Single Department Within Macy’s Is a Bargaining Unit

NLRB ruling upheld

By Craig A. Reutlinger Jul 6, 2016
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A ruling by the National Labor Relations Board (NLRB) that employees within the cosmetics and fragrances department at a Macy's department store may constitute a separate bargaining unit has been upheld by the 5th U.S. Circuit Court of Appeals. In so doing, the court relied upon the "overwhelming community of interest" test set forth in Specialty Healthcare and Rehabilitation Center of Mobile, 357 NLRB No. 83 (2011). Many employers and business organizations have criticized the Specialty Healthcare decision, claiming that it would lead to a proliferation of small voting units within a single workplace, forcing the employer to deal with a complicated array of bargaining units.

Macy's had refused to bargain with a union consisting solely of the cosmetics and fragrances department, contending that the smallest appropriate bargaining unit must include all employees in that Macy's store. The court agreed with the NLRB's finding that while cosmetics and fragrances employees had some incidental contact with other store employees, they had a separate sales and management structure and separate training programs from other employees in the store, and only sold products and services within their unique portion of the store.

The court also deferred to the board's findings that the cosmetics and fragrances department consisted of two separate and distinct work areas, that department employees were functionally integrated with distinct duties and assignments, and that department employees had little contact with other salespersons in the store.

In upholding the NLRB's decision, the court noted that since the board has primary responsibility for developing national labor policy, its decisions are accorded considerable deference and are only subject to being reversed if they are determined to be arbitrary, capricious, resulting from an abuse of discretion or lacking in any factual support.

Macy's had argued that separate department bargaining units would "wreak havoc in the retail industry" as well as ultimately undermine some worker rights, and that therefore a single storewide bargaining unit would be more appropriate. The court replied by noting that the board may certify any bargaining unit that is appropriate, rather than what might be the single most appropriate unit, as long as the certified unit is not clearly inappropriate based on the employees' community of interest.

Thus, the "community of interest" standard set forth by the board in Specialty Healthcare remains alive and well, not only within the 5th Circuit but also within the 4th, 6th and 8th circuits, where the courts have also upheld the NLRB's reliance on Specialty Healthcare.

Macy's Inc. v. NLRB, 5th Cir., No. 15-60022 (June 2, 2016).

Professional Pointer: Based on this decision, once the NLRB determines that employees within a proposed unit share a community of interest, the mere fact that they may also share a community of interest with other employees outside that unit will not necessarily render the smaller unit inappropriate. Instead, the employer contesting the smaller unit must be prepared to show that all of its employees share a greater community of interest than those in the smaller unit and that there is no rational basis for excluding certain employees from that larger unit.

Craig A. Reutlinger is an attorney with Van Hoy, Reutlinger, Adams & Dunn PLLC, the Worklaw® Network member firm in Charlotte, N.C.

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