6th Circuit’s Cemex ruling opens door to new NLRB precedents

A recent U.S. 6th Circuit Court of Appeals decision striking down a bargaining order against a bourbon distillery not only creates an opportunity for the National Labor Relations Board (NLRB) to rethink its 2023 Cemex ruling that established a new standard for issuing such orders but also raises fundamental questions about whether the Board will change how it establishes or overturns precedents. 

Rulemaking overreach 

In a recent decision, the 6th Circuit struck down a 2024 NLRB order requiring Brown-Forman Corp.—which does business as Woodford Reserve Distillery—to bargain with a Teamsters local. A split three-judge panel said the Board’s landmark 2023 decision in Cemex Construction Materials Pacific LLC, which lightened the standard for when the board will issue bargaining orders, was “rulemaking under the guise of an adjudication,” and therefore the agency could not apply it against Woodford Reserve. 

In a novel but compelling opinion, the 6th Circuit held that the Board overreached with its decision in Cemex because the new bargaining order standard it announced in the case wasn’t crafted to resolve the dispute before it. Instead, the Board used the case—as it traditionally has—to issue a blanket rule based on its general experience with bargaining orders that would deter future violations, an outcome that should be reserved for rulemaking under the Administrative Procedure Act.

Precedent on establishing or reversing precendents