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Labor Board Eases Union Organizing of Smaller Worker Groups (2)

Dec. 14, 2022, 5:36 PMUpdated: Dec. 14, 2022, 9:04 PM

The National Labor Relations Board handed down a ruling that lowers the bar for unions to organize smaller groups of employees within larger workplaces.

The NLRB’s 3-2 decision Wednesday overturned a Trump-era precedent that tightened the legal test for approving smaller bargaining units—known in management circles as “micro units"—and reinstated the standard set during the Obama administration.

The board’s Democratic majority brought back the standard from its 2011 decision in Speciality Healthcare, a more lenient test that can help unions tailor the group of workers they want to represent and avoid needing to win over more employees than they had anticipated.

Under that framework, the board considers whether workers in the proposed unit share a community of interest and can be easily identified as a group, and if that subdivision is “sufficiently distinct” from the other employees that weren’t included.

An employer that argues the smaller group isn’t different enough must prove there’s an “overwhelming community of interest” between the workers in the proposed unit and those that were excluded.

“The Board’s task in assessing the appropriateness of bargaining units is to ensure that workers enjoy—in the words of the National Labor Relations Act—‘full freedom of association,’” NLRB Chair Lauren McFerran (D) said in a statement. “Returning to the Specialty Healthcare standard is consistent with this principle, ensuring that workers have the ability to organize in the unit of their choosing, so long as it is not arbitrary or irrational.”

American Steel Dispute

The NLRB will use the standard retroactively in pending union representation petitions.

However, the board didn’t apply the Specialty Healthcare test in Wednesday’s ruling, instead reviving an Ironworkers Union affiliate’s bid to represent ironworkers at an American Steel Construction Inc. facility and sending it back to a regional director “for action consistent with our decision today.”

American Steel Construction’s attorney, Ray Carey of Gasiorek, Morgan, Greco, McCauley, & Kotzian PC, said the company’s position is that the union’s proposed unit doesn’t satisfy the Specialty Healthcare standard.

But the union’s lawyer, James Faul of Hartnett Reyes-Jones LLC, said the group is appropriate under the restored test. Unlike the Trump-era standard, which disadvantaged union organizing, the revived framework “isn’t a thumb on the scale one way or another” and correctly focuses on the workers petitioning for representation, he said.

Trump-Era Tightening

The NLRB struck down Specialty Healthcare in its 2017 ruling in PCC Structurals. That opinion’s test for small units, which was further refined in its 2019 decision in The Boeing Co., took a different approach on what’s necessary to show the proposed group is sufficiently different than the excluded workers.

Under PCC-Boeing, the petitioned-for unit is distinct enough only if the other workers have “meaningfully distinct interests” related to collective bargaining that outweigh their similarities.

That approach has three defects, the Democratic majority said in Wednesday’s ruling. It’s vague, confusing, and lacks support in NLRB precedent; it removes a safeguard that protects workers’ rights; and it doesn’t provide a rationale for adding workers to an otherwise appropriate unit, the majority said.

“When combined, these three flaws lead to a decision that is impractical, damaging to employee interests, and unpersuasive from either a statutory or policy standpoint,” the board’s Democrats said.

Dissenting View

The NLRB’s two Republican members dissented, arguing that PCC-Boeing is the superior framework because it properly considers the interests of workers in the proposed unit and those who are excluded.

The restoration of Specialty Healthcare may mean workers are improperly left out of smaller bargaining units, such that “their working conditions will be collaterally controlled” by labor contracts that give them no benefits, the board minority said.

That revived standard “focuses almost exclusively” on making organizing easier while basically ignoring whether the proposed unit will facilitate stable and efficient collective bargaining, the GOP members said.

“In the end, the animating principle of the majority’s position is clear,” they said. “For them, the primary goal of a unit determination is to facilitate employees’ ability to organize in the unit selected by the petitioning union.”

The case is American Steel Construction, N.L.R.B., Case 07-RC-269162, 12/14/22.

(Updated with additional details from ruling.)

To contact the reporter on this story: Robert Iafolla in Washington at riafolla@bloomberglaw.com

To contact the editors responsible for this story: Andrew Harris at aharris@bloomberglaw.com; Genevieve Douglas at gdouglas@bloomberglaw.com; Laura D. Francis at lfrancis@bloomberglaw.com; Rebekah Mintzer at rmintzer@bloombergindustry.com