Login | January 21, 2020

Experts discuss impact of NLRB micro-unit decision

Legal News Reporter

Published: January 19, 2018

It was one of the more controversial rulings made by the National Labor Relations Board under the Obama Administration, but on Dec. 15, 2017 the newly reconstituted NLRB overruled the decision that allows unions to organize smaller units of employees, often called “micro-units.”

Employers argued the 2011 ruling in Specialty Healthcare & Rehabilitation Center of Mobile, 357 NLRB 934, gave unions an unfair advantage by allowing them to organize a minority share of a company’s workforce without the consent of the majority of employees.

The National Labor Relations Board’s 3-2 decision in PCC Structurals Inc. in December reinstated the previous community-of-interest standard when determining an appropriate bargaining unit for union representation.

In an NLRB press release, the board stated that “there are sound policy reasons for returning to the traditional community-of-interest standard that the Board has applied throughout most of its history, which permits the Board to evaluate the interests of all employees—both those within and those outside the petitioned-for unit—without regard to whether these groups share an ‘overwhelming’ community of interests.”

Attorneys Rick Grimaldi, Lori Armstrong Halber and Todd Lyon, partners at the management-side labor and employment law firm Fisher Phillips, represented PCC Structurals in the action against the International Association of Machinists and Aerospace Workers AFL-CIO District Lodge W24.

“The Specialty Healthcare standard essentially took away the rights of other employees who worked side by side with those in the micro-unit,” said Grimaldi, who works out of the firm’s Philadelphia and D.C. offices.

“Specialty Healthcare significantly expanded the union’s ability to organize smaller units of employees by allowing them to define a bargaining unit based on the extent of the union’s organizing.

“If a union petitioned for an election among a particular group of employees, it merely needed to show the group it organized represented a ‘readily identifiable’ group based on job classifications, departments, functions, work locations, skills or similar factors,” he said. “The burden then shifted to the employer to demonstrate that additional employees ‘shared an overwhelming community of interest’ with the petitioned-for employees, an almost impossible standard for employers to meet.”

Rachel Reight, a partner at Baasten-McKinley & Co who represents employees, said the board’s decision in PCC Structurals to return to the traditional community-of-interest factors in union elections “effectively eliminates micro-units.

“Specialty Healthcare was a victory for unions,” said Reight. “The benefits of unions being able to organize subgroups were that it was more manageable for unions to organize smaller groups and that once the union was established, it is easier to unionize nonunion employees within the organization.

“The decision will make it more difficult for unions,” said Reight. “Employers often try to include more employees in the unit seeking recognition as there is a greater potential that the union will not receive support.

“PCC Structurals allows employers to more effectively counter-organize by including more employees in units, with greater potential for nonunion support,” Reight said.

Under the National Labor Relations Act, the NLRB is charged with deciding whether a particular group of employees a union seeks to represent constitutes a unit that is “appropriate” for collective bargaining.

In the case of Portland, Oregon-based PCC Structurals, the NLRB regional director applied the Specialty Healthcare standard when determining that the petitioned-for unit of about 100 welders shared a “community of interest” and therefore represented an appropriate bargaining unit for election purposes.

The workers were part of a larger group of more than 2,500 production workers.

“The director found that the welders shared a distinct community of interest despite the fact that the welders worked with other employees across different departments,” said Lyon, who works out of the firm’s Seattle and Portland, Oregon offices.

“All production workers, including the welders, worked similar hours, were paid on the same wage scale, received the same benefits, were subject to the same handbook and work rules, wore similar attire and protective gear, worked under the same safety requirements and participated in ongoing training regarding harassment, safety and other matters,” said Lyon.

As a result, he said the employer argued that all the production employees shared an “overwhelming community of interest” with the welder-only micro-unit and should have been part of the unit.

Members of the micro-unit voted to unionize on Sept. 22 and PCC Structurals appealed the result.

“We argued the Specialty Healthcare standard was inappropriate because it forced the board to cede its statutory obligation to determine the appropriate unit to the union,” said Armstrong Halber, who works out of the Philadelphia office.

“The board agreed with us,” she said. “In my view this decision benefits all the employees of the company, who now get a voice in whether to unionize as opposed to being forced to do so based on the decision of a small group of employees.

“The board also stated that Specialty Healthcare denied employees the full exercise of their Section 7 rights,” said Armstrong Halber.

Grimaldi said by overturning Specialty Healthcare, the board reaffirmed that the community-of-interest test requires “the board in each case to determine whether the employees are organized into a separate department; have distinct skills and training; have distinct job functions and perform distinct work, including inquiry into the amount and type of job overlap between classifications; are functionally integrated with the employer’s other employees; have frequent contact with other employees; interchange with other employees; have distinct terms and conditions of employment and are separately supervised.”

Reight said the PCC Structurals decision would deny smaller units of employees the benefits that unions provide, including the ability to collectively bargain for workplace safety, higher wages, better benefits and job security.

“More importantly, PCC Structurals will deny these smaller units the choice that they once had to either unionize or not. Now these smaller units will only have this choice if the larger units are making the decision to unionize or not,” said Reight.

She said the board’s reversal is the direct result of President Trump’s appointees and could be viewed “as a preview of things to come.”

Armstrong Halber said the next step is for the regional director to apply the community-of-interest standard in order to determine whether additional employees at PCC Structurals should have gotten the right to vote in the union election.

“It’s highly unlikely that the PCC Structurals decision will be reversed any time soon,” said Armstrong Halber.