Labor Law -- 2017



Volkswagen Group of Am., Inc. v. United Auto Workers, Local 42   (D.C. Circuit)

Application of Specialty Healthcare to maintenance employee union micro unit

On February 2, 2017, the NAM filed an amicus brief supporting Volkswagen in its dispute against the United Auto Workers (UAW). The UAW brought a complaint against Volkswagen for refusing to bargain with a group of maintenance employees at the automaker's Tennessee plant. The main issue is the application of the Specialty Healthcare case, which was decided in 2011 and overturned 70 years of precedent, and which established a new standard for determining the composition of a proposed bargaining unit. Volkswagen opposed the creation of a micro-bargaining unit exclusively for the maintenance employees. It argued that the bargaining unit should include all the employees in the plant because the plant is a highly integrated manufacturing operation in which all the employees work in concert to produce a finished product.

On December 15, 2017, the NLRB reinstated the traditional community-of-interest standard in a case called PCC Structurals, Inc., overturning Specialty Healthcare. Consequently, the court remanded this case to the NLRB for reconsideration in light of the PCC Structurals decision.

For more information, see the National Labor Relations Board case here.


Related Documents:
NAM amicus brief  (February 2, 2017)

 


Labor Law -- 2016



Constellation Brands US Operations, Inc. v. NLRB   (2nd Circuit)

Standard for determining bargaining units

The NAM previously filed an amicus brief with the National Labor Relations Board (NLRB) objecting to the NLRB’s application of its decision in the Specialty Healthcare allowing employees to create a bargaining unit that is small and under inclusive. In this case, the NLRB determined that 46 winemaking cellar employees within a completely integrated production facility constituted an appropriate bargaining unit because they were “readily identifiable as a group” that “shared a community of interest.” The NLRB rejected Constellation Brands’ argument that similarly situated production and maintenance employees who worked alongside the cellar employees shared common interests with them and should be included in the unit. Constellation Brands refused to bargain with the union, intending to challenge the NLRB’s unit determination, but the NLRB issued a decision finding that Constellation Brands’ refusal to bargain constituted an unfair labor practice.

The NLRB decision was appealed to a federal appeals court, and the NAM and others filed an amicus brief on 12/17/2015. The amicus brief continues our argument that the NLRB wrongly decided Specialty Healthcare and that the Board’s decision on that ruling should be overruled for three reasons. First, the Specialty Healthcare rule violates the plain terms of the NLRA by granting too much deference to the union’s proposed unit in violation. Second, Specialty Healthcare represents a radical departure from the Board’s longstanding precedent and encourages a multiplicity of fractured units within workplaces throughout the country. Third, in deciding Specialty Healthcare, the NLRB violated the Administrative Procedure Act. On 11/21/2016 the US Court of Appeals for the Second Circuit issued a decision in the Constellation Brand micro-union case. While the court upheld the Specialty Healthcare standard, it found the Regional Director did not apply the standard correctly. This case is part of a recent trend by the courts limiting the Specialty Healthcare micro union standard. In this case, the court required the Board to show that they analyzed the unit and found evidence that the employees in the proposed unit are sufficiently distinct from other similar employees that were not included.


Related Documents:
NAM brief  (December 16, 2015)

 

Macy's, Inc. v. NLRB   (5th Circuit)

Fifth Circuit case to reverse micro-unit determination

The NAM and coalition associations filed an amicus brief with the 5th Circuit on April 27, 2015 in Macy’s Inc. v. NLRB. The brief argued that the NLRB’s decision in Specialty Healthcare is erroneous. The new standard, as applied by a majority of the Board in Macy’s, provides that where the employees in the petitioned-for unit are a readily identifiable group who share a community of interest, they constitute a statutorily appropriate unit unless it can be demonstrated that other excluded employees share an “overwhelming community of interest” with the petitioned-for group. This new standard for determining the propriety of initial bargaining units flies in the face of the National Labor Relations Act’s statutory presumption in favor of broader bargaining units and departs from the standard consistently used by the Board for decades. The decision in Macy’s further encourages unions to engage in incremental organizing in the smallest units possible. The Board's new standards mean that unions will organize in units as small as possible and it will be virtually impossible for an employer to oppose the organizing effect either by campaign persuasion or through Board litigation. Because of these reasons, the NAM brief asked the Court to grant the petition for review and deny enforcement of the Board’s Order.

