Labor Relations Today

Labor Relations Today

NLRB Finds Micro-Unit at Macy’s Appropriate; Effectively Eliminates Retail Industry’s Presumption of Wall-to-Wall Units

Posted in NLRA, NLRB, Representation Elections, Unions

The National Labor Relations Board yesterday issued the long-awaited Macy’s, Inc. decision.  The Board majority consisting of Chairman Pearce and Members Hirozawa and Schiffer determined that the petitioned-for unit of cosmetics and fragrance employees at a Macy’s retail store is appropriate, while Member Miscimarra dissented by asserting that not only is the petitioned-for unit inappropriate, but the Board should set aside its controversial Specialty Healthcare ruling.  

The case reached the Board after the Acting Regional Director for Region 1 issued a Decision and Direction of Election (DDE) on November 8, 2012, providing that the United Food and Commercial Workers’ (UFCW) petitioned-for unit of only the cosmetics and fragrance employees at a Macy’s retail location in Saugus, MA was an appropriate unit.  Macy’s contested the DDE, arguing that the smallest appropriate unit must include either all employees at the Saugus location or at least all selling employees at the store.  The Board granted Macy’s request for review on December 4, 2012. 

The Board’s lengthy decision confirms that Specialty Healthcare is alive and well.  Under Specialty Healthcare, when a union seeks to represent a unit of employees: 

“who are readily identifiable as a group . . . and the Board finds that the employees in the group share a community of interest after considering the traditional criteria, the Board will find the petitioned-for unit to be an appropriate unit . . ..”

Once the petitioned-for unit is deemed an appropriate unit, the proponent of a larger unit must show that the employees it wishes 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.”   

The Board found the petitioned-for unit appropriate for several reasons.  First, the cosmetics and fragrance employees are readily identifiable “based on classification and function.”  Second, the proposed unit “is coextensive with a departmental line” Macy’s drew, which means that Macy’s chose to create a cosmetics/fragrance department at the Saugus location.  Third and most importantly, the petitioned-for employees undoubtedly share a community of interest. According to the Board, they are the only employees who sell cosmetics and fragrances and rarely come into contact with products sold in other departments.  While the cosmetics and fragrances department is split into two floors, the Board determined that this was of no moment because the two areas are connected by an escalator. 

Because the UFCW showed that the petitioned-for employees shared a community of interest, Macy’s bore the burden of proving that the petitioned-for unit shared an “overwhelming community of interest” with other employees at the store.  The Board found that Macy’s failed to meet its burden.  Not only do the petitioned-for employees work in a separate department from all other selling employees, but the petitioned-for employees are separately supervised as well.  The petitioned-for employees also work in their own “distinct selling areas.”  Moreover, the Board found little significant interchange between the petitioned-for employees and other selling employees.  Cosmetics and fragrance employees do not sell other products in other departments, just like other sales employees do not sell cosmetics and fragrance products.

Macy’s argued that the petitioned-for unit was not appropriate because the petitioned-for employees are “functionally integrated” with the rest of the store pursuant to DTG OperationsDTG Operations explained that “functional integration” of employees exists where all employees “pitch in” or perform the functions of different classifications.  The Board noted that Macy’s reliance on DTG Operations was misplaced.  Even if the petitioned-for unit was “functionally integrated” with the remainder of the selling employees, “the significance of functional integration is reduced where . . . there is limited interaction between” the proposed unit and other employees. 

The Board also reiterated that even though two groups of employees may share a community of interest, that fact by itself would not render a separate unit inappropriate.  The petitioned-for employees and other sellers are subject to the same employee handbook, maintain similar hours, are evaluated on the same rating system, and receive the same benefits.  But, the distinctions explained above ensure that Macy’s could not establish “an almost complete overlap.” Macy’s thus failed to establish that the petitioned-for unit and other sellers share an overwhelming community of interest. 

