Micro-Units – What Are They and Why Should I Care?

“Micro-unit” is the term used to refer to a small portion of the total number of employees at a particular worksite which a labor union seeks to represent. Recent decisions by the National Labor Relations Board (“NLRB” or the “Board”) have raised employers’ concerns that unions will focus organizational efforts on such small groups, or “units” of employees. Smaller units often are easier for a union to organize; if the union is successful in convincing a small unit to choose union representation, the employer will face bargaining with one or more unions over small portions of its workforce, creating numerous operational inefficiencies at the very least.

In Specialty Healthcare and Rehabilitation Center of Mobile, 357 NLRB No. 83 (2011), decided in August 2011, the NLRB found that such a smaller unit was appropriate for a union certification election. The Board decided that a bargaining unit comprised of only a small portion of the employer’s total number of employees in its facility was “appropriate” in the extended care (non-acute) facility. The employer had challenged the smaller proposed bargaining unit because it excluded the majority of its employees. The Board explained that the employer had to show that the excluded workers shared “. . . an overwhelming community of interest” with those in the smaller, proposed unit (the “micro-unit”).

In a recent decision, the Sixth Circuit Court of Appeals affirmed the Board’s decision.1 Since its 2011 decision, the Board and several of its Regional Directors, have approved smaller micro-units over the employers’ objections. For example, in cases currently pending before the Board, Regional Directors approved units comprised of single departments in large retail department stores.2

Section 9 of the National Labor Relations Act, 29 U.S.C. § 159(b) gives the Board responsibility of determining “the unit appropriate for the purposes of collective bargaining . . .” Other than specifically providing that certain units are not considered “appropriate,” such as ones including guards with other employees, the law does not give much guidance on what will be considered an “appropriate” unit. There is no specific unit which may be found to be “appropriate.” For many years, most unions sought representation of the broadest possible units, such as “wall-to-wall” units including all production and maintenance employees in a manufacturing facility, or comparable all-encompassing units in other settings.3

Faced with difficulties in organizing broader units in a number of industries, some unions have adopted a strategy of targeting smaller units in order to face a smaller number of employees to try to convince to vote for union representation. That strategy was endorsed by the NLRB in Specialty Healthcare, when the NLRB found that a bargaining unit consisting only of Certified Nursing Assistants constituted an appropriate unit. The Sixth Circuit’s decision confirms the Board’s adoption of such a “micro-unit” approach to collective bargaining.

Why should an employer care?

• Smaller units often are easier to organize.
• Smaller units create the possibility of inefficiency in operations; some employees in the same workplace may be subject to quite different work rules, or conflict resolution processes, or pay and benefit policies.
• In addition, the newly constituted Board likely will re-adopt its previously proposed “quickie election” rule. This would reduce the time a company has to explain the realities of collective bargaining (i.e., correcting many unions “over-promising”). Thus, employers may be faced with quickly scheduled union elections in smaller units, where the outcome will be all but a foregone conclusion.

What to do: Conduct a Labor Audit

• Although the decline in union membership and number of union elections has resulted in many employers taking a more complacent view towards labor relations and union avoidance strategies, it may be time for companies to revisit their priorities in order to be ready when a petition for a certification election arrives in the mail. Non-union employers would be well served to either conduct their own labor relations audit, or employ outside professionals to help them assess their vulnerability to union organizing. Many unions are jumping on issues such as wage and hour violations, workforce reductions, reduction in, or elimination of, fringe benefits and real, or perceived, unfair treatment of employees through smaller wage increases and longer working hours to attract support for an organization effort.
• Non-union employers in many industries, particularly those in retail and healthcare, need to begin looking at their workforce from the standpoint of whether it may be possible for a labor organization to carve out a small group of employees for organization and what, if anything, the employer may be able to do to avoid that result before they are faced with an organizing attempt.
• In order to minimize the potential of having smaller groups of employees picked off by a labor organization – – or, even worse, by multiple labor organizations – – employers should examine their workforce with an eye towards flattening out their management structures where more employees report to fewer managers, examine existing positions to determine whether the number of classifications can be reduced and whether employees can be cross-trained and actually utilized to perform different jobs on an interchangeable basis, and make sure, when practical, that the conditions of employment are consistent across their entire non-technical, non-supervisory workforce.

Employers likely will have a shortened time between a union’s filing of a petition for representation and the election. Thus, the steps identified here may be unavailable or less effective. Employers are urged strongly to consider taking some or all of these steps now.

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1Kindred Nursing Centers East, LLC v. NLRB, 2013 U.S. App. LEXIS 16916 (6th Cir. August 15, 2013).

2See Macy’s Inc. and Local 1445, United Food & Commercial Workers, 01-RC-091163 (Unit of cosmetic and fragrance sales employees). In a case involving Bergdorf Goodman, a unit of women’s contemporary shoe sales people was found appropriate. In Fraser Engineering Company, 359 NLRB No. 80(2013), a smaller unit of plumbers and pipefitters was found appropriate where a larger unit had been approved two years earlier. A unit of only maintenance employees was found appropriate at a Nestle’s manufacturing facility.

3 In the healthcare industry, the Board utilized its rule-making authority several years ago to establish eight separate units based on skills, licensing, etc. which would be considered appropriate in acute care hospitals.