Type: Law Bulletins
Date: 12/19/2022

NLRB Paves the Way for the Return of Micro-Units

It is common practice for the National Labor Relations Board (Board) to overturn precedent after a presidential election in which the party in control changes. While it took President Biden’s Board quite a while to begin the process of altering past precedent, that changed in the last two weeks as the Board issued a number of important decisions. The most notable decision as it relates to union organizing came on Dec. 14, 2022, when it issued its decision in American Steel Construction, Inc. In that decision, the Board flipped the framework for determining an appropriate bargaining unit when the union seeks to represent less than all of a company’s workforce.

 Who does the union seek to represent?

Typically, when a union files for an election, it seeks to represent a company’s entire workforce or, if the company has multiple facilities, an entire facility. In the 2011 case of Specialty Healthcare & Rehabilitation Center of Mobile, the Board held that in order for a unit to be appropriate, the employees in the petitioned-for unit must be readily identifiable as a group and share a “community of interest.” The community of interest factors typically include the organization of departments, skills, and training of employees, job functions, functional integration, contact, interchange, terms and conditions of employment, shared or separate supervision, and prior bargaining history. 

In practice, this case allowed for groups of employees to organize, even if the group did not include all employees. If a party, typically the employer, wanted to argue that additional employees should be included, that party would need to show that the excluded employees share an “overwhelming community of interest” with the petitioned-for employees, which was a high bar.

In 2017’s PCC Structurals, the Board overruled Specialty Healthcare and made it more difficult for unions to organize small groups of employees. The PCC Structurals decision allowed companies to more easily require that the union organize an entire workforce instead of a hand-picked group of employees within a larger workforce. 

A return to Specialty Healthcare

In American Steel, the Board announced a return to the Specialty Healthcare standard — as it has been amended. Under the revitalized standard, the Board will once again approve a petitioned-for "subdivision" unit of employee classifications if the petitioned-for unit: (1) shares an internal community of interest; (2) is readily identifiable as a group based on job classifications, departments, functions, work locations, skills, or similar factors; and (3) is sufficiently distinct, and will only expand that unit if the traditional community-of-interest factors show that there is an “overwhelming community of interest” between the petitioned-for and excluded employees, such that there is no rational basis for the exclusion.

Micro-units rise again!

The Board held that the return to the Specialty Healthcare standard would be retroactively applied to all pending cases. The decision empowers unions to seek the smallest unit of employees possible that they believe they can win an election over, providing a foothold for future organizing of other groups or the expansion of the unit once elected. For employers, the decision hinders the ability to seek a larger unit that facilitates “stable and efficient collective bargaining,” as noted by the two current Republican Board members in dissent.

What does this mean for companies? 

The expansion of labor’s ability to seek micro-units further emphasizes the need for employers to have a sound labor-relations strategy. Not only should employers have a strategy to address union interest, including a consistent communication stream to/from employees, but employers should also examine whether they are vulnerable to an organizing campaign targeted at a micro-unit. This work should be done well before there is union interest, as waiting too long could result in little time to respond appropriately. 

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