National Labor Relations Board Chairman Phil Miscimarra’s term expired today, but he did not coast into “retirement.” In addition to the late flurry of decisions which include the Board’s overruling of the Browning-Ferris joint employer standard and the Lutheran Heritage Village-Livonia standard used recently to attack neutral workrules, the Board today issued a decision undoing the radical departure announced in the 2011 Specialty Healthcare decision. That decision announced new standards for determining whether the bargaining unit proposed by a petitioning union is appropriate. It cast aside presumptions which were the result of decades of practical experience and case law development, and opened the door to so-called “micro-unit” organizing, whereby unions can gerrymander a larger workforce and cherry-pick smaller units best suited to organizing success.
In PCC Structurals, Inc., 365 NLRB No. 160 (Dec. 15, 2017), the Board held:
Today, we clarify the correct standard for determining whether a proposed bargaining unit constitutes an appropriate unit for collective bargaining when the employer contends that the smallest appropriate unit must include additional employees. In so doing, and for the reasons explained below, we overrule the Board’s decision in Specialty Healthcare & Rehabilitation Center of Mobile, 357 NLRB 934 (2011) (Specialty Healthcare), enfd. sub nom. Kindred Nursing Centers East, LLC v. NLRB, 727 F.3d 552 (6th Cir. 2013), and we reinstate the traditional community-of interest standard as articulated in, e.g., United Operations, Inc., 338 NLRB 123 (2002).
For decades prior to 2011, the Board made these unit determinations by analyzing a number of factors to determine whether the employees in a petitioned-for unit shared a sufficient “community of interest” to make their representation in a single bargaining unit reasonable and effective. The factors that the Board generally considered in unit determinations included:
whether the employees 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.
Specialty Healthcare, 357 NLRB at 942, quoting United Operations, Inc., 338 NLRB 123 (2002). Formal rulemaking in 1989 established industry-specific rules for determinations in acute care hospitals only; and, Park Manor Care Center, 305 NLRB 872 (1991) clarified and differentiated the standards for non-acute care facilities only. In the Specialty Healthcare case, although neither party requested it, the Board discarded the Park Manor standards for non-acute healthcare facilities.
Despite the very narrow and industry-specific focus of the rule at issue, the Board subsequently expanded the holding in Specialty Healthcare and applied the micro-unit standard in a wide variety of industrial settings well beyond non-acute healthcare facilities — including private aviation services, beverage manufacturing, telecommunications, wine production, military equipment manufacturing, and retail sales.
In PCC Structurals, the Board announced a return to the traditional standards, and remanded the case to the Regional Director to apply those standards to determine whether the petitioned for unit of 102 welders — and excluding some 2,463 other production and maintenance employees — was appropriate.
As with the other significant reversal cases this week, Members Pearce and McFerran filed a vigorous dissent, concluding:
As reflected by its favorable reception in the federal courts, the Specialty Healthcare framework—itself based on an earlier decision of the U.S. Court of Appeals for the District of Columbia Circuit—represented a major improvement to the Board’s approach in this area. It brought greater clarity and predictability to unit determinations, while vindicating the goals of federal labor law. There is simply no justifiable reason—certainly not a change in the Board’s membership alone—to reverse course and abandon a doctrine that has been so widely accepted and praised.
If the spate of decisions issued in the last couple of days are to be challenged, this theme woven through all the minority’s strident dissents will likely form a significant basis for the effort. It would seem the Board’s return to standards, which were accepted for decades before their radical overhaul just a few years ago, would survive challenge in the federal courts. But time will tell. Earlier this year, Rep. Tim Walberg (R-MI), introduced the Workforce Democracy and Fairness Act (H.R. 2776) which would amend the NLRA to expressly incorporate the traditional “community of interest” standards, and preclude future Boards from reversing course again on this issue. The bill passed a committee vote in September 2017, but has not gone any further.