On the eve of Chairman Phillip Miscimarra’s departure from the NLRB, he gave one final gift to employers: the overturning of Specialty Healthcare & Rehabilitation Center of Mobile, 357 NLRB 934 (2011), an Obama-Era Board decision that allowed unions to organize “micro-units” of employees—drastically limiting any challenges employers could have to a petitioned-for unit before being forced to negotiate with fractured units of employees throughout its workforce. In PCC Structurals, Inc., 365 NLRB No. 160 (Dec. 15, 2017), the Board reinstated the traditional community of interest standard to be used when determining whether unions have included all necessary employees on a petition for union representation. The Board’s reversal is a welcomed relief to employers who have been forced to bargain with several small units of employees in one workplace, thereby preventing all employees at a worksite from exercising their rights to vote on union representation.

Background on Specialty Healthcare & the “Overwhelming Community of Interest” Standard

Specialty Healthcare was one of the most controversial Board decisions to come out of the Democrat-majority Board put in place during the Obama administration. In Specialty Healthcare, the Board did away with over 20 years of established precedent by changing the test used in determining whether a petitioned-for unit of employees to vote for union representation was the most appropriate unit within the employer’s workforce. Traditionally, when a union prepares a petition with a proposed unit of employees to vote on whether they will be represented by the union, the Board would make the determination of whether the employees listed on the petition (the “petitioned-for unit”) is appropriate, or whether the proposed unit should be expanded to allow other similarly situated employees the opportunity to vote on union representation as well. This can be a hotly contested issue, as unions typically craft the petition to contain the smallest possible group to vote that has already showed their support for representation, while employers typically wish to expand the unit of voting employees to get a more accurate representation of what all employees in the workplace want in terms of union representation.

Under Specialty Healthcare, the Board moved from the traditional community of interest test and expanded the test to a multi-step analysis. First, the Board would determine whether the petitioned-for employees were readily identifiable as a group and shared a sufficient community of interest with the other petitioned-for employees. If the Board found the petitioned-for unit was appropriate under the first prong, the burden shifted to the employer who was hoping to expand the voting unit to prove under the second prong that an “overwhelming community of interest” existed between the petitioned-for employees and other employees, so that “there was no legitimate basis upon which to exclude certain employees from the proposed unit because the traditional community of interest facts overlap almost completely” This “overwhelming community of interest” standard was nearly impossible for employers to meet, resulting in several fractured units or different unions representing employees throughout a single workplace.

Specialty Healthcare’s “overwhelming community of interest” test essentially allowed unions to define a bargaining unit based on the extent of the union’s organizing. The union could simply name a unit of employees as small as possible with complete disregard of other employees’ rights to vote for or against union organization. In the aftermath of Specialty Healthcare, union representatives across the country touted a new strategy of organizing “micro-units” of employees to get its foot in the door to later disseminate large-scale organization, specifically excluding employees who did not want to be represented by unions from voting in initial elections.

The Board Restores Fairness & Traditional Standard in PCC Structurals

In PCC Structurals, Inc., the Board reinstated the traditional community of interest analysis to determine whether employees in the petitioned-for unit share a community of interest with excluded employees. The employer in PCC Structurals is an Oregon-based manufacturing facility, in which the International Association of Machinists & Aerospace Workers sought to unionize a micro-unit of approximately 100 welding employees, despite belonging to a larger group of over 2,000 production workers. The welding employees worked closely with other production workers, and shared several terms and conditions of employment, such as similar schedules, shared supervisors, constant contact, receiving the same benefits, receiving the same training, and wearing the same protective equipment while working throughout the manufacturing process.

In applying the Specialty Healthcare analysis, the Regional Director determined that the excluded production workers did not share an “overwhelming community of interest” with the micro-unit of welding employees, and therefore were not allowed to vote for union representation. The Employer promptly petitioned to the Board to review the decision, asserting that Specialty Healthcare must be overturned.

On December 15, 2017, the Board overruled Specialty Healthcare and remanded the case to the Regional Director to issue a decision consistent with the Board’s clarified standard to be used when determining whether a petitioned-for unit of employees is the most appropriate.

Chairman Miscimarra, a frequent dissenter of decisions applying the Specialty Healthcare standard, along with newly appointed Republican Board members Kaplan and Emanuel, held that the Board had an affirmative, statutory duty under Section 9(b) of the National Labor Relations Act to determine the appropriate unit of employees in each case. This duty under the Act had been restricted by Specialty Healthcare’s overwhelming community of interest standard, and actively interfered with the Board’s ability to protect the rights of all employees under the Act by limiting the ability of excluded employees who share a community of interest with the petitioned-for unit of employees to vote as to whether they want union representation as well. The Board majority criticized Specialty Healthcare as “fundamentally flawed,” and noted that restoring the traditional community of interest test will give the Board the freedom to assess whether shared interests among employees within the petitioned-for unit are sufficiently distinct from the interests of excluded employees when determining the appropriate unit to vote for union representation.

PCC Structurals and its Return to the Traditional “Community of Interest” Analysis

Under PCC Structurals, the Board unequivocally reinstated the more simplified and practical analysis used for decades before Specialty Healthcare, examining factors such as:

• whether the excluded employees and petitioned-for unit of 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 job classifications;
• are functionally integrated with the Employer’s other employees;
• have frequent contact and interchange with other employees;
• have distinct terms and conditions of employment;
• and are separately supervised.

What PCC Structurals Means for Employers

Employers in union and non-union shops alike can take solace in the fact that the Board will return to using the more equitable traditional community of interest test when determining appropriate bargaining units, and employers will no longer have the impossible burden of attempting to show that excluded employees must share an “overwhelming community of interest” with petitioned-for employees. PCC Structurals requires unions to listen to all employees now, as opposed to being able to focus on a micro-unit of employees that share the union’s views before forcing union organization upon excluded employees in the future.