Trump’s NLRB will reverse union unit ruling

During the Obama years, the National Labor Relations Board (NLRB) sought to promote union organizing and increase lagging union memberships by rewriting much of the National Labor Relations Act's (NLRA) case law -- often impacting employee free choice, effective collective bargaining, and labor peace. No decision altered the law more than Specialty Healthcare & Rehab. Ctr. of Mobile, 357 NLRB 934 (2011), where the board essentially gave unions the ability to determine the "appropriate" units within which representation elections would be conducted. Unit determinations are fundamental because they control how a union's majority status is measured and the group within which collective bargaining must occur.

President Donald Trump's recent appointments of labor law traditionalists, Marvin E. Kaplan and William J. Emanuel, to the NLRB will likely lead to the reversal of many of the Obama board's precedents. One of the most critical changes will likely be the abandonment of Specialty and a re-formulated and more balanced bargaining unit test. This new test will cater to neither labor nor management. Instead, it will focus on units that are truly appropriate for bargaining purposes and give fuller freedom to all employees to exercise their rights under the NLRA.

Traditional "Appropriate" Bargaining Unit Approach

Section 9 of the NLRA directs the NLRB to resolve questions concerning representation by way of secret ballot elections among employees in appropriate bargaining units, granting the board broad discretion to determine "the unit appropriate for the purposes of collective bargaining" in order "to assure employees the fullest freedom in exercising [their statutory rights]." The board must undertake an active inquiry and evaluate whether a unit's appropriateness is supported by a careful examination of the interests shared within and outside the petitioned-for unit. However, there are limits to the board's discretion -- Section 9(c)(5) expressly bars the board from giving controlling effect to a union's extent of organization when making unit determinations. Accordingly, a unit determination that gives controlling weight to the extent of a union's organization is an abuse of the board's discretion.

Prior to Specialty, the NLRB met its statutory mandate by engaging in an individualized and pragmatic "community of interests" assessment which focused on what unit would be "appropriate" for collective bargaining. This traditional analysis considered the totality of the relevant record evidence, giving fair weight to the manner in which an employer organized its business and utilized the skills of its workforce, as well as the resulting communities of interest that existed among the employees in the units sought by the parties. The board could, and often did, consider a union's extent of organization as one of the many factors in making unit determinations. However, the union's extent of organization was never treated as a governing or determinative factor, nor was it given controlling weight. Similarly, evidence relating to the community of interests that existed among employees in a union's petitioned-for unit was not automatically given greater weight than evidence favoring a broader unit.

The board's traditional approach favored neither management nor labor. Instead, it sought to strike a fair balance by avoiding unnecessarily large units -- making successful union organizing and a union's achievement of majority status unduly difficult -- and those units that were too narrowly drawn or limited, which create the potential for balkanized workforces, inefficient bargaining, and reoccurring labor unrest.

Because unit scope is the foundation of the whole collective bargaining relationship, the pre-Obama board recognized that each unit determination needed a direct connection to the circumstances within which collecting bargaining would take place. Accordingly, the board's traditional test focused primarily on the identifying the smallest employee grouping that would be appropriate for effective bargaining. The question to be answered was whether a given unit -- regardless of who sought it -- could lend itself to effective bargaining. If an examination of the totality of the facts led the board to answer that question in the affirmative, then the unit would be found appropriate for a vote and, should the union prevail at the ballot box, for purposes of the collective bargaining that would follow.

Specialty's Doctrinal Shift

In an effort to tilt its election process further in Big Labor's favor, the Specialty board sua sponte scrapped the pragmatic community of interest test, and traded it in for a new test which placed the burden of proving the inappropriateness of a petitioned-for unit on employers and gave de facto controlling weight to a union's extent of organization. Thus, all a union must do to obtain a favorable unit determination was to seek an election among employees who (1) were readily identifiable as a group (based on job classifications, departments, functions, work locations, skills or similar factors) and (2) shared a community of interests. This low threshold was met even if such narrow units enjoyed a broader community of interests with a larger group, and even if identical units had previously been found inappropriate under the board's traditional standard.

