The interim period between the 2024 Presidential election and President-elect Trump’s January 20, 2025, inauguration has been eventful with respect to labor law and the National Labor Relations Board (“NLRB” or “Board”). These developments have largely brought good news for employers and have many looking forward to the expected priorities of the Board during a second Trump administration.
An Immediate GOP-Appointed Board Majority
On December 11, 2024, the lame-duck Senate unexpectedly rejected the re-nomination of the former NLRB Chair and Biden appointee, Lauren McFerran (“McFerran”). While the terms of the Board’s members are usually staggered as not to allow an incoming administration immediate majority control, the defeat of McFerran’s nomination will permit President Trump to swiftly nominate two additional Board members. The Senate will likely confirm Trump’s nominations and promptly hand him a GOP-majority Board, i.e., three of the five members.
In addition to appointing two Board members, Trump is expected to immediately remove President Biden’s General Counsel, Jennifer Abruzzo (“Abruzzo”), and replace her with his own selection. The General Counsel is independent from the Board and is responsible for investigating and prosecuting unfair labor practices cases. Further, the NLRB General Counsel publishes memoranda that outline the key priorities of the agency. Unlike the slower process of overturning Board decisions, Abruzzo’s memoranda and the policy guidance identified therein will likely be rescinded and replaced with the key priorities of Trump’s General Counsel in short order.
The Trump Board’s Expected Reversal of Key Biden Board Decisions
With a likely majority, the “Trump 2.0” Board is expected to soon find opportunities to overturn a number of aggressive pro-union decisions issued by the Biden Board. This could include reversals on a number of key issues important to employers, including:
- Cemex: Union Recognition. Former chair McFerran called the Cemex decision the “most significant” of her Board tenure. Under the Board’s decision in Cemex Construction Materials Pacific, LLC, when faced with a union demand for voluntary recognition based on the alleged support of more than half of the proposed bargaining unit, the employer must either voluntarily recognize the union or it must petition the Board for an election; without a timely petition, the union will be recognized by default and without a secret ballot election. Further, under Cemex, if an employer commits a significant unfair labor practice in the run-up to the election, the Board may impose a bargaining order that requires the employer to recognize and bargain with the union as a penalty. This decision will almost certainly be overruled by Trump’s Board as soon as the opportunity arises. Under the prior standard, an employer is not required to seek a union election; it may “do nothing” and force the union to petition the Board for an election. Further, under the prior standard, the usual remedy for an unfair labor practice during an election campaign was a less severe “re-do” of the election.
- Endurance Environmental Solutions: Waiver of Union’s Right to Bargain. One of the Biden Board’s most significant decisions came only weeks ago in Endurance Environmental Solutions, LLC. The Board imposed a heightened “clear and unmistakable” standard for a union’s waiver of its duty to bargain. The incoming Republican Board is expected to return to the prior “contract coverage” test that makes it easier for employers to take unilateral action by relying on common “management rights clauses” to avoid the duty to bargain with a union over workplace changes.
- Amazon: Captive-Audience Meetings. The Biden Board overturned longstanding precedent going back eighty years and prohibited “captive-audience meetings” in its decision in Amazon.com Services LLC. “Captive-audience meetings” is the term used to describe an employer’s mandatory employee meetings, at which the employer can share its position on unions and unionization. These meetings had been permitted for decades as a lawful exercise of an employer’s First Amendment rights. Trump’s NLRB will likely seek to restore the prior standard that permits employers to hold mandatory meetings during work hours to express their views against unionization efforts.
- Stericycle: Workplace Rules. The Board’s decision in Stericycle, Inc. imposed a high burden for all employers – unionized or not – regarding workplace rules. Under Stericycle, even a seemingly neutral workplace rule (handbook provision, written policy, etc.) is considered presumptively unlawful if an employee can reasonably interpret the rule as coercive or threatening towards the employee’s right to engage in “concerted protected activity,” i.e. the employee’s right to discuss workplace conditions or union activities with others. During Trump’s first term, the Board adopted a more lenient standard for these workplace rules, to which the Board is expected to return. This standard gave significant deference to the legitimate business needs of employers, including maintaining consistent workplace policies.
Uncertain Future Job Security for NLRB Judges
Beyond the expected policy changes of the Board, the Trump administration could see significant changes to the structure and protections of NLRB Administrative Law Judges (“ALJs”).
On December 10, 2024, a federal judge ruled that NLRB ALJs must be removable by the President “at will,” or for any reason. In VHS Acquisition Subsidiary No. 7 v. NLRB, the U.S. District Court for the District of Columbia ruled that the existing protections for ALJs – that they may only be removed “for good cause” – violate the U.S. Constitution. The Judge concluded that these protections undermine the constitutional right of the President to remove an ALJ.
The court’s decision has limited application, for now. The decision aligns itself with the position of the U.S. Court of Appeals for the Fifth Circuit, which reached a similar conclusion related to judges for the Securities and Exchange Commission (SEC), a similarly situated federal agency. However, it contrasts with district court decisions in the Sixth, Ninth, and Tenth Circuits, which approved similar protections for ALJs in other government agencies.
On December 27, 2024, the Third Circuit had the opportunity to weigh in on the constitutionality of insulating ALJs from presidential removal in NLRB v. Starbucks Corporation. The court did not reach the ultimate issue of the constitutionality of the protections because the court determined that it did not have jurisdiction to consider the issue because Starbucks did not raise it before the Board. Further, the court determined that Starbucks did not have standing to bring this constitutional challenge because it could not show that it was injured by the provision it sought to challenge.
While no Court of Appeals has definitively ruled on the constitutionality of the NLRB’s ALJ structure, the district court’s decision in VHS Acquisition Subsidiary No. 7 may equip President Trump (and future Presidents) with the legal support required to remove hostile NLRB ALJs. We expect the issue will ultimately reach the U.S. Supreme Court. Until then, employers faced with an unfair labor practice charge should timely raise a defense that the protections afforded to ALJs are unconstitutional.
What Now?
Employers should stay abreast of the coming changes expected from the NLRB. No matter the administration, the attorneys in Stoll Keenon Ogden’s Labor, Employment & Employee Benefits practice are able to assist employers with questions regarding current Board law and expected changes to determine the appropriate next steps in any labor matter.
Stoll Keenon Ogden’s Labor, Employment & Employee Benefits practice has a proven record of being trusted advisors and effective advocates. We help employers solve their problems through proactive counseling, employee training and, where possible, cost-efficient litigation, including alternative dispute resolution. We know the employment laws thoroughly, and we make it our goal to acquire a comprehensive knowledge of our clients and their business, so we can provide tailored solutions for each of their needs.
