In its 2011 decision in Specialty Healthcare, the National Labor Relations Board changed the test it uses to determine bargaining unit appropriateness. We reported on Specialty Healthcare for the American Bar Association and in a June 2012 FR Alert. In that case, the Board explained that where a non-petitioning party challenges a petitioned-for unit that is readily identifiable as a group and shares a community of interest on the grounds that it is inappropriate because it does not include additional employees, it has the burden of demonstrating an “overwhelming” community of interest between the included and excluded employees. Specialty Healthcare arose in a non-acute healthcare facility, but the Board recently applied it outside the healthcare industry.

In Fraser Engineering Company, the union petitioned to represent a bargaining unit of 26 pipefitters, welders, and plumbers, and seven service technicians employed by Fraser Engineering. The employer objected to the petition, and argued that the bargaining unit should also include 13 additional pipefitters, welders, and plumbers who were employed by Fraser Petroleum, a wholly-owned subsidiary of Fraser Engineering. The employer’s argument was based, in part, on the fact that the union had agreed to an earlier election in a unit that included employees of Fraser Petroleum and Fraser Engineering.

The Board applied Specialty Healthcare and rejected the employer’s arguments in favor of the larger unit. The Board determined that the employer failed to meet its burden to establish that the Fraser Petroleum employees “share such an overwhelming community of interest with the petitioned-for employees that there is no legitimate basis upon which to exclude them from [the bargaining unit].” The Board determined that the employer failed to meet this high standard because the two groups of employees had different supervisors, limited contact with each other, and were not functionally integrated. The Board also was not persuaded by the employer’s argument that a larger unit composed of both groups of employees was appropriate because that was the unit to which the parties had stipulated in a 2010 Board proceeding. According to the Board, it was “not bound by prior unit stipulations when considering the appropriateness of a petitioned-for unit.”

Employers in all industries can expect to see more cases like Fraser Engineering where the Board permits a union to attempt to organize a discrete subset of an employer’s workforce under the authority of Specialty Healthcare. The composition of the unit is a critical factor in the outcome of a union election. Cases like Specialty Healthcare and Fraser Engineering allow the union to control this critical factor, thus adding one more challenge to an employer’s ability to prepare for and respond to union organizing. We will provide further updates as the law under Specialty Healthcare continues to develop.