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October 31, 2016



On August 30, 2011, the National Labor Relations Board (NLRB or Board) issued a 3-1 decision in a case called Specialty Healthcare and Rehabilitation Center of Mobile. This controversial ruling created a new standard for determining the composition of bargaining units suitable for a union certification election.

Using the new criteria established in Specialty Healthcare, unions can form very small “micro” bargaining units that exclude employees who, under previous law, would likely have been included. This outcome was effectuated by the “overwhelming community of interest” test articulated in the decision, which has the practical effect of making it nearly impossible for an employer to include additional employees into a proposed “micro” bargaining unit suggested by a union.

In practice, the Specialty Healthcare decision means that the NLRB will approve almost any proposed bargaining unit a union recommends, regardless of how small or fragmented. Many practitioners of labor law, including the dissent in the case, have argued that the Board’s ruling effectively allows unions to petition for bargaining units that reflect little more than the extent to which they have already recruited supportive employees, in violation of Section 9(c)(5) of the National Labor Relations Act (NLRA or Act).

This has real world implications for employers and workers because a union can populate a prospective bargaining unit with those more inclined to accept representation and thus increase the odds that it will win the election. Thus, these micro-units mean that unions can use Specialty Healthcare to gain a foothold at a business even if a majority of workers do not support unionization.

Regardless of how one feels about the merits of the case, the NLRB’s public description of its decision should be a particular cause for concern. When Specialty Healthcare was announced, the agency stated in a press release that it had established a “new approach” to the formation of bargaining units only in the non-acute health care setting. The Board specifically denied that it had created new criteria for other industries. Yet that assurance has proven to be false. In fact, the micro bargaining units enabled by Specialty Healthcare have surfaced in industries as varied as retail, manufacturing, rental cars, delivery services, and telecommunications. The downplaying of a significant policy change is similar to what occurred when the Board established a new joint employer standard in the Browning Ferris case and when it issued a new rule on election procedures.

The obfuscation is especially worrying as the agency considers a range of new issues during the final months of the Obama presidency. Additional regulatory actions related to joint-employment, so-called “captive audience” meetings, and the definition of independent contractor may be on tap. Given the potentially controversial nature of these issues, the public should be able to have confidence that, even if the NLRB is no longer the neutral arbiter envisioned by the NLRA, it will at least represent its actions truthfully.

Unfortunately, that confidence has been compromised, and when analyzing any NLRB actions during the remainder of the administration, labor practitioners and the public would be well served to read the fine print. The widespread application of the Specialty Healthcare standard, despite the NLRB’s initial assurances, should also encourage Congress to use the powers at its disposal to overturn the decision and restore common sense to the NLRA, a law whose boundaries the current Board has expanded dramatically.