The Return of the Micro-Unit: The NLRB Shifts Course Yet Again

By Fiona W. Ong - Shawe Rosenthal LLP

December 14, 2022

As we predicted when President Biden took office, the National Labor Relations Board has now returned to an Obama-era standard that permits a union to organize in as small a unit as it has support (i.e., micro-units). This continues the Biden administration’s trend of easing the path to unionization.

The Historical Standard. Historically, the Board applied a “community of interest” standard to determine whether a petitioned-for unit has the “requisite mutuality of interest” to constitute an appropriate unit for collective bargaining. This test examines multiple factors:

•  whether the employees are organized into a separate department;
•  have distinct skills and training;
•  have distinct job functions and perform distinct work, including inquiry into the amount and type of job overlap between classifications;
•  are functionally integrated with the Employer’s other employees;
•  have frequent contact with other employees;
•   interchange with other employees;
•  have distinct terms and conditions of employment; and
•  are separately supervised.

Because various configurations of employees share a community of interest, there may be more than one appropriate unit. Employer-wide, plant-wide, and craft units are presumed to be appropriate. But there are other possible, smaller units and there are three fundamental elements in determining whether such units are appropriate:

1.  It must be “homogeneous,” meaning they share a community of interest.
2.  It must be “identifiable,” meaning a grouping that has a substantial, rational basis (and is not composed of “random classifications” with “no coherent organizing principle”)
3.  It must be “sufficiently distinct,” meaning that it does not “exclude[] employees who cannot rationally be separated from the petitioned-for employees on community-of-interest grounds.” The extent of the shared interests has been the issue of controversy.

The Obama Board’s Standard. In 2011, the Obama Board issued its Specialty Healthcare decision, in which it ostensibly “clarified” the historical standard by establishing a high burden of proof for an employer to show that a petitioned-for micro-unit is inappropriate because other employees should be included in that unit: that the excluded employees shared an “overwhelming community of interest” with the petitioned-for unit. As a practical matter, this standard was almost impossible to meet, meaning that unions were able to organize small units based on “readily identifiable” groupings. This included employees who carried the same job title or classification, without regard to the interrelationships with other job classifications, the particular work environment or how other classifications of employees factor into the unit.

The Trump Board’s Standard. In PCC Structurals, Inc. and then in Boeing Co., the Trump Board rejected the Specialty Healthcare standard, stating that this move “permits the Board to evaluate the interests of all employees—both those within and those outside the petitioned-for unit—without regard to whether these groups share an ‘overwhelming’ community of interests.” In effect, this standard made it more difficult to organize a micro-unit of employees.

And the Resurrection of the Micro-Unit. In American Steel Construction, Inc., the Biden Board has overturned PCC Structurals and Boeing, Inc., and has returned to the “overwhelming community of interest” standard that was articulated in Specialty Healthcare. The Biden Board contends that this standard is “superior” to PCC Structurals in that “it better reflects traditional Board precedent, better achieves consistency with Supreme Court precedent, and better promotes the policies of the Act.” Specifically, the Biden Board states that:

the “overwhelming community of interest” standard reflects the Board’s historical requirement that, in order to demonstrate that the petitioned-for unit is not sufficiently distinct, a party contesting that unit must show more than a community of interest between the petitioned-for and excluded employees: it must make a heightened showing to demonstrate that the interests of the petitioned-for and excluded employees are so similar that the petitioner is seeking, in essence, an arbitrary segment of an otherwise appropriate unit. In other words, the interests of the petitioned-for and excluded employees must “overlap almost completely” to mandate inclusion.

Consequently, unions will now be able to organize smaller groups of employees with little concern that the employer may be able to add to the voting unit other employees who share something less than the overwhelming community of interest with the union’s preferred bargaining unit.

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