Sixth Circuit: NLRB Cannot Create a Default Bargaining-Order Regime (Cemex) Through Adjudication Untethered to Case-Specific Remedial Need

1. Introduction

Case: Brown-Forman Corp. v. NLRB (6th Cir. Mar. 6, 2026).
Parties: Brown-Forman Corporation d/b/a Woodford Reserve Distillery (employer/petitioner), the National Labor Relations Board (respondent), and International Brotherhood of Teamsters, Local Union No. 651 (intervenor).
Setting: A union organizing campaign at Brown-Forman’s Woodford Reserve facility in Versailles, Kentucky, following employee dissatisfaction with wages.

The central dispute arose after Brown-Forman, amidst an accelerating union campaign, announced and implemented significant economic benefits—most notably a $4-per-hour across-the-board raise (after earlier stating no further raises would occur until the next fiscal year), changes to pay progression/merit eligibility, increased flexibility around December vacation usage, and a pre-election gift of bourbon. The union lost the election decisively (14–45) and filed objections and unfair labor practice charges.

Key issues on review: (i) whether substantial evidence supported the NLRB’s findings of unfair labor practices under Section 8(a)(1) and (3); (ii) whether the Board properly considered pre-petition conduct; and—most consequentially—(iii) whether the Board could lawfully issue a bargaining order relying solely on the NLRB’s new framework announced in Cemex Construction Materials Pacific, LLC, 372 NLRB No. 130, 2023 WL 5506930 (2023), rather than applying the Supreme Court’s bargaining-order framework under NLRB v. Gissel Packing Co., 395 U.S. 575 (1969).

The Sixth Circuit’s opinion is notable because it is described as the court’s “first review” of the validity of the Cemex bargaining-order standard, and it invalidates that standard on administrative-law procedural grounds—specifically, the limits of agency adjudication versus rulemaking.

2. Summary of the Opinion

The Sixth Circuit:

  • Affirmed (under substantial-evidence review) the Board’s findings that Brown-Forman committed unfair labor practices by conferring economic benefits and gifts timed to chill union support.
  • Approved the Board’s consideration of pre-petition conduct because the conduct related to and continued into the post-petition period, invoking the Sixth Circuit’s “administrative convenience” principle and its exception.
  • Denied enforcement and granted the petition for review because the Board’s bargaining order rested solely on Cemex, which the court held was created through an improper exercise of the Board’s adjudicatory authority and therefore could not serve as the basis for a bargaining order.
  • Remanded to the Board for further proceedings consistent with the opinion (without reaching potential substantive defects in Cemex).

In short: the court upheld the unfair-labor-practice findings but vacated the bargaining order because the Board used an invalid decisionmaking route to establish (and then apply) Cemex.

3. Analysis

3.1. Precedents Cited

A. Unfair labor practices: timing of benefits and coercion

  • NLRB v. Exch. Parts Co., 375 U.S. 405 (1964)
    The court relied heavily on Exch. Parts for the principle that “well-timed” benefits during organizing can operate as “a fist inside the velvet glove,” coercing employees by implying future benefits depend on rejecting unionization. This case supplied the doctrinal backbone for concluding substantial evidence supported the finding that Brown-Forman’s wage/benefits changes were unlawfully motivated and reasonably tended to coerce.
  • Caterpillar Logistics, Inc. v. NLRB, 835 F.3d 536 (6th Cir. 2016) and Dayton Newspapers, Inc. v. NLRB, 402 F.3d 651 (6th Cir. 2005)
    These cases provided the Sixth Circuit standard that an unfair labor practice exists when conduct has a “reasonable tendency to coerce” employees in exercising Section 7 rights, supporting the court’s deferential posture toward the Board’s inference-drawing.
  • Biestek v. Berryhill, 587 U.S. 97 (2019) and Consolidated Edison Co. of N.Y. v. NLRB, 305 U.S. 197 (1938)
    Cited to illustrate the low threshold of “substantial evidence” and to reinforce that the reviewing court does not reweigh competing inferences when a reasonable mind could accept the Board’s conclusions.

