Written by James J. La Rocca from Hunton Andrews Kurth LLP on January 31, 2025
Developments at the National Labor Relations Board (Board or NLRB) have made all employers–especially retailers–more vulnerable to unionization than ever.
Last November, the Board issued two blockbuster decisions that seek to strip employers of their rights to speak to employees about unionization: Amazon. com Servs., LLC, 373 NLRB No. 136 (2024) and Siren Retail Corp. d/b/a Starbucks, 373 NLRB No. 135 (2024). The decisions were historically significant, together overturning about 120 years of Board law precedent.
The decisions build on changes in recent years and go a long way toward eliminating the biggest obstacle facing unions during an organizing drive: employees who are informed about unions.
Although a new administration occupies the White House soon, it remains unclear whether reversing the pro-labor trends in Board rulings will be a priority of the new administration, and, if so, to what degree. In this new year, it would be prudent for retailers to prepare for the worst while hoping for the best.
The Board drastically curtailed employers’ rights to hold mandatory group meetings with employees to address unionization
In Amazon, the Board decided that employers no longer have the right to hold mandatory group meetings with employees to address unionization. The decision is of monumental importance. Since the US Congress added a free speech provision to the National Labor Relations Act (Act or NLRA) in 1947, employers have freely exercised the right to speak to employees about unionization, particularly when there is a union organizing drive afoot. Absent these meetings, employees are left to decide whether to unionize based on inaccurate and/or incomplete information provided to them by unions.
As part of the Board’s decision in Amazon, the NLRB set forth “safe harbor” guidelines for employers to follow if they wish to discuss unionization with a group of employees. According to the guidelines, employers should provide employees the following assurances “reasonably in advance” of any such meeting and be sure to follow through with these assurances: (1) “[t]he employer intends to express its views on unionization at a meeting at which attendance is voluntary;” (2) “[e]mployees will not be subject to discipline, discharge, or other adverse consequences for failing to attend the meeting or for leaving the meeting;” and (3) “[t]he employer will not keep records of which employees attend, fail to attend, or leave the meeting.”
The Board’s decision applies prospectively.
The Board placed restrictions on employer statements to employees about how employees’ relationships with management can be adversely impacted in a unionized environment
A few days earlier, in Starbucks, the Board rejected employers’ rights to tell employees that employees’ relationships with management can be adversely impacted if the employees unionize unless that statement is “carefully phrased on the basis of objective fact to convey an employer’s belief as to demonstrably probable consequences beyond its control.” The NLRB opined:
When an employer makes a statement that contradicts [the NLRA] by asserting that an existing practice of permitting individual employees to address issues with management must end if employees choose union representation, that statement amounts to an unlawful threat of retaliation that an employer may end existing practices, “solely on his own initiative.”
A practical consequence of the decision is that, for the first time in nearly 40 years, employers risk a violation of the Act for making basic statements to employees along the following lines: “if you unionize, you may need to raise workplace issues with your union instead of me directly.” These kinds of statements are not only common during union organizing drives, but (contrary to the Board’s opinion) they align with the NLRA. They also reflect the realities of working in a union environment and can be important for employees to understand before deciding whether to elect a union as their exclusive collective bargaining representative.
Like the Amazon decision, this decision applies prospectively.
The decisions in Amazon and Starbucks build on changes in recent years that already heavily tilt the playing field in favor of unions
The Amazon and Starbucks decisions build on the following recent changes that have already set a favorable stage for union organizing.
- The resuscitation of the “micro unit” standard, which makes it easier for a union to cherry-pick the unit of employees to unionize. Am. Steel Constr., Inc., 372 NLRB No. 23 (2022).
- A return to a “quickie” election process, which expedites the time between the filing of an election petition with the NLRB–which is when many employers first learn about a union organizing drive–and the election itself. 88 Fed. Reg. 58076 (2023).
- Novel paths by which a union can become the exclusive collective bargaining representative of employees if a union secures signed authorizations from a majority of employees in an effectively unregulated setting, and an employer does not voluntarily recognize the union. Cemex Constr. Materials Pacific, LLC, 372 NLRB No. 130 (2023). With such authorizations, the Board now can certify a union: (1) without even affording employees an opportunity to vote if an employer fails to file a petition for an election within 14 days of receiving a union’s demand for recognition and the union does not file a petition in that timeframe; or (2) if employees vote against the union and an employer commits an unfair labor practice that is less than the egregious conduct historically necessary to deny employees a new election.
The Board’s recent rulings are subject to challenge and reversal, particularly in light of the new administration, but we don’t know to what extent or when
It is not clear whether the Board’s recent pro-union rulings will stand the test of time. They can be subject to reversals by federal appellate courts or the NLRB itself under the new administration.
