We have reported extensively over the last few years regarding the many pro-labor decisions issued by the National Labor Relations Board (“NLRB”), which largely align with General Counsel (“GC”) Jennifer Abruzzo’s expansive prosecutorial agenda (discussed here and here).  However, employers have not sat idly by in response to such rulings.  Rather, employers have availed themselves of their right to challenge these decisions in federal court.  Employers may bring challenges in the circuits where they are headquartered or do business, where the alleged labor law violation occurred, or in the U.S. Court of Appeals for the District of Columbia Circuit. 

Indeed, this confluence of new NLRB precedent and federal court oversight of the NLRB appears very likely to come to a head in the next several months, as there are a number of impactful appeals lining up the dockets, that we plan to watch very closely. 

Below is a brief snapshot of the status of some of these challenges:

  • Cemex (Union Representation Rules):  Cemex Construction Materials Pacific, LLC, is awaiting oral argument in the U.S. Court of Appeals for the Ninth Circuit in the company’s challenge to the NLRB’s landmark ruling from August 2023, 372 NLRB No. 130 (discussed here), which established an easier path for unions to achieve representation. As a reminder, when confronted with a demand for recognition, the Board’s decision in Cemex requires employers to either grant voluntary recognition and bargain with the union or file an RM petition to seek a government-supervised secret ballot election.  This landmark decision established a brand new standard that departed from more than 50 years of precedent.  GC Abruzzo provided guidance on this decision in a Memorandum published in November 2023, which discussed key issues such as the process by which unions can demand recognition and bargaining, how unfair labor practices during the “critical period” for an election may trigger a remedial bargaining order, even with a minor violation, and the standard’s retroactive application.  Although the Ninth Circuit—and potentially, the U.S. Supreme Court—may alter or vacate the watershed Cemex decision, that has certainly not stopped labor unions from taking advantage of the new framework in the meantime, which has established many new collective bargaining relationships that will not be undone, regardless of the outcome of Cemex.   
  • McLaren (Severance Agreements):  Oral argument took place on Tuesday, April 30 in the U.S. Court of Appeals for the Sixth Circuit in an appeal brought by Michigan hospital McLaren Macomb.  The hospital appealed a significant NLRB decision issued in February 2023, 372 NLRB No. 58, which held that broad non-disparagement and confidentiality clauses in severance agreements signed by employees covered by the NLRA violate Section 8(a)(1) of the Act.  After the decision was issued, GC Abruzzo swiftly published a Memorandum to Regional Directors regarding enforcement of the decision.  Her Memorandum instructed, among other things, that the decision applies retroactively, that an employer’s inclusion of a “savings clause” or disclaimer will not save an overbroad provision, and that employers cannot negotiate their way out of compliance with the ruling.
  • Starbucks (10(j) Relief Standard):  On April 23, 2024, oral argument before the United States Supreme Court took place in Starbucks Corp. v. McKinney, U.S., No. 23-367.  In this case, the NLRB Region filed an administrative unfair labor practices complaint against the company, after Starbucks terminated seven employees involved in union-organizing efforts at one of its stores. During the pendency of this ULP charge, the NLRB filed a petition for temporary injunctive relief against Starbucks in the U.S. Court of Appeals for the Sixth Circuit pursuant to Section 10(j) of the National Labor Relations Act (“NLRA”). As previously discussed here, Section 10(j) of the NLRA authorizes the NLRB to seek injunctive relief in federal court to remedy an alleged unfair labor practice while the merits of the underlying case are being litigated.  The Supreme Court will decide the appropriate standard governing Section 10(j) requests for temporary injunctive relief, which, for decades, had been the subject a split among circuit courts (discussed here).  Resolution of this critical issue is particularly important, as GC Abruzzo has made it a priority to seek 10(j) relief. 
  • Lion Elastomers (Protected Activity):  Oral argument was held on Monday, April 29 in Lion Elastomers, LLC v. NLRB, No. 23-60270, in the U.S. Court of Appeals for the Fifth Circuit.  The company appealed a May 2023 NLRB decision, 372 N.L.R.B. No. 83, challenging the Board’s framework for deciding when an employee’s abusive workplace conduct may be characterized as protected activity under the Act.  The Board’s ruling reinstated the use of a trio of context-specific standards to determine whether an employer’s discipline of an employee’s abusive workplace conduct violates the Act in various settings, including when an employee converses or interacts with management in the workplace, when they post on social media and when they are on picket lines. The case pending before the Fifth Circuit involves a complicated procedural history as well, with the NLRB abandoning the legal tests used to support its original decision from 2020, 369 NLRB No. 88, less than a year after the decision was issued, and instead adopting a new standard in General Motors LLC, 369 NLRB No. 127 (2020).  In 2021, the Fifth Circuit granted the NLRB’s unopposed request to remand the case back to the Board to consider whether the new standard under General Motors LLC was applicable. On remand, however, GC Abruzzo argued in a statement of positions that the General Motors LLC standard should be overturned. While Lion Elastomers asked for a chance to respond to the GC’s argument in a reply brief, the Board denied the request.  In its briefing in the instant case, Lion Elastomers took issue with the Board’s rejection of its request, arguing that it violated the company’s due process rights to be heard. 

