Under the NLRA, an employer that wants to challenge a union certification in court has a key mechanism to do so: To refuse to bargain while seeking judicial review. For over five decades, a 1970 decision, Ex-Cell-O, has protected that employer right while holding that “make-whole” remedies for doing so would “exceed the Board’s statutory powers.” It further followed that a suitable remedy would be an order to bargain, not a financial penalty.
Fast forward to 2021, and Biden-era NLRB General Counsel Jennifer Abruzzo felt differently, to put it mildly. The Board then intended to cement her guidance with a decision but ultimately failed to do so. This is a complicated subject, but let’s discuss where the current Board landed.
A Decision That Protected the Right to Fight
The Ex-Cell-O case began with a UAW election, which was contested by the employer, at an Indiana plant. The process of refusing to bargain generally triggers a ULP charge, which happened here.
Accordingly, the Board declined to punish the employer for exercising this legal right, and it rejected make-whole remedies. The decision also included an argument that such remedies would be “so speculative” that they’d amount to the “imposition of a penalty.”
Abruzzo’s Overreach and the Biden Board’s Shortfall
When Jennifer Abruzzo began her NLRB tenure in 2021, she issued memo GC 21-06, “Seeking Full Remedies,” in which she forecast her aggressive plan to expand remedies for ULP charges as defined under Section 8 of the NLRA. She specifically targeted Ex-Cell-O for reversal for “declining to provide a make-whole compensatory remedy for failures to bargain.”
Clearly, Abruzzo’s goal was to intimidate employers away from seeking judicial review of union certification by installing a cost-prohibitive penalty. The Board then proceeded to sever the Ex-Cell-O make-whole issue in multiple cases, including ArrMaz Products (2022) and Hudson Institute of Process Research (2023). Then came Longmont United Hospital, but the Biden Board never carried Ex-Cell-O to Abruzzo’s desired finish line.
The New Board Makes Its Move
The current Board and General Counsel Crystal Carey have made clear that Ex-Cell-O is preserved for the foreseeable future.
First, a Feb. 26 Board decision resolved the severed Longmont issue while Board members James Murphy and Scott Mayer declined to overrule Ex-Cell-O. In doing so, this two-member majority reached the same conclusion as the 1970 decision. They reasoned that make-whole remedies would not only obstruct employers from their legal right to judicial review but also, “It is hard to imagine a better recipe for hindering, rather than encouraging, the parties reaching agreement through collective bargaining.”
Next, General Counsel Crystal Carey confirmed in memo GC 26-03 that Ex-Cell-O sits among the cases that the NLRB “would no longer pursue” for reversal.
The End of the Ex-Cell-O Road, For Now
It should be noted that Murphy and Mayer recently found “no need at this time” to review existing precedent on Thryv make-whole remedies that might apply across a wide swath of ULP cases. That could change, but the Board has ensured that Ex-Cell-O stands intact and protects employers who refuse to bargain while seeking judicial review of union certification.
Of course, this could also change if the Board swings back to a more labor-friendly version, so employers should still seek legal counsel in these cases and keep their eyes open for future developments.