President Trump already has started to shake things up at the Board. On his first day in office, he named the lone Republic Board member (Marvin Kaplan) the agency’s Chairman. During his second week, President Trump terminated the current general counsel of the Board, Jennifer Abruzzo, who had consistently urged the NLRB to implement drastic pro-union changes. Trump appointed an acting general counsel (Jessica Rutter, who previously held other positions at the agency, including deputy general counsel) to hold the position pending the installation of a replacement whom he nominates for the US Senate’s consideration. Trump also terminated one of the two Democratic Board members (Gwynne Wilcox) in the middle of her term, leaving the Board with just two members for now (Chairman Kaplan and member David Prouty). No president has previously terminated a Board member and the action likely will face legal challenge. For now, this leaves the Board–which consists of five Board member seats–without a quorum of at least three members necessary for the Board to exercise its delegated authority. The agency’s regional offices still can continue to operate, but their actions may be limited. Trump now has an opportunity to nominate three Board members to the currently vacant seats and give Republicans majority control of the Board.
Even with these and additional anticipated changes in NLRB leadership, it remains unclear when new leaders would take office, the extent to which they would be willing to better balance the union organizing process and when any such balancing would take effect. In a surprise to many, Trump has nominated Lori Chavez-DeRemer to head the US Department of Labor. As a member of the US House of Representatives, Chavez-DeRemer supported the Protecting the Right to Organize (PRO) Act, legislation that would even more dramatically open the door to union organizing than the current Board’s actions have. So Trump’s Board nominations could be more union friendly than many anticipate.
Union organizing is on the rise and, in a sign of the times, the rulings in Amazon and Starbucks concerned retail companies
Irrespective of any changes to the union organizing process, there has been a recent surge in union organizing and that very well may continue even with a less union-friendly Board at the helm. According to NLRB statistics, the agency received 3,286 election petitions last fiscal year (covering October 1, 2023, to September 30, 2024), a 27 percent increase from the prior year. Gallup has reported that Americans’ approval of labor unions now hovers around 70 percent, a significant increase from 15 years ago when the percentage was less than 50.
Retailers should take note that this calendar year, they continued to be among union organizing targets, some for the first time. Unions have garnered headlines in their efforts to organize Apple, Barnes & Noble, Costco, H&M, Peet’s Coffee, Starbucks, The GAP, Trader Joe’s and Walgreens, to name a few.
There are measures retailers can and should take now
With an increased risk of union organizing, there are actions retailers can take to help insulate themselves. Some questions to consider include the following:
1. Are any of your stores more vulnerable to an organizing drive than others? Are there certain departments and/or employee groupings that are most vulnerable? Are there actions you can take now to reduce those vulnerabilities?
2. Are there steps your company can take now to counter a union’s efforts to cherry-pick a voting unit?
3. Do your store managers understand the role they play in protecting your organization from union organizing? Do they know how to detect union activity and notify the appropriate people at your company? Are you confident they can effectively and lawfully respond to questions employees may ask about unions?
4. Is your organization prepared to handle strikes, walkouts, unfair labor practice charges and other potential job actions? Are there other entities that will be impacted/should be involved (e.g., other tenants, property owners, local police)?
5. How would members of your management team respond to a union demand for recognition? Is your company prepared to timely file a petition for an election with the NLRB?
6. Does your organization have a position on unions? How will you communicate any such position to employees? When will you communicate such position? If you’ve had a strategy in place, does it need to be reconsidered in light of the Board’s new restrictions on employer speech?
7. How will your company respond to media inquiries about union activity? What about unflattering news articles containing incorrect information about your organization’s working conditions? Does it make sense to proactively communicate with shareholders?
There was some good news last year…
There were some positive labor law developments for employers, including retailers, last year. Perhaps most notably:
- The Board dismissed an appeal to a federal appellate court seeking to reverse a lower court decision that vacated a joint employer rule promulgated by the NLRB that would have made it much easier for the Board to hold one entity liable for the unfair labor practices committed by another. NLRB v. Chamber of Commerce of U.S. of Am., No. 2440331 (5th Cir.).
- In Starbucks Corp. v. McKinney, 602 U.S. 339 (2024), the Supreme Court of the United States decided that the traditional standard for obtaining preliminary injunctive relief applies to the Board when it seeks injunctive relief in federal court, and not some compromised standard that entitles the agency’s arguments to deferential treatment. The decision is favorable to employers to the extent a pro-union NLRB, like the current one, seeks injunctive relief against employers based on legitimate business decisions they make amid a union organizing drive. This has been a tactic the current Board general counsel espoused throughout her tenure.
- The Supreme Court has signaled that it may be inappropriate for courts to apply special agency deference to NLRB decisions. In a non-labor case, Loper Bright Enterprises v. Raimondo, 603 U.S. 369 (2024), the Supreme Court reversed Chevron, USA, Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984) and explained that courts need not defer to an agency’s interpretation of ambiguous statutory language. Since then, the Supreme Court has remanded two labor cases back to lower courts, asking them to reconsider their decisions in light of Loper Bright. These cases are Hospital Menonita de Guayama, Inc. v. NLRB, No. 24-138 (U.S.) and United Natural Foods, Inc. v. NLRB, No. 23-558 (U.S.). Absent special deference, the Board will be held more accountable by courts for their decisions.
Conclusion
We urge retailers to let the adage “an ounce of prevention is worth a pound of cure” ring loud in the new year and guide their approach to labor relations. Labor relations counsel can assist retail employers in raising awareness within management of the new dynamics, and adjusting labor relations programs to meet the new challenges.
