In a long-awaited decision, the National Labor Relations Board (NLRB) unanimously held that women’s shoe sales associates from two different departments within Bergdorf Goodman’s New York store could not be combined into a single micro-bargaining unit. Specifically, in Neiman Marcus Group, Inc. d/b/a Bergdorf Goodman, 361 N.L.R.B. No. 11 (July 28, 2014), the NLRB dismissed a union’s petition for a representation election among 35 employees in the Salon shoe department and 11 employees in the Contemporary shoe department because the employees lacked a “community of interest.” The NLRB’s decision hinged on the fact that the boundaries of the petitioned-for unit did not resemble any administrative or operational lines drawn by the employer—the employees were in different departments, had different job classifications and did not report to the same supervisors. The decision highlights some important lessons for retail employers in preventing the certification of interdepartmental micro-bargaining units.
The Two Do Not Make a Pair
The NLRB explained that in order for the petitioned-for unit to be an appropriate bargaining unit, the employees in the petitioned-for unit must: (1) be readily identifiable as a group; and (2) share a community of interest. Here, the NLRB found that the petitioned-for employees (Salon shoe employees and Contemporary shoe employees) were readily identifiable as a group by virtue of their function: they comprise all sales associates at the employer’s retail store who are dedicated to selling women’s shoes.
However, the NLRB found that the petitioned-for unit was inappropriate because sales associates in Salon shoes and Contemporary shoes lacked a community of interest. In determining whether a petitioned-for unit is appropriate, the NLRB weighs various community-of-interest factors, including:
whether the employees are organized into a separate department;
have distinct skills and training;
have distinct job functions and perform distinct work;
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.
As an initial matter, the NLRB acknowledged that the petitioned-for employees shared some community-of-interest factors. Specifically, the NLRB found that the work of sales associates in Salon shoes and Contemporary shoes has a common purpose (selling women’s shoes) and that they are the only employees in the store to be paid on a “draw against commission” basis. Finally, along with all other employees store-wide, they share the same hiring criteria, receive the same employee handbook, and have the same appraisal process.
Despite these similarities, the NLRB explained that the balance of the community-of-interest factors weighed against finding that the petitioned-for unit was appropriate. Specifically, the Salon shoe employees and the Contemporary shoe employees were organized into different departments. There was no interchange between the two departments and the employees had limited contact. Further, the Salon shoe employees did not report to the same supervisors as the Contemporary shoe employees (except at the highest level of store management). Finally, there was no evidence that the Salon shoe employees and Contemporary shoe employees share any distinct skills or received any specialized training beyond the general orientation program that all new hires attend. The NLRB concluded:
"[W]hile some factors favor a finding of community of interest, they are ultimately outweighed, on these facts, by the lack of any relationship between the contours of the proposed unit and any of the administrative or operational lines drawn by the Employer (such as departments, job classifications, or supervision), combined with the complete absence of any related factors that could have mitigated or offset that deficit.
If the Shoe Fits . . . NLRB Contrasts Macy’s, Inc. Decision
The NLRB took care to distinguish its decision from its finding in Macy’s, Inc., 361 NLRB No. 4 (July 22, 2014) just six days earlier, wherein it affirmed an acting regional director’s decision that employees in a Macy’s department store’s cosmetics and fragrance department constituted an appropriate micro-bargaining unit. In Macy’s, Inc., the NLRB determined that the fragrance and cosmetics employees shared a community of interest, allowing for the establishment of their own bargaining unit because: (1) they all work in the same department, (2) they are all directly supervised by the same manager, (3) they all sell cosmetics and/or fragrances, (4) they have limited contact with other selling employees, (5) they all have the same commission-based pay structure and benefits, and (6) there is “limited” transfer of employees between the fragrance and cosmetic department and other store departments.
The NLRB explained that it found it particularly significant in Macy’s Inc. that the unit conformed to the departmental lines established by the employer in comprising all of the sales employees in the cosmetics and fragrances department. In contrast, while the Bergdorf Salon shoe employees constituted the whole of their department, the petition carved the Contemporary shoe employees out of a second department—Contemporary Sportswear—excluding the other sales associates in that department. In other words, although the employees represented all of the employees that sold shoes they were organized into completely different departments.
Points to Step Away With
Retail employers should be mindful that the NLRB will apply the “community of interest” test in determining appropriate micro-units. In its decision, the NLRB explained that the petition’s departure from any aspect of the employer’s organizational structure might be mitigated or outweighed by other community-of-interest factors, such as common supervision, interchange of employees between departments, and shared skills and training. Accordingly, to prevent the certification of micro-bargaining units, employees in different departments should not share direct supervisors (i.e., floor managers and directors of sales) and should not share employees (even on a temporary basis). Further, any training efforts beyond store-wide training should be kept separate. Nonetheless, both of these decisions highlight the NLRB’s willingness to accept micro-units within the workplace—a trend that will likely continue to be on the upswing.