On Monday, a unanimous National Labor Relations Board dismissed a union petition seeking to represent 46 shoe sales associates at a Bergdorf Goodman store in New York. This decision comes on the heels of the NLRB’s ruling last week where the Board certified a “micro-unit” of Macy’s cosmetic and fragrance sales associates, relying on its controversial decision in Specialty HealthCare, 357 N.L.R.B. No. 83, 191 LRRM 1137 (2011).

Summary of the Case

The employer, Bergdorf Goodman, is a luxury department store in Manhattan with over 350 sales associates. The union filed a representation petition with the NLRB seeking to organize and represent 41 sales associates in two different departments within the Women’s store. In May 2012, the Regional Director found the unit appropriate and ordered an election held. 

The Board reversed the Regional Director’s decision, finding that the sales associates in Salon Shoes and those in Contemporary Footwear do not share a sufficient community of interest to constitute a single bargaining unit. Although the associates in each department share similar functions, the crucial difference between these employees and the cosmetics sales associates in Macy’s is the organizational structure established by the employer.  At Bergdorf Goodman, the shoes sales associates are assigned to two separate departments: Salon Shoes and Contemporary Footwear, which is part of a larger Contemporary Sportswear department.  In contrast, the Macy’s cosmetic and fragrance associates are part of the same department established by the store itself. InBergdorf, the union’s attempt to “carve out” the Contemporary Footwear sales associates from the Contemporary Sportswear department proved fatal to the petition.

Additionally, the supervisory structure at Bergdorf Goodman differed from that at Macy’s.  In Macy’s, the Board noted that all cosmetics and fragrance associates are all directly supervised by the same Sales Manager.  Bergdorf Goodman, on the other hand, has separate sales directors responsible for Salons Shoes and Contemporary Sportswear. Moreover, because the two departments are located on different, non-adjacent floors of the building, sales associates from each department answer to separate floor managers. Finally, Salon Shoes has its own department manager, but Contemporary Footwear does not, since it is part of the larger Contemporary Sportswear.

Importantly, the NLRB explored factors which, if present, might have justified affirming the Regional Director’s ruling. For example, if the sales associates answered to common supervisors, or if the associates regularly transferred between the two departments, the NLRB indicated it might have found the unit appropriate.  In dismissing the petition, the Board found that the “boundaries of the petitioned-for unit do not resemble any administrative or operational lines drawn by the Employer.”

Employer Insights

The Bergdorf decision provides some insight into how an employer can best structure its business to avoid the potential for “micro-units.” Bergdorf makes clear that even with the NLRB’s current pro-union stance, it may still defer to the organizational structure established by an employer in determining the appropriateness of a unit. Employers should consider formally classifying as many employees as possible into the same “department,” having employees share office or warehouse space, requiring employees to shoulder responsibilities in multiple departments when possible, cross-training employees, and employing common supervision and employee relations.