NLRB Reaffirms Ex-Cell-O — No Make-Whole Remedy for Test-of-Certification Refusals

The NLRB declined to overrule Ex-Cell-O Corp., 185 NLRB 107 (1970), preserving a 56-year-old framework that limits remedies when an employer refuses to bargain to test a union’s certification.

The decision came in Longmont United Hospital. Biden’s General Counsel, Jennifer Abruzzo, had urged the Board to overrule Ex-Cell-O and authorize a new monetary remedy requiring employers to compensate employees for the “lost opportunity to bargain.” That would have imposed economic damages in test-of-certification scenarios where an employer lawfully refuses to bargain to get judicial review.

The two-Republican majority — Members James Murphy and Scott Mayer — rejected the request and offered four reasons for keeping Ex-Cell-O intact:

1. Statutory structure. The NLRA’s scheme contemplates that employers must refuse to bargain to obtain judicial review of certification. Imposing damages would disrupt that structure.

2. Section 8(d) limits. The NLRA bars the Board from imposing substantive contract terms. Monetary remedies would indirectly do just that.

3. Speculative damages. Calculating hypothetical lost wages or benefits would require speculation about what bargaining would have produced.

4. Impact on bargaining. Monetary remedies could improperly insert the Board into the economic aspects of collective bargaining.

Member David Prouty — the lone Biden appointee — dissented, advocating for both monetary and non-monetary remedies, including compensation for “any other provable, reasonably quantifiable economic harm” (see, Thryv remedies) resulting from an unlawful refusal to bargain.

What this means for employers:

* Employers facing close election losses may be more inclined to pursue test-of-certification challenges because the financial exposure for refusing to bargain — and then losing the appeal — is limited.

* Those engaged in bargaining can take firmer positions without worrying that extended negotiations will be re-characterized as a refusal-to-bargain and converted into monetary liability.

But these are act-at-your-peril strategies. If you refuse to bargain AND implement unilateral changes to terms and conditions, and the certification is upheld on appeal, you’re rolling back changes and bargaining from a weaker position.

Is Ex-Cell-O the right rule — or is the lack of make-whole remedies effectively rewarding employers for stalling?