Sixth Circuit Becomes First Federal Appeals Court To Reject NLRB Cemex Ruling

On March 6, 2026, the U.S. Court of Appeals for the Sixth Circuit issued a significant decision limiting the National Labor Relations Board's (NLRB or the Board) ability to impose bargaining orders under its recently announced Cemex framework. In Brown-Forman Corporation d/b/a Woodford Reserve Distillery v. National Labor Relations Board, the court held that the Board's Cemex standard was unlawfully created through adjudication and cannot serve as the basis for ordering an employer to recognize and bargain with a union.

Background

Employees at Brown-Forman's Woodford Reserve distillery in Kentucky began organizing in 2022 after expressing dissatisfaction with their compensation package. When it appeared the union was succeeding in its efforts to persuade employees to vote for representation, Brown-Forman implemented several compensation-related changes, including a $4 per hour across-the-board wage increase, modifications to benefit policies, and the distribution of bottles of bourbon, intended to get employees to vote against unionization.

Not surprisingly, the union lost the election. However, the union challenged the results and alleged Brown-Forman had committed unfair labor practices that interfered with employee votes by giving the compensation enhancements shortly before the election; therefore, the election should be set aside, Brown-Forman should be required to recognize the union as the employee's representative and should also be required to bargain with the union over terms and conditions of employment. The Board agreed and ordered Brown-Forman to recognize and bargain with the union — despite it having lost the election.

The Sixth Circuit's Decision

The Sixth Circuit upheld the Board's findings that Brown-Forman committed unfair labor practices by granting wages, benefits, and gifts during the organizing campaign in a manner that reasonably tended to interfere with employee free choice; however, it rejected the Board's implementation of a bargaining order because it was based exclusively on the Cemex standard and remanded the case to the Board to determine whether a Gissel bargaining order was supported or if a second election should be held. The court said the Cemex standard was invalid because it was created through an improper exercise of the Board's adjudicatory authority. According to the court:

• The Cemex standard represented a sweeping policy change that displaced more than 50 years of Supreme Court-approved precedent under NLRB v. Gissel Packing Co.

• The Board did not derive the Cemex standard from the specific facts of the case in which it was announced, nor was it necessary to resolve that dispute.
• Instead, when it created the new Cemex standard, the Board effectively engaged in rulemaking without following the notice-and-comment procedures required by the Administrative Procedure Act.

Practical Implications

The decision has immediate and potentially far-reaching consequences:

• First, It Limits Cemex: Employers in the Sixth Circuit (Kentucky, Michigan, Ohio, and Tennessee) now have strong grounds to challenge bargaining orders that rest on the Cemex framework or standard. Further, employers throughout the country have a solid framework for arguing against bargaining orders issued by the Board in other circuits as well, if based on Cemex.
• Second, It Renews Recognition of the Importance of Gissel: Whereas Cemex had stated that anyunfair labor practice during the lead up to an election would result in a recognition and bargaining order, now, as was the case under Gissel, the Board must first determine whether the unfair labor practice makes it unlikely that a second election would be fair. Only if a second election would not be fair could the Board order recognition and bargaining, as the Supreme Court recognized under Gissel. By reverting to the Gissel standard, the Sixth Circuit — as had been the case with the Supreme Court — recognized that a secret-ballot election remains the preferred manner for determining unionization.
• Third, It Confirmed that Unfair Labor Practices in Lead Up to Elections Are Still Not Permitted: The court's rejection of Cemex does not diminish the Board's ability to find unfair labor practices or to set aside elections; and, as such, employers should remain cautious about wage increases, benefit changes, or other actions during organizing campaigns.
• Fourth, It Potentially Sets the Stage for Supreme Court Review: Because this is the first appellate decision directly addressing the validity of Cemex, if there are differing outcomes in other circuits, Supreme Court review may become necessary.

Conclusion

While the Sixth Circuit's decision curtails the Board's ability to impose recognition and bargaining orders under Cemex, it leaves intact the Board's authority to remedy serious employer misconduct under longstanding Supreme Court precedent. Employers facing organizing activity should continue to carefully evaluate labor-relations decisions during campaigns and stay alert to further developments as other courts weigh in on Cemex.

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