On June 2, 2016, the Fifth Circuit Court of Appeals upheld the NLRB's ruling, affirming the Specialty Healthcare standard for determining appropriate units in representation elections. On June 20, 2017, the Supreme Court denied Macy’s petition for a writ of certiorari after Macy’s asked the Supreme Court to consider whether the NLRB must explain the distinctions between employees when considering what constitutes a unit appropriate for collective bargaining. On June 20, 2017, the Supreme Court denied Macy’s petition for a writ of cert. after Macy’s asked the Supreme Court to consider whether the NLRB must explain the distinctions between employees when considering what constitutes a unit appropriate for collective bargaining.


Related Documents:
NAM brief  (April 27, 2015)

 

Nestle Dreyer's Ice Cream Co. v. National Labor Relations Board   (4th Circuit)

Overturning the NLRB's "overwhelming community of interest" test for bargaining units

On 1/13/2015 the NAM filed an amicus brief with the Fourth Circuit Court of Appeals in Nestle Dreyer's Ice Cream Co v. NLRB. We argued that the Court should reverse the Board’s decision that Dreyer’s technical refusal to bargain violates Section 8(a)(5) of the Act because by certifying the petitioned-for unit of maintenance employees, the Board erroneously: (1) failed to give proper consideration to the bargaining history that included a broader unit of maintenance and production employees; (2) made the extent of organization a controlling factor in the unit determination, which is in direct contravention of Section 9(c)(5) of the Act; (3) relied on the “overwhelming community of interest” test announced in Specialty Healthcare, which this Court explicitly rejected in Lundy Packing Co., 68 F.3d 1577 (4th Cir. 1995); and (4) ignored long-standing Board precedent that production and maintenance units are presumptively appropriate.

According to our brief, "To simply allow the instant certification of a maintenance-only unit to stand in contravention of Section 9(c)(5) of the Act, bargaining history, the Board’s long-standing recognition that production and maintenance units are presumptively appropriate, and this Court’s clear precedent in Lundy Packing Co., would be a disservice to employees, employers, orderly collective bargaining, and national labor policy."


Related Documents:
NAM brief  (January 13, 2015)

 

Volkswagen Group of Am., Inc. v. United Auto Workers, Local 42   (NLRB)

Application of Specialty Healthcare to maintenance employee micro unit

On May 5, 2016 the NAM filed an amicus brief supporting Volkswagen in their dispute against the United Auto Workers (UAW). The UAW brought a complaint against Volkswagen for refusing to bargain with a group of maintenance employees at the automaker's Tennessee plant. Volkswagen opposed the creation of a bargaining unit for employees who are responsible for repairing and maintaining machinery and robots because the plant is a highly integrated manufacturing operation in which all of the employees in the plant work in concert to produce a finished product. The maintenance employees are fully integrated into that process, and they do not have their own, separate department. Instead, maintenance employees are assigned to, and work within, each of Volkswagen’s individual production shops.

This is yet another case where the NAM has filed an amicus brief objecting to the National Labor Relations Board’s (NLRB) decision in Specialty Healthcare allowing employees to create a bargaining unit that is small and under inclusive. In this case, the NAM filed an amicus brief explaining the substantial impact this case will have on employers, particularly in the manufacturing industry, and urging the NLRB to use it as an opportunity to re-examine the Specialty Healthcare standard. Job titles, departmental lines and the like simply are not a valid proxy for the NLRB’s careful consideration of the proper grouping of workers for bargaining unit purposes, particularly in a highly integrated manufacturing process such as that at Volkswagen.