Takeaways

A reversal of a decision by the NLRB by a federal appeals court is significant with respect to the parties in the underlying case.  However, because the NLRB adopts a policy of non-acquiescence, it typically does not change its own precedent based on an appellate court decision—only a determination by the U.S. Supreme Court or a subsequent decision by the NLRB will definitively change NLRB precedent for the parties in subsequent proceedings. 

We will continue to monitor these important cases as they travel through the federal court system.

Photo of Paul Salvatore Paul Salvatore

Paul Salvatore provides strategic labor and employment law advice to companies, boards of directors/trustees, senior executives and general counsel in such areas as labor-management relations, litigation, alternative dispute resolution, international labor and employment issues, and corporate transactions.

He negotiates major collective bargaining agreements…

Paul Salvatore provides strategic labor and employment law advice to companies, boards of directors/trustees, senior executives and general counsel in such areas as labor-management relations, litigation, alternative dispute resolution, international labor and employment issues, and corporate transactions.

He negotiates major collective bargaining agreements in several industries, including real estate and construction. Paul represents the NYC real estate industry’s multi-employer organization, the Realty Advisory Board on Labor Relations (RAB), and its principal trade organization, the Real Estate Board of New York (REBNY). In 2023, he helped the RAB reach a new collective bargaining agreement with SEIU Local 32BJ, covering 20,000 commercial building employees, enabling the industry to adapt its labor practices to tenants’ post-COVID utilization of office space, including that caused by remote/hybrid work.

Paul has long represented construction employers and developers, such as the Related Companies, Cement League, Association of Master Painters and others. He negotiates Project Labor Agreements (PLA’s), such as for Related (enabling the construction of Hudson Yards), and presently for Gateway Development Corporation (GDC) in building the New York-New Jersey train tunnels, the largest infrastructure project in America. City & State magazine has named him one of the most powerful lawyers in New York for his work in this sector.

Paul also tries arbitrations and litigations, and argues appeals, arising from labor-management relationships. He argued and won before the U.S. Supreme Court 14 Penn Plaza LLC v. Pyett. In a 5-4 decision of importance to employers, the Court held that a collective bargaining agreement explicitly requiring unionized employees to arbitrate employment discrimination claims is enforceable, modifying 35 years of labor law. Unions and employers now negotiate “Pyett clauses” in collective bargaining. He has argued and won federal circuit court cases reversing the National Labor Relations Board’s findings against employers, including in the D.C. and Fifth Circuits.

Paul represents universities and colleges in their labor and employment relations, including in the currently active areas of unionization and collective bargaining with graduate students, undergraduates, athletes and adjunct faculty. Among other schools he has worked with are Yale, Duke, Chicago, Washington University in St. Louis and Caltech. Paul pioneered innovative non-NLRB graduate student union election agreements at Cornell, Brown and Syracuse Universities.

An honors graduate of Cornell’s School of Industrial and Labor Relations (ILR) and the Cornell Law School, Paul served eight years on Cornell’s Board of Trustees, including on its Executive Committee. He subsequently was elected Trustee Emeritus and Presidential Councilor. He presently serves as a Trustee Member of the Board of Fellows of Weill Cornell Medicine, as well as on the Law School and ILR Deans’ Advisory Councils. In 2002, ILR awarded him the Judge William B. Groat prize, the school’s highest honor.

At Proskauer, Paul was elected to its Executive Committee and served as co-chair of its global Labor & Employment Law Department, named during his tenure by The American Lawyer and Chambers USA as one of the premier U.S. practices. He is widely recognized as a leading U.S. labor and employment lawyer in such publications as Chambers Global and USA (Band 1), and Legal 500 (“Hall of Fame”). The National Law Journal selected Paul as one of “The Decade’s Most Influential Lawyers” – one of only three in the labor and employment law field. His peers elected him to the College of Labor and Employment Lawyers.

