Today’s Labor Updates:
Micro-Units under the Microscope: The Second and Fifth Circuit Courts Consider Specialty Healthcare and Its Misapplication
Weekly Summary of NLRB Decisions for Week of November 21-25, 2016
Why America’s labor unions are about to die
Micro-Units under the Microscope: The Second and Fifth Circuit Courts Consider Specialty Healthcare and Its Misapplication
By Michael Lebowich, Mariya (Masha) Nazginova and Brett Schwab on December 1st,
Last week, the U.S. Court of Appeals for the Second Circuit joined the Third, Fourth, Fifth, Sixth, Seventh, and Eighth Circuits in upholding the Board’s Specialty Healthcare standard for determining appropriate bargaining units under the National Labor Relations Act, although with a very skeptical eye on how it applied. Constellation Brands, U.S. Operations, Inc. v. NLRB, No. 15-2442, 2016 U.S. App. LEXIS 20768 (2d Cir. Nov. 21, 2016). Though the court found that Specialty Healthcare was consistent with the Act, the court further held that the Board misapplied the test because the Regional Director failed to analyze why the excluded employees had “meaningfully distinct interests” from members of the petitioned‐for unit to warrant the establishment of a separate unit. This comes merely three days after the Fifth Circuit denied a petition for rehearing en banc in Macy’s, Inc. v. NLRB, No. 15-60022, 2016 U.S. App. LEXIS 20682 (5th Cir. Nov. 18, 2016), where six dissenting judges sharply criticized a “micro” unit’s certification, similarly questioning the “meaningfully distinct interests” analysis under the Specialty Healthcare framework.
In Specialty Healthcare, 357 NLRB No. 83 (August 26, 2011), a divided National Labor Relations Board held that it will find a petitioned-for unit appropriate where the unit is made up of an identifiable group of employees who share a community of interest with one another. No other employees could be added to the petitioned-for unit unless they shared an overwhelming community of interest with employees already included by the union. We’ve previously discussed this topic here, here, and here.
In Constellation Brands, the Board’s Regional Director determined that a subset of a cellar operations department within a completely integrated production facility constituted an appropriate bargaining unit. The Regional Director rejected the employer-winery’s argument that the remaining employees within cellar operations should also be included in the unit. He found “that the employees in that unit are a readily identifiable group, such that there is a rational basis for grouping them together in a bargaining unit.” In a footnote order, the Board declined to review the Regional Director’s decision.
On appeal, the Second Circuit upheld the Specialty Healthcare standard, but remanded the case to the Board. The court held that Specialty Healthcare demands more than a mere recitation and repetition of the standard. Rather, “the Board must analyze . . . the facts presented to: (a) identify shared interests among members of the petitioned‐for unit, and (b) explain why excluded employees have ‘meaningfully distinct interests’ in the context of collective bargaining that outweigh similarities with unit members.” The court further clarified that this showing must be made by the union, and not the employer.
The Second Circuit is the latest circuit court to uphold Specialty Healthcare. Back on June 2nd, 2016, the Fifth Circuit upheld Specialty Healthcare and found that Macy’s failed to establish that a bargaining unit, consisting solely of cosmetics and fragrances employees at one of its stores, was clearly not appropriate. Macy’s petitioned for a rehearing en banc, arguing that it could be compelled to bargain with thousands of “micro” units – comprised of employees working in a specific sales department in a single store. On November 18th, 2016, the Fifth Circuit, in a split vote, denied further review. In the process, six judges dissented in a sharply-worded opinion penned by Judge E. Grady Jolly.
The dissenting judges noted that the Board’s community-of-interests analysis focused solely on the similarities of the employees in the petitioned-for unit, while failing to consider the similarities and differences of excluded employees. By the same logic, “[t]hree bowtie salesmen would be an appropriate bargaining unit if they sold bowties at a separate counter from other merchandise.” This approach hardly promotes labor peace and stability, the dissent observed. In analyzing the community of interest factors, “the NLRB must compare and contrast the employees in the group with each other and with employees outside of the group.” Because the Board failed to consider any of the similarities between included and excluded employees, only identified one distinction between them, and did not explain how that distinction was meaningful, its decision was an abuse of discretion.
Significantly, both the Second Circuit and the dissenting judges of the Fifth Circuit noted the drawbacks that can result from the incorrect application of the Specialty Healthcareframework. The Second Circuit noted amici’s concerns of the proliferation of “micro” units and their impact on employer’s operations. The Fifth Circuit dissenters explained that as “micro” units flourish, there could be a dozen micro-units within an employer’s workforce, with disputes and “mini-strikes occurring continually over the working year.” While Specialty Healthcare has been upheld by every circuit court to consider it, various bills have been introduced in Congress to repeal the decision and eliminate “micro” units. We will continue to monitor the developments given the recent changes in political administration.