The NLRB’s wrongly decided Specialty Healthcare decision should be overruled for three reasons. First, the Specialty Healthcare rule violates the plain terms of the National Labor Relations Act by granting too much deference to the union’s proposed unit. Second, Specialty Healthcare represents a radical departure from the NLRB’s longstanding precedent and encourages a multiplicity of fractured units within workplaces throughout the country. Third, in deciding Specialty Healthcare, the NLRB violated the Administrative Procedure Act.

Notwithstanding the continuing questions regarding the legality and application of Specialty Healthcare generally, the decision in this case fails to even comply with the standard as set forth in Specialty Healthcare. Our national labor policy is not to foster industrial peace through collective bargaining while at the same time making that bargaining difficult and ineffective through the application of Specialty Healthcare. We urge the NLRB to take the opportunity presented by this case not only to correct the flawed decision, but in a broader sense to consider anew its Specialty Healthcare decision and, in particular, its application to manufacturing enterprises. On April 13, 2016, the NLRB rejected the NAM's petition.


Related Documents:
NAM brief  (December 23, 2015)

 


Labor Law -- 2015



In re Constellation Brands   (NLRB)

Unlawful application of bargaining unit determination

The NAM filed a letter with the National Labor Relations Board affirming support for Constellation Brands. The NAM’s letter asserted that the Regional Director ignored important factors which influenced unit determinations including the departmental lines drawn by Constellation. NAM members have a vital interest in the Board’s application of Specialty Healthcare in the manufacturing setting. The standard for bargaining-unit determinations applied by the Regional Director in this case, which is an inaccurate application of the already unlawful standard established by the Board in Specialty Healthcare is problematic in all industries covered by the National Labor Relations Act (“Act” or “NLRA”), 29 U.S.C. §§ 151-169 including manufacturing. The NAM letter further asked that the Board grant Constellation’s Request for Review and invite NAM and other interested parties to brief these issues as they relate to manufacturing/production facilities.


Related Documents:
NAM letter  (February 12, 2015)

 


Labor Law -- 2014



Macy's, Inc.   (NLRB)

Challenge to micro-unions

The NLRB’s Specialty Healthcare decision favoring micro-unions has led to numerous cases involving the definition of a bargaining unit. In Macy’s Inc., the Board’s regional director decided that employees of the fragrance and cosmetic departments at Macy’s could form their own union. The regional director found that the small group of employees was an appropriate unit because they were readily identifiable as a group and shared a community of interest. Moreover, the burden to show that the small unit is inappropriate is on the employer, who would have to demonstrate that a larger unit shares an overwhelming community of interest with the smaller unit. Interestingly, the previous year, the union unsuccessfully tried to organize a wall-to-wall unit in the entire store.

The NAM filed an amicus brief urging the Board to overturn the regional director’s decision. The Board’s policy conflicts with the rights of employees who do not want to form a union by allowing them to be gerrymandered out of the bargaining unit. In effect, if the majority of employees in a facility do not favor forming a bargaining unit, they can be relegated to a minority status when a union selects a gerrymandered unit where it has majority support. The NAM argued that the burden should be shifted to the union to initially demonstrate that the a proposed smaller bargaining unit is constituted on factors other than union support and that the employees are readily identifiable as a group.

Manufacturers are starting to face a multitude of small unionized bargaining units, making management of the workplace much more difficult and harming their ability to compete. This is the fifth case since Specialty Healthcare in which the NAM has sought to change the Board’s policy and encourage the proper definition of bargaining units in manufacturing facilities.


Related Documents:
NAM amicus brief  (February 27, 2013)

 

Neiman Marcus Group, Inc.   (NLRB)

Challenging NLRB's policy promoting micro-unions

A small group of women’s shoe salespeople were handed a decision by an NLRB regional director that allowed them to hold a vote to unionize. The employer appealed, arguing that their group should include many more store employees that have common workplace interests.

