Opportunities for union victories in representation elections improved this week as a three-judge panel of the U.S. Court of Appeals for the Sixth Circuit ordered enforcement of the National Labor Relations Board decision in Specialty Healthcare and Rehabilitation of Mobile. The NLRB decision, issued in August 2011, allows “micro-bargaining units” of two or more employees, overruling the Board’s longstanding “inclusive” standard for determining the appropriateness of bargaining units. 

The Board ruled in its 2011 Specialty Healthcare decision that a petitioned-for unit made up of a single job classification, Certified Nursing Assistants, was appropriate because the CNAs were "readily identifiable as a group" and  shared a “community of interest.” Under the Board’s prior standard, it had looked pragmatically at a broad set of factors to determine whether  employees in other job classifications should be included in the unit. This meant that the union's choice of voter group for an election unit was not essentially automatic, and the union would not necessarily get an election in the precise group that it wanted (that is, where it had the most support). Under the Specialty Healthcare standard, which has now been accepted by the Sixth Circuit, the “default” will be smaller, less-inclusive units selected unilaterally by petitioning unions, unless the employer can demonstrate an “overwhelming community of interest” between the petitioned-for unit and other employees outside the unit. The effect is likely to be more union success in elections, and a mosaic of small bargaining units for employers to contend with.

The Sixth Circuit Panel Decision

On review of the Board’s decision, the Sixth Circuit held that the Board’s decision was not “arbitrary, unreasonable, or an abuse of discretion,” which is the standard that courts apply in reviewing Board bargaining unit determinations. Thus, the court denied the employer’s petition for review and enforced the Board’s decision.

First, the court rejected the contention that the NLRB decision represented an insufficiently explained material change in the standard for unit determinations. The court emphasized the wide latitude given to the Board in exercising its discretion to determine appropriate bargaining units and found that the Board had satisfactorily explained its decision. It noted that the Board was free to follow some of its prior decisions and not follow others. The court also noted that the Board had explained in its decision that one rationale for the new standard was criticism that unit determination litigation is sometimes used to delay elections.

Second, the court concluded that the Board had not abused its discretion by adopting the “overwhelming community of interest standard.” Citing a few Board decisions and one court case where the words “overwhelming community of interest” were used to describe facts in the cases at issue, the court found that the Board had previously used the standard in some cases, albeit inconsistently.

Third, the court concluded that the Board’s “overwhelming community of interest standard” did not violate Section 9(c)(5) of the National Labor Relations Act, which states that “the extent to which the employees have organized shall not be controlling” in determining whether a unit is appropriate. The employer argued that the Board’s new standard essentially made “extent of organization” sought by a union the sole measure of unit appropriateness. But according to the court, the Board first established prima facie appropriateness using a threshhold “community of interest” test that included extent of organization as well as other factors. It was only after this threshhold test was applied, the court said, that the employer had to show that employees outside the petitioned-for unit shared an “overwhelming community of interest” with the employees in the petitioned-for unit.

Fourth, the court held that the Board did not abuse its discretion by making policy through adjudication rather than rulemaking. The court held that the Board was empowered to announce new principles through adjudication, and noted that the Board’s process in the case had involved numerous amici providing public input through briefs. The court found this was consistent with the hallmark of notice-and-comment rulemaking under the Administrative Procedures Act.

Based on all of the above, the court denied the employer’s petition for review and granted the Board’s cross-petition for enforcement.

Impact of the New Standard

For more than 20 years, the Board had held that, in the non-acute health care industry, concerns about a proliferation of small bargaining units warranted special rules and that the Board should consider unit appropriateness factors beyond the traditional “community of interest.” This rule for nursing homes and other non-acute care facilities was based on the Board’s 1991 ruling in Park Manor Care Center, as well as the admonitions of Congress in enacting the Health Care Amendments to the National Labor Relations Act. Accordingly, a heightened standard had regularly been applied to non-acute care facilities, in an effort to balance an employee’s right to unionize with the facility’s interest in minimizing the number of bargaining units in a health care setting. The Specialty Healthcare decision abrogates 20 years of consistent precedent in this regard, and eliminates any protections against unit proliferation in these facilities. Moreover, the standard the Board announced is already having impact outside the non-acute healthcare sector: it is being applied by the Board across all industries and to all bargaining unit determinations, thus allowing bargaining units based on individual job classifications at any stand-alone facility. This will inevitably lead to a proliferation of small units almost unchecked by any considerations of reasonableness.

The decision will allow unions to win more elections in small groups when they lack broader support in the workforce. Unions can target small employee groups to organize and gain beachheads in their organizing of larger workforces. For example, when a union finds a group of employees – no matter how small – in a job classification with a “community of interest,” it will be able to petition the Board for an election based simply on the “community of interest” the employees have and a showing of representation interest in that group. At the petition stage, there will be no consideration of other factors the Board has historically applied. Meanwhile, the party opposing the unit will face an uphill battle trying to show that excluded employees must be included in the unit based on the “overwhelming community of interest” standard. With Specialty Healthcare as the guide, the single job classification bargaining unit is presumptively appropriate. Unions will be able to organize and win elections in piecemeal fashion, and can leverage power in a small group to cause disruption in a larger workforce that they would not have been able to organize under prior Board standards.

The Board has been applying the Specialty Healthcare standard for two years, and it is but one of many significant changes of law undertaken by the Board. With a full NLRB now confirmed, it is certain that more changes will be coming.