In our last post, we summarized the 2011 Specialty Healthcare decision and the potential for the NLRB to recognize an unduly burdensome number of smaller collective bargaining units. So far, cases interpreting Specialty Healthcare indicate that the NLRB’s expanded view has not resulted in a proliferation of arbitrary bargaining units.

Two recent cases decided within a week of each other this July – Macy’s, Inc. and The Neiman Marcus Group, Inc. – demonstrate the current boundaries set by the NLRB.

Macy’s examined a proposed micro-bargaining unit comprised of cosmetics and fragrances employees at a store in Massachusetts. Using the Specialty Healthcare analysis, the NLRB held that the proposed unit was a “readily identifiable unit who share a community of interest.” In doing so, the NLRB noted that the petitioned-for unit of employees worked in mostly the same capacity in the same sales department, and performed their jobs in connected work areas under common supervision where they had only limited interaction with other employees.

By contrast, in Neiman Marcus, the NLRB also applied Specialty Healthcare but declined to find a community of interest among a group of women’s shoes sales associates. In reaching that conclusion, the NLRB found it “particularly significant” that the proposed unit spanned separate departments, involved separate management groups, and aggregated groups of people who interacted on only a limited basis while simultaneously excluding others who worked in the same sales department.

What the NLRB “Micro-Unit” Cases Mean for Your Startup or Emerging Business

For most startups with few employees, Specialty Healthcare, and its recent progeny, does not provide an immediate cause for concern. However, it is helpful for the founders and executives to understand how these cases might impact the future growth of their company. In particular, as a company grows in scale, it can use factors discussed in Specialty Healthcare, Macy’s and Neiman Marcus to identify possible constituencies and anticipate how they might impact its business. For example, a startup should consider the following:

  • Is there a group of employees at the company who all perform the same function?
  • Is that group of employees supervised by the same managers?
  • Within the company hierarchy, does that group of employees constitute a single department or group (as opposed to spanning a number of departments containing other employees not included in the group)?

If the answer to these questions is yes, then there is a possibility that the group could be identified as a community of interest and, therefore, a potential bargaining unit. What should be done to guard against this possibility is up to each individual business. If the goal is to avoid micro-bargaining units, then, at the very minimum, the Specialty Healthcare factors provide a lens through which to examine the possible existence in a business.

A prudent startup hoping to avoid the formation of micro-unions would be well advised to look at all the major factors considered by the NLRB and, to the extent possible, maintain a flexible, integrated and well-rounded work staff with common management when doing so supports its business goals.