Labor & Employment Law Daily Wrap Up, NLRB NEWS—Board petitions for en banc rehearing of Sixth Circuit decision that it exceeded authority in creating Cemex standard, (May 19, 2026)

By Brandi O. Brown, J.D.

“The Board has, since its inception, primarily used adjudication to set national labor policy... Brown-Forman threatens this process and risks hamstringing the Board’s ability to fulfill its congressional mandate.”

Recently, the NLRB petitioned the Sixth Circuit to rehear, en banc, an appeal in which a panel had previously reviewed the validity of the Board’s Cemex bargaining order standard and, in a 2-1 decision, determined that the Board applied the new standard without sufficient justification, violating the principles of “reasoned decisionmaking.” Because the Cemex standard was created through an improper exercise of the Board’s adjudicatory authority, the panel majority concluded, it could not serve as the basis for a bargaining order. Judge Mathis filed a separate dissenting opinion.

The Board argues:

“Rehearing en banc is warranted because the decision conflicts with precedent from the Supreme Court, this Circuit, and other circuits. Rather than recognize, as the Supreme Court directs, the vast latitude Congress afforded to the Board to create policy through rulemaking or adjudication, the majority imposes procedural limits on that broad discretion. The majority’s errors create an issue of exceptional importance by improperly impinging on the Board’s adjudicative authority, the primary procedure it uses to announce policies under the National Labor Relations Act, 29 U.S.C. §§ 151, et seq.. The Court should find that the Board did not abuse its discretion by promulgating the new bargaining-order framework through adjudication.”

The case below. Employees at a distillery began a union campaign with the Teamsters in February 2022 due to dissatisfaction with pay. Support grew after a minimal $1 raise and no promise of more increases. As union activity intensified, management responded by “debriefing” employees to determine the level of support for the union campaign and then announcing significant new benefits, including a $4/hour raise, expanded pay policies, and more flexible holiday time off.

The employer also held mandatory meetings warning that unionization could limit wage flexibility. After these changes—along with gifts of bourbon before the vote—some employees withdrew union support. The union lost the election and later alleged the employer’s actions were unfair labor practices that interfered with the outcome.

Board process. An administrative law judge concluded that the employer committed unfair labor practices and recommended a cease-and-desist order. The ALJ also recommended issuing a bargaining order that would direct the employer to recognize and negotiate with the union, citing both Cemex Construction Materials Pacific, LLC, and NLRB v. Gissel Packing Co., 395 U.S. 575 (1969) as the standards that support such a remedy. The Board agreed with the ALJ, but it relied solely on the Cemex standard in issuing the bargaining order, explicitly stating that it was not relying on Gissel to issue the order. The employer petitioned for review of the Board’s order.

Below, the Sixth Circuit held that the Board’s factual findings regarding the employer’s unfair labor practice violations were supported by substantial evidence, and that the Board properly considered pre-petition conduct. However, the appeals court panel denied the Board’s petition for enforcement because, in issuing the bargaining order against the employer, it relied solely on the Cemex standard, which the panel majority concluded was created through an unlawful exercise of adjudicatory authority.

The majority held that the Board exceeded its adjudicatory authority because the Cemex standard, which it deemed a “hard-and-fast rule,” was neither derived “from the case-specific facts” nor created “in furtherance of resolving the parties’ dispute.” Because part of the Board’s fashioned remedy was deemed invalid, the court remanded the entire order.

In its petition, the Board argues that the panel majority contravened controlling law by holding that it had exceeded its adjudicatory authority, arguing that none of the cases cited by the majority limited its authority in that way, including the three U.S. Supreme Court cases upon which it relied.

Panel misinterpretations. However, the Board argued that the panel majority misinterpreted those High Court decisions. It explained:

“The trio of Supreme Court cases and the circuit-court decisions issued in their wake establish the Board’s broad discretionary power to choose adjudication or rulemaking. The majority decision, which spies only limitations and restrictions on adjudicative authority, contravenes long-standing precedent and allows the majority to improperly cabin the Board’s “massive” authority. In doing so, Brown-Forman presents a question of exceptional importance. The Board has, since its inception, primarily used adjudication to set national labor policy, in part because, unlike other agencies, the Board itself cannot initiate action; it depends entirely, in the first instance, on third-party filings, such as election petitions or unfair-labor-practice charges. The Board therefore frequently discovers issues only in the context of particular cases. Brown-Forman threatens this process and risks hamstringing the Board’s ability to fulfill its congressional mandate.”

The Board also argues that the majority was wrong to conclude that the Cemex standard was not based on case-specific facts or created to resolve the parties’ dispute. “The majority justifies the ‘rarity’ of departing from deference to agency choice between adjudication and rulemaking by casting Cemex as an ‘anomaly,’ but in doing so it mischaracterizes Cemex.”

“A plain reading of the Board’s initial order in Cemex and the order denying reconsideration shows that the majority incorrectly characterized the standard as a generalized ‘hard-and-fast,’ ‘rigid,’ ‘default’ rule or ‘formula.’” Instead, the Board argues in its petition, “Cemex requires a fact-intensive inquiry for a bargaining order that considers various factors, including the strength of the majority-status showing and the nature and impact of violations.”

The cases are Nos. 24-2107 and 25-1060.

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