B. Consideration of pre-petition conduct

  • Randall, Burkart/Randall Div. of Textron, Inc. v. NLRB, 638 F.2d 957 (6th Cir. 1981)
    The court used Randall to reject Brown-Forman’s attempt to exclude pre-petition conduct. Even if the Board typically focuses on post-petition activity “for administrative convenience,” it may consider pre-petition conduct when there is “significant post-petition conduct related to or continuing from pre-petition events.” The court treated Brown-Forman’s actions as a continuous campaign spanning the petition and election period.
  • NLRB v. Curwood Inc., 397 F.3d 548 (7th Cir. 2005)
    Cited to support the proposition that nothing in the Act or Supreme Court precedent confines the Board to post-petition conduct.

C. Bargaining orders, elections, and Gissel’s “last resort” structure

  • NLRB v. Gissel Packing Co., 395 U.S. 575 (1969)
    The opinion treated Gissel as the long-standing Supreme Court anchor: elections are “preferred,” bargaining orders are “extraordinary,” and (at least for Category II situations) the Board must determine whether a fair rerun election is unlikely under all the circumstances before compelling bargaining.
  • NLRB v. Taylor Mach. Prods., Inc., 136 F.3d 507 (6th Cir. 1998) and Henry Bierce Co. v. NLRB, 23 F.3d 1101 (6th Cir. 1994)
    These cases framed bargaining orders as extraordinary and typically last-resort remedies.
  • Ctr. Constr. Co., Inc. v. NLRB, 482 F.3d 425 (6th Cir. 2007)
    Cited for the Sixth Circuit’s articulation of the Gissel requirement that the Board must find “a fair election cannot [occur] under all the circumstances.”
  • NLRB v. Gen. Fabrications Corp., 222 F.3d 218 (6th Cir. 2000) and United Servs. for the Handicapped v. NLRB, 678 F.2d 661 (6th Cir. 1982)
    Reinforced the election preference as the usual mechanism for measuring employee choice.

D. Administrative law: adjudication vs. rulemaking and the Chenery line

  • SEC v. Chenery Corp., 318 U.S. 80 (1943) (“Chenery I”) and SEC v. Chenery Corp., 332 U.S. 194 (1947) (“Chenery II”)
    Chenery I supported the court’s insistence that an agency action stands or falls on the grounds the agency invoked. Chenery II supplied the key framework for when policymaking by adjudication is permissible: agency orders must arise from “due consideration of the particular facts,” and adjudication is for case-by-case development, not for creating free-standing, generally applicable rules untethered to resolving the dispute at hand.
  • NLRB v. Wyman-Gordon Co., 394 U.S. 759 (1969)
    Used as the cautionary example of “rulemaking through adjudication,” especially where the agency effectively announces a broadly applicable rule in an adjudication rather than using APA notice-and-comment procedures.
  • NLRB v. Bell Aerospace Co. Div. of Textron, Inc., 416 U.S. 267 (1974)
    The court emphasized that while the Board often has discretion to choose adjudication versus rulemaking, there are situations where reliance on adjudication can be an “abuse of discretion or a violation of the Act.” The Sixth Circuit invoked this to justify scrutinizing whether Cemex crossed the adjudication/rulemaking boundary.
  • Allentown Mack Sale & Servs., Inc. v. NLRB, 522 U.S. 359 (1998) and Motor Vehicle Mfrs. Ass'n of the U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29 (1983)
    These cases were invoked to emphasize “reasoned decisionmaking” and the necessity that the Board apply the standard it announces, with adequate justification for changes and applications.
  • Department of Homeland Security v. Regents of University of California, 591 U.S. 1 (2020) and Michigan v. EPA, 576 U.S. 743 (2015)
    Cited to reinforce administrative-law norms of accountability and reasoned decisionmaking.
  • Loper Bright Enters. v. Raimondo, 603 U.S. 369 (2024)
    Used to underscore the court’s duty to exercise “independent judgment” on whether the Board acted within statutory authority—an important move in a post-Loper Bright world where courts stress boundaries of delegation.
  • FDA v. Wages & White Lion Invs., 604 U.S. 542 (2025) and Calcutt v. Fed. Deposit Ins. Corp., 598 U.S. 623 (2023)
    Wages & White Lion was used for the Chenery-style proposition that agency action cannot stand unless it rests on valid grounds; Calcutt for the principle that once legal error is identified, the reviewing court remands.