The Board also rejected Macy’s claim that the Board’s own precedent requires a store-wide unit of all employees.  The Macy’s decision traces the evolution of the Board’s reasoning concerning retail establishments.  “[O]ver time, the overall trend [in decision-making] has been an unmistakable relaxation of a presumption in favor of a storewide unit.”  Rather, a less-than-storewide unit would be found appropriate as long as unit employees share an identifiable community of interest and are “sufficiently distinct” from other employees. 

Member Miscimarra penned a spirited dissent, finding that the petitioned-for unit is not an appropriate unit under either pre or post-Specialty Healthcare reasoning.  According to Member Miscimarra, the smallest appropriate unit here must consist of all selling employees at the Saugus location because the proposed unit employees are so similarly situated to other sellers. 

Member Miscimarra then explained that long-standing Board precedent presumed that a store-wide unit would be an appropriate unit.  “Employees in a single retail outlet form a homogenous, identifiable, and distinct group . . . [and] generally perform related functions under immediate supervision.”  In the instant case, a store manager rates, hires, and fires employees, which effectively demonstrates that a community of interest exists and affirms the appropriateness of a presumption of a storewide unit.

Lastly, the dissent faults the Specialty Healthcare ruling on three grounds.  It undercuts the Board’s “responsibility to evaluate each proposed unit on its own merits because it upholds petitioned-for units except in limited circumstances.  The decision also throws out the presumption that a store-wide unit is an appropriate unit in the retail industry.  Most damningly, the “overwhelming community of interest” standard enunciated in Specialty Healthcare renders the relationship between proposed-unit members and their excluded coworkers “irrelevant in all but the most exceptional circumstances.”

The Macy’s decision demonstrates that the current Board is determined to cement Specialty Healthcare’s place in labor law, and that industry-specific presumptions for appropriate bargaining units are meeting their demise as we predicted in June 2012.  Unfortunately for employers, the fear that Specialty Healthcare will lead to a proliferation of micro-units is proving true.  As noted in the instant case, there are several other departments at the Saugus location.  If those departments chose to organize, Macy’s would be forced to bargain with several different unions within the same store location. 

Labor watchers now expect that the Regional Director’s Decision and Direction of Election in Bergdorf Goodman, Case No. 2-RC-076954, will also be affirmed and thus join the Macy’s decision as the death knell of the retail industry’s presumption of wall-to-wall bargaining units.   In that case, the Regional Director found the petitioned-for unit of women’s shoes associates on the second and fifth floors of Bergdorf Goodman’s New York City location to be an appropriate unit.   

Stay tuned to @LRToday for further developments concerning this case and all things related to the field of labor relations.

Met Raises Spectre Of Lockout

Posted in Negotiations, Quick Hits, Unions

The Metropolitan Opera notified union members that the famed opera house will lock out its union employees if union and management officials fail to agree to a new collective bargaining agreement.  The current contract is set to expire at the end of this month.  Union employees were advised in a letter that they should prepare themselves for a work stoppage beginning August 1st if the parties are still at odds.

The parties have been butting heads over a new CBA for some time.  The Met claims that it has to cut costs to remain viable.  The union counters that poor management decisions have caused the opera house’s budgetary issues.   

More on this story can be found here:

Guards To Board: SEIU Forces Us To Pay Dues

Posted in NLRA, NLRB, Quick Hits, Unfair Labor Practices, Unions

The National Right to Work Foundation has filed unfair labor practice charges on behalf of a group of security guards against the Service Employees International Union (SEIU), alleging that the union forced them to pay dues to support union activities.  The guards, who are not members of the union, accuse the union of forcing them to pay full union dues, even though some of those dues are unrelated to bargaining activities.

The guards argue that the SEIU’s actions are in contravention of the guards’ current collective-bargaining agreement with their employer, in which the union stated that nonunion workers could refrain from paying for the union’s political activities.

“SEIU bosses are resorting to deception and even outright intimidation to force workers into full dues paying union ranks,” Patrick Semmens, vice president of the National Right to Work Foundation, said in a statement announcing the unfair labor practices claim.

