NLRB Revives Obama-Era Framework for Determining Appropriate Bargaining Units

UPDATE: On December 14, 2022, the National Labor Relations Board restored the Obama-era bargaining unit test making it easier for unions to secure representation elections for smaller groups of employees within a larger workplace.  

 The National Labor Relations Board has issued a decision in American Steel Construction, Inc., 372 NLRB No. 23 (December 14, 2022), that lowers the bar for unions to organize smaller groups of employees (known as “micro-units”) within larger workplaces. The recent 3-2 decision overturned Trump-era rulings that tightened the test for approving micro-units and reinstated the Board’s 2011 standard in Specialty Healthcare, 357 NLRB 934, holding that an employer seeking to broaden a bargaining unit must show workers outside the union’s proposed group have an “overwhelming community of interest” with included employees.

In its current decision, the Board majority held that the Trump-era rulings in PCC Structurals, 365 NLRB No. 160 (2017), and The Boeing Co., 368 NLRB No. 67 (2019), which placed the burden on unions to show workers in their proposed units have “sufficiently distinct” interests from those of excluded employees, undercut workers’ rights to organize as they see fit. Under the restored standard, to be found appropriate, employees in the petitioned-for unit must only be “readily identifiable as a group” and merely share a “community of interest.” The burden falls on the party challenging appropriateness — usually the employer — to show that the excluded employees share an “overwhelming community of interest” to mandate their inclusion. NLRB Chairman Lauren McFerran  — a Democrat first appointed to the Board by President Obama — reasoned that a return to the Specialty Healthcare standard ensures “that workers have the ability to organize in the unit of their choosing, so long as it is not arbitrary or irrational.”

The Dissent

Dissenting Board Members Marvin Kaplan and John Ring argued that the restored standard gives petitioning unions too much power over bargaining unit makeup and “focuses almost exclusively on facilitating organizing,” while giving little weight to whether the organized unit will facilitate efficient and stable collective bargaining with the employer. The dissent maintained that the PCC/Boeing test is superior as it accords appropriate weight to the Section 7 rights of employees who have been excluded from the petitioned-for unit along with assuring greater stability in bargaining.

Consequences of the Ruling

Unions generally initiate the inquiry into bargaining unit makeup by filing a representation petition with the NLRB in which they identify the groups of employees that they seek to represent in a workplace. The employees included in the bargaining unit are permitted to vote in an election  for or against representation by the Union. The standard in American Steel is triggered when an employer argues that the petitioned-for unit inappropriately excludes employees who should be entitled to inclusion and a vote on union representation. The American Steel decision aids unions in reducing the group of employees they seek to represent to a small number in which it is easier to secure a majority vote for union representation.

Under the newly relaxed  standard, NLRB regional offices — which conduct union-representation elections for the Board — will approve elections focusing on smaller subsets of employees so long as the petitioned-for unit shares an “internal community of interest,” is readily identifiable as a group and is sufficiently distinct from other employees in the workplace.  The employer can defeat the union’s petition for a “micro-unit” only if it can show that included and excluded workers share an “overwhelming community of interest.”

The higher burden of proof placed on the employer who challenges the legal appropriateness of a micro-unit makes it substantially more difficult to demonstrate that excluded employees should be counted as part of the unit and allowed to vote on the question of union representation.

Employers can expect an increased number of representation petitions at the NLRB as this ruling makes it easier for unions to obtain certification to represent small groups of employees within an organization.

Please do not hesitate to contact any of our attorneys if you have any questions regarding this new ruling.