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December 19, 2017

NLRB Overrules Specialty Healthcare and Eliminates “Overwhelming Community of Interest” Standard to Determine the Appropriateness of a Bargaining Unit

On December 15, 2017, the National Labor Relations Board (the “Board”) issued PCC Structurals, Inc. & International Association of Machinists & Aerospace Workers, Case 19–RC–202188 (“PCC Structurals”), which overturned Specialty Healthcare & Rehabilitation Center of Mobile, 357 NLRB 934 (2011) (“Specialty Healthcare”), an Obama-era decision that enabled employees to form so-called “micro-bargaining units.”  Specialty Healthcare had made it very difficult for employers to successfully challenge the appropriateness of a proposed bargaining unit.

Under the National Labor Relations Act, employers are only obligated to collectively bargain with appropriate bargaining units.  A proposed bargaining unit may be inappropriate if it is underinclusive.  Before Specialty Healthcare was decided in 2011, the Board evaluated the appropriateness of a proposed bargaining unit challenged as underinclusive by assessing whether the traditional community-of-interest factors showed the interests the employees included the proposed unit to be sufficiently distinct from those outside of the proposed unit.  The traditional community-of-interest factors include whether the employees comprising the two groups (i) are organized into separate departments; (ii) have distinct skills and training; (iii) have distinct job functions and perform distinct work; (iv) are functionally integrated with the other employees; (v) have frequent contact with other employees; (vi) interchange with other employees; (vii) have distinct terms and conditions of employment; and (viii) are separately supervised.  Under the traditional standard, the Board focused on how these factors demonstrated differences between the collective-bargaining interests of each group.

The Board’s decision in Specialty Healthcare in 2011 changed the standard used to assess the appropriateness of a proposed bargaining unit challenged as underinclusive by shifting the Board’s focus to similarities between the interests of the two groups.  Under Specialty Healthcare, a proposed bargaining unit was appropriate if it was comprised of a readily identifiable group of employees that shared a community of interest among themselves, regardless of the interests of the excluded employees, unless the employer could show the two groups of employees shared an “overwhelming” community of interest based on the traditional community-of-interest factors.  Showing this overwhelming community of interest proved to be a very heavy burden on employers.  To show an overwhelming community of interest, an employer was usually required to show the employees in the two groups worked in the same department; had the same skills, training, and job functions; performed the same work under the same terms and conditions of employment; were functionally integrated with each other; had very frequent contact with each other; interchanged across proposed-unit lines; and were jointly supervised.  Employers were rarely able to make this showing, resulting in the approval of the micro-units sought by unions.

In PCC Structurals, the Board rejected the level of deference afforded to the union under Specialty Healthcare as inconsistent with its statutory obligations and announced it would once again evaluate the appropriateness of a proposed bargaining unit under the traditional community of interest standard, without considering whether the two groups of employees shared an overwhelming community of interest.  The Board explained that there were several policy reasons to overrule Specialty Healthcare and return to the traditional standard that had been applied by the Board throughout most of its history.  In returning to this traditional standard, the Board stated that it intends to take a more active role in determining the appropriateness of a proposed bargaining unit than that permitted under Specialty Healthcare.

Takeaway for Employers

By reducing both the level of deference afforded to unions and the burden on placed on employers seeking to challenge a proposed bargaining unit as inappropriate, this decision limits employees’ ability and incentive to form micro-units.  Thus, unions will now have to organize on a broader basis in order to be found appropriate, especially given the Board’s stated commitment to taking a more active role in appropriateness determinations. 


If you have any questions regarding the Board’s decision in PCC Structurals, please do not hesitate to contact us.