This week, the Eighth Circuit Court of Appeals joined the Sixth Circuit in deferring to the NLRB’s Specialty Healthcare standard for determining appropriate bargaining units in union representation cases. The decision is yet another victory for unions seeking to quickly organize relatively small units of employees.
The case, FedEx Freight v. NLRB, No. 15-2494 (8th Cir., Mar. 7, 2016), stems from two elections held among proposed units of city and road drivers working at FedEx terminals in North Carolina and Pennsylvania. The Company proposed that the units should also include more than 200 dockworkers at the terminals. After the unions prevailed in both elections, FedEx appealed to the 8th Circuit for review of the Board’s orders forcing it to bargain with the unions, and challenging the Board’s Specialty Healthcare standard.
In Specialty Healthcare, the Board created a new standard in evaluating the appropriateness bargaining units, which requires a determination of whether employees in the petitioned-for unit are “readily identifiable as a group” and whether “they share a community of interest using the traditional criteria.” The party seeking a larger unit must demonstrate that any additional employees share an “overwhelming community of interest” with the workers in the proposed unit.
The Court held that the Board’s two-step Specialty Healthcare analysis is a “reasonable interpretation” of the NLRA “and is therefore an interpretation to which we must defer.”
In rejecting FedEx’s argument that Specialty Healthcare departed from Board precedent, the Court found that Board law makes clear that proposed units are not viewed in isolation and that the community of interest test does, in fact, compare the interests and characteristics of the workers in the proposed unit with those of other workers. The Court also noted that the Board and the courts have “repeatedly required a heightened showing to challenge a proposed unit found appropriate under the community of interest test.”
The Court also rejected the Company’s arguments that the Board must consider other possible units before determining whether the union’s proposed unit is appropriate and that Specialty Healthcare improperly creates a standard under which unions are “sure to prevail.” Joining the Sixth Circuit, the Court found that the Board’s decision to adopt the “overwhelming community of interest” standard by adjudication, as opposed to notice and comment rulemaking, did not violated the Administrative Procedures Act.
In the end, the Eighth Circuit found “common sense logical distinctions” between FedEx drivers and dock employees and that substantial evidence supported the conclusion that the driver units were appropriate.
It remains to be seen whether other Courts of Appeal will continue deferring to the Specialty Healthcare decision, but for now, it remains the law of the land.