NLRB Must Show Why Employees are Distinct in Micro Unit Cases Says Second Circuit

The Second Circuit Court of Appeals reviewed the two-step analysis of Specialty Healthcare for determining whether employees share a “community of interest.” Under step one, the NLRB Regional Director performs a community of interest analysis to determine if the proposed unit is appropriate. If appropriate, the party opposing the proposed bargaining unit must demonstrate that the employees it wants to include share an overwhelming community of interest with the employees already included in the bargaining unit.

While Regional Directors are given (very) broad discretion in determining Specialty Healthcare issues, that discretion is not unfettered and must have a rational basis. They must, the Court reminds them, to engage in a meaningful first step analysis.

In Constellation Brands, the Second Circuit noted that although the Regional Director concluded the petitioned employees had distinct characteristics, the Regional Director “did not explain why those employees had interests sufficiently distinct from those of other employees to warrant the establishment of a separate unit” Essentially, the Regional Director has to make a prima facie showing at step one before moving on to step two. Since that was not done here, the Second Circuit refused to uphold the Regional Director’s determination and criticized the NLRB for failing to properly exercise its power of review to ensure Specialty Healthcare was applied correctly.

Matt Austin who 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