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 

Will VW Challenge UAW’s Historic Union Win in Chattanooga?

I’m sure you remember last year’s coverage of the UAW’s attempt at organizing all workers at Volkswagen’s Chattanooga, Tennessee, facility. Had VW workers voted to unionize, it would have been the first union in a southern automaker and perhaps open the door for the UAW to organize the foreign manufacturers in the South the way they have a lock on the Big Three American car companies in Detroit. But, the union withdrew the election petition before the employees had a chance to vote.

Fast forward to early December and the UAW again sought to organize VW’s Chattanooga employees, but only the skilled trades workers this time. VW said it would be amenable to a vote of all maintenance and production workers, but opposed the vote of just skilled trades workers.

Under newish Board law, a subset of workers within a larger group can vote on union representation without seeking input from other employees if the larger unit does not “share an overwhelming community of interest with those in the petitioned for unit.” This law basically allows unions to decide which employees to group together for a union vote since the burden of proving “overwhelming” is very high. And, in VW’s case, the union chose just the skilled trades workers. The UAW won the election, so we now wait to see if VW challenges the results.

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.