NLRB Decisions on “Micro Units” Provide Guidance for Employers Concerned With Union Organizing

by Ogletree, Deakins, Nash, Smoak & Stewart, P.C.
Contact

In two recent decisions, the National Labor Relations Board (NLRB) reached different conclusions on whether unions can organize small groups of employees in a workplace. While the NLRB’s decisions in Macy’s, Inc. and The Neiman Marcus Group, Inc. d/b/a Bergdorf Goodman, both deal with retail employers, the principles articulated are applicable to employers in all industries. The decisions constitute a roadmap for unions seeking to gain representation rights over workers in single departments or within single job classifications. Employers concerned about union organizing need to understand the new paradigm that the NLRB created with these cases and take proactive steps to counter the expected surge in union organizing.

Moreover, employers must take these steps now. Employers do not have the luxury to delay thoughtful, advanced planning as the NLRB is likely to issue the ambush election rules shortly. The net effect of the proposed rules is

  • a significant reduction in the pre-election due process typically afforded employers in representation cases;
  • a substantial reduction in employers’ ability to have meaningful input regarding the size and scope of the bargaining unit; and
  • the creation of an environment in which employees will be required to vote without being fully informed of the critical facts.

The new rules effectively limit the opportunities for employers to educate employees about unions and unionization prior to voting.

Macy’s: NLRB Concludes a Unit Limited to Cosmetics and Fragrance Employees is Appropriate

In Macy’s, the United Food and Commercial Workers International Union unsuccessfully attempted in 2011 to organize all full-time and regular part-time employees at the company’s Saugus, Massachusetts store. In 2012, believing it would be more successful if a vote was conducted in a different bargaining unit, the union filed a petition seeking to represent a much smaller group of employees at the same store including both the employees working on the first floor in cosmetics and women’s fragrances and those employed on the second floor selling men’s fragrances. This group constituted about 41 of 150 total Macy’s employees at the Saugus store.

The employer contended that the appropriate bargaining unit needed to include all 150 employees in the 11 departments of the store or, alternatively, all selling employees at the store. It was undisputed that all store employees shared almost identical terms and conditions of employment; they were issued the same handbook, had the same fringe benefits, worked under a single dispute resolution procedure, were evaluated according to the same performance evaluation process, used the same time clock system and the same break room. Despite that strong evidence of common interest among all store employees, the employees in the petitioned-for micro unit were separately supervised and there were apparently few documented instances of interchange of employees between the 11 departments.

The NLRB agreed with the union and concluded that a bargaining unit of only employees in the first floor cosmetics and fragrance department and those on the second floor selling men’s fragrances was appropriate for collective bargaining. Applying its landmark decision in Specialty Healthcare and Rehabilitation Center of Mobile, the NLRB found that Macy’s did not meet its affirmative burden of proof to demonstrate that all store employees shared an “overwhelming community of interest” with the much smaller group of employees the union sought to represent. The NLRB focused on the fact that employees did not work in multiple departments and did not share common front-line supervision. The NLRB rejected the employer’s arguments that the bargaining unit should be composed of all store employees because the retail industry historically has been organized in wall-to-wall units and because the union represented significantly larger and more comprehensive bargaining units at other company stores.

The Neiman Marcus Group, Inc. d/b/a Bergdorf: NLRB Concludes a Unit of Second Floor and Fifth Floor Shoe Sales Associates is not Appropriate

The Board reached the opposite conclusion in The Neiman Marcus Group, Inc. d/b/a Bergdorf Goodman, perhaps setting the outer limits of the NLRB’s willingness to allow unions to organize “micro units” of employees. In Bergdorf, the union sought to organize employees working in the second floor “Salon Shoe Department” of the company’s multi-floor, Manhattan store as well as the “contemporary footwear” employees working on the fifth floor who themselves were a subset of the larger “Contemporary Sportswear Department.”

All employees at the store enjoyed identical working conditions; they were issued the same handbook, were offered the same health care plan, had the same holidays and vacations, and worked the same number of hours. Employees selling shoes on the second and fifth floors had separate direct supervisors who reported to different floor managers. Employees were not interchanged between the Salon Shoe and Contemporary Footwear departments.

