NLRB Continues Labor-Friendly Push by Reinstating Obama-Era Standard to Facilitate Union Organizing of “Micro-Units”

Speciality Healthcare requires the Board to give extraordinary deference to an organizing union’s preferred bargaining unit, allowing the union to gerrymander the voting pool and increase its likelihood of winning a representation election.

Inexorably, the threshold and often determinative question in any union representation case is who’s in, and who’s out? — i.e., which employees are eligible to vote and (potentially) be included in the prospective bargaining unit, and which employees are excluded? And, inexorably, the organizing union seeks to gain every possible advantage by defining the proposed bargaining unit (the voting group) in a manner that aligns with its perceived support. For instance, a union that successfully builds support among a smaller subgroup of employees — those in a particular department, classification, or shift — may petition for an election involving employees just from that subgroup, understanding it is better to win a smaller election than lose a larger one. Once the union successfully organizes the smaller group, it can seek to expand its influence and representative status from within. The metaphorical nose-under-the-tent-flap approach.

The National Labor Relations Act (NLRA or Act) purportedly provides a check against such gerrymandering in union elections by empowering the Board to determine what constitutes an “appropriate bargaining unit” in representation cases. Historically, the Board discharged this responsibility by assessing the overall “community of interests” among employees in a workplace, giving due (but not undue) consideration to the positions advanced by the interested parties — i.e., the union and employer. In 2011, the Obama Board effectively abdicated its role in this process, deciding in Specialty Healthcare that a union’s petitioned-for unit would be deemed appropriate unless an objecting employer could demonstrate that excluded employees shared an “overwhelming community of interests” with those employees in the union’s proposed unit. In application, Specialty Healthcare operated as a rubber stamp of the union’s petition.

Then, in 2017, the Trump Board overruled Specialty Healthcare and returned to its historical community of interests analysis in PCC Structurals, Inc., 365 NLRB No. 160 (2017), and The Boeing Co., 368 NLRB No. 67 (2019). Comparatively, the PCC-Boeing standard was less deferential than Specialty Healthcare to the union’s proposed unit, and called for the Board to evaluate whether “excluded employees have meaningfully distinct interests in the context of collective bargaining that outweigh similarities with unit members.” Again, as a practical effect, the PCC-Boeing standard made it easier for employers to challenge a union’s proposed bargaining unit where the unit was inappropriately crafted in order to win a representation election.

Last week, a majority of the current Biden Board held that Specialty Healthcare properly reflects the Board’s “historical requirement” that a party challenging the make-up of a proposed unit prove through a “heightened showing” that the petitioned-for and excluded employees are so similar, and “overlap almost completely,” such that the union is seeking “in essence, an arbitrary segment of an otherwise appropriate unit.” The majority criticized the PCC-Boeing standard as removing “an important safeguard that provides employees with the fullest freedom to organize in units of their own choosing,” and providing “no compelling rationale” for adding employees to units where they meet the other two prongs shared in the Specialty Healthcare and PCC-Boeing tests, an internal community of interests and a readily identifiable group based on industry and job classifications. The majority claimed the PCC-Boeing standard could have the effect of denying employees their statutory rights to self-organization and bargaining by requiring larger units, which are harder to organize.

Dissenting Board Members Kaplan and Ring argued that PCC-Boeing, not Specialty Healthcare, better represents the Board’s historical precedent for unit determination challenges. While PCC-Boeing asks the Board to evaluate whether the petitioned-for unit and excluded employees “as a whole” share interests similar enough to require inclusion in the unit, Specialty Healthcare asks only whether the interests of included and excluded employees “overlap almost completely.” This approach creates an “irrational,” “stringent,” and “nearly insurmountable” burden for employers challenging the petitioned-for unit. Indeed, there is just one published decision applying Specialty Healthcare in which the Board ruled in favor of an employer seeking to challenge a union’s proposed unit.

Thus, the dissenters argued that while the NLRA directs the Board to determine an “appropriate” unit for “purposes of collective bargaining,” Specialty Healthcare instead focuses on determining a unit “for the purpose of making it easier for unions to win elections.” This result runs counter to the Act by improperly excluding employees who will be “collaterally controlled by a collective bargaining agreement from which they derive no benefit.” Instead, the dissenters conclude, a return to Specialty Healthcare serves only the “animating principle” adopted by the Board majority that “the primary goal of a unit determination is to facilitate employees’ ability to organize in the unit selected by the petitioning union.”

Under American Steel, employers seeking to challenge a union’s preferred unit in a representation case will face the difficult and “nearly insurmountable” Specialty Healthcare standard. By making it easier for unions effectively to hand-select their voters, the Board continues to place a heavy thumb on the scale in favor of unions and at the expense of employee choice. AFS will continue to monitor these developments as we enter the new year.