Beware of "Micro" Units Bargaining Within Your Company

When a union begins to "organize" employees in your workplace, it must first determine which employees it wants in the "bargaining unit": Production? Maintenance? Sales? Clerical? Shipping? Receiving? Some of the above? All of the above? However, whether or not the bargaining unit the union chooses is "appropriate" ultimately will be determined by the National Labor Relations Board ("NLRB" ).

Historically, the NLRB's primary concern has been whether or not the employees chosen have substantial mutual interests in wages, hours, supervision and other terms and conditions of employment, known as a community of interest. Thus, in most industries unions have organized using a facility-wide (location specific) model. For example, at a delivery company all couriers on all shifts almost certainly would be in the same unit. Indeed, neither a union nor an employer would have had much chance of prevailing were it to argue that the couriers who handle airfreight packages should be in a separate unit from the couriers who handle ground packages or that each shift should be in a separate bargaining unit.

The underlying policy reason for nonproliferation of bargaining units is that to do otherwise would not make for good labor relations. For example, each separate bargaining unit could have its own contract with different work rules and benefits, its own expiration date, and be organized by any labor union in the land. However, the current activist NLRB has decided that such an arrangement would be a good thing and, in doing so, has demonstrated its pro-union bias yet again. In addition to the chaos mentioned above, organizing a larger group is more difficult for the union than organizing a smaller group. Using the courier company example again, meeting with and persuading 12 couriers, all of whom work the night shift, is less time-consuming than meeting with and persuading 70 couriers that work all three shifts.

The first NLRB decision that approved a "micro" unit was Specialty Healthcare. In that case, the nursing home and rehabilitation center had various employee groups, including nurses, nurse assistants, cafeteria workers, maintenance workers, housekeeping, laundry and social services/rehabilitation staff. Normally, an appropriate unit would have consisted of all of the above except the registered nurses, because professionals are treated differently. But the NLRB approved a micro unit of solely nursing assistants, creating the potential for the other small employee groups to organize separately.

Historically, healthcare cases such as Specialty Healthcare have been used to provide guidance only for other healthcare cases, so there was some sense that this doctrine would not spread beyond healthcare. But that proved not to be the case as just last month a "micro" unit was approved for a cosmetic and fragrance department in a retail store in Macy's, Inc.

In that case the NLRB approved a micro unit consisting of only the cosmetic and fragrance department employees at the Macy's store. Macy's argued to no avail for a unit that included all sales floor personnel. The NLRB held that because the cosmetic department employees did not also work in other departments and their pay structure was substantially different from all other store employees, they alone constituted an appropriate unit. It is certainly possible under the logic of the Macy's decision that it would be just as easy for the shoe salespersons just across the aisle from cosmetics, the jewelry department workers across the other aisle from fragrances, and any other micro unit in the store to be granted "unique" status with the department store. That means any one of these "micro" units can be separately organized as discussed above, and that anyone could strike and shut down the entire store. Is that good labor policy? Only for a Labor Board that is in thrall to organized labor.

But there is some good news. Only a week after the Macy's decision, the NLRB dismissed a petition and, in doing so, outlined some useful restrictions that may limit the growth of "micro" units. The dismissal decision involved a petitioned-for unit of women's shoes employees from the store's Salon shoes and Contemporary shoes departments. Unlike in Macy's, the union could not establish a community of interest specific to that group because the employer had not established a clear departmental differentiation as it had in Macy's. The unit petitioned for in Bergdorf Goodman included some employees from a second department, Contemporary Sportswear, but excluded that department's other sales associates, which the NLRB viewed as a departure from the Employer's organizational structure.

However, in making the Bergdorf Goodman decision, the NLRB noted that it would likely have approved the unit had the following factors been present:

  • the petitioned-for employees shared a common supervisor;
  • there was significant personnel interchange between the two departments;
  • contact among the petitioned-for employees was not limited to storewide meeting attendance and incidental contact in the locker room, cafeteria, etc.; and
  • there were shared skills and training for the employees from the different departments.

Therefore, employers may look to the missing Bergdorf Goodman factors for guidance.

Implications for Employers and Employees

In the wake of these NLRB decisions, employers should be aware of "micro" bargaining units, their own employees' movement to organize, and the potential impact on the work environment. Because it is now clearly possible for a small group of employees to be deemed a "micro" unit under the right conditions, employers may consider reevaluating their workplace structure, with consideration for:

  • cross-training employees
  • increasing interchange of employees among departments
  • integrating functions across job classifications
  • developing comparable or consistent pay structure and policies across departments
  • centralize supervision
  • limiting/eliminating barriers across departments and employees

Employers can take little solace in the fact that Macy's is a retail industry case or that the Bergdorf case sought to delineate specific needed criteria. Clearly, an NLRB that could make the leap from healthcare to retail without pause will not hesitate under the right facts to expand this logic to all American industries.

To reach Attorney Englehart, call 216-928-2929 or e-mail fenglehart@walterhav.com.