Micro-Bargaining Unit Upheld in FedEx Case

By H. Scott Johnson Jr. Sep 14, 2016

The 3rd U.S. Circuit Court of Appeals became the latest appellate court to uphold the National Labor Relations Board's (NLRB's) Specialty Healthcare framework for determining whether a union's petitioned-for bargaining unit is appropriate. In so doing, the 3rd Circuit joined the 4th, 5th, 6th, 8th and D.C. circuits in permitting the NLRB's certification of micro-bargaining units, instead of the all-inclusive "wall-to-wall" units that employers generally prefer.

In NLRB v. FedEx Freight Inc., the NLRB certified a collective-bargaining unit made up of drivers at a New Jersey FedEx terminal. Contending that the unit should have included the terminal's dockworkers, the company refused to bargain with the unit, thereby triggering unfair-labor-practice proceedings.

An NLRB regional director issued an unfair-labor-practices order against FedEx, and the board granted summary judgment in favor of the union. The company then filed a petition for review in which it alleged that the board abused its discretion in certifying the unit because it applied a unit-determination standard from Specialty Healthcare. Furthermore, FedEx argued that even if use of the Specialty Healthcare standard was appropriate, the board failed to properly apply it.

Under Specialty Healthcare, the board will presume that a petitioned-for bargaining unit is appropriate as long as it consists of a readily identifiable group of employees. If an employer argues that the unit should include additional employees, the employer must then demonstrate that employees in a proposed larger unit share an "overwhelming" community of interest with those in the petitioned-for unit.

On appeal from the NLRB, the 3rd Circuit found in FedEx Freight that the board's application of the Specialty Healthcare framework was reasonable and in line with board precedent. The court held that the regional director's application of the community-of-interest test was not an abuse of discretion because he weighed relevant factors to determine whether the union had shown that the petitioned-for unit was appropriate. The regional director looked not only at whether the employees in the petitioned-for unit were similar and constituted a readily identifiable group, but also at whether they were sufficiently distinct from other employees.

The 3rd Circuit rejected FedEx's contention that the dockworkers shared an overwhelming community of interest with the drivers. The court found that the regional director relied on sufficient distinctions between the drivers and dockworkers. Based on such distinctions, his conclusion that they did not share an overwhelming community of interest was proper. Accordingly, the court denied FedEx's petition for review and granted the board's cross-petition for enforcement of its order to bargain.

NLRB v. FedEx Freight Inc., 3rd Cir., No. 15-2585 (Aug. 9, 2016).

Professional Pointer: Given that most of the appellate courts in the United States have upheld the NLRB's application of the Specialty Healthcare standard, it appears that employers are going to have to live with the certification of "micro-unions" until such time that the composition of the board changes or the board decides to apply a different framework. It is worth noting that, regardless of the standard used for determining the appropriateness of a petitioned-for unit, the certification process ultimately comes down to an election. As such, the prudent strategy for management is to focus its efforts at the campaign organization level.

H. Scott Johnson Jr. is the managing partner of PCT Law Group PLLC in Alexandria, Va.


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