NLRB's Specialty Healthcare's "Micro-Union" Decision Upheld by Court of Appeals

Author: Melissa Gonzalez Boyce, XpertHR Legal Editor

August 23, 2013

The National Labor Relations Board (NLRB) decision in Specialty Healthcare and Rehabilitation (Specialty Healthcare) survived its first court challenge when the Sixth Circuit of Appeals (court) upheld the decision in Kindred Nursing Centers East (f/k/a Specialty Healthcare and Rehabilitation Center) v. NLRB, 2013 U.S. App. LEXIS 16919 (6th Cir. 2013). As a result of this decision, employers should be cautioned that employees who share a community-of -interest are not required to be in a single bargaining unit and may instead campaign and organize smaller bargaining units, i.e. micro bargaining units or "micro-unions", within a single workplace, thereby multiplying the burdens on employers.

In Kindred Nursing Centers East, the court addressed the employer's arguments that the NLRB abused its discretion by departing from the traditional community-of-interest test and adopting a new approach, the overwhelming-community-of interest test, to be used by employers attempting to challenge the composition of a bargaining unit. Under the traditional test, employees are grouped together in the same bargaining unit if they share a community of interests after consideration of the following factors:

  • Similarity in skills, interests, duties and working conditions;
  • Functional integration of the plant, including interchange and contact among the employees;
  • The employer's organization and supervisory structure;
  • The bargaining history; and
  • The extent of union organization among the employees.

The new approach is a heightened standard that requires the party (in this case, the employer) challenging the composition of a bargaining unit to demonstrate that excluded employees share an overwhelming community of interest with the employees already included in the unit.

Noting that courts must uphold NLRB's bargaining unit determinations "unless the employer establishes that it is arbitrary, unreasonable or an abuse of discretion", the court ruled that the NLRB did not abuse its discretion for the following reasons:

  • The NLRB properly explained and justified its departure from the traditional standard in its prior decisions.
  • The NLRB's standard is not new because the overwhelming-community-of-interest test based on some of the NLRB's prior cases and has been previously approved by the D.C. Circuit in Blue Man Vegas, LLC v. NLRB, 529 F.3d 417 (D.C. Cir. 2008).
  • The NLRB has used different words to describe this standard in prior decisions and has merely clarified that it will use this standard going forward.

Employers should be mindful that the NLRB will continue to apply and possibly expand the "overwhelming community of interest" test in representation cases, especially now that it has been upheld by a court. XpertHR will continue to follow this issue as additional legal challenges to this test are sure to follow.