The NLRB ruled that the two groups of employees did not share a community of interest and, therefore, did not constitute an appropriate bargaining unit. The Board observed that the unit the union sought to represent did not follow “any administrative or operational lines drawn by the employer,” had little contact, were separately supervised and otherwise did not share sufficient interests in working conditions to be grouped together for collective bargaining.

Understanding the NLRB’s Specialty Healthcare Decision

The Macy’s and Bergdorf decisions purport to apply the Board’s 2011 decision in Specialty Healthcare, which permits unions to organize small groups of employees such as single departments or single job classifications of workers within an employer’s overall operation. After the union has established that the unit they have requested is appropriate that decision places the burden of proof on the employer to establish that any employees sought to be added to the unit share an “overwhelming community of interest” with the group the union seeks to represent. Naturally, Specialty Healthcare makes it far easier for unions to collect authorization cards and get to elections due to their ability to organize the smallest possible unit. In Macy’s, for instance, the union only needed to secure authorization cards from 30 percent of the 41 employees in the unit (13 cards) rather than 45 cards from among the 150 total employees at the store.

The danger of unions’ use of micro-units is not limited to the ease with which they may be organized. Consider for example (i) the time, expense, and disruption caused by multiple union organizing campaigns; (ii) the possibility of negotiating multiple labor contracts; (iii) circumstances in which different unions may seek to represent various departments or job classifications within a single operation; (iv) competitive bargaining among the various micro units; and (v) the danger of unstable bargaining relationships.

As Macy’s demonstrates, under the Specialty Healthcare analysis it is extremely difficult for employers to defeat a micro unit by simply arguing that the appropriate bargaining unit should also include other groups of workers, even when those employees work in the same establishment under almost identical terms and conditions of employment. However, there are limits. A careful reading of Berfdorf and Macy’s provides employers key guidance on proactive steps to take to change the dynamic.

Proactive Steps for Employers to Develop the Optimal Bargaining Unit

Employers that desire to remain union-free need to consider the impact of the NLRB’s decisions paving the way for unions to organize small bargaining units. Employers have the ability to make changes now that help defeat attempts to organize micro units. According to the Board, the manner in which employers chose to structure their operations, including the manner in which the skills and training of employees are utilized throughout the operation and supervision of employees “is an important consideration in any unit determination.”

The Macy’s and Bergdorf decisions establish that the critical factors in the NLRB’s bargaining unit analysis are whether separate groups of employees have common supervision and have common or overlapping job duties as well as the degree of interchange between departments or job classifications. Dependent upon the particular operation or industry, employers can consider combining job classifications, cross-training employees in multiple job duties and rotating employees among classifications or jobs. Employers should make an individualized risk assessment and consider operational and structural changes based upon practical considerations unique to their businesses.

To meet the heightened burden of proof imposed by the NLRB, employers should document the degree of interchange between departments and across job classifications. As well, supervisor responsibilities should be structured so that oversight of multiple departments is shared among several individuals. Employees must also share common terms and conditions of employment such as wages, benefits, and training requirements. To be sure, these steps may not make sense for every business, but are worthy of consideration, particularly in light of the NLRB’s ambush election rules.

In conjunction with developing the optimal bargaining unit—which will be an asset in the event of a union campaign—employers should also implement strategies that make unions unnecessary. This includes insuring fair and equitable treatment of workers, establishing appropriate complaint procedures, workplace issue identification and resolution, instituting adequate supervisory training, and offering competitive wages and benefits. The NLRB’s obsession with micro units and ambush elections are reminders that the most successful campaign is the one employers never have to face.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Ogletree, Deakins, Nash, Smoak & Stewart, P.C. | Attorney Advertising

Written by:

Ogletree, Deakins, Nash, Smoak & Stewart, P.C.
Contact
more
less

Ogletree, Deakins, Nash, Smoak & Stewart, P.C. on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.