NLRB Deals Severe Blow to Micro-Bargaining Units

Allen Smith, J.D. By Allen Smith, J.D. December 18, 2017

​Unions will have a much tougher time getting their foot in the door through small groups of employees organized into micro-bargaining units, thanks to a Dec. 15 decision by the newly Republican-controlled National Labor Relations Board (NLRB).

The NLRB voted by a 3-2 margin in PCC Structurals to overturn the Obama board's Specialty Healthcare micro-bargaining unit decision. In doing so, it returned to a traditional community-of-interest standard in determining the appropriate bargaining unit size and abandoned Specialty Healthcare's "overwhelming" community-of-interest standard. The Republican board majority that made the PCC Structurals decision possible is short-lived, however, as Chairman Philip Miscimarra's term expired Dec. 16, and he has not yet been replaced.

In PCC Structurals, the board said that it will return to scrutinizing petitioned-for bargaining units on a case-by-case basis to determine if they are appropriate. Specialty Healthcare required that employers objecting to petitioned-for bargaining units show that employees excluded from the units share an "overwhelming" community of interest with those workers in the petitioned-for units.

The overwhelming community-of-interest standard was almost impossible for employers to meet, said Rick Grimaldi, an attorney with Fisher Phillips in Radnor, Pa., who represented PCC Structurals.

"SHRM [the Society for Human Resource Management] opposed the Specialty Healthcare decision. By overturning it, the NLRB has made a welcome return to the traditional community-of-interest test used to determine bargaining units," said Nancy Hammer, SHRM senior government affairs policy counsel. "A return to the traditional rule stops the fragmentation of the workplace that occurred under Specialty Healthcare and allows employers and HR to focus on developing attractive benefits and working conditions for all employees rather than bargaining separately with small units within the workplace."  

Organizing from Inside Out

"Micro-bargaining units allowed unions to use a Trojan horse approach to organizing by first organizing small groups of employees in businesses with otherwise larger employee populations," Grimaldi said. "By picking off smaller units, they would then be able to organize employers from the inside out."

In PCC Structurals, the board reviewed the NLRB regional director's finding that 102 rework welders and rework specialists could form their own bargaining unit. The employer had objected to the welders' union election win, claiming that the petitioned-for unit should have included all 2,565 production and maintenance employees.

The NLRB regional director had found that the distinct qualifications and training, performance of distinct job duties, limited contact with other employees and lack of significant interchange across proposed-unit lines showed that the welders did not share an overwhelming community of interest with the remainder of the production and maintenance employees.

Rejecting Specialty Healthcare's "overwhelming community of interest," the board sent the PCC Structurals case back to the regional director for reconsideration. It instructed the regional director to judge whether the welders:

  • Are organized into separate departments, which the welders were.
  • Have distinct skills and training.
  • Have distinct job functions and perform distinct work, including inquiry into the amount and type of job overlap between classifications.
  • Are functionally integrated with the employer's other employees.
  • Have frequent contact with other employees.
  • Interact with other employees.
  • Have distinct terms and conditions of employment.
  • Have separate supervisors, which the welders did. They were scattered throughout numerous departments, the board noted.

Now that Specialty Healthcare has been overturned, "at no point does the burden shift to the employer to show that any additional employees it seeks to include share an overwhelming community of interest with employees in the petitioned-for unit," the board emphasized.

Return to Rational Bargaining Units

When micro-bargaining units were created, businesses often had to operate under more than one set of rules. Grimaldi said that this resulted in animosity among employee groups.

The PCC Structurals decision returns the law to what it had been for decades before Specialty Healthcare, which is rational bargaining units designed to facilitate collective bargaining harmoniously throughout a business establishment, said Ronald Meisburg, an attorney with Hunton & Williams in Washington, D.C., and former NLRB member. "These wall-to-wall, storewide and similar comprehensive units greatly simplify collective bargaining and contract administration," he said.

Micro-bargaining units could engage in strikes that shut down the rest of operations, noted Michael Lotito, an attorney with Littler in San Francisco and co-chair of its government affairs branch, the Workplace Policy Institute. The purpose of the National Labor Relations Act (NLRA) is to establish sounder labor relations and eliminate obstructions to commerce, he said. "Small units do exactly the opposite," he said.

[SHRM members-only HR Q&A:  What is the function of the National Labor Relations Act (NLRA)?]

Dissenters Say Welders Formed Appropriate Unit

The dissenting board members—Mark Gaston Pearce and Lauren McFerran—asserted that the regional director's decision was "unquestionably correct," as the workers share a community of interest under any standard ever applied by the board. "Indeed, welders-only units in this exact industry have been approved by the board in the past," they noted.

"The board's newly-constituted majority seizes on this otherwise straightforward case as a jumping-off point to overturn a standard that has been upheld by every one of the eight federal appellate courts to consider it," they stated. "Without notice, full briefing and public participation, and in a case involving a manifestly appropriate unit, the majority overturns Specialty Healthcare."

The standard articulated by the majority is "a radical new approach," they said, disagreeing that it was a return to the law as it existed prior to Specialty Healthcare and predicting that it would lead to unnecessary litigation.


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