Written by: Michelle D. Wyrick
In Brown-Forman Corp. v. NLRB, Nos. 24-2107/25-1060, the Sixth Circuit reviewed a National Labor Relations Board (NLRB) order requiring Brown-Forman’s Woodford Reserve facility to bargain with the Teamsters Local 651 after the union lost a secret-ballot election. The NLRB upheld a finding that Brown-Forman had committed unfair labor practices and interfered with its employees’ efforts to unionize. The NLRB then issued a bargaining order based solely on the standard articulated in Cemex Constr. Materials Pac, LLC, 2023 WL 5506930 (2023), which required it to issue a bargaining order as the default remedy if it set aside an election. Upon review, the Sixth Circuit held that Cemex could not support a bargaining order because Cemex was an improper exercise of the NLRB’s adjudicatory authority.
Background
In the midst of a union campaign sparked by employee dissatisfaction with wages, Brown‑Forman announced a $1-per-hour across-the board pay raise. Upon learning that support for the union appeared to be growing, Brown-Forman announced an additional $4-per-hour across‑the‑board raise and adjustments to employee benefits, including holiday vacation flexibility. According to the Sixth Circuit, some employees viewed the “pay raise as a ’bribe’ worth taking.” Management also held mandatory meetings emphasizing that unionization could limit the company’s discretion to adjust wages, and it gave employees bottles of bourbon a week before the election. These actions were deemed to be unfair labor practices that interfered with the union election.
The Legal Framework and the NLRB’s Approach
Under long‑standing Supreme Court precedent in NLRB v. Gissel Packing Co., 395 U.S. 575 (1969), a bargaining order is an extraordinary, last‑resort remedy appropriate only when an employer’s unfair labor practices make a fair rerun election unlikely and when the union, at one point, had a majority of the employees’ support as evidenced by union authorization cards. Under Gissel, the NLRB can issue a bargaining order if other remedies (like ordering a new election) are not sufficient to protect the employees’ choice to unionize. In 2023, the NLRB’s Cemex decision announced a new approach: automatically defaulting to the issuance of a bargaining order when an employer’s unfair labor practices interfered with a free, fair, and timely election. The Cemex standard does not consider whether a new, fair election could occur. In Brown‑Forman’s case, the Board relied solely on the standard announced in Cemex and declined to analyze whether a bargaining order would be appropriate under Gissel.
The Sixth Circuit’s Decision
The Court upheld the NLRB’s unfair labor practice findings as supported by substantial evidence and approved consideration of related pre‑petition conduct. But it held that Cemex was created through an improper exercise of adjudicatory authority because it announced a generally applicable, forward‑looking standard not derived from or necessary to resolve the case before the agency. The new standard announced in Cemex was not remedial in nature. It was designed to deter future, hypothetical preelection violations of the National Labor Relations Act. In short, “the new standard was rulemaking under the guise of an adjudication.” The NLRB must announce new rules in the Federal Register, not in the context of an adjudication. Because the Board’s bargaining order against Brown‑Forman rested solely on Cemex, the court refused enforcement and remanded for proceedings consistent with its opinion.
The Decision’s Impact Going forward, in the areas covered by the Sixth Circuit, Cemex cannot be used to issue a bargaining order if an employer commits an unfair labor practice that arguably interferes with a union election. The stricter Gissel standard, which requires a showing that a fair rerun is unlikely and that a bargaining order is needed to protect employees’ choices, remains the law.
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