On July 28, 2014, the National Labor Relations Board issued its long-awaited decision in Bergdorf Goodman, 361 NLRB No. 11 (2014), unanimously finding inappropriate the petitioned-for unit of “all women’s shoe sales associates” at the employer’s retail store on Fifth Avenue–even under the controversial test articulated in Specialty Healthcare. The outcome is somewhat surprising given the Board’s recent decision in Macy’s, Inc., in which it applied Specialty Healthcare and found appropriate a petitioned-for unit consisting of all sales employees from only cosmetics and fragrances departments.

In Bergdorf, the union sought a bargaining unit comprised only of the women’s shoe sales associates in the “Salon shoes” department on the second floor, and in “Contemporary shoes” group in the larger “Contemporary Sportswear” department. The Board’s decision overturns the Regional Director’s decision, in which he found that petitioned-for unit appropriate because the women’s shoe associates position:

requires a distinct skill set from other sales associates due to the unique nature of the product they are selling. If a shoe is not sized appropriately for a customer, discomfort and possible knee, back and other physical injuries could result.

The Regional Director also found that the women’s shoes associates were compensated differently than the other sales associates and that there was little interchange and interaction with other employees, which outweighed the common terms and conditions of employment among all employees.

The Board disagreed as it found that the employees in these two departments lacked a community of interest despite the fact that they all sold women’s shoes, were the only employees who specialized in women’s shoes, were the only employees in the store paid on a “draw against commission” basis, and received the highest commission rate. Specifically, the Board noted that while the petitioned-for employees were readily identifiable as a group by virtue of their function, the “boundaries of the petitioned-for unit do not resemble any administrative or operational lines drawn by the Employer”:

while the Salon shoes employees constitute the whole of their department, the petition carves the Contemporary shoes employees out of a second department, Contemporary Sportswear, excluding the other sales associates in that department. The carved-out Contemporary shoes employees are then grouped with the Salon shoes employees, who are located on a separate, nonadjacent floor.

The Board, except for Members Miscimarra and Johnson, then took it upon itself to identify the following facts that could have swung the decision in the union’s favor:

  • if Salon shoes and Contemporary shoes employees shared common supervision despite being located in different departments;
  • significant interchange between the Salon Shoes department and the carved-out Contemporary shoes group;
  • significant contact between the two groups; and
  • shared skills and training.

Interestingly, while all five members of the Board participated in the decision, in a footnote Member Miscimarra expressly disagreed with the viability of Specialty Healthcare, as he reiterated the standard he set for in his dissent in Macy’s. that should apply. Member Johnson declined to address Specialty Healthcare or the recent Macy’s case.

Although the unit cherry-picked by the union was found inappropriate, employers should take little comfort in Bergdorf Goodman as the Board used it to create a road map for unions to identify “appropriate” fractured units despite Specialty Healthcare‘s admonition against  such units. Accordingly, please continue to monitor the blog for additional developments and analysis of micro unit cases.