions. As to non-union employees, the company implemented a profit-sharing program around 2011. This plan was not offered to the union or part of any collective bargaining agreement between the parties.

In 2019, while this dispute unfolded, the union and employer were engaged in contract negotiations. Negotiations had stalled, and the employer held a meeting with its employees to update them on the company’s views regarding the lack of meaningful progress. A company representative informed workers that the union’s claim for back pension contributions was a major impediment in negotiations and further stated its position that the back payments would not financially benefit company employees who were not in the union and that non-union employees would forfeit profit-sharing payments. Soon after, the unionized employees filed a decertification petition seeking to oust the union. The company ceased contract negotiations and withdrew recognition.

The union filed a charge with the board, alleging in part that the petition was brought about by the employer’s alleged unfair labor practices, including its non-payment of pension contributions and failure to bargain with the union in good faith.

The board found that the employer committed unfair labor practices by unilaterally modifying its agreements with the union, failing to make pension contributions required by the collective-bargaining agreement, initiating a profit-sharing payment program for non-union employees, ceasing all pension fund contributions after the 2015-2019 agreement expired, failing to bargain with the union in good faith, and withdrawing recognition of the union. To remedy the violations, the board ordered the company to “make pension contributions for all unit employees, regardless of union status, and to include union members within the profit-sharing program. The company was ordered to “[m]ake all delinquent payments to the Central Pension Fund” and to “[m]ake all current and former unit employees who were excluded from [Coreslab’s] profit-sharing plan… whole for any loss of earnings and other benefits.” The board directed Coreslab to provide these make-whole remedies “without an offset for the benefits [the employees] were already receiving.”

Coreslab appealed the board’s decision. The Tenth Circuit ultimately concluded that substantial evidence supported the board’s conclusion that the employer violated the act by committing unfair labor practices. However, some of the board’s remedies were improper. The court noted that in “fashioning its remedies under the act, the board draws on a fund of knowledge and expertise all its own, and its choice of remedy must, therefore, be given special respect by reviewing courts. But that deference cannot extend to remedial orders other than those that can fairly be said to effectuate the policies of the act or those exceeding a rational and consistent interpretation of the board’s statutory authority. The power Congress granted to the board to rectify unfair labor practices is—and must be in its exercise—remedial, not punitive.”

Thus, the employer could not be made to pay any benefits “without offset” and could not be ordered to retain the profit-sharing program as to union employees. Such remedies did not make affected employees whole – they provided additional benefits to those employees as, in the court’s view, a punishment to the employer via the board.

While the employer ultimately was found to have committed unfair labor practices, Coreslab reminds us that there are limitations on the board’s ability to fashion make-whole remedies under the act.

Other Significant Labor Decisions

Janus Holding Does Not Relieve Public Sector Employees of Contractual Obligations to Pay Dues

In 2018, the United States Supreme Court ruled in Janus that compelling public sector employees to pay “fair share fees” to unions violates the First Amendment. As a refresher, a fair share fee is a fee that non-union members must pay to the union to cover the expenses incurred by the union in representing bargaining unit employees. For the most part, the fair share fees were paid by employees who had opted out of becoming full, dues-paying union members.

Janus clarified that fair share fees were illegal even where expressly authorized by state law. In a nutshell, SCOTUS held that fair share fees violate public sector employees’ right to free speech as protected by the First Amendment of the Constitution because such fees forced employees to pay to support an organization that they did not wish to support. The result is that public sector employees can opt out of union membership and cannot be forced to pay any fees to the union. However, public sector unions must still represent these “free-riding” employees through collective bargaining and contract administration.

After Janus, unions have worked hard to reduce the number of free riders and lock employees into voluntarily paying union dues. One approach has been to obtain a voluntary, contractual agreement to make dues payments for a specific duration and to provide a complicated revocation process. For example, a new public sector employee may be convinced to sign a dues deduction authorization, which contains an agreement to become a dues-paying union member and not withdraw union membership for the duration of the collective bargaining agreement.

When we first wrote about Janus, we indicated that there would be many questions to follow. One of those questions was whether a contractual agreement to require union dues payment for a certain period of time is enforceable. Recently, in Barlow v. SEIU, Local 668, the Third Circuit Court of Appeals answered that question. And the answer is a clear yes.

In Barlow v. SEIU, Local 668, some of the plaintiffs signed new union membership applications and voluntarily authorized dues deductions from their paychecks. The authorizations were valid from year to year and irrevocable unless the plaintiff provided written notice of revocation within a specified annual window of at least ten days and not more than thirty days before the end of the yearly period. There were other plaintiffs with different deduction authorizations in place, but you get the idea.

Essentially, the Third Circuit held that Janus did not create any new rights for employees who voluntarily elected to become union members. Janus protected the rights of those public sector employees who had never elected to pay union dues or fees of any sort to the union. Further, the court noted that the First Amendment does not provide a right to reject or ignore contractual promises that would otherwise be enforced under state law. Thus, if a public sector employee promises to pay union dues for a certain period of time, Janus will not relieve those employees of that obligation. Further, Janus will not serve as an “out” if the employee has not effectively revoked their authorization for dues deductions.

Why does this matter? Public sector employees who are asked to sign union dues deduction authorization contracts should be sure to read the fine print and understand exactly what they are signing. In addition, public sector employers should consider provisions in collective bargaining agreements that govern dues deductions from employee paychecks and also understand whether a collective bargaining agreement does or does not impact the rights of public sector employees to revoke authorization of dues deductions.

Summary

While 2024 may have been a high-water mark in many ways for organized labor, the celebration was likely short-lived. Although the number of petitions for certification and work stoppages continued to soar in 2024, January 2025 saw the beginning of Trump 2.0. It is very likely that the second Trump board will roll back many of the Biden board’s decisions and rulemakings. It is hard to say when these decisions will be made, but it is very likely that the Trump board will re-evaluate the joint employer standard and the election rules.

Shortly after the inauguration, President Trump removed the former General Counsel Abruzzo, but as of the date of this writing, she has not been replaced. In addition, President Trump removed board member Wilcox, who subsequently filed a legal challenge to the president’s authority to remove her. This suit will likely play out throughout 2025.

As of the date of this article, the board does not have a quorum to take action, and it is unclear when President Trump will appoint additional board members or a new general counsel. We will certainly stay on top of these developments, and you are welcome to follow along on our blog: www.palaborandemploymentblog.com.