Less than one month after the National Labor Relations Board (“NLRB” or the “Board”) issued its seminal decision in Cemex Construction Materials Pacific, LLC, 372 NLRB No. 130 (2023), which reversed over 50 years of Board precedent, an NLRB administrative law judge applied Cemex and ordered a Massachusetts cannabis company to bargain with a union. Unlike the never-ending wait for federal cannabis legalization, the NLRB wasted no time finding a case to apply its game-changing Cemex decision to a Salem, Massachusetts cannabis dispensary that was the subject of a union organizing campaign.

The Decision

In I.N.S.A., Inc. and United Food and Commercial Workers International Union, Local 1445, the employer received a letter signed by a majority of the store employees demanding that it recognize and bargain with the Union as their chosen representative. Four days later, the Union petitioned for an election, which the Union eventually lost. During the period after the Union presented the employer with the letter demanding recognition and the election, the Union alleged that the employer engaged in the following unlawful conduct:

• holding mandatory meetings to discourage employees from supporting the Union;
• soliciting employee grievances, and promising employees increased benefits and improved terms and conditions of employment if they refrained from supporting the Union;
• having its owners and high-level managers make unprecedented and repeated visits to the store, creating the impression of surveillance;
• threatening employees with various adverse consequences if the Union were to win the election;
• informing employees that they would not receive performance reviews and related wage increases until after the election;
• restricting employees from talking about unions while allowing employees to discuss other, non-work-related topics;
• discriminatorily enforcing work rules and policies;
• disciplining and discharging employees because they engaged in union activities; and
• implementing a wage increase for all employees following the election.

While the list of unfair labor practices allegedly committed by the employer may have been long, it contained allegations commonly made during the course of an organizing campaign.

The General Counsel and the Union both argued that, based on the above conduct, there is only a slight possibility of a fair re-run election. Because a majority of unit employees have already expressed their sentiments regarding representation through their signatures on the demand letter and on the authorization cards, the Board should issue a bargaining order to protect their rights. Following a multi-day hearing, the Administrative Law Judge issued his decision in which he stated:

About a month ago, the Board issued Cemex Construction Materials Pacific, LLC, 372 NLRB No. 130 (2023), setting forth a new standard for determining whether an employer’s unfair labor practices in response to an organizing effort require setting aside an election and issuing a remedial bargaining order. For the reasons stated below, I conclude Respondent committed certain serious unfair labor practices shortly after the petition was filed, that, under Cemex, require setting aside the results of the election and issuing a remedial bargaining order.

So, What Just Happened?

The Administrative Law Judge retroactively applied the new standard that the Board created in August 2023 in the Cemex case to an election that took place in May 2022 to invalidate the employer’s election win.  Under the Board’s standard that was in place prior to Cemex, the Board could only order an employer to bargain with a union in the rarest of cases involving egregious unfair labor practices.

The ALJ’s decision is a recommended decision that will almost certainly be appealed by the employer to the Board within the next few weeks. However, it is unlikely that the employer is going to get any relief from the very Board that issued the Cemex decision just last month. Therefore, we can expect this case to ultimately find its case to the federal Court of Appeals (absent some type of resolution).

What Does This Mean for Employers?

An already tough labor environment just got that much tougher as the NLRB continues its push to encourage union organizing. This case provides the first glimpse as to how the NLRB’s administrative law judges plan to apply the Cemex standard, and it is not pretty for employers. This case also demonstrates why it is critical to train your supervisors regarding labor relations issues to avoid unfair labor practice allegations and to proactively get in front of union organizing.