The company's own settlement left it just one argument to make - and it fell short
A plumbing company that dropped its union must go back to bargaining, after an appeals court upheld a labor board order.
The US Court of Appeals for the Seventh Circuit turned down American Backflow & Fire Prevention's challenge to a National Labor Relations Board order and enforced it. The upshot: the company has to sit down and bargain in good faith with Plumbers Local 130, the union representing its workers. The court released its decision on September 8, 2026.
The story starts with a deal the company signed, then walked away from.
In June 2021, the company's plumbers voted to unionize. Six months later, the union filed charges with the labor board, accusing the company of a run of unfair labor practices. Among them: posting a petition to decertify the union on the staff bulletin board, emailing employees to encourage them to sign it, and refusing to meet for bargaining.
To settle those charges, the company signed an agreement in April 2022. It promised to "meet at reasonable times and intervals and bargain in good faith with the Union." The deal came with a sting. If the company broke it and failed to fix the breach within 14 days, the board could file a fresh complaint, and the company agreed in advance that every allegation in that complaint would be "deemed admitted." By signing, in other words, it gave away most of its room to argue later.
That is close to what unfolded. In March 2023, after a single bargaining session, the company canceled the next one and told the union it was withdrawing recognition, dropping it as the workers' representative. It pointed to "documentary evidence" that the union had lost majority support. When a board attorney warned it was in breach, the reply from the company's side was blunt: "Take whatever action you believe is appropriate."
The board did. It moved for default judgment, a ruling issued without a full hearing when one side hasn't put up a real defense. And the company's defense was thin. It denied relying on the very decertification documents it had named in its own withdrawal notice, then insisted, without explaining why, that the withdrawal was "lawful."
The board wasn't persuaded, and neither was the court. An employer can't simply cut a union loose, the judges explained. It needs objective proof that the union has actually lost majority support, such as a signed petition or letter. The documents the company leaned on didn't hold up. Some were dated before the union's certification period closed on January 24, 2023 - a window in which the union's majority support is presumed - so they couldn't count. The rest came afterward, at a point when, as the board saw it, the company's own labor troubles could have turned workers against the union.
A flat denial, the court held, wasn't enough to earn a hearing. Under the 2022 settlement, the only question the company could raise was whether it had defaulted, and simply branding its withdrawal "lawful" didn't create a genuine dispute.
The company had one more line of attack. It argued that federal labor law guarantees a hearing in every case, and that being denied one violated due process. The court declined to take that up, because the company never raised it with the board first. New arguments can't be sprung on an appeals court when the agency never had a chance to weigh them.
One related thread is worth noting. In a separate case, an administrative law judge found the company's withdrawal of recognition and refusal to bargain unlawful, a conclusion the board later affirmed.
For HR and labor relations teams, the takeaways are concrete. NLRB settlements often carry a clause that treats the original allegations as admitted the moment a company breaks the deal, so signing one and then stepping out of line can leave almost nothing to argue. Withdrawing recognition from a union is not a call an employer can make on a hunch either; it takes objective evidence that majority support is gone, and petitions tangled up in the company's own labor problems won't clear that bar. And any argument worth making has to be made to the board first. Raise it late, and a court won't hear it.
For now, the board's order stands, and the company is back on the hook to bargain.
