Executive Summary: On December 15, 2017, the National Labor Relations Board (NLRB or Board) overruled Specialty Healthcare & Rehabilitation Center of Mobile, 357 NLRB 934 (2011), which required an “overwhelming community of interest” when determining the appropriateness of a bargaining unit, and returned to the “traditional community of interest” standard that the Board has applied throughout most of history. See PCC Structurals, Inc. and International Association of Machinists & Aerospace Workers, AFL-CIO, District Lodge W24, Case 19-RC-202188.
Specialty Healthcare & Rehabilitation Center of Mobile
In 2011 the NLRB issued its decision in Specialty Healthcare, one of the most controversial Board decisions to come out during the Obama administration. The Board changed the test used in determining whether a petitioned-for unit of employees was the most appropriate unit within an employer’s workforce. Under Specialty Healthcare, if a union petitioned for an election among a group of employees and the employer objected to the appropriateness of the bargaining unit, the Board required the employer to prove that the excluded employees shared an “overwhelming” community of interest with the petitioned-for-group. This standard made it much easier for smaller groups of employees to become certified bargaining units (often referred to as “microunits”).
PCC Structurals
In PCC Structurals, the company had a two-stage manufacturing process that involved creating casting for molds (front end) and inspecting and reworking the castings (back end). The union petitioned for a bargaining unit that consisted of welders who work in the back-end stage of the production process and one employee who worked in the front-end. The Regional Director found that the petitioned-for unit shared a community of interest among themselves under the traditional criteria and that the excluded workers did not share an “overwhelming community of interest” with the smaller unit of welders. The employer objected on the grounds that all production employees, including the petitioned-for group, worked similar hours, were paid on the same wage scale, received the same benefits, were subject to the same employee handbook and work rules, wore similar attire and protective gear, worked under the same safety requirements and participated in the same training regarding safety, harassment and other matters. The Regional Director rejected the employer’s contention that the rest of the production and maintenance employees shared an “overwhelming community of interest” with the petitioned-for employees, even after acknowledging that “functional integration” weighed in favor of finding an overwhelming community of interest and a “wall-to-wall” unit.
PCC requested review of the decision, arguing that Specialty Healthcare was wrongly decided, and, alternatively, even under the Specialty Healthcare standard, PCC met its burden of showing an overwhelming community of interest between the petitioned-for employees and the rest of the workforce. PCC argued that in deciding Specialty Healthcare, the Board abdicated its duty to determine an appropriate unit on a case-by-case basis as required by Section 9(b) of the National Labor Relations Act (the “Act”).
The Act’s legislative history established three benchmarks that the Board must follow in determining the appropriateness of a bargaining unit. First, employees have the right to representation by a labor organization designated by the majority of the employees in a unit appropriate for such purposes. Therefore, questions about appropriateness should be resolved by reference to whether the grouping of employees should be given collective expression. Second, it was contemplated by Congress that whenever unit appropriateness was questioned, the Board would conduct a meaningful evaluation. In other words, the Board would conduct a case-by-case determination of whether the employees (both those within the petitioned-for group and those excluded from it) are assured the fullest freedom to exercise their rights. And finally, the language in Section 9(b) of the Act resulted from “intentional legislative choices, made by Congress over time” and placed an emphasis on the role of the Board in determining the appropriateness of a unit.
The Board in Specialty Healthcare and the Regional Director in PCC essentially allowed the union to make the determination as to the appropriateness of the petitioned-for unit. In rejecting Specialty Healthcare, the Board in PCC held that it will no longer be constrained by the extraordinary deference that Specialty Healthcare gave to the petitioned-for unit but rather will determine on a case-by-case basis whether the petitioned-for unit shares a community of interest that is so distinct from the employees excluded from the proposed unit to warrant a separate and appropriate unit.
Effect on Employers
This is welcome news for employers as they will no longer have the burden of proving an “overwhelming community of interest” when contesting a petitioned-for unit, but will be able to rely on the decades-old “community of interest” standard in which the Board will make decisions on a case-by-case basis to ensure employees are granted the fullest freedom in exercising their rights under the Act.
If you have any questions regarding this decision or other labor or employment related issues, please feel free to contact the author of this Alert, Michelle Harkavy, mharkavy@fordharrison.com, partner in our New York City office. You may also contact the FordHarrison attorney with whom you usually work.