Micro-Unions: I Cannot Overstate their Effect in the Labor Movement

Workplace organizing typically requires large amounts of time and money. Yet for more than five years now, labor unions increasingly have been relying on a low-cost alternative: micro-unions (or as some say, partial workplace organizing).

President Obama used his power of appointment to achieve a highly partisan pro-union majority on the five-member National Labor Relations Board, even when operating short-handed. The result has been a series of landmark decisions favorable to unions – and unfavorable to employers an dissenting employees. Specialty Healthcare, which addressed the issue of the appropriate size of a bargaining unit, is perhaps the most far-reaching.

Along with the decision in Specialty Healthcare, the NLRB issued a press release. Really, a press release for a decision? Seems like a big deal. In its press release, the NLRB downplayed the importance of the decision. The text spoke of a “new approach,” one that merely “clarified” standards for approval of bargaining units outside of the health care industry. Even then-Chairman and current Member Mark Pearce asserted “Specialty Healthcare was not designed to create any difference in the size of bargaining units.” Yet, the practical effect of the decision is that when a union cannot garner widespread support, unions in all industries are encouraged to organize the smallest units of employees possible.

The United States Chamber of Commerce recently released a report titled “Trouble with the Truth: Specialty Healthcare and the Spread of Micro-Unions” that summarizes several micro-union cases. Here is an excerpt from that report:

Volkswagen Chattanooga. The 108-44 vote in December 2015 by machine maintenance workers in favor of United Auto Workers representation at Volkswagen’s Chattanooga assembly plant. VW management appealed to the NLRB to reverse the regional director’s decision to hold the election, arguing that the union had created a fictional maintenance department for the sole purpose of undoing its defeat in a February 2014 election by a 712-626 margin for full plant representation (the company actually supported the union in that instance). The NLRB declined to overturn the regional director. Volkswagen this past September took its case to District of Columbus federal appeals court, where it remains active.

DTG Operations. At a rental car facility at Denver International Airport, 31 agents appealed to the NLRB for recognition as a collective bargaining unit after the board regional office had rejected their bid. The regional office had concluded that the smallest appropriate unit would be a “wall to wall” unit consisting of all 109 employees at the operation. In the aftermath of Specialty Healthcare, however, the NLRB had a rationale for overruling the regional office. And on December 30, 2011, the board concluded: “The RSA (rental service agents) and LRSAs (lead rental service agents) share a community of interest and…the Employer failed to demonstrate that the additional employees it seeks to include share an overwhelming community of interest.”

Macy’s. In March 2011, the United Food and Commercial Workers union filed a petition with the NLRB to represent all roughly 120 sales associates at the Macy’s department store in Saugus, Mass. The board approved the application. The UFCW lost its representation election in May. The Specialty Healthcare ruling months later gave the union a new lease on life. And in October 2012 the union went small. It filed a representation petition with the NLRB regional office, proposing to represent only the 40 or so salespeople / consultants who worked at the store’s cosmetics and fragrance counters. The regional office certified the bid for the micro-bargaining unit and ordered an election held. Macy’s management appealed, citing the nearly half-century precedent covering the retail industry. But it was to no avail. The NLRB upheld the regional decision, and in language indicating Specialty Healthcare should apply to the broader economy.

Nestle Dreyer’s. A local of the International Union of Operating Engineers proposed organizing more than 110 maintenance workers at Dreyer’s ice cream plant in Bakersfield, California. Dryer’s management objected saying that the campaign willfully prevented 578 production workers at the plant from having any say. Late in 2011, not long after the Specialty Healthcare ruling, the IUOE filed a complaint with the regional NLRB office. The office approved the proposed micro-bargaining unit. The company, in response, appealed to the National Labor Relations Board for a review of the approval. The board declined. Dreyer’s then took its case to court. Last April, the U.S. Court of Appeals for the Fourth Circuit upheld the NLRB’s decision.

The essence of the issue is this. If, for example, only 40 out of 200 employees at a given worksite want to unionize, any union is going to have enormous obstacles winning representation whether through secret ballot election or card check. But if those 40 pro-union employees constitute a majority within a division of 60 employees, under the Specialty Healthcare test they would win. And equally to the point, the 20 employees who do not wish to join the union would be outvoted and forced to join (unless they were in a Right to Work jurisdiction).

Matt Austin owns Austin Legal, LLC, a boutique law firm based in Ohio that limits its representation to employers dealing with labor, employment, and OSHA matters. You can call Matt at (614) 285-5342 or email him at Matt@MattAustinLaborLaw.com.

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