NLRB Rulings Make It Harder to Organize Micro-Bargaining Units, Easier to Change Contract Terms

Author: Robert S. Teachout, XpertHR Legal Editor

September 12, 2019

The National Labor Relations Board (NLRB) issued two rulings this week that shift the labor relations landscape in employers' favor. The first ruling makes it more difficult for a union to organize a micro-unit within an organization. The second adopts a new standard for determining whether a unilateral change of a term or condition of employment by an employer violates the National Labor Relations Act (NLRA) requirement to bargain changes with the union.

Boeing Micro-Unit Not an Appropriate Bargaining Unit

In June 2018, a group of Boeing flight line mechanics voted to join the International Association of Machinists (IAM) union as a "micro-unit" representing only a small portion of the South Carolina plant's employees. Boeing challenged the election results, saying that the mechanics did not constitute an appropriate bargaining unit and must be included in the larger community of workers at the aircraft production plant. Prior to the mechanics' vote, IAM had attempted and failed to organize the entire plant two other times.

In The Boeing Company, the NLRB held that the micro-unit at Boeing did not meet the traditional "community-of-interest" test for an appropriate bargaining unit. The Board had restored the community-of-interest standard in its 2017 PCC Structurals ruling, rejecting a 2011 standard set by the Obama NLRB that eased the formation of more micro-units. The Boeing Company is one of the first cases to apply the traditional test since it was readopted, and the Board used the ruling to set forth a three-step analysis for determining whether a petitioned-for unit is appropriate.

In an analysis, the Board will evaluate:

  1. Whether the members of the petitioned-for unit share a community of interest with each other;
  2. Whether the employees excluded from the unit have meaningfully distinct interests in the context of collective bargaining that outweigh similarities with unit members; and
  3. Guidelines the Board has established for appropriate unit configurations in specific industries.

The Board determined that the mechanics in the petitioned-for unit did not share an internal community of interest and did not have sufficiently distinct interests from the employees excluded from the petitioned-for unit. It also concluded that there were no guidelines for an appropriate unit that are specific to Boeing's industry.

"Contract Coverage" Standard for Changing Terms and Conditions of Employment

In M.V. Transportation, Inc., the NLRB adopted a "contract coverage" standard for determining whether a unionized employer's unilateral change in a term or condition of employment violates the NLRA. The new standard makes it easier for an employer to make workplace changes without being required to bargain the changes with the union.

Under the "contract coverage" standard, the Board will examine the collective bargaining agreement to determine if the change the employer made was within the scope of the plain language of the contract, thus permitting the employer the right to act unilaterally. If so, the employer will not have violated the NLRA by making the change without bargaining.

In adopting the "contract coverage" standard, the Board abandoned the "clear and unmistakable waiver" standard. That standard held that an employer's unilateral change violated the NLRA unless a contractual provision unequivocally and specifically referred to the type of change at issue.

The "clear and unmistakable waiver" standard has been rejected by several federal courts of appeals including the Court of Appeals for the District of Columbia Circuit, which has jurisdictional authority to review NLRB rulings. The DC Circuit has applied the "contract coverage" standard for more than 25 years and sanctioned the Board in 2016 for continuing to press for use of the "clear and unmistakable waiver standard" in hearings before the court.