The union has yet to comment on the charges.  We will keep you posted as the charges move through the National Labor Relations Board’s processes.

St. Thomas Adjuncts Say No To Union

Posted in NLRA, NLRB, Quick Hits, Representation Elections, Unions

This past week, it was announced that an organizing campaign among adjunct professors at the University of St. Thomas in St. Paul, Minnesota had failed.  In a drawn out and contested election, the final vote tally was 84 in favor of unionizing and 136 against.  The proposed unit, which would have been represented by Adjunct Action, was limited to the 300 or so adjunct faculty who teach undergraduate students.

In a short statement, Adjunct Action expressed its disappointment with the results.

“We are disappointed with the results of today’s election, but are incredibly proud of the gains this campaign achieved by bringing the reality faced by adjuncts at St. Thomas out of the shadows. By starting this process, we’ve initiated a long overdue dialogue with leadership at St. Thomas that has not happened for far too long.”

This is one of the first big losses during a union drive involving Adjunct Action, which has been installed at approximately a dozen universities across the country.  We will keep you posted on further developments.

Subway Franchise Workers Unionize

Posted in NLRA, NLRB, Quick Hits, Representation Elections, Unions

In a sign that the Fight for Fifteen is not going away, a group of workers employed at a Subway Sandwich Shop franchise in Bloombury, NJ voted to join a labor union.  A National Labor Relations Board elections official notified parent company Pilot Flying J late last week that the workers voted 8-5 to join the Retail, Wholesale, and Department Store Union.  Pilot Flying J now has one week to file any objections to the results before the union is certified as the workers’ official bargaining representative.

Interestingly, Pilot Flying J is run by Jimmy Haslam, the owner of the Cleveland Browns and the brother of Tennessee Governor Bill Haslam.  The reader may recall that Governor Haslam was involved in a protracted labor dispute earlier this year when the United Auto Workers sued to overturn a union election after they were voted down at a Volkswagen Plant in Chattanooga, TN.

As noted above, the movement toward unionizing fast food employees is very likely here to stay.  Big labor has been investing significant sums of money into organizing campaigns and protests over the last few years.  This year’s international “Fight for Fifteen” protest comes to mind, wherein the SEIU and several other labor unions convinced fast food employees to walk off the job in a day of action.  

@LRToday will be watching this story closely to see whether the employer appeals the election results.

Board Investigating McDonalds For ULPs

Posted in NLRA, NLRB, Quick Hits, Unfair Labor Practices, Unions

The Huffington Post reports that the National Labor Relations Board has opened an investigation into whether a McDonalds franchise violated the National Labor Relations Act for terminating nine workers for allegedly supporting an employee unionization effort.  The Fast Food Workers Committee, an outside labor organization representing the fired workers, claims that nine McDonalds franchise employees were fired between November of 2012 and this year for joining labor unions and helping to organize workers.  This investigation is significant because the McDonalds corporation, not just the franchise, has been named in the complaint.  If the corporation is deemed to be a “joint employer” of the employees at issue, then the corporation could be held liable for the acts of its franchisor.  We will keep you posted as the investigation continues.

Tribes Pressing For Timely Review of Board Orders

Posted in Federal Court Litigation, NLRA, NLRB, Quick Hits

Last week, the Chickasaw Nation, the Saginaw Chippewa Indian Tribe of Michigan, and the Little River Band of Ottawa Indians argued in briefs to the Sixth and Tenth Circuit Courts of Appeal that several Orders issued by the National Labor Relations Board concerning the agency’s jurisdiction should be remanded for expedited review.  The Board is asking that its prior Orders be totally vacated.  In those Orders, the Board determined that it had jurisdiction over the three tribes’ casino operations pursuant to the National Labor Relations Act.

The tribes are all arguing that completely vacating the Orders would prolong the jurisdictional question for years.  As such, the Courts should abate the tribes’ current appeals of the Board’s Orders and force the Board to take up the jurisdictional question again forthwith.

