Last week, the U.S. Court of Appeals for the Eighth Circuit upheld the National Labor Relations Board’s Specialty Healthcare framework for determining whether a union’s petitioned-for bargaining unit is appropriate. Under this two-step analysis, the Board evaluates whether the employees in the proposed unit are “readily identifiable” as a group and “share a community of interest.” If the unit is determined to be appropriate, an employer seeking to challenge the proposed unit must show that other workers not identified by the union share an “overwhelming community of interest” with the proposed bargaining unit. As we have previously reported in our November 24, 2015 alert, employers face a high hurdle when challenging a union’s petitioned-for bargaining unit under Specialty Healthcare.

In FedEx v. NLRB, the Teamsters filed separate petitions to represent city and road drivers at FedEx terminals in Croydon, PA and Charlotte, NC. City drivers pick up and deliver freight to customers, while road drivers move freight between FedEx facilities. FedEx claimed that the petitioned-for units were not appropriate and should include the dockworkers who load and unload trucks and move freight around the docks at the FedEx terminals. Among FedEx’s arguments in favor of a broader unit included that dockworkers may be part of a “dock to drive” program under which workers can obtain commercial driver license and become eligible for city and road driver positions. In addition, Fed Ex argued that at both locations, some drivers also performed dock work. Two NLRB Regional Directors rejected FedEx’s arguments and determined that the bargaining units were appropriate under Specialty Healthcare. The NLRB denied FedEx’s request for review of the Regional Director decisions, and when drivers in both cities voted to unionize, FedEx refused to bargain, contested the bargaining units determinations, and sought review of the NLRB’s decision in the Eighth Circuit where it claimed that Specialty Healthcare violated the NLRA, Eighth Circuit precedent, and the Administrative Procedure Act.

The Eighth Circuit upheld the NLRB’s Specialty Healthcare framework as a “reasonable interpretation” of the NLRA to which the Court “must defer.” Importantly, the Court determined that “overwhelming community of interest” standard that is part of the Specialty Healthcare analysis is not a material departure from precedent and is consistent with the NLRA. The Court also explained that Specialty Healthcare did not create an impossible standard for employers to meet and did not give controlling weight to a union’s proposed bargaining unit. The Court referred to the NLRB’s decision in Odwalla, Inc., 357 NLRB No. 132 (2011), where the employer successfully argued that excluded workers shared an overwhelming community of interest with the proposed bargaining unit, as an example that Specialty Healthcare did not unduly bias the framework in favor of the union’s proposed bargaining unit.

Having upheld Specialty Healthcare, the Eighth Circuit proceeded to dismiss FedEx’s challenge to the NLRB’s unit determination decisions because FedEx failed to show that dockworkers had an “overwhelming community of interest” with city and road drivers under Specialty Healthcare.

The Eighth Circuit joins the Sixth Circuit in affirming the Specialty Healthcare unit determination framework. Growing federal court acceptance of Specialty Healthcare, along with the NLRB’s 2015 expedited election rules, combine to create unique challenges for employers who find themselves in union organizing campaigns. Thoughtful preparation and planning are necessary for employers to successfully navigate these choppy waters.