The NLRB closed out its busy week of reversing Obama-era standards in two more high-profile decisions, this time addressing the duty to bargain and bargaining unit determination (see our previous post covering work rule and joint employer standards). On Chairman Phillip Miscimarra’s final day in office, the Board’s two key decisions: (1) returned to a standard returning to broader employer rights to make unilateral changes without providing a union notice and an opportunity to bargain; and (2) eliminated the “micro-unit” bargaining unit standard that constricted employers’ ability to expand proposed bargaining units to include other employees who share a community of interest with those of the proposed unit.
Impact on Employers
The return to previous standards of unilateral change analysis will allow employers more discretion in changing terms of employment consistent with past practice. This benefit to employers most commonly arises with company-wide changes to health insurance plans. Under the previous standard, an employer could be forced to delay implementation of health insurance changes until it had provided notice to the union and an opportunity to bargain, even in the face of longstanding past practice. Many employers with medical plans covering union and non-union employees will have less interruption during open enrollment plan changes.
Elimination of the “micro-unit” standard of bargaining unit appropriateness substantially reduces a union’s ability to cherry pick favorable groups of employees to win elections. Unit determination will return to a more holistic review of shared “community of interest” rather than proceeding based on the union’s extent of organizing. Ultimately, the decision will give employers more ability to defend against union organizing campaigns and keep unions from obtaining representation through small pockets of employees amongst a larger department or facility.
The Reinstated Standard for Unilateral Changes
Employers remain required to provide a union with notice and the opportunity to bargaining over “changes” to terms and conditions of employment. Following the Board’s decision, however, actions do not constitute a “change” if they are similar in kind and degree with an established past practice consisting of comparable unilateral actions. The Board also held this principle applies regardless of whether (i) a CBA containing a management rights clause authorizing unilateral action was in effect when the past practice was created, and (ii) no CBA existed when the disputed actions were taken. Finally, the Board ruled such actions consistent with an established practice do not constitute a change requiring bargaining merely because they may involve some degree of discretion.
Returning to a Familiar Standard: Bargaining Unit Determinations
Bargaining unit determination will return to the familiar “community of interest” standard, under which the Board will evaluate terms and conditions to determine whether a proposed bargaining unit is appropriate.
The factors include:
- Whether the employees are organized into a separate department;
- Have distinct skills and training;
- Have distinct job functions and perform distinct work, including inquiry into the amount and type of job overlap between 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.
The proposed unit is not required to be the most appropriate unit, just an appropriate unit. Accordingly, a union will still be entitled to some deference on its proposed unit as long as the unit is appropriately comprised and does not exclude others sharing a community of interest.
The former test (Specialty Healthcare) allowed for appropriate units comprised of employees sharing a community of interest amongst themselves, but only required addition of other employees to the unit if the excluded employees shared an “overwhelming” community of interest with the proposed unit. The enhanced “overwhelming” standard resulted in deference to the proposed unit in all but the most egregious situations.
More Detail on the Cases
The case reversing unilateral change analysis can be found here. The case involved an employer with a medical plan covering both represented and non-represented employees. Every year between 2001 and 2011, the employer mailed a benefit overview document to all covered employees describing available medical and benefit options and changes to employee costs and coverage. Following the notification, the employer made the change each successive year. During that time, the union representing a segment of the employees did not object or seek bargaining, although each such notification and change occurred during the term of a CBA containing a management rights clause. In 2012, the employer followed the same procedure, but the CBA had then expired and the parties were in the midst of negotiations for a successor CBA. The union asked the employer to exclude the represented employees from open enrollment. The employer denied the union’s request and proceeded with changes to the plan. The Board determined that the employer’s action did not constitute a “change” because past practice represents the status quo – eliminating the employer’s right to proceed in line with past practice would itself be a change. Therefore, the employer did not have an obligation to notify or bargain with the union. The Board will apply the standard to all pending cases related to unilateral change.
The case reversing bargaining unit determination standards can be found here. The case involved a union’s petition for election in a proposed unit of approximately 100 employees in two job classifications across three of the employer’s facilities. The employer contended that the smallest appropriate unit would be a wall-to-wall unit of 2565 employees across approximately 120 job classifications. The NLRB Regional Director used the Specialty Healthcare standard to determine appropriateness of the petitioned-for bargaining unit and concluded: (1) the employees in the petitioned-for unit were readily identifiable as a group based on job classification; and (2) the rest of the employer’s suggested unit did not share an “overwhelming community of interest” with the petitioned-for employees. Accordingly, the petitioned-for unit was approved. The Board reversed the Specialty Healthcare standard and remanded the case to the Regional Director for further consideration of the appropriate bargaining unit.
Next on the Horizon
As noted, the current NLRB has reversed many of the standards of the previous administration (as is typical of the NLRB following a change of presidential political party). Most of the highly disputed partisan standards and decisions have now been reversed. One remaining controversial rule of the previous administration is the so-called “quickie election” rule, which shortened the time between petition and election from over 40 days to less than 15. Earlier this week, the NLRB issued a request for public input on the election rules, signaling a potential return to prior rules. The deadline for public comment is February 12, 2018.
Please reach out to your Baker McKenzie lawyer for more details.