Sixth Circuit Rejects NLRB Cemex Framework, Vacates Bargaining Order in Brown-Forman Case

The U.S. Court of Appeals for the Sixth Circuit handed down a ruling on March 6 that marks the first time a federal appeals court has rejected the NLRB's 2023 Cemex framework, striking down a bargaining order against Brown-Forman Corp., the company behind Woodford Reserve Distillery, and sending the case back to the Board to start over on remedies.

The 2-1 decision in Brown-Forman Corp. d/b/a Woodford Reserve Distillery v. NLRB found that the National Labor Relations Board exceeded its authority when it relied on the Cemex standard as the default basis for imposing bargaining orders. The court granted Brown-Forman's petition for review, denied the Board's cross-application for enforcement, vacated the bargaining order, and remanded the matter to the NLRB to reconsider the appropriate remedy under valid legal standards.

The Cemex framework, established through the NLRB's 2023 decision in Cemex Construction Materials Pacific, LLC, had significantly lowered the bar for forcing employers to recognize and bargain with a union. Under Cemex, any unfair labor practice serious enough to require setting an election aside could trigger an automatic bargaining order, regardless of how minor the infraction or how many employees had voted against union representation. The union needed only to show it had majority card support when it originally demanded recognition.

The Sixth Circuit's majority held that this approach was fatally flawed on procedural grounds: the Board had effectively created a sweeping, broadly applicable rule through adjudication rather than the formal rulemaking process. As Rachel Domash and R. Jason Patterson of Franczek P.C. summarized the court's position, the Board may not use adjudication to announce sweeping policy changes untethered from the specific facts of a case or necessary to resolve the dispute before it.

Critically, the Sixth Circuit did not let Brown-Forman off the hook on the underlying conduct. The court agreed that substantial evidence supported the Board's findings that the company's pre-election activity violated federal labor law and reasonably tended to coerce employees. The dispute came down entirely to remedy. The court described the bargaining order as an "extraordinary remedy" and declined to enforce it because it rested solely on the Cemex standard. The question now before the NLRB on remand is whether a bargaining order can be justified under the traditional Gissel standard, or whether a rerun election is the appropriate path.

Under Gissel, the longstanding Supreme Court precedent that predates Cemex, bargaining orders remain available but only when employer misconduct is so severe that conducting a fair election would be unlikely. That is a considerably higher threshold than what Cemex required.

The ruling's direct reach is limited to the Sixth Circuit's four states: Kentucky, Michigan, Ohio, and Tennessee. Cemex remains binding Board precedent everywhere else unless other circuits follow suit or the NLRB itself reverses course. That second possibility carries real weight: a newly reconstituted, Republican-majority Board may already be positioned to revisit and potentially overturn Cemex, according to analysis from Squire Patton Boggs.

Employers operating outside the Sixth Circuit should not read the decision as a free pass. The Board retains authority to issue bargaining orders under other legal theories, and the Sixth Circuit specifically reaffirmed that significant wage increases, new benefits, or other workplace changes announced during an organizing campaign can still constitute unlawful interference with employee rights. Lyndsey Almeida of Fisher Phillips noted the ruling offers employers both reassurance and a continuing obligation to carefully evaluate labor-relations decisions during organizing campaigns.

For employers facing organizing activity nationally, the Brown-Forman decision nonetheless opens a new avenue: Squire Patton Boggs analysts concluded the ruling paves the way for employers across the country to challenge NLRB-imposed bargaining orders issued under Cemex, even in circuits where the framework has not yet been tested in court.