Jul 25, 2014 - 11:00am

Mischief at Macy’s

Executive Director, Labor Policy


Macy's store with an American flag on its roof.
Photographer: Luke Sharrett/Bloomberg.

Crossposted from the Workforce Freedom Initiative's blog.

The National Labor Relations Board (NLRB) on July 22 upheld a January 2013 Acting-Regional Director’s (RD) decision to permit a bargaining unit consisting of only the cosmetic and fragrance salespersons at a Macy’s department store.  Though it comes as little surprise, the Board’s decision is yet another example of the expansion of its controversial 2011 decision in Specialty Healthcare. That decision has enabled the formation of micro-unions in a number of industries, now including retail.

The present case involves a Macy’s store in Saugus, Mass. that employs approximately150 individuals, of whom 120 are sales associates in various departments throughout the store.  Back in March 2011, the United Food & Commercial Workers (UFCW) filed a petition with the NLRB to represent all of the sales associates as a traditional “wall-to-wall” bargaining unit, which at the time was the well-established standard in retail department stores.  The NLRB’s RD accepted the wall-to-wall unit, and a representation election took place on May 20, 2011, though it did not turn out well for the UFCW, which lost.

A few months after the UFCW’s failed organizing bid, the NLRB issued its decision in Specialty Healthcare, in which the Board overturned a 20-year-old precedent covering the composition of bargaining units in non-acute health care facilities. Calling the previous standard “obsolete,” the NLRB permitted a segmented bargaining unit of certified nursing assistants at a nursing home to the exclusion of other employees at the same facility. The Board further said that in order to successfully challenge a proposed bargaining unit, employers henceforth would need to prove that the excluded employees share “an overwhelming community of interest” with the employees in the proposed unit.

Thus, the NLRB opened the door for unions to cherry-pick which employees they want to organize and granted them the ability to form micro-unions.  In a press release at the time, the Board asserted that it “did not create new criteria for determining appropriate bargaining units outside of health care facilities,” which has been proven false repeatedly in industries ranging from private aviation to rental car agencies and restaurants (see herehere, and here). 

In October 2012, the UFCW filed a second representation petition seeking representation just of the 41 cosmetics and fragrance salespersons at the Saugus Macy’s.  Using Specialty Healthcare as the guiding precedent, the RD certified the newly-proposed bargaining unit and ordered the election to proceed.  Macy’s appealed that decision to the Board, citing the NLRB’s nearly half-century precedent covering the retail industry, in which the Board affirmed that wall-to-wall bargaining units in the retail setting are “presumptively…appropriate.”

That argument apparently held little sway with the Board.  Saying, “Board precedent regarding retail department stores has evolved away from any presumptions favoring storewide units, and the current standard for determining whether a less-than-storewide unit comports with, and is in fact complementary to, the framework articulated in Specialty Healthcare,” the NLRB essentially confirmed that it intends to apply the Specialty Healthcare standard across the economy.  In other words, any small group of employees with similar jobs in any workplace can form a gerrymandered micro-union.

Seeking to lull any worried readers into a sense of calm, the opinion states:  “we do not reach the question of whether other subsets of selling employees at this, or any other, retail department store may also constitute appropriate units.”  Given its penchant for dubious disclaimers, one could be forgiven for discounting that one. 

The NLRB’s activist majorities over the last several years have pushed aside decades of NLRB case law in order to tilt the playing field toward labor unions.  The Board’s outlandish decision in Macy’s furthers that practice and in doing so reinforces its reputation as a rogue agency in need of serious reform.

More Articles On: 

About the Author

About the Author

Sean P. Redmond
Executive Director, Labor Policy

Sean P. Redmond is Executive Director, Labor Policy at the U.S. Chamber of Commerce.