Court rejects NLRB’s Cemex bargaining order standard as improper rulemaking

A three-judge panel from the U.S. Court of Appeals for the 6th Circuit recently held 2 to 1 that the National Labor Relations Board’s (NLRB) Cemex bargaining order framework was improperly established through the NLRB’s administrative unfair labor practice adjudication process rather than formal administrative agency rulemaking. The court vacated the Board’s bargaining order and remanded the case (sent it back to the lower court) for further proceedings. This is the first appellate decision to reject the Cemex standard.

Actions timed to undermine organizing effort

The dispute originated with a Teamsters organizing campaign at the Brown-Forman Corporation’s Woodford Reserve distillery in Versailles, Kentucky. As organizing activity intensified in 2022, the company implemented a $4-per-hour across-the-board wage increase—the second raise that year and the first time it had provided two raises in a single year—along with expanded pay progression benefits and, one week before the election, bottles of bourbon. The union lost the election 45 to 14. 

The NLRB found—and the 6th Circuit agreed—that these actions were unlawful new benefits timed to undermine the organizing effort. The appellate decision centered on the remedy.

Court finds Board’s remedy was rulemaking in disguise