Weekly Summary of NLRB Decisions for Week of November 21-25, 2016
The Summary of NLRB Decisions is provided for informational purposes only and is not intended to substitute for the opinions of the NLRB. Inquiries should be directed to the Office of the Executive Secretary at 202‑273‑1940.
Summarized Board Decisions
Spectrum Juvenile Justice Services (07-CA-180451; 364 NLRB No. 149) Highland Park, MI, November 22, 2016.
The Board granted the General Counsel’s motion for summary judgment in this test-of-certification case on the ground that the Respondent failed to raise any issues that were not, or could not have been, litigated in the underlying representation proceeding in which the Union was certified as the bargaining representative.
Charge filed by International Union, Security, Police and Fire Professionals of America (SPFPA). Chairman Pearce and Members Miscimarra and McFerran participated.
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Unpublished Board Decisions in Representation and Unfair Labor Practice Cases
R Cases
Draper Trucking, LLC (03-RD-177325) Buffalo, NY, November 21, 2016. The Board denied the Petitioner’s Request for Review of the Acting Regional Director’s Decision and Order dismissing the petition on the ground that it raised no substantial issues warranting review. Petitioner ‒ an individual. Intervenor/Union ‒ International Brotherhood of Teamsters, Local 449. Chairman Pearce and Members Miscimarra and McFerran participated.
C Cases
Charter Communications, LCC (31-CA-150248, et al.) San Luis Obispo, CA, November 21, 2016. The Board approved a formal settlement stipulation between the Respondent, the Charging Parties, and the General Counsel, and specified actions the Respondent must take to comply with the Act. Charges filed by International Brotherhood of Electrical Workers Local 639 and International Brotherhood of Electrical Workers Local 1245. Chairman Pearce and Members Miscimarra and McFerran participated.
Metal Container Corporation (12-CA-174724) Jacksonville, FL, November 22, 2016. The Board denied the Employer’s petition to revoke an investigative subpoena duces tecum, as the subpoena sought information relevant to the matter under investigation and described with sufficient particularity the evidence sought, and the Employer failed to establish any other legal basis for revoking the subpoena. Charge filed by United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service International Union, AFL-CIO-CLC, Local 8461. Chairman Pearce and Members Miscimarra and McFerran participated.
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Appellate Court Decisions
Constellation Brands, U.S. Operations, Inc. d/b/a Woodbridge Winery, Board Case No. 32-CA-148431 (reported at 363 NLRB No. 126) (2d Cir. decided November 21, 2016)
In a published opinion in this test-of-certification case, the court upheld the Board’s two-step standard for determining whether a proposed bargaining unit is an appropriate unit as clarified in Specialty Healthcare & Rehabilitation Center of Mobile, 357 NLRB No. 83 (2011). In doing so, the Second Circuit joined the Third, Fourth, Fifth, Sixth, Seventh, and Eighth Circuits in rejecting challenges to the standard. See FedEx Freight, Inc. v. NLRB, 839 F.3d 636 (7th Cir. 2016); NLRB v. FedEx Freight, Inc., 832 F.3d 432 (3d Cir. 2016); Macy’s Inc. v. NLRB, 824 F.3d 557 (5th Cir.), reh’g en banc denied (Nov. 18, 2016); FedEx Freight, Inc. v. NLRB, 816 F.3d 515 (8th Cir.), reh’g & reh’g en banc denied (May 26, 2016); Nestle Dreyer’s Ice Cream Co. v. NLRB, 821 F.3d 489 (4th Cir. 2016); Kindred Nursing Ctrs. East, LLC v. NLRB, 727 F.3d 552 (6th Cir. 2013).
However, in reviewing the Board’s application of the standard, which resulted in certification of a unit of 46 employees in the outside cellar department at the Employer’s winery in Acampo, California, and rejected the Employer’s claim that the unit must also include 23 barrel department employees, the court found the Board’s analysis insufficient. Specifically, the court held that the Board did not adequately “analyze at step one of the Specialty Healthcare framework whether the excluded employees had meaningfully distinct interests from members of the petitioned‐for unit in the context of collective bargaining that outweigh similarities with unit members.” Accordingly, the court remanded the case to the Board for further proceedings consistent with its opinion.
The court’s decision is here.
