This week, the National Labor Relations Board (NLRB) reinstated its 2011 decision allowing unions to form smaller bargaining units by organizing smaller portions of an employer’s business. These small bargaining units – also called “micro-units” – are considered more susceptible to union organizing because it is generally easier for a union to organize smaller groups of workers.
Given the wave of union organizing throughout the country, employers should be keenly aware that a union may target a smaller portion of its workforce for an organizing campaign.
The “Appropriate” Unit for Bargaining
Under Section 9(a) of the National Labor Relations Act (NLRA), a union can only represent a union that is “appropriate” for the purposes of collective bargaining. The NLRB is responsible for determining what groups of employees are “appropriate” under the NLRA.
Generally speaking, the larger the bargaining unit, the more difficult it is for a union to organize it. As a result, after a union files a petition to represent a group of employees (called an RC-petition), the most common dispute is whether, as the employer claims, the unit should be expanded to include additional employees who share a “community of interest” with the petitioned-for unit, or whether the petitioned-for unit is “appropriate.”
Traditionally, the NLRB analyzes certain factors to determine whether a group of employees shares a “community of interest” with a larger group of employees. These factors address whether the employees:
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- Are organized into a separate department;
- Have distinct skills and training;
- Have distinct job functions and perform distinct work, including inquiry into the amount and type of job overlap between classifications;
- 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.
These factors are never addressed alone. Instead, the Board focuses on “whether the interests of the group sought are sufficiently distinct from those of other employees to warrant the establishment of a separate unit.”
The Fight Over “Micro-Units”
In 2011, the NLRB issued a decision in Specialty Healthcare, 357 NLRB 934 (2011), which held that the unit sought to be organized by the union (i.e., the “petitioned-for unit”) is presumptively valid if: (1) those employees “are readily identifiable as a group (based on job classifications, departments, functions, work locations, skills, or similar factors)” and (2) they share a community of interest with each other.
Additional employees can be added to the bargaining unit only if the party seeking to add additional employees (i.e., typically the employer) shows that those employees “share an overwhelming community of interest” with the petitioned-for employees. The result is that the vast majority of bargaining units – even if they are “micro” in size – are considered “appropriate” under Specialty Healthcare.
The Board overruled Specialty Healthcare in PCC Structurals, Inc., 365 NLRB No. 160 (2017), and The Boeing Company, 368 NLRB No. 67 (2019). Under the framework established in PCC Structurals and Boeing, the Board first considers whether the employees in a proposed unit share an internal community of interest. Second, the Board considers whether the interests of employees within the proposed unit are sufficiently distinct from the interests of those excluded from the proposed unit. Third, the Board considers any applicable guidelines that the Board has established for the specific industry involved with regard to appropriate unit configurations.
“Micro-Units” Are Back
This week, the NLRB released its opinion in American Steel Construction, Inc., 372 NLRB No. 23 (Dec. 14, 2022). In American Steel, the Board overruled its decisions in PCC Structurals and Boeing and returned to the standard set forth in Specialty Healthcare. The Board majority explained:
[B]y making it easier to invalidate a petitioned-for unit based on the supposed interests of excluded employees, PCC Structurals discounted the rights of the employees seeking representation and obscured the core inquiry in such cases: whether the employees in the petitioned-for unit share a community of interest rendering the unit appropriate for the purposes of collective bargaining.
As a result, the Board reinstated its Specialty Healthcare decision and explained that it will find the following units “appropriate” for purposes of bargaining under the NLRA:
[T]he Board will once again approve a petitioned-for “subdivision” of employee classifications if the petitioned-for unit: (1) shares an internal community of interest; (2) is readily identifiable as a group based on job classifications, departments, functions, work locations, skills, or similar factors; and (3) is sufficiently distinct. Of course, the Board need not address each element in every case: if a particular element is not disputed, it need not be adjudicated. But if a party contends that the petitioned-for unit is not sufficiently distinct—i.e., that the smallest appropriate unit contains additional employees—then the Board will apply its traditional community-of-interest factors to determine whether there is an “overwhelming community of interest” between the petitioned-for and excluded employees, such that there is no rational basis for the exclusion. If there are only minimal differences, from the perspective of collective-bargaining, between the petitioned-for employees and a particular classification, then an overwhelming community of interest exists, and that classification must be included in the unit.
Importantly, the Board noted that, as it did in Specialty Healthcare, “this test does not disturb or displace any preexisting rules or presumptions applicable to specific industries or occupations.”
The Board applied its decision retroactively to all pending election cases.
Bottom Line
With Specialty Healthcare again the law of the land, it will be easier for smaller groups of workers to be organized. Thus, employers should review their workforces and determine what opportunities and practices need to be improved in 2023 to increase employee engagement. Also, any organizational audit may be helpful to see if your organization is susceptible to a “micro unit.”
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