E. Limits on remedial power: deterrence vs. remedial objectives

  • Republic Steel Corp. v. NLRB, 311 U.S. 7 (1940) and Nat'l Cash Register Co. v. NLRB, 466 F.2d 945 (6th Cir. 1972)
    The court invoked these to argue the Board lacks authority to impose sanctions solely for general deterrence; remedial action must be tied to undoing the effects of violations in the case at hand.
  • Nat'l Licorice Co. v. NLRB, 309 U.S. 350 (1940) and Frank Bros. Co. v. NLRB, 321 U.S. 702 (1944)
    These cases were used to situate the Board’s remedial authority as preventing a violator from enjoying the advantages of its own violations—again, a case-specific remedial conception rather than systemwide deterrence through default, non-case-specific remedies.

3.2. Legal Reasoning

A. Why the court upheld the unfair labor practice findings

The Sixth Circuit applied deferential substantial-evidence review to the Board’s findings that Brown-Forman violated Section 8(a)(1) and (3) by conferring economic benefits and gifts to discourage union support. The court emphasized:

  • Timing and deviation from past practice: the $4 raise was unprecedented (two across-the-board raises in one year) and followed management’s earlier “no further raises” messaging.
  • Management’s anti-union awareness and motive evidence: internal emails reacting to likely card majority and linking compensation changes to union momentum were treated as probative of unlawful motive.
  • Employee reaction evidence: testimony that workers perceived the raise as a “bribe” and withdrew support supported causation and tendency-to-coerce.

B. Why pre-petition conduct could be considered

The court rejected a categorical post-petition limitation. Even under the Board’s convenience practice described in Randall, Burkart/Randall Div. of Textron, Inc. v. NLRB, 638 F.2d 957 (6th Cir. 1981), pre-petition conduct may be considered when it is connected to post-petition coercion. Here, the wage increase took effect in the anticipated post-petition period and the conduct culminated in a pre-election bourbon gift, so the court found sufficient continuity and relatedness.

C. The central holding: Cemex is invalid because it was promulgated through an improper use of adjudication

The court’s core administrative-law holding is structural rather than substantive: it did not decide whether the Cemex approach is a permissible interpretation of the NLRA; instead, it held the Board used the wrong procedure and exceeded the bounds of adjudicatory authority.

The opinion framed the Board’s authority as having two distinct channels:

  • Rulemaking under 29 U.S.C. § 156 (subject to APA notice-and-comment safeguards), used for generally applicable, forward-looking rules; and
  • Adjudication under 29 U.S.C. § 160, limited to resolving disputes by applying standards to the “particular facts,” crafting remedies to undo the effects of violations in the case, and (incidentally) generating precedent.

The court concluded Cemex crossed the line into adjudicative rulemaking because:

  • Not derived from the case-specific facts: the Cemex Board itself described its new standard as driven by “[d]ecades of experience administering the Gissel standard,” rather than by a fact-bound need revealed by the dispute it was deciding.
  • Not necessary to resolve the dispute before the Board: the Cemex Board had already applied NLRB v. Gissel Packing Co., 395 U.S. 575 (1969) and found a bargaining order warranted in that very case; it then announced a broader “new standard” that (as it acknowledged) produced “neither” additional violations nor “additional remedial obligation” in that case.
  • General deterrence as the animating purpose: the Sixth Circuit read Cemex as aiming to “mak[e] remedial bargaining orders more readily available” to deter future employer misconduct—a goal the court treated as characteristic of quasi-legislative rulemaking rather than dispute-bound adjudication.
  • Hard-and-fast default structure: the court characterized Cemex as making a bargaining order the default once an election is set aside, without the Gissel-type inquiry into whether a fair rerun election remains possible.
  • Opinion structure signaling separateness from remedy: the Sixth Circuit pointed to how Cemex completed a Gissel-based remedy discussion and then separately announced “New Standard” and “Application and retroactivity,” reinforcing that the new standard was not an incident of resolving the dispute.

Under FDA v. Wages & White Lion Invs., 604 U.S. 542 (2025) and SEC v. Chenery Corp., 318 U.S. 80, 95 (1943) (“Chenery I”), the court held that because the Board’s bargaining order here rested solely on an invalid ground (Cemex), it could not be enforced. The proper course was remand.

D. The role of Chenery and “reasoned decisionmaking” in the remedy vacatur

A key practical point is that the Board, in the Brown-Forman order, explicitly declined to rely on Gissel and instead relied solely on Cemex. That choice mattered: the Sixth Circuit emphasized it could not affirm on alternative grounds the agency itself disclaimed (a classic Chenery constraint). The court also invoked Allentown Mack Sale & Servs., Inc. v. NLRB, 522 U.S. 359 (1998) to stress that the Board cannot apply a new standard without sufficient justification in the adjudication before it.

