At the end of an unprecedented week of reversals of “Obama Board” precedent, the National Labor Relations Board (“NLRB” or “Board”) reversed its 2011 decision in Specialty Healthcare & Rehabilitation Center of Mobile, 357 NLRB 937 (2011), casting aside the concept of micro-units and reverting back to the traditional community of interests test for determining bargaining unit appropriateness in representation cases.

In PCC Structurals, Inc., 365 NLRB No. 160 (2017), the International Association of Machinists & Aerospace Workers filed a petition for election with the NLRB, seeking to represent a unit of approximately 100 production employees. The Employer, a metal casting company, objected to the unit and argued that its maintenance employees shared the same community of interests as the production employees. It asserted that a wall-to-wall bargaining unit, consisting of 2,565 production and maintenance employees, was the only appropriate unit. The Regional Director disagreed and concluded that the maintenance employees did not share an “overwhelming” community of interests with the production employees. The Employer lost the representation election in this micro-unit by sixteen votes.

On appeal, the newly constituted Republican majority reversed and remanded. In a 3-2 decision, the Board discarded the “overwhelming” community of interest standard, and reinstated its pre-2011 standard “that the Board has applied throughout most of its history” allowing it to “evaluate the interests of all employees – both those within and those outside the petitioned-for unit.” The majority criticized the NLRB’s Specialty Healthcare decision for changing the standard for appropriateness in representation petitions, disputing that there ever was a need to “clarify” the traditional community of interests test. 

Focusing on the interests of excluded employees, which it believed was ignored by the “overwhelming” community of interests standard, the NLRB held, “We believe Specialty Healthcare effectively makes the extent of union organizing ‘controlling,’ or at the very least gives far greater weight to that factor than statutory policy warrants, because under the Specialty Healthcare standard, the petitioned-for unit is deemed appropriate in all but rare cases.” The traditional test will focus on whether the excluded employees share the same community of interest as those in the petitioned-for unit and consider factors such as functional integration, organizational/departmental structure, skills and training, interchangeability, common supervision, along with similarities/differences in working conditions, wages and benefits. 

In a strongly worded dissent, the Democratic members of the NLRB chided their Republican colleagues as being hypocritical and opportunistic, in light of their newly found majority status and the impending departure of Chairman Miscimarra (who left the NLRB the following day). It argued, “Instead of performing its statutory duty…the Board’s newly-constituted majority seizes on this otherwise straightforward case as a jumping off point to overturn a standard that has been upheld by every one of the eight federal appellate courts to consider it.” 

As with the recent decision on joint employers, this decision is an overdue but welcome victory for Employers. Challenges to “arbitrary” or “irrational” designations of micro-units will likely be much more successful under the traditional standard. A Union’s ease in organizing smaller and smaller units will become more difficult.