On December 14, 2022, the National Labor Relations Board (“Board”) issued a decision in American Steel Construction, Inc., reinstating its “overwhelming community of interest” Specialty Healthcare [1] test that gave rise to micro-bargaining units, which are smaller bargaining units that scored unions numerous victories during the Obama administration.  In so doing, the Board overruled PCC Structurals [2] and The Boeing Co., [3] both of which restored and refined the traditional “community of interest” standard used to evaluate challenges to a petitioned-for bargaining unit on the basis it excluded necessary employees. 

Specialty Healthcare and the “Overwhelming Community of Interest” Standard

In 2011, the Board discarded twenty years of precedent in Specialty Healthcare, and instead imposed the aptly titled “overwhelming community of interest standard” for the party proposing a larger more complete unit. Under this standard, to establish that a unit is not appropriate and must include other employees, the Board required evidence that the petitioned-for unit is “truly inappropriate.” To successfully meet this standard required a “next to impossible” showing that the employees inside and outside the proposed unit’s interests “overlap[ped] almost completely.” With this demanding standard in place, employers rarely succeeded in contesting the absence of employees in a petitioned-for bargaining unit, which resulted in the prolific rise of micro-bargaining units. For a more complete discussion of Specialty Healthcare, please see our post from August 18, 2017.

PCC Structurals – Return of the Traditional “Community of Interest” Standard

In 2017, to address these imbalances and to provide “employees their fullest freedom in exercising their rights under the Act,” the Board overturned Specialty Healthcare in PCC Structurals and reinstated the traditional “community of interest” test. Under the reinstated, multi-factor standard, the Board assessed if the excluded employees shared a community of interest with the petitioned-for unit by examining:

whether the employees are organized into separate departments; have district skills and training; have distinct job functions and perform distinct work, including an inquiry into the amount and type of job overlap between job classifications; are functionally integrated with the Employer’s other employees; have frequent contact with other employees; interchange with other employees; have distinct terms and conditions of employment and are separately supervised.

After weighing these factors, case-by-case, if the Board determined the excluded employees shared a community of interest with the petitioned-for unit, it deemed that unit inappropriate due to the exclusion of those employees. For a more complete discussion of PCC Structurals, please see our post from December 18, 2017.

The Boeing Co. – Refining the Traditional Test by Adding a Three-Step Analysis

In 2019, in The Boeing Co., the Board refined the traditional “community of interest” analysis. Specifically, the Board noted that the “community of interest” analysis must consider the shared interests of the employees in the petitioned-for unit and whether those shared interests are sufficiently distinct from the interests of the employees excluded from the proposed unit. To appropriately analyze these factors, the Board created a tripartite analysis examining whether:

  1. The employees in the proposed unit share a community of interest;
  2. The workers excluded from the unit “have meaningfully distinct interests in the context of collective bargaining that outweighsimilarities” with the employees in the proposed unit; and
  3. There are already Board-established guidelines for determining an appropriate unit configuration for the employer’s industry.

For a more complete discussion of The Boeing Co., please see our post from November 18, 2019.

Specialty Healthcare Makes a Comeback & What This Means for Employers

Last week, in American Steel Construction, Inc., the Board, in step with its practice of recycling Obama-era practices, reinstated Specialty Healthcare’s “overwhelming community of interest” standard. Specifically, Chairman McFerran heartily lauded the Specialty Healthcare standard as a promise to provide “full freedom of association” and to “ensur[e] that workers have the ability to organize in the unit of their choosing, so long as it is not arbitrary or irrational.” Moreover, the Board indicated that it would retroactively apply the Specialty Healthcare standard to pending union representation petitions. Employers are likely to see more petitions for micro-units as a result of this decision. As such, employers should understand how the Board’s decision to re-adopt the “overwhelming community of interest” standard may alter the types of bargaining units that a union may successfully petition to represent and consult with legal counsel regarding potential adjustments to the management of their workforces to minimize the impact of the NLRB’s decision in American Steel Construction, Inc.

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[1] 357 NLRB 934 (2011)

[2] 365 NLRB No. 160 (2017)

[3] 368 NLRB No. 67 (2019)