Hunton Employment & Labor Perspectives

During a week that brought several notable decisions, the National Labor Relations Board issued a ruling on Friday, December 15, 2017, overturning its controversial 2011 Specialty Healthcare & Rehabilitation Center of Mobile, 357 NLRB 934 (2011) (“Specialty Healthcare”) decision, which held that in order for employees to be included in a collective bargaining unit, employers had to prove the employees shared an “overwhelming community of interest” with one another.  The unions argued that the “overwhelming community of interest” burden was all but impossible to meet and effectively allowed unions to create “micro-units” of any number, group, or sub-group of employees the unions saw fit.  This in turn meant that an employer could be faced with negotiating collective bargaining agreements with multiple groups of employees who often shared the same schedule, workplace, and general terms and conditions of employment, but nonetheless were represented by different locals or divisions of the same or multiple unions.  In one particularly glaring example, the Board approved a union’s request for separate bargaining units in each of nine different graduate student departments at Yale University despite the fact that the union already represented existing, university-wide bargaining units.

The Board now returns to a standard that it has used “[t]hroughout nearly all of its history,” by looking at such factors as: whether the employees in the proposed unit were organized into separate departments, had distinct skills, training, and job functions and performed distinct work, were “functionally integrated” with other employees, how often the employees interacted, and whether they had distinct terms and conditions of employment and were separately supervised. The Board stated that returning to the traditional approach would “ensure[] that bargaining units will not be arbitrary, irrational, or ‘fractured’—that is, composed of a gerrymandered grouping of employees whose interests are insufficiently distinct from those of other employees.”  Noting that Specialty Healthcare “created a regime under which the petitioned-for unit is controlling in all but narrow and highly unusual circumstances,” the Board found that Specialty Healthcare impeded the Board’s obligation to determine appropriate bargaining units by granting too much deference to the unions’ proposed units “without attaching any weight to the interests of excluded employees.”

The 3-2 decision to overturn Specialty Healthcare is a welcome development for employers facing proposed micro-units that bear no logical or reasonable relationship to the realities of the workplace.  The decision came amid a wave of other pro-business decisions at the end of Chairman Philip Miscimarra’s tenure on the Board, which expired on December 16, 2017.  Chairman Miscimarra announced in August 2017 that he would not seek reappointment, leaving a vacancy for another Trump appointee.