Key Takeaways:

• The NLRB’s decision shifts the burden to employers to show that a union’s proposed bargaining unit is too narrow.
• Under the reinstated Obama-era standard, employers must show that workers outside of the proposed unit have an “overwhelming” common interest with workers inside the proposed unit to successfully challenge the proposed bargaining unit.
• The decision increases the odds that unions will be able organize and represent small bargaining units within an employer’s larger workforce.

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On December 14, 2022, in a return to Obama-era precedent, the National Labor Relations Board (NLRB) toughened the standard an employer must meet to prevent a union from organizing a small group of employees within a larger workforce. Under the NLRB’s ruling in American Steel Construction Inc., 372 NLRB No. 23 (2022), employers must show workers outside of the proposed unit have an “overwhelming” common interest with workers inside the proposed unit in order to expand the unit. The 3-2 decision represents the second time the standard has been overturned in the past 5 years.
 
American Steel Construction Inc. concerned a union’s attempt to represent all field iron workers at American Steel Construction Inc. American Steel asserted that the petitioned-for unit was inappropriate, arguing that the smallest appropriate unit should include additional classes of employees, including painters, drivers, and inside fabricators who work at its shop. The Regional Director applied the standard set forth in the NLRB’s 2017 ruling in PCC Structurals, Inc., 365 MLRB No. 160 (2017), which shifted the burden to unions to show workers in their proposed units had sufficiently distinct interests from those not in the proposed group. Applying PCC Structurals, the Regional Director sided with the employer, finding that there was insufficient evidence to show the field iron workers’ community of interests were “sufficiently distinct” from the rest of the facility’s employees.
 
The NLRB overturned the Regional Director’s decision and reinstated its 2011 standard set forth in Specialty Healthcare & Rehabilitation Center of Mobile, 357 NLRB 934 (2011). This standard places the burden on employers seeking to challenge a bargaining unit to show workers outside of the proposed unit have an “overwhelming” common interest with workers inside the proposed unit to justify expanding the unit. The NLRB articulated three reasons why the “sufficiently distinct” standard needed to be overturned: (1) the standard was “vague, confusing, and [had] no support in Board precedent”; (2) the standard removed an important safeguard that provided employees with the freedom to organize in units of their choosing; and (3) the PCC Structurals, Inc. decision offered no compelling rationale for why the Board should be adding employees to bargaining units that possess a rational basis to bargain collectively.

The NLRB’s reinstatement of the overwhelming common interest standard was applied retroactively to all pending cases. Therefore, employers should evaluate any pending claims they have challenging proposed units and assess whether they have sufficient evidence to meet this new burden. Moving forward, the NLRB’s decision places a heightened burden on employers that will make challenging union attempts to organize small bargaining units within a larger workforce more difficult. Unions likely will have an easier time organizing smaller units within an employer’s larger force. Accordingly, employers will want to consider increased emphasis on their union avoidance efforts to prevent or curtail organizing efforts in their workplaces.