Once a union made this minimal initial showing, Specialty shifted to the employer the burden of proving that the union's proposed unit was either statutorily "inappropriate" or that the employees who the employer sought to add shared such an "overwhelming community of interests" with the employees in the union's unit that there could be no legitimate basis for their exclusion from the election unit.

The Specialty doctrinal shift favored union-proposed units. Indeed, the high burden of proving an "overwhelming community of interest" has made it impossible for employers to successfully challenge a union's proffered unit, thereby affording unions the ability to fashion voting units based the extent of their organizing and with little to no regard for the purposes of collective bargaining. Indeed, a survey of the NLRB decisions applying the Specialty standard shows that the Obama board found in favor of petitioned-for micro-units roughly 97 percent of the time.

The Specialty test is flawed on multiple levels. It gives favored status to a union's petitioned-for unit on the basis of a union's extent of organization, while imposing a heightened burden of proof of a larger community of interests outside the union's proposed unit. This twofold blow disregards wide-ranging similarities that may exist among employees in a broader unit, and gives short shrift to the legitimate interests and statutory rights of the omitted employees. Further, by disregarding the more wide-ranging interests of employees in a larger unit, Specialty's test risks sanctioning fragmented units that are inconsistent with the realities of the workplace, and that could prove unsuitable for a stable collective bargaining relationship. Finally, by giving dispositive weight to a union's community of interest showing -- to the exclusion of all other proof to the contrary that fails to be so overwhelming as to compel a broadening of the unit -- Specialty is an abuse of the board's discretion by giving de facto controlling weight to the extent of a union's organizing, in clear contravention of Section 9(c)(5).

Preview of Likely Coming Attractions

In Macy's, Inc., 361 NLRB No. 4 (2014), a union sought an election limited to a department store's cosmetics and fragrance employees, excluding all other employees. The employer objected to the petitioned-for unit and sought a unit of all of the store's employees, or all of its sales employees. Applying Specialty, a Democratic board majority found that the employees in the narrow cosmetic and fragrance unit met the minimal threshold for propriety because they were a readily identifiable group who shared a community of interests. Further, the majority held that the employer had not met its burden of demonstrating that the employees who the employer sought to include had an overwhelming community of interest with the petitioned-for employees, and thus declined to include them in the unit. Accordingly, the board directed an election among the store's cosmetic and fragrance employees only.

Dissenting from the decision and objecting to Specialty "here and in any other decision" was then-Board Member, now-Board Chairman Philip Miscimarra, who concluded that the petitioned-for unit was not bargaining appropriate and that the smallest "appropriate" unit consisted of all salespeople in the employer's store. In his view, "Specialty constitute[d] an unwarranted departure from standards developed over the course of decades that ha[d] long governed the board's bargaining-unit determinations" and that it was "irreconcilable with the role that Congress intended that the board would play 'in each case' regarding bargaining unit questions." Further, Miscimarra observed that Specialty rendered "controlling" the extent to which the employees had organized, because under Specialty the petitioned-for unit would govern except in the rarest of circumstances where an employer proved the existence of an overwhelming community of interests between those excluded and those in the proposed unit. Finally, Miscimarra rejected the "overwhelming community of interest" standard because it improperly focused solely on the rights of employees in the petitioned-for unit and disregarded the rights and interests of excluded employees.

Specialty's Days Are Numbered

Since his Macy's dissent, Miscimarra has adhered to his views and dissented from every case applying Specialty. He continues to believe that, contrary to Section 9(c)(5) and Sections 9(a) and (b), Specialty affords too much deference to petitioned-for units and that it will result in bargaining units based upon "whatever group or groups the petitioning union has organized at the time." Instead, Miscimarra would return to units decided upon by the board based on criteria specified in the NLRA. With the addition of Members Kaplan and Emanuel, pendulum will swing back and Chairman Miscimarra's dissents will likely become the majority. When that happens, the board will return to its pragmatic community of interest standard and the sun will set on Specialty.