An active speaker and writer on labor and employment law issues, Paul’s recent publications include “One Dozen Years of Pyett: A Win for Unionized Workplace Dispute Resolution” in the American Bar Association Labor & Employment Law Journal (“ABA Journal”), Volume 36, Number 2 at 257, and “The PLA Alternative in an Increasingly Open Shop New York City Construction Market: The REBNY-BCTC Statement of Principles,” Volume 37 ABA Journal, Number 3 at 415. He is an Adjunct Professor at Cornell Law School, teaching “Current Issues in Collective Bargaining.”

Photo of Joshua Fox Joshua Fox

Joshua S. Fox is a senior counsel in the Labor & Employment Law Department and a member of the Sports, Labor-Management Relations, Class and Collective Actions and Wage and Hour Groups.

As a member of the Sports Law Group, Josh has represented several…

Joshua S. Fox is a senior counsel in the Labor & Employment Law Department and a member of the Sports, Labor-Management Relations, Class and Collective Actions and Wage and Hour Groups.

As a member of the Sports Law Group, Josh has represented several Major League Baseball Clubs in all aspects of the salary arbitration process, including the Miami Marlins, Boston Red Sox, Los Angeles Dodgers, Kansas City Royals, San Francisco Giants, Tampa Bay Rays and Toronto Blue Jays. In particular, Josh successfully represented the Miami Marlins in their case against All-Star Catcher J.T. Realmuto, which was a significant club victory in salary arbitration. Josh also represents Major League Baseball and its clubs in ongoing litigation brought by current and former minor league players who allege minimum wage and overtime violations. Josh participated on the team that successfully defended Major League Baseball in a wage-and-hour lawsuit brought by a former volunteer for the 2013 All-Star FanFest, who alleged minimum wage violations under federal and state law. The lawsuit was dismissed by the federal district court, and was affirmed by the U.S. Court of Appeals for the Second Circuit.

Josh also has extensive experience representing professional sports leagues and teams in grievance arbitration proceedings, including playing a vital role in all aspects of the grievance challenging the suspension for use of performance-enhancing drugs of then-New York Yankees third baseman Alex Rodriguez. Josh also has counseled NHL Clubs and served on the trial teams for grievances alleging violations of the collective bargaining agreement, including cases involving use of performance-enhancing substances, domestic violence issues, and supplementary discipline for on-ice conduct. He has played a key role in representing professional sports leagues in all aspects of their collective bargaining negotiations with players and officials, including the Major League Baseball, National Hockey League, the National Football League, Major League Soccer, the Professional Referee Organization, and the National Basketball Association,.

In addition, Josh has extensive experience representing clients in the performing arts industry, including the New York City Ballet, New York City Opera, Big Apple Circus, among many others, in collective bargaining negotiations with performers and musicians, the administration of their collective bargaining agreements, and in grievance arbitrations.

Josh also represents a diverse range of clients, including real estate developers and contractors, pipe line contractors, hospitals, hotels, manufacturers and public employers, in collective bargaining, counseling on general employment matters and proceedings before the National Labor Relations Board, New York State Public Employment Relations Board and arbitrators.

Josh has also recently served as an adjunct professor at Cornell University’s School of Industrial Labor Relations for the past two years, teaching a course regarding Major League Baseball salary arbitration.

Prior to joining Proskauer, Josh worked for a year and a half at the National Hockey League, where he was involved in all labor and employment matters, including preparations for collective bargaining, grievance arbitration, contract drafting and reviewing and employment counseling. Josh also interned in the labor relations department of Major League Baseball and at Region 2 of the National Labor Relations Board. He was a member of the Brooklyn Law Review and the Appellate Moot Court Honor Society and served as president of the Brooklyn Entertainment and Sports Law Society.

Photo of Ren Morris Ren Morris

Hannah D. Morris is an associate in the Labor Department and a member of the Employment Litigation & Counseling Group.

During her time at Proskauer, Hannah has assisted in litigation and investigation matters involving workplace harassment, discrimination, and retaliation. She also assists employers…

Hannah D. Morris is an associate in the Labor Department and a member of the Employment Litigation & Counseling Group.

During her time at Proskauer, Hannah has assisted in litigation and investigation matters involving workplace harassment, discrimination, and retaliation. She also assists employers in counseling matters, such as drafting employment handbooks and researching workplace policies.

Hannah earned her J.D. from the University of Virginia School of Law. While in law school, she served as a Research Assistant for Professor Richard J. Bonnie working on matters related to juvenile justice. Additionally, she interned for the Office of the Public Defender for Arlington County and the City of Falls Church.

Prior to law school, Hannah was a Teach for America Corps member teaching Fourth Grade in Eastern North Carolina.