Wackenhut Corporation d/b/a G4S, Board Case No. 12-CA-026644 (reported at 362 NLRB No. 134) (11th Cir. decided November 21, 2016)
In an unpublished per curiam opinion, the court enforced the Board’s order issued against this provider of security services at the Turkey Point Nuclear Power Plant in Miami/Dade County, Florida. The Board (Chairman Pearce and Member Hirozawa; Member Miscimarra, dissenting) found that the Employer failed to carry its burden of proving that two security guards whom it suspended and discharged were supervisors under Section 2(11) of the Act. Rather, the Board found that the security guards were employees covered by the Act, and that the Employer took those adverse actions against them in violation of Section 8(a)(1) for having raised myriad concerns, on multiple occasions, about the security officers’ conditions of employment. Those conditions included inadequate bathroom facilities, lack of water, bulky vests, time spent standing in the sun, uncomfortable desk furniture, favoritism, and unfair treatment. On review, the court held that substantial evidence supported the Board’s findings, and without further comment, enforced the Board’s order.
The court’s opinion is here (link is external).
McKenzie-Willamette Regional Medical Center Associates, LLC, Board Case No. 19-CA-119098 (reported at 362 NLRB No. 20) (D.C. Cir. decided November 22, 2016)
In an unpublished judgment, the court enforced the Board’s order issued against this medical facility in Springfield, Oregon, for violating Section 8(a)(5) and (1) of the Act by unreasonably delaying or failing to provide information requested by Service Employees International Union Local 49, CTW-CLC, during negotiations for a successor agreement covering various service, technical, and skilled-maintenance employees at the facility. Before the court, the Employer did not challenge the Board’s findings on the merits. Instead it contended, as it did before the Board, that the underlying complaint was void because it had been issued by a regional director appointed by the Board in January 2012 when it lacked a quorum. Rejecting that argument, the court held that the Board properly relied on the Board Minute that demonstrated that the regional director’s appointment was made on December 22, 2011, when the Board had a quorum. The court held that the Board Minute was a self-authenticating document under the Federal Rules of Evidence, and found unpersuasive the Employer’s remaining contentions.
The court’s judgment is here.
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Administrative Law Judge Decisions
East End Bus Lines, Inc. (29-CA-161247, et al.; JD-111-16) Medford, NY. Administrative Law Judge Ira Sandron issued his decision on November 21, 2016. Charges filed by International Brotherhood of Teamsters Local 1205 and an individual.
Insight Global, LLC (15-CA-161491; JD-113-16) Atlanta, GA. Administrative Law Judge Thomas M. Randazzo issued his decision on November 23, 2016. Charge filed by an individual.
United Parcel Service, Inc. (06-CA-143062; JD-112-16) North Apollo, PA. Administrative Law Judge Geoffrey Carter issued his decision on November 25, 2016. Charge filed by an individual.
Bauer’s Intelligent Transportation, Inc. (20-CA-160321, 20-CA-161534, and 20-CA-167627; JD(SF)-45-16) San Francisco, CA. Administrative Law Judge Ariel L. Sotolongo issued his decision on November 25, 2016. Charges filed by an individual and Teamsters Local 665, International Brotherhood of Teamsters.
Why America’s labor unions are about to die
Raymond Hogler, Colorado State University Published 7:24 pm, Tuesday, November 29, 2016
I’ve written before on how the decline of organized labor beginning in the late 1970s gave birth to the backlash that fueled Donald Trump’s election.
Labor’s deterioration weakened worker protections, kept wages stagnant and caused income inequality to soar to the highest levels in over eight decades. It also made workers feel they needed a savior like Trump.
In other words, his unlikely victory follows a straight line from the defeat of the Labor Reform Act of 1978 to the election of 2016. That bill would have modernized and empowered unions through more effective recognition procedures accompanied by enhanced power in negotiations. Instead, its death by filibuster became the beginning of their end.
It’s a sad twist of irony that Trump’s election and Republican dominance across the country may finally destroy once and for all the institution most responsible for working- and middle-class prosperity. It will likely be a three-punch fight, ending with a fatal blow: the expansion of right-to-work laws across the country that would permanently empty the pockets of labor unions, eroding them of virtually all their collective solidarity.
In 1980, union membership density stood at 23 percent of the work force; some 40 years later, just over 11 percent of American workers belong to unions. During the same period, wealth inequality in the U.S. continued to accelerate largely on a social class basis.
White males without college degrees reacted to their ongoing misery in 2016 with a political transformation unrivaled since Franklin Delano Roosevelt’s electoral victory in 1932. The election’s postmortem pundits offered differing explanations for Trump’s victory, including racism, sexism and the ennui of Hillary Clinton supporters.
