Micro Units, the Next Obama-Era Rule to Die

In PCC Structurals, Inc., the Board reinstated the traditional community of interest standard to be used when determining whether unions have included all necessary employees on a petition for union representation. The Board’s reversal is a welcomed relief to employers who have been forced to bargain with several small units of employees in one workplace, thereby preventing all employees at a worksite from exercising their rights to vote on union representation.

In Specialty Healthcare, the Board did away with over 20 years of established precedent by changing the test used in determining whether a petitioned-for unit of employees to vote for union representation was the most appropriate unit within the employer’s workforce. Unions typically craft the petition to contain the smallest possible group to vote that has already showed their support for representation, while employers typically wish to expand the unit of voting employees to get a more accurate representation of what all employees in the workplace want in terms of union representation.

In PCC Structurals, the Board reinstated the traditional community of interest analysis to determine whether employees in the petitioned-for unit share a community of interest with excluded employees. There, the IAM sought to unionize a micro-unit of approximately 100 welding employees despite belonging to a larger group of over 2,000 production workers. The welding employees worked closely with other production workers and shared several terms and conditions of employment, such as similar schedules, shared supervisors, constant contact, same benefits, same training, and wearing the same protective equipment while working throughout the manufacturing process.

In applying the Specialty Healthcare analysis, the Regional Director determined that the excluded production workers did not share an “overwhelming community of interest” with the micro-unit of welding employees.

Under PCC Structurals, the Board unequivocally reinstated the more simplified and practical analysis used for decades before Specialty Healthcare, examining factors like:

  • Whether the exclude employees and petitioned for unit of employees are organized into a separate department;
  • Have distinct skills and training;
  • Have distinct job functions and perform distinct work, including inquiry into the amount and type of job overlap between job classifications;
  • Are functionally integrated with Employer’s other employees;
  • Have frequent contact and interchange with other employees;
  • Have distinct terms and conditions of employment;
  • And are separately supervised.

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 reach Matt by calling him at (614) 843-3041 or emailing him at Matt@MattAustinLaborLaw.com.

Will the Disastrous Micro-Unit become Extinct?

The NLRB’s Regional Director recently approved a bargaining unit consisting of only warehouse workers (the unit sought by the union) and rejecting the employer’s contention that the unit should include the production employees in the plant as well as the production employees working in the employer’s plant across the street.

This bifurcation of the workers is permissible because of a case called Specialty Healthcare. That case is arguably the most significant decision issued by the Obama NLRB because it virtually guarantees that whatever ready-made bargaining unit the union wants to organize the union will be allowed to organize. If the group of employees sought by the union is identifiable, then the only way the employer can prove that a larger unit was appropriate is to establish the employees it seeks to add shared an “overwhelming community of interest” with the group of employees handpicked by the union. The word “overwhelming” has allowed the NLRB to deny most every employer’s request for a larger bargaining unit. (Larger bargaining units are more difficult for unions or organize, i.e. it is easier for unions to convince 3 out of 5 employees to vote for a union than 30 out of 50 or 300 out of 500).

NLRB Chairman Miscimarra (who remains the lone pro-business Board Member and thus in the minority) issued a dissent signaling his desire to overturn Specialty Healthcare when the Board is at full strength with a pro-business majority. But, Specialty Healthcare may go away sooner. Senator Johnny Isakson (R-Ga) recently introduced the “Representation Fairness Restoration Act” that would insert language directly into the National Labor Relations Act that states, “fragmentation of the bargaining units” is to be disfavored. Representative Francis Rooney (R-Fla) also introduced a companion bill in the House. Between Miscimarra, Isakson, and Rooney, it appears that Specialty Healthcare’s days are numbered.

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 reach Matt by calling him at (614) 285-5342 or emailing him at Matt@MattAustinLaborLaw.com 

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.

NLRB Refuses to Allow Truckers to Form a Micro Bargaining Unit

In contrast to yesterday’s blog post that summarized a decision where the NLRB upheld a micro bargaining unit, today the Board refuses to find that a micro bargaining unit is necessary.

The Teamsters union petitioned for an election of only drivers who drive company-owned vehicles and excluding drivers who use their own vehicles. The Regional Director ruled that the petitioned for unit constituted a fractured unit because personally owned vehicle drivers share an overwhelming community of interest with company-owned vehicle drivers which requires their inclusion in the unit.

For example, drivers of personally owned and company owned vehicles are both given the same responsibilities for pickups and deliveries, are subject to the same supervisors, receive their routes through the same training work out of the same facility, record their work time using the same method, and wear the same uniform.

As a result of the NLRB expanding the petitioned-for bargaining unit from only drivers of company-owned vehicles to all drivers, the Teamsters did not have enough signed authorization cards to go forward with a union election. Thus, the petition for an election was dismissed; a company win.

