NLRB Deems Micro-Unit An Appropriate Bargaining Unit In Retail Industry

The National Labor Relations Board (the "Board" or NLRB) recently issued a pair of decisions applying its Specialty Healthcare test to determine if petitioned-for units in two large department stores were appropriate for bargaining purposes. The Board reached different outcomes in these cases, relying heavily on how the employers organized their employees for administrative purposes.

The Board ruled on July 22, 2014, that a unit sought by the union—comprising only cosmetics and fragrances employees at a Macy's store—was an appropriate unit despite the retailer's contention that the group was too narrow, and despite the decades-long presumption that the only appropriate unit in retail department store settings is a wall-to-wall unit.

The Board stated that its decision in Specialty Healthcare & Rehabilitation Center of Mobile, 357 NLRB No. 83 (2011), enfd. sub nom. Kindred Nursing Centers East, LLC v. NLRB, 727 F.3d 552 (6th Cir. 2013), applies in cases like this one, in which the union contends that a segment of what could be a larger unit is an appropriate bargaining unit and the employer contends that the unit must include additional employees beyond those in the petitioned-for unit.

The Board explained in Specialty Healthcare that when a union seeks to represent a unit of employees "who are readily identifiable as a group (based on job classifications, departments, functions, work locations, skills, or similar factors), and the Board finds that the employees in the group share a community of interest [], the Board will find the petitioned-for unit to be an appropriate unit ... ." 357 NLRB No. 83, supra, slip op. at 12. If the petitioned-for unit satisfies that standard, the burden is on the employer who seeks a larger unit to demonstrate that the additional employees it seeks to include share an "overwhelming" community of interest with the petitioned-for employees, such that there "is no legitimate basis upon which to exclude certain employees from" the larger unit because the traditional community of interest factors "overlap almost completely." Id. slip op. at 11-13, fn.

Applying the principles of Specialty Healthcare to Macy's, the Board concluded that the cosmetics and fragrances employees were a readily identifiable group who shared a community of interest. Further, the Board emphasized that the unit sought by the union conformed to the departmental lines established by Macy's, comprising all of the sales employees in the cosmetics...