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Aug 04, 2014 - 1:45pm

Bergdorf Goodman: A Pyrrhic Victory?

Director, Research & Legislative Affairs, Workforce Freedom Initiative

Crossposted from the Workforce Freedom Initiative blog.

According to a somewhat hackneyed adage, even a broken clock is right twice a day. At first, that seemed to be the best way to describe the National Labor Relations Board’s (NLRB) decision in the case of Bergdorf Goodman.  The Board’s ruling overturned a controversial decision by one of its regional directors that a tiny unit of just women’s shoe sales associates could unionize, but unfortunately, the Board’s reasoning for its conclusion did more harm than good.

Like other department stores, Bergdorf Goodman employs hundreds of employees who work in 18 different departments, yet the union (Local 1102 of the Retail, Wholesale Department Store Union) proposed a bargaining unit with about 45 employees composed of just women’s shoes sales associates on the 2nd Floor Salon Shoes Department and the 5th Floor Contemporary Footwear Department at a Bergdorf Goodman department store.

Back in May 2012, the regional director in question applied the NLRB’s flawed logic in Specialty Healthcare and approved the proposed unit, which the union presumably targeted because it would be easier to win a representation election of this smaller subset rather than all of Bergdorf’s sales people.

Winning elections of such small subsets of employees is precisely what the micro-union concept aims to facilitate, and the NLRB’s labor-friendly majority paved the way for it in Specialty Healthcare (despite falsely reassuring the world that its decision would not apply in industries outside of non-acute health care). 

To observers of labor policy, the regional director’s decision highlighted the absurdity of Specialty Healthcare because many employers have different divisions with overlapping responsibilities, and the prospect of multiple bargaining units throughout a complex workplace threatens to inject inefficient and unnecessary complications for businesses trying to, well, do business.

That fact is especially true in the context of a retail department store, where so-called wall-to-wall bargaining units have been considered “presumptively…appropriate” for nearly half a century under NLRB precedent. That is, they were until the recent NLRB decision in Macy’s, in which the Board allowed a bargaining unit of just cosmetics and fragrance sales associates.

Following that ruling, the outcome in Bergdorf Goodman appeared to be preordained. However, after over two years, Bergdorf Goodman’s appeal to the Board actually reversed the regional director’s ruling, which almost seemed reassuring until one read the decision. What the Board concluded was that the unit was inappropriate not because it was too small, but rather because it was too big and disconnected to have a true community of interest. In other words, the union should have gone for an even smaller, and more fractured unit. Thus, the decision did not back away from Specialty Healthcare at all, but rather amplified it. And, it sidestepped the question of wall-to-wall bargaining units altogether when it comes to department stores.

With Specialty Healthcare still in place, even if a union cannot establish a community of interest between two departments (as in this case), there appears to be nothing stopping it from seeking to represent each department or sub-department as discreet bargaining units of their own. For employers in search of sanity from this NLRB, they are best advised not to look for it in this decision. 

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Director, Research & Legislative Affairs, Workforce Freedom Initiative

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