The NAM and other business groups filed a brief 6/13/12 arguing that the NLRB’s recent decision in the Specialty Healthcare case improperly allows this kind of micro-union to be formed, and puts an unreasonable burden on employers to show that a large group is more appropriate. The regional director had ruled that the employees at the store may serve different functions and thus vary in skills to the point that they qualify to form multiple unions. The NAM argued that Congress intended that each case be determined on its own, rather than having the NLRB impose a blanket determination for all cases that a proposed group is valid unless the employer can show otherwise.

The brief noted that all employees have a statutorily protected “right to refrain from” unionizing activities, and micro-unions prevent those employees from exercising the right to reject a union.

Furthermore, the Board abused its power by adopting its new standard in the Specialty Healthcare case when it should have gone through formal notice-and-comment rulemaking procedures.

Finally, it is bad policy to favor micro-unions, because they prevent employees from performing varying job functions, thus inhibiting employee skill development. They also lead to “endless multiple negotiations, conflicting union demands and contract obligations, and burdensome administrative duties.” Micro-unions may foster disruptive employee and union rivalry, as well as situations where one small group of employees could shut down an entire location.


Related Documents:
NAM brief  (June 13, 2012)

 

Nestle Dreyer's Ice Cream Co. v. NLRB   (4th Circuit)

Forming micro-unions under a community of interest standard

The NAM filed an amicus brief on July 10, 2012, arguing that the ruling in Specialty Healthcare, which allows very small numbers of employees to form a union, should be overruled because it violates provisions of the National Labor Relations Act (NLRA). That decision creates policy implications that will upset and reduce American investments and competitiveness. We argued that Specialty Healthcare prevents all of the employees from fully controlling the creation of the union. This violation allows micro-unions of as little as 2 employees to circumvent employees who do not wish to unionize. Further, by its ruling in Specialty Healthcare, the NLRB does not determine bargaining units “in each case,” and gives nearly all the control of determining who will be in the union to a very small group. The labor uncertainty from this precedent endangers investment in manufacturing, as employers would be required to deal with multiple and often conflicting unions.

In 2014, the court vacated and remanded the case to the NLRB. The original decision had been made by a Board that was ruled unconstitutional by the Supreme Court in the Noel Canning case. In 2016, the 4th Circuit denied Nestle Dryer’s petition for review, stating the NLRB was correct in allowing a maintenance-only bargaining unit, holding that the maintenance workers shared a community of interest distinct enough from the production workers for them to have their own bargaining unit.


Related Documents:
NAM brief  (July 10, 2012)

 


Labor Law -- 2013



Huntington Ingalls Inc. v. NLRB   (4th Circuit)

Defining scope of bargaining units

This is another case in which the NLRB has applied its decision in the Specialty Healthcare case to allow employees to create a bargaining unit that is small and underinclusive. The Board’s decision was appealed to a federal appeals court, and the NAM and other filed an amicus brief arguing that the Specialty Healthcare decision was wrong and violated at least two provisions of the National Labor Relations Act. An employer should not have to bear the burden of demonstrating that a proposed bargaining unit should include additional employees who share “an overwhelming community of interest with the included employees.”

In this case, the company argued that a unit of technical employees working in one department at its shipyard should include all the technical employees at that location. We argued that the Board’s rule eliminates important considerations in determining the breadth of the bargaining unit, and will disrupt the smooth operation of the company processes at a time when American employers face unprecedented economic and competitive pressures. The rule also places too much weight on the grouping selected by the organizing employees, thus effectively violating a statutory provision that the “extent to which the employees have organized shall not be controlling.” In addition, the statute requires the bargaining unit decisions assure employees the fullest freedom in exercising their legal rights, but the Board’s rule failed to consider the rights of employees to refrain from collective activities. By allowing small bargaining units, the Board effectively denies the rights of a majority of the remaining workers to refrain from having union representation in an appropriately defined unit.

