Micro Unions Are Here to Stay: Cosmetics Workers Made Up for Unionizing But Shoes Salespeople Need to Find a Better Fit

by Foley & Lardner LLP

The question – or controversy, depending on who you talk to – about the propriety of “micro-units” or “micro-unions” has been a pressing issue for employers since the National Labor Relations Board issued its Specialty Healthcare decision in 2011. The concern has been that unions, as a way of getting a foot in the door at a non-union employer, would petition to represent arbitrarily defined small groups covering only those employees who supported the union to win an election where the majority of a more readily apparent “community of interest” does not support unionization. Though the Board claimed Specialty Healthcare did not create new criteria for defining appropriate bargaining units outside the healthcare industry, the dissent from that decision was direct in saying “Make no mistake. Today’s decision fundamentally changes the standard for determining whether a petitioned-for unit is appropriate in any industry under the Board’s jurisdiction.” Two decisions recently issued by the Board suggest that the dissent’s prognostication in Specialty Healthcare was correct, but they may also give some hope to employers that their union-free workforces cannot be penetrated through blatant “micro-unit” gerrymandering to ensure the union delivers itself an election victory.

In the first decision involving 41 cosmetics and fragrance salespeople in a department store, the Board concluded that the small group of workers was an appropriate group to organize. Seemingly putting to rest any debate that Specialty Healthcare only applied to the health care industry, the Board specifically cited the decision (despite then claiming it did not need to rely on Specialty Healthcare) and applied it to the retail industry in support of its ruling applying to a less-than-storewide unit of employees. According to the Board, the cosmetics and fragrance sales workers were “a readily identifiable group who share a community of interest.” The Board further stated that the employer had not met its burden to demonstrate that the other employees shared “an overwhelming community of interest with the petitioned-for employees so as to require their inclusion in the unit.”

The Board’s decision in this first case turned on numerous facts, but the three most important were that the employees in the petitioned-for group: (1) all worked in a “separate department from all other selling employees” and comprised all the nonsupervisory employees in their department; (2) were supervised by the same sales manager; and (3) had little, if any, contact with employees or customers of other departments – essentially all were dedicated to the same task of selling cosmetics and fragrances. The Board seemed particularly swayed by the fact that the department store itself had grouped cosmetics and fragrance employees together for purposes of internal store management.

The importance of this employer-chosen-organization factor seemed to provide the critical departure point for the second Board decision issued just a week later. In this second case, the Board examined the propriety of yet another narrowly drawn petitioned-for unit in the retail sector – this time all women’s shoe sales associates inside a single department store in New York. Distinguishing that petitioned-for unit from the one in the earlier case, the Board focused on the fact that “the boundaries of the petitioned-for unit do not resemble any administrative or operational lines drawn by the Employer.” In fact, contrary to the unit in the earlier case, the petitioned-for micro-unit in the second case was “carved out” by the union from other departments and then “grouped” together for the union’s own hoped-for bargaining purposes. Such a gerrymandered group, according to the Board, could not be deemed to share a community of interest sufficient to support a bargaining unit.

Employers who have thus feared that Specialty Healthcare portended an unwelcome and crippling onslaught of “micro-unions” could, therefore, be simultaneously dismayed and somewhat heartened by these recent decisions. The earlier assertion by the Board itself that it would not expand micro-unions outside the health care industry seems to be yet another instance, among many recent actions by the Board in which it departs from its own precedent to expand union protections. However, the way the employer chooses to organize itself and manage and supervise its employees appears to play a vital role in determining the appropriateness of a narrowly drawn petitioned-for unit and giving unions opportunities to penetrate workforces through micro unionization. That said, a prudent employer hoping to avoid the formation of micro-unions would be well advised to look at all the major factors considered by the Board and, to the extent possible, maintain a flexible, integrated and well-rounded work staff with common management when doing so supports the employer’s operational imperatives.

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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.

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