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 Matt@MattAustinLaborLaw.com

NLRB Just Illogically Expanded its Specialty Healthcare Micro-Units Decision

As we have explained several times before, the controversial 2011 Specialty Healthcare decision opened the door for unions to organize smaller, union-friendly groups of employees. Specialty Healthcare allows unions to create micro-bargaining units, which are a small portion of the total number of employees at a particular worksite. Unions can target these smaller groups and organize them more effectively and quickly than organizing an entire department or workplace. Micro-units create a logistical nightmare for companies, as one company could have to manage several unions with several different union contracts. The different terms and conditions of employment in each contract require more time from management and make it more likely that a supervisor will make a mistake in administering the contract.

Unfortunately, the Board further expanded the reach of Specialty Healthcare in a recent case where the union organized a unit at a commercial printer that included pre-press, digital press, offset bindery, digital bindery, and shipping and receiving employees, but excluded offset-press employees. During a printing project, the project would start in pre-press, move to offset-press, and then move to offset bindery. By excluding the offset-press employees, the union cherry-picked one small group of employees to remove from an integrated work process.

The company challenged the proposed unit and argued that the offset-press employees needed to be included in the petitioned-for unit. Despite the offset-press employees working closely with the other employees in the petitioned-for unit and all employees working toward the same final product, the Board found that the petitioned-for unit was appropriate.

This case demonstrates that even where employees work in the same space and form part of the same workflow, they do not all have to be included in the unit. This gives unions the ability to cobble together a unit of union-friendly employees to increase their chances of successfully organizing the employees. Unions are gaining the ability to decide exactly who they want to be in their union, a powerful tool in union organizing.

Matt Austin is a lawyer based in the Columbus, Ohio office of Roetzel & Andress, LPA who limits his practice to representing employers dealing with labor, employment, and OSHA matters. You can call Matt at (614) 723-2010 or email him at maustin@ralaw.com.

Macy’s Challenge to a Union’s Successful Micro-Unit Election Reaches the Court of Appeals

In July, the National Labor Relations Board ruled that a bargaining unit of just the fragrance and cosmetic employees at a Macy’s store was lawful. This ruling departed from decades-long precedent favoring a wall-to-wall bargaining unit at retail stores. In an odd procedural mandate, Macy’s was precluded from directly appealing the Board’s decision. Instead, Macy’s had to refuse to bargain with the newly elected union. As expected, the union filed an unfair labor practice charge over Macy’s refusal to bargain. The Regional Director found against Macy’s, as did the NLRB on appeal. Now, Macy’s gets to appeal the decision to the Court of Appeals. Circuitous, I know. No one ever said the Board embodied efficiency. This case will be closely watched. The outcome will either cement in stone the legal permissibility or prohibition of micro-units.

Matt Austin is a lawyer based in the Columbus, Ohio office of Roetzel & Andress, LPA who limits his practice to representing employers dealing with labor, employment, and OSHA matters. You can call Matt at (614) 723-2010 or email him at maustin@ralaw.com.

NLRB Recent Ruling Against Macy’s Stinks

In 2011 there was a case called Specialty Healthcare that permitted micro bargaining units in the healthcare industry. Micro bargaining units exist when just a few people in a department, instead of all people in the company, are allowed to be in a union. In a grocery store, this means the frozen food employees can be in one union, the produce boys in another, the cashiers in a third, etc. Specialty Healthcare micro-units have recently crept into the retail industry, in the Bergdorf Goodman and Macy’s cases.

In Bergdorf Goodman, only the full-time and regular part-time women’s shoes associates in a second-floor designer shoes department and a fifth-floor contemporary shoes department sought to unionize. According to the Board, the designer shoe department made up their whole department, but the contemporary shoe employees were carved out from a department called contemporary sportswear. This carve out did not comport with Specialty Healthcare’s appropriate unit requirements. Without the carve out it is likely that just the designer shoe department clerks maintained the right community of interest to satisfy the micro-unit test. Specialty Healthcare’s “community of interest” test looks almost exclusively at how the employer has chosen to structure its workplace. The Bergdorf decision makes it clear that management can set up operations in ways that avoid unions organizing departmental units. While there is no one-size-fits-all solution, companies need to look at their operations and organizational structures and be aware of the potential consequences that come with different approaches.

For a contrary decision, and one that stinks, just the cosmetic and fragrance department of a Macy’s store sought to unionize. These workers accounted for 41 of 150 store workers. Historically, all 150 employees would have constituted an appropriate bargaining unit, but under Specialty Healthcare, these 41 are appropriate and admittedly larger than a true micro-unit. The Board determined that just the cosmetic and fragrance employees (a) had the same first level supervisor (even though the second level manager and store supervisor exercised control over everyone); (b) worked in connected defined work areas (though on different floors and adjacent to other employees); (c) had limited interaction with other employees (despite having daily all-employee meetings); and (d) they were paid on commission.

Challenging narrowly defined micro-units appears to be almost impossible. Companies that have employees in distinct fields should be diligent to eliminate the types of unique, department-specific management and sales practices that sways the NLRB to permit a small group to organize within the larger workforce. Further, companies should place a premium on how businesses are structured administratively and how employees are integrated in their work functions.