A popular narrative argues that deteriorating economic conditions provided the fuel for the Trump conflagration as it swept through the former union strongholds of Pennsylvania, Michigan, Wisconsin and Ohio.
Despite the enthusiasm of his working-class supporters, Trump’s economic policies would bring them a raw deal, not a New Deal. Three key areas will play a crucial role in union diminution and workers’ bargaining power during Trump’s administration, with further declines in real hourly earnings.
The first is regulatory. On his inauguration, Trump has the opportunity to appoint two new members to the National Labor Relations Board now controlled by Obama appointees with administrative discretion to implement pro-labor decisions. With their new majority, Republican appointees will have a smorgasbord of past cases and regulations to repeal and replace. Trump’s future replacements undoubtedly will promote a business-friendly agenda, and the board’s shift in emphasis will be immediately apparent.
The second is the Supreme Court. If Trump fills the vacant seat with someone in the mold of the late Antonin Scalia, the new court will likely uphold what in my view is the rickety constitutional theory of union dues put forth by Samuel Alito in Knox v. SEIU. Alito’s rule holds that public sector union members have a constitutional right to decline dues payments unless they consent to do so. Or, in Alito’s words, dues payers will be deemed to “opt out” of dues unless they “opt in.”
In early 2016, the Friedrichs v. California Teachers Association case, which would have mandated a constitutional right-to-work rule, stalled out with Scalia’s demise, but a similar case is moving through the lower federal court system that raises the matter once more. The litigation will eventually work its way back to the Supreme Court, and the new Trump justice can affirm the undoing of public sector union dues.
The third and most lethal blow against unions, along with board and court hostility, is the expansion of right-to-work laws as a by-product of Trump’s victory.
Trump ran on a platform of making America great again by restoring incomes through innovation and deregulation.
Trump’s plan meshes perfectly with the ideology of right to work, which promotes itself as a tool of development and economic advancement, even though recent evidence shows the claim is dubious.
Twenty-six states have now enacted right-to-work laws, which forbid compulsory payment of union dues by workers who are covered under a collective bargaining agreement. Among other adverse consequences, the laws create a free-rider problem because under the exclusive representation doctrine, employees who do not pay dues must still receive the same wages, benefits and protections as those who do.
Republicans in the past election won a legislative trifecta in the states of Missouri, Kentucky, Ohio and New Hampshire. Those states are presently not right-to-work, but such conditions will not long stand.
In Missouri, Republicans legislators said they expect to pass a right-to-work law that bars mandatory union fees early in 2017, and the incoming GOP governor says he will sign it.
Legislators in Kentucky followed a slightly different route by focusing on county rather than statewide legislation. Their gambit paid off in November when a federal appeals court upheld the validity of a county right-to-work law. Expect the entire state to adopt the policy soon.
New Hampshire has traditionally followed the principle of collective security and defeated right-to-work initiatives in 2011 and 2015. But with the election of a Republican governor and legislature, the issue could prevail, which would make the Granite State the first in New England to institute right to work.
And in Ohio, a Republican legislator introduced a bill in April to ban compulsory dues payments, declaring: “Over the past three-quarters of a century, unions have become the ultimate zombies.” While Governor John Kasich is not enthusiastic about right to work, he could yield to political reality if the bill passes.
Clearly, right-to-work supporters have seized the initiative and are marching on the offensive. With enough political momentum, the battle for right to work could soon migrate to the federal level, where a national right-to-work bill is pending in Congress. Republicans have the votes to pass it in the House. In theory, it could face a filibuster in the Senate, but as a practical matter, the legislative dumpster fire during Trump’s first year will burn so hot and bright that right to work may become an early casualty in the battle for Democrats’ political survival.
Since the Taft-Hartley Act of 1947, class forces in this country have fought for supremacy over the political and economic machinery as Republicans attempted to roll back the consequences of the New Deal legislative revolution. Right to work figures importantly in the struggle between labor and capital.
As I show in my book on the subject, right-to-work laws are statistically correlated with lower rates of union membership, lower levels of human development, lower per capita incomes, lower levels of trust and less progressive tax schemes. In short, the empire of right to work leans toward further entrenching the power of corporations, not the economic emancipation of American wage earners.
The voters who brought Trump to the big dance would be the ones who suffer when he leaves with his wealthy and glamorous friends. As an article in Fortune suggests, Trump’s plan for deportations and broken trade agreements will inflict serious injury on the economy in general and in particular on those industrial sectors that elected him. The rest of us will be collateral damage.