This is another example of how the Board’s new ruling fosters disruptions that smaller or multiple bargaining units can have on business operations, stable labor relations, and realistic collective bargaining. A unit determination should reflect an employer’s functional integration and the resulting “community of interests” shared by its employees. Smaller units reduce employer flexibility and employee advancement opportunities as separate units isolate employees in different seniority systems and job classifications.

On 7/17/2013, the Fourth Circuit ruled that the NLRB did not have a quorum to issue the decision in this case, because three recess appointments to the Board were unconstitutional. But it also upheld the selected bargaining unit under the standard that was in place prior to the Specialty Healthcare decision, thus avoiding any decision on the propriety of the standard adopted in that case. Although the employees in this case possessed a sufficiently distinct community of interest to qualify for their own bargaining unit, the court refused to enforce the Board's order because it was not properly constituted. Subsequently, the Board issued another decision in October 2014 that required Huntington Ingalls to bargain with the micro-bargaining units. Huntington Ingalls then filed a petition of review of the Board’s order, claiming that the Board did not have jurisdiction, but the 4th circuit enforced the Board’s order.


Related Documents:
NAM brief  (October 17, 2012)

 

Kindred Nursing Centers East, LLC v. NLRB   (6th Circuit)

Challenging burden on companies to prove "overwhelming community of interest" when contesting bargaining units

The NAM, along with the HR Policy Association and the Society of Human Resource Management, filed an amicus brief 4/23/12 urging the Sixth Circuit to overturn a new NLRB rule that makes it much easier to create exceedingly small collective bargaining units in a workplace. The rule, announced by the NLRB in the Specialty Healthcare case, allows a group of employees to select the bargaining unit they want, and as long as the unit is defined to include those workers who share a “community of interest,” that defined union can only be rejected if an employer can prove that a larger unit is appropriate because the excluded employees share an “overwhelming” community of interest. This burden of proof is extremely difficult to satisfy, and our brief argued that it violates Section 9(c)(5) of the National Labor Relations Act, which limits the Board from granting controlling authority to a union based on the extent to which the employees are organized. Instead, the Board should decide not only that the employees in a proposed unit have a community of interest, but also whether their interests “are sufficiently distinct from those of other employees to warrant the establishment of a separate unit.”

We also noted that Section 9(b) of the Act requires the Board to decide on the appropriateness of a bargaining unit, and we argued that it may not delegate this duty to petitioning employees or unions, because that would undermine its obligation to guarantee all employees – including those excluded from the union’s proposed unit – the fullest freedom in exercising their collective bargaining rights. Otherwise, unions can gerrymander the bargaining units “to their hearts’ content” and leave many employees out of the collective bargaining process.

Furthermore, the Board must act to effectuate the law’s policy of promoting efficient collective bargaining, and the micro-union policy announced in Specialty Healthcare leads to piece-meal unionization and inefficient collective bargaining. Multiple unions may have inconsistent goals, may shut down a plant, affecting other employees, and will create a state of chaos.

Finally, we argued that the NLRB must change its policy through notice-and-comment rulemaking, not by simply announcing its new rules in a decision in one of its many cases. This change is a legislative-type judgment that is generalized and designed to govern all future cases.

On August 15, 2013, the Court of Appeals approved the NLRB’s "overwhelming community of interest test" in bargaining unit determination cases. The court rejected all of the employer's challenges to the Board's decision and found that not only did the Board have considerable discretion under the Act in determining the appropriateness of voting units, but also that the Board, in this case, did not substantially change prior law in the unit determination area. The court also held that the Board's decision in Specialty Healthcare did not violate Section 9(c)(5) of the NLRA, which prohibits the approval of bargaining units on an extent-of-organizing basis.


Related Documents:
NAM brief  (April 23, 2012)

 


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