Sixth Circuit Points Out Limits of NLRB Adjudicatory Rulemaking

In Brown-Forman v. NLRB, the U.S. Court of Appeals for the Sixth Circuit became the first federal circuit court to review the National Labor Relations Board’s recent Cemex decision. The court found the Board engaged in improper rulemaking when it altered decades of precedent by mandating a bargaining order whenever the employer commits unfair labor practices (ULPs) that require setting aside a union election. 

The Precedent: Gissel Bargaining Orders

For nearly 50 years, NLRB v. Gissel Packing Co., 395 U.S. 575 (1969), set the standard to be used by the Board when considering whether to impose a bargaining order after a union lost an election. In Gissel, the Supreme Court held that a bargaining order was an extraordinary remedy, but could be issued when an employer’s ULPs made it unlikely that employees could express their free choice through a re-run election. Under Gissel, a bargaining order could be issued in two circumstances: (i) when an employer engaged in extraordinary ULPs; and (ii) in less extraordinary cases if the employer’s practices still had the “tendency to undermine majority strength and impede the election processes.” 

The Change: Cemex Bargaining Orders

In 2023, the Board changed its approach to issuing bargaining orders. In Cemex Construction Materials Pacific, LLC, 372 NLRB No. 130 (Aug. 25, 2023), the union alleged the employer committed ULPs before, during, and after the “critical period” of an election campaign, at a time when the labor organization held signed authorization cards from a majority of eligible voters. Based on these ULPs, the Board imposed a Gissel bargaining order on the employer. Critical to the Sixth Circuit in Brown-Forman, however, despite resolving the case based upon Gissel, the Board went on to make an “alternative holding” in which it promulgated a new rule for imposing bargaining orders.

As previously reported, the new Cemex bargaining order rule held that bargaining orders were no longer to be considered an extraordinary remedy available only when a fair election could no longer be held. Instead, bargaining orders became the de facto remedy whenever an employer commits ULPs that require the “setting aside [of an] election.” In articulating this new approach, the Board reasoned that if the employer’s ULPs prevented a fair election in the first instance, the result “necessarily fails to reflect the uncoerced choice of a majority of employees.” Thus, the Board chose to remedy such situations by relying on the “prior designation of a representative by the majority of employees by nonelection means” and issue a bargaining order. This holding abandoned the 50-year-old Gissel rule, in a case where such a new rule was not necessary to impose an effective remedy.

The Sixth Circuit’s Rejection of Cemex

On March 6, 2026, the Sixth Circuit became the first court of appeals to address Cemex. In a 2-1 decision, the Sixth Circuit held that, although the record supported the finding that the employer committed various ULPs during a union organizing drive, the bargaining order was improper because the Board entered that order “relying solely on the Cemex standard, which was created through an unlawful exercise of adjudicatory authority.” 

The majority explained that Congress empowered the Board with two avenues of policy-making authority: (1) formal notice and comment rulemaking; and (2) adjudication. The Board’s rulemaking authority allows it to create rules necessary to carry out the provisions of the NLRA, and it must exercise that authority consistent with Administrative Procedure Act requirements. The Board must use rulemaking to promulgate rules of general applicability, and may use adjudication only to resolve specific disputes between specific parties, which can then be used as precedent in future cases. These parameters reflect “Congress’s careful and intentional delegation of its legislative powers, establishing guardrails that protect the public’s role in the policymaking process and maintain accountability over agency action.” 

Applying these principles, the Brown-Forman majority rejected the Board’s use of its adjudicatory powers to create the Cemex framework. The majority determined that using adjudication rather than rulemaking to promulgate the Cemex bargaining order rule was improper because: (1) the Board did not consider case-specific facts of the contemporaneous adjudication and instead relied on its general observations that the Gissel rule had proved ineffective over several decades of application; (2) in the Cemex decision itself, the Board relied on Gissel to resolve the parties’ dispute; and (3) the Board did not create the new Cemex standard in furtherance of resolving the parties’ dispute, or to remedy the specific violations at issue. Rather, the Board stated that its new Cemex rule was intended to be a deterrent to future election-related ULPs. Given that the “the Board’s adjudicatory authority is limited to resolving the dispute of the parties that stand before it,” the majority held the Cemex standard was improperly created through adjudication rather than rulemaking. Thus, the court denied enforcement of the Board’s Cemex bargaining order and remanded the case to the Board for further proceedings. 

Impact of the Sixth Circuit’s Decision 

Unless the Board requests en banc review by the Sixth Circuit, or obtains Supreme Court review, the decision will be controlling law within the Sixth Circuit (Kentucky, Michigan, Ohio, and Tennessee). Pursuant to the Board’s doctrine of non-acquiescence, which affects its nationwide jurisdiction, the Board may continue to apply Cemex in future cases unless and until the Supreme Court rejects it.¹

Despite possible non-compliance by the Board, Brown-Forman provides a clear procedural path for employers to challenge Cemex bargaining orders in other circuits in addition to challenging the Cemex decision on its merits. 

Practical Takeaways for Employers 

Here are some practical takeaways for employers: 

• Preserve Arguments Challenging Cemex. Although the Sixth Circuit’s rejection of Cemex bargaining orders is a welcome development for employers, the Board may continue to apply it in future cases. Employers should preserve all arguments that Cemex is wrongly decided, including that it is procedurally infirm, incompatible with the Supreme Court’s Gissel decision, and contrary to the NLRA. 
• The Board Could Bring Cemex Back to Life. It is important to remember that the Sixth’s Circuit’s decision is procedural, not substantive. The Board could revise the Cemex bargaining order rule by imposing it in response to a specific dispute between specific parties. 
• Rely on the Sixth Circuit’s Reasoning in Other Cases. The NLRB occasionally relies on adjudication to impose new rules prospectively and not in response to the specific parties and disputes before it. Employers should evaluate their cases before the Board to determine whether they can challenge such rules based on the Board’s failure to adhere to rulemaking guardrails.
• Continue to Comply with Cemex’s Election Procedures. The Sixth Circuit’s decision did not impact Cemex’s rules regarding union demands for recognition and the possible requirement to file an RM petition in response to same. Although the NLRB recently held there is no timeline for filing RM petitions,² employers should remain vigilant about these requirements.
• Focus on Compliance. Cemex bargaining orders remain a viable remedy outside the Sixth Circuit if the NLRB’s general counsel decides to pursue such a remedy. As always, employers should avoid committing ULPs connected to union organizing activity, whether pre-petition or post-petition. Among other things, employers should consider training their leaders regarding the dos and don’ts during union organizing drives.