“The board asks this court to simply vacate its order and allow the board an unstructured do-over,” the Saginaw Chippewa tribe argues in its Sixth Circuit appeal. “This ‘solution,’ though, would penalize both the tribe and this court for the board’s mistake.”

We will be watching these appeals closely.  Stay tuned to @LRToday for any and all updates concerning the Board’s jurisdiction over the tribes.

Board Judge: Becker’s Appointment Valid

Posted in NLRA, NLRB, Quick Hits, Unfair Labor Practices

This past week, a National Labor Relations Board Administrative Law Judge determined that a sushi manufacturer violated the National Labor Relations Act by seeking to compel individual arbitration proceedings of a wage-and-hour class action brought by a former employee.  In his decision, Judge Wedekind determined that Fuji Food Products had run afoul of the NLRB’s D.R. Horton ruling, which provides that mandatory arbitration agreements requiring employees to waive their right to pursue collective action are unlawful. 

While an ALJ striking down yet another unlawful arbitration agreement is certainly a run of the mill ruling these days, this decision was notable for an entirely different reason.  Fuji had attempted to argue that the D.R. Horton decision itself was invalid because Member Craig Becker, one of the participating members in the ruling, was appointed by the President during an intrasession recess of the Senate.

Judge Wedekind gave this argument short shrift, explaining that the Supreme Court’s Noel Canning decision overruled the D.C. Circuit’s view that intrasession recesses were unconstitutional.  Despite Fuji’s arguments to the contrary, Member Becker’s appointment was most likely valid because he was appointed during a 17-day recess. 

“Further, the court’s analysis suggests that recess appointments will be upheld if the recess lasted 10 days or longer. Member Becker was appointed during a 17-day intrasession recess. Thus, his appointment appears to have been valid,” Judge Wedekind wrote.

Even though the ALJ’s decision is not particularly surprising, it is notable because it is the first time since the Supreme Court’s Noel Canning decision that a Board Judge had an opportunity to pass on the validity of recess appointments.  The larger open question, however, remains the continuing validity of the D.R. Horton decision.  The Board recently chose not to seek Supreme Court view of the Fifth Circuit’s decision invalidating D.R. Horton.  Accordingly, labor watchers must continue to wait and see whether the decision will stand the test of time, or whether it will be invalidated based on recent Supreme Court holdings like CompuCredit Corp. v. Greenwood or American Express Co. v. Italian Colors Restaurant.

Breaking: LIRR Strike Averted

Posted in Negotiations, Quick Hits, State/Local Issues, Unions

Earlier today, it was announced that unions representing employees of the Long Island Rail Road (LIRR) reached an agreement with the Metropolitan Transit Authority (MTA), averting a labor strike that was set to begin on Sunday morning.  The deal was signed early this afternoon and will grant LIRR employees 17% raises over a six and a half year period.  While the cost of the contract was not immediately available, union officials disclosed that LIRR workers would have to contribute to their health care costs.  Thankfully for consumers, the cost of the deal will not be passed on to them.

“This deal puts no additional pressure on the fares,” Metropolitan Transportation Authority Chairman Tom Prendergast said at a press conference at which the deal was signed.

A union spokesperson explained that he was confident union members would ratify the deal by the middle of August.  The MTA Board, in turn, will formally approve the contract in early September. 

More on this story can be found here:

UFCW Sets Sights On Sodexo

Posted in Negotiations, NLRB, Quick Hits, Unions

This past week, cafeteria workers at Texas Christian University (TCU) approved their first-even union contract.  TCU’s cafeteria workers, employed by food service company Sodexo, voted last March to join the United Food and Commercial Workers union (UFCW).  A spokesman for the union now reports that it has begun organizing drives in at least five other colleges and universities this summer.  Those schools are believed to be Dallas Baptist, Texas A & M, Tulsa, Oral Roberts, and Langston.

TCU’s union issues began after Sodexo revised its full-time employment formula last fall.  The change, which went into effect January 1, caused many of Sodexo’s variable-hour workers to lose health insurance coverage.  The resulting discontent allowed the UFCW a foothold on campus.