NLRB: Dividing The Workplace for Unions

The National Labor Relations Board (NLRB), fixated by the decline of union density in the private sector to just under seven percent, is dividing the workforce at the behest of Big Labor into multiple small collective bargaining units to stack the deck in favor of a union outcome. The Board’s policy: divide and conquer.

In a recent elections case, the Retail, Wholesale and Department Store Union petitioned to represent 42 of Bergdorf Goodman’s 372 sales associates working in the company’s Fifth Avenue store, that is, only those associates who sell women’s shoes. The employer sought a larger unit, either a store-wide unit or a unit of all its sales associates. The Board’s Regional Director (RD) sided with the union. Why? Because the employer’s other sales associates sell merchandise other than shoes.

According to the RD, although “all sales associates work toward a common goal of selling merchandise, the women’s shoe department has the unique goal of selling shoes in particular.” She explained that sales associates in the other departments do not have prior shoe sales experience and “[i]f a shoe is not sized appropriately for a customer, discomfort and possible knee, back and other physical could result.” Although the RD cited a few additional differences between the 42 sales associates and the store’s remaining sales force, they were minor when compared with the community of interest all the sales associates shared —including the same hiring criteria, common supervision, the same hours and working conditions, the same benefits (health care, vacation and holiday pay), the same evaluation criteria and even a common cafeteria. The RD conceded as much. She said that “an over-all unit including all the Employer’s sales associates might be an appropriate unit.” Might be? It would be an appropriate unit under long-standing Board law, it simply was not the unit sought by the union.

The Board has dismantled a half-century of labor law.

The RD relied on a controversial decision issued by the Board at the end of last year – Specialty Healthcare – that essentially enables organized labor to determine the size and scope of collective bargaining units. The decision changed Board law that had been developed and applied for over half a century by Republican and Democrat-controlled Boards alike. Before Specialty and mindful of the dangers posed by undue unit proliferation, the Board generally favored larger units. Its standard for determining the size and scope of a unit was whether the employees in the petitioned-for unit had a community of interest sufficiently distinct “to warrant separate group identity.” 

Specialty fundamentally changed this Board law to favor whatever unit is petitioned-for by the union. Under Specialty, an employer can secure a unit larger than the unit the union petitions for only if it can demonstrate that there were some employees excluded from the unit who share an “overwhelming” community of interest with the petitioned-for employees. As this RD’s decision amply demonstrates, “overwhelming” can be a difficult standard for an employer to meet.

The new standard benefits only the unions.

Before the ink was dry on Specialty Healthcare, critics correctly warned that the decision would result in an undue proliferation of units to the detriment of employers, their employees, and the collective bargaining process. Undue unit proliferation dramatically increases an employer’s labor relations costs as the business owner will be required to negotiate and apply multiple collective bargaining agreements. It also increases the likelihood of industrial unrest and workplace disputes as different unions with differing goals represent different employees. And it prolongs the collective bargaining process and makes it more difficult as one union seeks to leap-frog over an agreement reached by another.  

The Regional Director’s decision – if sustained by the Board, as it undoubtedly will be – demonstrates the threat posed to the nation’s retail industry by Specialty Healthcare and the micro-unions it authorizes. Under prior law, there was an industry presumption in favor of a single bargaining unit of selling and non-selling employees. That presumption has been replaced with one favoring any group of two or more employees petitioned-for by the union doing the same job in the same location. Retail stores throughout the nation are apt to see their workforces divvied-up into multiple small collective bargaining units based on nothing more than the nature of the product their employees handle. For Bergdorf Goodman there may be one unit for employees selling women’s shoes, another for woman’s handbags, a third for men’s suits, and so on and so forth.   

The beneficiary of the Board’s Specialty Healthcare decision is organized labor. Unions generally favor smaller units because it is easier to convince four or 40 employees to vote for a union than to convince 300. And smaller units give a union easy access to an employer, enabling it to more speedily organize the other employees. But the cost to the nation of this divide-and-conquer strategy will be enormous. This RD’s decision and the case upon which it relies unquestionably demonstrate that the NLRB under the Obama Administration is fully prepared to replace balanced even-handed policy with partisan approaches that reward Big Labor at the expense of the rest of us. 

It is time for change.

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