3.3. Impact

A. Immediate impact in the Sixth Circuit

  • Cemex-only bargaining orders are vulnerable: where the Board issues a bargaining order and expressly relies only on Cemex Construction Materials Pacific, LLC, 372 NLRB No. 130, 2023 WL 5506930 (2023), this decision provides a direct blueprint to vacate and remand.
  • Agency litigation posture is constrained by Chenery: the Board may face increased pressure, at least in the Sixth Circuit, to preserve Gissel analyses as alternative grounds when issuing bargaining orders, to avoid remedial collapse if Cemex is held invalid elsewhere.

B. Administrative-law ripple effects (procedure as the battleground)

The most significant implication is that the court placed a major NLRB policy shift behind a procedural gate: if the Board wants a generally applicable “default” bargaining-order regime, the Sixth Circuit’s reasoning suggests it must proceed via APA-compliant rulemaking under 29 U.S.C. § 156 rather than announcing such a regime in adjudication.

The opinion also reflects intensified judicial boundary-policing after Loper Bright Enters. v. Raimondo, 603 U.S. 369 (2024), emphasizing “independent judgment” on the scope of delegated authority and on procedural compliance, not only on interpretation.

C. Labor-law and organizing-campaign effects

  • Unfair labor practice doctrine remains robust: the court strongly reaffirmed NLRB v. Exch. Parts Co., 375 U.S. 405 (1964)-style scrutiny of “well-timed” benefits during union campaigns.
  • Remedy uncertainty increases: unions and employers face less predictability on bargaining-order remedies where the Board has leaned on Cemex. This may shift strategic focus back to traditional Gissel showings about whether a fair rerun election is possible.

4. Complex Concepts Simplified

  • “Substantial evidence” review: The appellate court does not decide the facts anew. It asks whether a reasonable factfinder could reach the Board’s conclusions based on the whole record (even if the court might have weighed evidence differently).
  • Section 8(a)(1) and 8(a)(3): Section 8(a)(1) broadly prohibits interference, restraint, or coercion regarding employees’ Section 7 rights. Section 8(a)(3) prohibits discrimination in terms/conditions of employment to encourage or discourage union membership. Timing and motive can turn “benefits” into unlawful interference.
  • Why “well-timed” raises can be unlawful: Under NLRB v. Exch. Parts Co., 375 U.S. 405 (1964), granting benefits in response to organizing can implicitly threaten that benefits depend on rejecting the union—coercing choice.
  • Bargaining order: A remedy requiring the employer to recognize and bargain with a union even though the union lost (or an election is set aside), typically used only when employer misconduct has made a fair election unlikely.
  • Rulemaking vs. adjudication: Rulemaking is the APA’s public process (notice, comment, explanation) for generally applicable policies. Adjudication is case-specific dispute resolution. Agencies may develop precedent through cases, but (per this opinion) cannot use a case as a vehicle to issue a free-standing, generally applicable rule not needed to resolve the dispute.
  • Chenery principle: Courts review an agency decision based on the reasons the agency gave. If the agency relied on an invalid reason, a court generally cannot uphold the action by inventing or substituting different reasons.

5. Conclusion

Brown-Forman Corp. v. NLRB does two important things at once. First, it reinforces traditional unfair-labor-practice doctrine: employers risk violating the NLRA when they deploy unusually timed, campaign-linked economic benefits to undermine union support, consistent with NLRB v. Exch. Parts Co., 375 U.S. 405 (1964). Second—and more consequentially—it establishes a Sixth Circuit administrative-law constraint on the Board’s remedial policymaking: the Board may not impose a broadly applicable, default bargaining-order framework like Cemex Construction Materials Pacific, LLC, 372 NLRB No. 130, 2023 WL 5506930 (2023) through adjudication when the policy is not derived from case-specific remedial necessity and is instead aimed at general deterrence and systemwide administration.

The decision does not foreclose the possibility that a Cemex-like regime could exist; it holds that, in the Sixth Circuit’s view, the Board must use the proper procedural vehicle (and provide case-tethered justification when acting through adjudication). For now, bargaining orders resting solely on Cemex are on unstable ground within the circuit, and the Board on remand must “start fresh” with valid standards in mind—most notably the enduring Supreme Court framework of NLRB v. Gissel Packing Co., 395 U.S. 575 (1969).