Key Takeaways:
- The NLRB's decision shifts the burden to employers to show that a union's proposed bargaining unit is too narrow.
- Under the reinstated Obama-era standard, employers must show that workers outside of the proposed unit have an "overwhelming" common interest with workers inside the proposed unit to successfully challenge the proposed bargaining unit.
- The decision increases the odds that unions will be able organize and represent small bargaining units within an employer's larger workforce.
On December 14, 2022, in a return to Obama-era precedent, the
National Labor Relations Board (NLRB) toughened the standard an
employer must meet to prevent a union from organizing a small group
of employees within a larger workforce. Under the NLRB's ruling
in American Steel Construction Inc., 372 NLRB No. 23
(2022), employers must show workers outside of the proposed unit
have an "overwhelming" common interest with workers
inside the proposed unit in order to expand the unit. The 3-2
decision represents the second time the standard has been
overturned in the past 5 years.
American Steel Construction Inc. concerned a union's
attempt to represent all field iron workers at American Steel
Construction Inc. American Steel asserted that the petitioned-for
unit was inappropriate, arguing that the smallest appropriate unit
should include additional classes of employees, including painters,
drivers, and inside fabricators who work at its shop. The Regional
Director applied the standard set forth in the NLRB's 2017
ruling in PCC Structurals, Inc., 365 MLRB No. 160 (2017),
which shifted the burden to unions to show workers in their
proposed units had sufficiently distinct interests from those not
in the proposed group. Applying PCC Structurals, the
Regional Director sided with the employer, finding that there was
insufficient evidence to show the field iron workers' community
of interests were "sufficiently distinct" from the rest
of the facility's employees.
The NLRB overturned the Regional Director's decision and
reinstated its 2011 standard set forth in Specialty Healthcare
& Rehabilitation Center of Mobile, 357 NLRB 934 (2011).
This standard places the burden on employers seeking to challenge a
bargaining unit to show workers outside of the proposed unit have
an "overwhelming" common interest with workers inside the
proposed unit to justify expanding the unit. The NLRB articulated
three reasons why the "sufficiently distinct" standard
needed to be overturned: (1) the standard was "vague,
confusing, and [had] no support in Board precedent"; (2) the
standard removed an important safeguard that provided employees
with the freedom to organize in units of their choosing; and (3)
the PCC Structurals, Inc. decision offered no compelling
rationale for why the Board should be adding employees to
bargaining units that possess a rational basis to bargain
collectively.
The NLRB's reinstatement of the overwhelming common interest
standard was applied retroactively to all pending cases. Therefore,
employers should evaluate any pending claims they have challenging
proposed units and assess whether they have sufficient evidence to
meet this new burden. Moving forward, the NLRB's decision
places a heightened burden on employers that will make challenging
union attempts to organize small bargaining units within a larger
workforce more difficult. Unions likely will have an easier time
organizing smaller units within an employer's larger force.
Accordingly, employers will want to consider increased emphasis on
their union avoidance efforts to prevent or curtail organizing
efforts in their workplaces.
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