On March 6, 2026, the U.S. Court of Appeals for the Sixth Circuit issued a significant decision in Brown-Forman Corp. v. NLRB, becoming the first federal appellate court to invalidate the National Labor Relations Board’s Cemex bargaining order standard. The decision has significant implications for employers facing union organizing campaigns and signals potential limits on the NLRB’s ability to impose bargaining orders as a remedy for unfair labor practices.
Background
This case arose from a union organizing campaign at Brown-Forman Corporation’s Woodford Reserve distillery in Versailles, Kentucky. After employees began contacting the International Brotherhood of Teamsters about unionization, Brown-Forman announced several changes to employee compensation, including a $4-per-hour across-the-board wage increase, expanded pay progression and merit-based salary increases, and modified vacation policies. Brown-Forman also gifted employees bottles of bourbon one week before the election. When the election was held, the union lost, with only 14 employees voting in favor and 45 voting against. The NLRB found that Brown-Forman committed unfair labor practices by conferring these benefits to discourage unionization. Relying solely on its newly announced Cemex standard—rather than the longstanding Gissel framework—the Board issued a bargaining order requiring Brown-Forman to recognize and negotiate with the union despite the failed election.
The Court’s Holding
The Sixth Circuit granted Brown-Forman’s petition for review and denied enforcement of the Board’s bargaining order. While the court affirmed the Board’s unfair labor practice findings, noting that internal emails revealed anti-union motivations, it held that the Cemex standard itself was invalid because it was improperly promulgated through adjudication rather than notice-and-comment rulemaking.
Invalidated: The Cemex Standard
The court’s central holding was that the Cemex standard could not serve as the basis for a bargaining order because it was created through an improper exercise of the Board’s adjudicatory authority. Under Cemex, the Board replaced the Gissel framework that governed bargaining orders for over 50 years with a new default rule: if an employer commits unfair labor practices that require setting aside an election, the Board will issue a bargaining order without analyzing whether a fair future election could be held.
The court held that this represented impermissible rulemaking through adjudication for two primary reasons. First, the Cemex standard was not derived from the case-specific facts before the Board. The court emphasized that the Cemex Board had already concluded that the existing Gissel standard was sufficient to resolve the dispute before it, yet then announced a new general rule based on “decades of experience” rather than the particular case. Second, the standard was not created to resolve the parties’ dispute but rather to deter future, hypothetical employer misconduct. The Board itself acknowledged that “the application of the revised standard in this case results in neither finding any additional violation of the Act nor any additional remedial obligation.” The court concluded this forward-looking, deterrence-based purpose exceeded the Board’s adjudicatory authority and required formal rulemaking procedures.
Implications for Employers
- Bargaining Orders Remain Available Under Gissel.
The decision does not eliminate bargaining orders as a remedy for employer unfair labor practices. The Gissel standard remains valid, and employers who commit serious unfair labor practices may still face bargaining orders if the Board determines that a fair election is unlikely. However, under Gissel, the Board must make a case-specific finding that traditional remedies are insufficient before imposing a bargaining order.
- Circuit Split Potential.
The Sixth Circuit is the first appellate court to invalidate the Cemex standard. Other circuits (such as the Ninth Circuit) may reach different conclusions, and the Board may seek further review or attempt to promulgate a similar standard through notice-and-comment rulemaking.
- Unfair Labor Practice Liability Remains.
Employers should note that the court affirmed the Board’s unfair labor practice findings. Conferring benefits, wage increases, or gifts during an organizing campaign—particularly when motivated by anti-union intent—remains unlawful. The case has been remanded for the Board to analyze remedies consistent with its proper statutory authority.
- Administrative Procedure Challenges Could Gain Traction.
The decision reflects a broader judicial willingness to scrutinize agency policymaking procedures in the post-Loper Bright era. Employers may have grounds to challenge other Board policies that were announced through adjudication rather than rulemaking.
Potential NLRB Responses
The timing of this decision is significant. The NLRB’s composition has changed since Cemex was issued in 2023, with a new General Counsel and Board members who may take a different view of labor policy.
The current Board could take affirmative steps to resolve the issue: it could overrule Cemex on its own initiative and formally return to the Gissel standard nationwide, or it could issue a new rule through notice-and-comment rulemaking that codifies a return to Gissel or adopts a modified standard addressing the Sixth Circuit’s procedural concerns.
Alternatively, the Board’s response may depend on the pending Ninth Circuit appeal. The Cemex case heard oral argument in October 2024, and the panel appeared divided, with some judges expressing skepticism toward the employer’s arguments and others voicing concerns that closely parallel the Sixth Circuit’s reasoning. If the Ninth Circuit upholds Cemex, a circuit split would exist, potentially teeing the issue up for Supreme Court review. If the Ninth Circuit instead invalidates Cemex, the Board may face mounting pressure to abandon the standard. The Board could also act proactively before the Ninth Circuit rules in an attempt to control the outcome.
Linden Lumber
Notably, the Cemex decision had two major components: the bargaining order standard (replacing Gissel) and the RM petition requirement (overruling Linden Lumber Division, Summer & Co. v. NLRB, 419 U.S. 301 (1974)). Under Linden Lumber, an employer presented with authorization cards purportedly signed by a majority of employees could reject the cards and insist on a Board-conducted election without filing its own petition. Cemex changed this, requiring employers to file an RM petition within two weeks of a union’s demand for recognition or face a bargaining order. The Sixth Circuit explicitly declined to address this aspect of Cemex because the union in Brown-Forman had petitioned for an election, so the RM petition requirement was not at issue. Accordingly, if the Board revisits Cemex, it could separately reconsider whether to restore Linden Lumber, though Brown-Forman does not compel that result.
The Brown-Forman decision represents a significant check on the NLRB’s efforts to expand the availability of bargaining orders. While the ultimate fate of the Cemex standard may depend on decisions from other circuits or potential Supreme Court review, employers in the Sixth Circuit can now challenge bargaining orders issued under Cemex. Employers should continue to consult with labor counsel before implementing any changes to compensation or benefits during union organizing campaigns, as unfair labor practice liability remains a serious concern.
