In its 2011 decision in Specialty Healthcare, the National Labor Relations Board changed the test it uses to determine bargaining unit appropriateness. We reported on Specialty Healthcare and its expansion in an alert earlier this year, for the American Bar Association, and in a June 2012 FR Alert. In this case, the Board explained that where a non-petitioning party challenges a petitioned-for unit that is readily identifiable as a group and shares a community of interest on the grounds that it is inappropriate because it does not include additional employees, it has the burden of demonstrating an “overwhelming” community of interest between the included and excluded employees. Last week, the Sixth Circuit Court of Appeals (covering Michigan, Ohio, Kentucky, and Tennessee) upheld this controversial decision.
The case began when the union filed a representation petition with the NLRB for a bargaining unit of all full-time and regular part-time CNAs at a nursing home and non-acute healthcare facility. The employer contended that the only appropriate unit containing the CNAs would include all non-professional service and maintenance employees. The Regional Director found the petitioned-for unit to be appropriate and the Board upheld the decision. The employer refused to bargain with the newly certified unit and the union filed an unfair labor practice charge, which ultimately was appealed to the Sixth Circuit.
On appeal, the employer made four arguments that the Board abused its discretion in its 2011 decision, all of which were rejected by the court. First, it argued that the Board incorrectly adopted a new standard that strayed from clearly established precedent. The court recognized the Board’s broad discretion in determining bargaining unit appropriateness and that its decision to follow prior precedent over more recent precedent was justified because the Board “cogently explained” its rationale for doing so. Second, the employer argued that the “overwhelming community of interest” standard was a “material change in the law.” The court rejected this claim on the basis that the Board had previously used this standard and that it had even been upheld by the D.C. Circuit Court of Appeals. Third, the employer argued that the Board violated Section 9(c)(5) of the NLRA which states that “the extent to which the employees have organized shall not be controlling” in determining whether the petitioned-for unit is appropriate. The court disagreed with this contention and held that the Board “did not assume that the CNA-only unit was appropriate” and applied the proper community of interest standard. Finally, the court rejected the employer’s claim that the Board unlawfully established a general rule through adjudication instead of rulemaking, holding that the Board’s decision to follow an “already existing principle” in adjudication was not improper.
The Sixth Circuit’s ruling highlights the deferential standard reviewing courts apply to Board decisions, especially in the area of bargaining unit appropriateness. Although not binding on other circuits, this clear holding in favor of the NLRB should result in more cases where the Board permits a union to attempt to organize a discrete subset of an employer’s workforce. The composition of the unit is a critical factor in the outcome of a union election. Specialty Healthcare allows the union to control this critical factor, thus adding one more challenge to an employer’s ability to prepare for and respond to union organizing.