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NLRB ruling on size of bargaining unit debated

A National Labor Relations Board (NLRB) ruling that could fundamentally alter the size and scope of collective bargaining units was a hot topic of debate during a June 26, 2013, hearing of the House Subcommittee on Health, Employment, Labor and Pensions.

Much of the hearing’s testimony and discussion focused on the board’s August 2011 decision in NLRB v. Specialty Healthcare and Rehabilitation Center of Mobile (NLRB case no. 15-RC-008773). Corporate labor attorneys and employer groups have criticized the NLRB for using the case to overturn a long-held standard for determining the size of collective bargaining units.

During the hearing, Jerry Hunter, a partner at the St. Louis-based law firm Bryan Cave and a former general counsel for the NLRB, testified that the Specialty Healthcare ruling “has created a disturbing new element to the ‘community of interest’ test which the board uses to determine the composition of bargaining units.”

According to Hunter, the ruling would allow multiple bargaining units or “microunits” within one business location. These microunits could be any size, Hunter said, and would “wreak havoc on an employer’s ability to effectively manage its workforce.”

Growing concern over the effect of this NLRB decision led Rep. Tom Price, R-Ga., to introduce the Representation Fairness Restoration Act (H.R. 2347) on June 13. If enacted, the bill would re-establish the standards for determining the size and scope of collective bargaining units that were used prior to the Specialty Healthcare decision.

Employer groups, including the Society for Human Resource Management (SHRM), are urging Congress to overturn the board’s decision by enacting H.R. 2347. Eric Oppenheim, SPHR, chief operating officer of Republic Foods Inc. of Rockville, Md., described the impact that the NLRB’s ruling was having on his business and other companies.

“At Republic Foods stores, the Specialty decision could eventually mean that our workforce becomes needlessly fragmented,” said Oppenheim, whose company operates 19 Burger King franchises in the Washington, D.C., area. “Our employees cross-train on multiple job functions and cover for one another during busy hours without hesitation in order to effectively serve customers. HR professionals and business owners like me are very concerned that the Specialty decision may complicate how we cover various job functions, by restricting our ability to train and manage our employees.”

Oppenheim told the subcommittee that, under the new standard, employees who perform certain job functions, such as line cooks or cashiers, could organize union representation. If this happens, cross-training would be difficult -- if not impossible -- because under union contract rules, job duties could become very static, so a restaurant cashier would not be allowed to work as a cook or perform other tasks.

Fractured and highly unionized restaurants also could lead to conflicts and low morale among workers because of varying compensation and benefit packages and unequal levels of seniority.

“For the operation of our restaurants, it is essential that our employees have good communication skills and the flexibility to learn and perform multiple job functions or cross-train to serve our customers,” Oppenheim said.

He told the subcommittee that SHRM members are concerned that the NLRB ruling would take away flexibility and effectively squelch communication among employees.

“Small businesses like mine with thin profit margins can’t afford the time and expense required to negotiate and manage crew members working under different collective bargaining contracts. The costs of Specialty may unfortunately compel employers of all sizes to raise prices, reduce services or eliminate jobs.”

In the hearing, opponents of H.R. 2347 and of rolling back the NLRB’s decision argued that the proposed bill was an overreaction and that the board’s action has had an opposite effect by actually increasing the size of collective bargaining units.

“One of the major misconceptions about the Specialty Healthcare decision is that [it] would lead to a proliferation of small microunits,” said Fred Feinstein, a senior fellow at the University of Maryland’s School of Public Policy Executive Programs. “NLRB statistics show that this has not been the case. Prior to Specialty Healthcare, the average size of bargaining units was 24 employees, and since the ruling, the average size of bargaining units has slightly increased, to 27.”

Feinstein, who served as NLRB general counsel under President Bill Clinton, warned that H.R. 2347 could set a bad precedent by allowing Congress to control the size and scope of collective bargaining units.

“My primary concern with H.R. 2347 is placing Congress in the role of legislating unit determinations,” Feinstein said. “I believe that the board’s decision in Specialty Healthcare was an appropriate reaffirmation of its long-standing ‘community of interest principle’ and not the dramatic change in law that some have suggested.”

During the hearing, Republicans favored approving the bill and overturning the NLRB decision. If the measure passes the GOP-majority House, it will move to the Senate, where it would face strong opposition from the Democratic majority. President Barack Obama also has stated that he will not support any legislation designed to overrule or limit the authority of the NLRB.

Bill Leonard is a senior writer for SHRM.

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