NLRB axes micro-unit decision

December 20, 2017

Employment Law Alert

Author(s): Andrew B. Prescott

Late last week, the National Labor Relations Board reversed its controversial bargaining unit determination decision in Specialty Healthcare & Rehabilitation Center of Mobile. In the 2011 Specialty Healthcare decision, the Board saddled employers challenging bargaining units as under-inclusive (i.e., too small) with the burden to prove an “overwhelming community of interest” between included and excluded employees. Employers now will sometimes have an easier time with stopping elections from taking place in the bargaining units chosen unilaterally by unions when they file their election petitions with the Board.

The Board chopped down Specialty Healthcare in PCC Structurals, Inc. and International Association of Machinists & Aerospace Workers (December 15, 2017). PCC Structurals, a castings manufacturer, challenged the Machinists’ Union’s petition for a bargaining unit consisting of 100 welders and rework specialists. PCC argued that the Union’s chosen unit inappropriately excluded other employees in its three Portland, Oregon, facilities. PCC’s proposed “wall to wall” unit consisted of 2,565 production and maintenance employees, encompassing many more employees than the union’s 100-employee “micro-unit.” The NLRB Regional Director responsible for resolving the dispute before an election determined that PCC could not show that the production and maintenance employees excluded from the unit shared an overwhelming community of interest with the welders and rework specialists. The Regional Director thus directed that an election take place in the unit as described by the Union.

PCC appealed to the Board and sought abandonment of Specialty Healthcare. In its decision-siding with PCC, the Board characterized Specialty Healthcare as improperly creating a “regime under which the petitioned-for unit is controlling in all but narrow and highly unusual circumstances.” The Board also decried the resultant superseding of traditional industry-specific unit rules as evidenced in post-Specialty Healthcare cases. The Board cited as one example the Macy’s, Inc. decision in 2015. In Macy’s, the Board used Specialty Healthcare to countenance a petitioned-for unit of employees in a Massachusetts store’s cosmetic and fragrances department. The Board approved unit excluded employees in ten other sales departments at the same location. This result conflicted with the Board’s longstanding rule favoring storewide units in retail stores.

According to the Board in PCC, jettisoning Specialty Healthcare and its “overwhelming community of interest test” permits the Board to assess unit appropriateness more vigorously. Employers will undoubtedly read PCC as an invitation to challenge the units Unions put in their election petitions more frequently. Employers will be particularly watchful for the exclusion of employees who have much in common with included employees, or the subdivision of units favored by the Board’s industry-specific unit rules. Unions will have to reconsider whether to invest time and money in organizing smaller units more vulnerable to challenge after the PCC decision.

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