Legal Updates
NLRB Restores Union-Friendly Bargaining-Unit Test
In a recent decision, the National Labor Relations Board (the “Board” or “NLRB”) revised its standard for assessing the appropriateness of proposed bargaining units, making it easier for unions to form bargaining units representing only a subset of the employees in a workplace. The decision, American Steel Construction, Inc., reverses a Trump-era Board ruling that gave employers greater leeway to argue for larger bargaining units against union objections.
Through this ruling, the Board has shifted back to the standard it adopted in a 2011 ruling. The Board stated that the reinstated standard, which requires that the employees in a petitioned-for bargaining unit be “readily identifiable as a group and share a community of interest,” is more consistent with the Board’s precedents and better serves the purposes of the National Labor Relations Act (“NLRA”).
Background
This line of cases dates back to Specialty Healthcare & Rehabilitation Center of Mobile (“Specialty Healthcare”), which was decided by the Obama-era Board, in 2011. In Specialty Healthcare, the Board held that employers challenging the makeup of a union’s petitioned-for bargaining unit must show that workers excluded from the proposed bargaining unit share “an overwhelming community of interest” with the workers in the proposed unit. This strict standard made it difficult for employers to challenge proposed bargaining units that included only a portion of the employees in the workplace.
In 2017, the Board, which was now led by a Republican majority, issued a new ruling, PCC Structurals, Inc., overturning the Specialty Healthcare decision. PCC Structurals concerned an employer’s challenge to a Board decision approving an approximately 100-member bargaining unit at a facility with 2,000 workers.
In PCC Structurals, the Board rejected the Specialty Healthcare “community of interest” test in favor of a new standard consisting of three criteria: (i) the proposed bargaining-unit members must share an internal “community of interest”; (ii) the interests of those employees within the proposed bargaining unit must be analyzed in comparison to the interests of those excluded from the proposed unit; and (iii) the Board must give consideration to its previous bargaining-unit determinations in that particular industry.
The second prong of the PCC Structurals standard differed significantly from the Specialty Healthcare test. Under Specialty Healthcare, the burden was on the employer to show that excluded employees shared an “overwhelming community of interest” with employees included in the proposed bargaining unit. By contrast, the PCC Structurals standard placed the burden on the union to show that the “excluded employees have meaningfully distinct interests in the context of collective bargaining that outweigh similarities with unit members.”
Background To American Steel
The American Steel case arose in late 2020, when the union filed a petition seeking to represent all journeyman and apprentice field ironworkers working for the employer. The NLRB Regional Director, applying the PCC Structurals test, determined that the union’s proposed unit was not appropriate, as she found the evidence insufficient to “establish that the Employer’s field ironworkers… possess a community of interest that is ‘sufficiently distinct’ from the Employer’s remaining employees.”
On appeal, the Board granted review and also issued a Notice and Invitation to File Briefs (“NIFB”) signaling that the PCC Structurals test might be overturned. As part of the NIFB, the Board raised two questions: (i) whether the Board should adhere to its current standard under PCC Structurals; and, (ii) if not, whether that standard should be replaced by the former Specialty Healthcare standard or by some other legal test.
Board’s Holding
In its decision, the Board overturned the PCC Structurals ruling, restoring the Specialty Healthcare “overwhelming community of interest” standard. The Board found the second prong of the PCC Structurals test flawed for three important reasons. First, the test did not articulate a workable alternative to the “overwhelming community of interest” standard, instead substituting a standard that is “vague, confusing, and has no support in Board precedent.” Second, in the Board’s view, the PCC Structurals test “removes an important safeguard” that allows employees the freedom to organize into bargaining units of their choosing. Finally, the Board found that PCC Structurals provided “no compelling rationale” for why more employees should be added to bargaining units that already had “a rational basis and the requisite mutuality of interests to bargain collectively.”
Under the restored Specialty Healthcare standard, the Board will approve proposed bargaining units that (i) “share an internal community of interest,” (ii) are readily identifiable as a group “based on job classifications, departments, functions, work locations” or other similar factors, and (iii) are “sufficiently distinct” from other employees. The burden is once more on the employer to show that excluded workers share an “overwhelming community of interest” with the included workers. The Board’s American Steel decision applies retroactively to all pending cases as well.
Implications For Employers
The American Steel decision makes it easier for unions to petition for smaller bargaining units within a workplace. For instance, if a union believes that employees in a particular department or job category have a less favorable view of unionization, the union might exclude those employees from its proposed unit, and the employer will face an uphill battle in challenging the proposed unit’s composition. The likely result is heightened prospects on unions’ parts for winning representation elections.
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If you have questions about the American Steel decision or any other issues relating to union organization, please feel free to reach out to one of our experienced labor attorneys.
