SHRM Opposes Return to Standard That Resulted in Small Bargaining Units

​The National Labor Relations Board (NLRB) should not return to a standard that resulted in a proliferation of small bargaining units, commonly referred to as micro-units, according to a Society for Human Resource Management (SHRM) brief filed Jan. 21.

A return to the standard that allowed for micro-units would "allow unions to more easily get their foot in the door because they will not have to organize large groups of employees," said Molly Kaban, an attorney with Hanson Bridgett in San Francisco. With micro-units, unions "can gain entry into a workforce through a small number of employees and then work to organize larger groups from within."

Not only do micro-units make it easier to unionize, but they also create instability in collective bargaining arrangements "by allowing gerrymandering and fracturing of an employer's workplace into multiple groups of employees that are not consistent with the employer's organizational or operational structure," said A. John Harper III, an attorney with Littler in Houston.

Board Is Reconsidering Standards

In its brief, SHRM noted that in American Steel Construction Inc. on Dec. 7, 2021, the board asked whether it should adhere to the standards set forth in PCC Structurals, a 2017 NLRB decision, as modified by The Boeing Corp., a 2019 decision, or return to the standard adopted in Specialty Healthcare, a 2011 board decision, for determining whether there is a valid bargaining unit. The Specialty Healthcare standard raised the possibility that "small groups represented by different, competing unions become splinter groups, each advocating for its own interests," SHRM wrote in its brief.

"This question is of particular importance to SHRM and its members because HR professionals are critical to collective bargaining efforts and managing the day-to-day compliance and relationships with labor unions," the brief noted. "Many of SHRM's members regularly engage with unionized workforces."

What Are Micro-Units?

When filing a union election petition with the NLRB, a union must identify a legally appropriate group of employees—called the bargaining unit—that it is seeking to organize, explained David Pryzbylski, an attorney with Barnes & Thornburg in Indianapolis.

Historically, the NLRB favored all-inclusive wall-to-wall units—such as units that included production, quality and maintenance divisions in the manufacturing setting, he said.

"By contrast, micro-units are fractional," he noted. "Generally, they seek to decrease the size of the unit and make organizing easier."

For example, a union could believe it has ample support in a manufacturing plant among maintenance employees, but not production employees, so it could seek to represent only the maintenance workers. If the union is permitted to do this, "the employer would be left dealing with a labor agreement applying only to half of the workforce and likely resulting in inequities among its employees as well as administrative headaches," Pryzbylski said.

"Such an outcome is not in the interests of either employees or employers," SHRM wrote. "A small unit of a subgroup of employees within a single facility is unlikely to have sufficient strength to engage in meaningful bargaining."

In addition, HR professionals "would have to manage multiple bargaining relations and varying collective bargaining agreements within a single facility," the brief noted. "Rather than promoting labor peace, the existence of multiple units within a single location creates a greater risk of strikes and labor unrest."

Specialty Healthcare Standard

"In 2011, the board issued its Specialty Healthcare decision that made it significantly easier for unions to seek and represent micro-units," Pryzbylski said.

Prior to Specialty Healthcare, if, for example, a union filed an election petition at a manufacturer seeking only to organize maintenance workers, the employer could challenge the petition and argue the petition should include all rank-and-file workers at the site, such as production, maintenance and quality-check workers, he said.

"To prevail, the company needed to show the excluded workers shared a community of interest with the employees the union wanted to represent, such as by showing all the workers were subject to the same HR policies [or] wore the same uniforms," he noted.

"In Specialty Healthcare, however, the board said that in order for an employer to succeed on adding additional employees to a proposed unit, it needed to show the excluded workers share an overwhelming community of interests with the employees targeted by the union," Pryzbylski said. In other words, the board "drastically heightened the burden on employers. Indeed, after that decision we saw an explosion of micro-units being confirmed by the board and most legal efforts by companies to blunt them defeated."

PCC Structurals and The Boeing Corp. Standards

In 2017, Specialty Healthcare was overruled in PCC Structurals by a newly constituted NLRB, and the board returned to the community-of-interest standard. Employers once again were successful in staving off micro-units in many cases, Pryzbylski said.

Under the community-of-interest standard, both parties present their evidence and the board makes a decision without imposing the overwhelming community-of-interest burden of proof on the party asserting that excluded employees should be included, Harper said.

In The Boeing Corp., the NLRB held that unit determinations are a three-step process, he added. Those steps are:

• Assessing whether the employees in the petitioned-for unit are readily identifiable as a group and have sufficiently shared interests among themselves.
• Assessing whether employees in the petitioned-for group have meaningfully distinct interests in the context of collective bargaining that outweigh the similarities with excluded employees.
• Assessing whether there are any special board rules governing the petitioned-for unit based on the industry or jobs at issue.

"Then-member, now chairman [Lauren] McFerran dissented from the Boeing decision on the grounds that the 'outweigh' aspect of the second step above was a new test," Harper said. "However, circuit courts of appeal have set aside board bargaining unit determinations when the board has failed to explain which community of interest factors it accorded weight, which it did not and why."

If the NLRB revives the Specialty Healthcare standard, nonunionized employers could be vulnerable to micro-unit organizing drives, Pryzbylski said.