Employment Law Daily NLRB's Specialty Healthcare approach upheld; employer must bargain with maintenance-workers-only unit
Thursday, April 28, 2016

NLRB's Specialty Healthcare approach upheld; employer must bargain with maintenance-workers-only unit

By Lisa Milam-Perez, J.D. The NLRB did not violate the NLRA or abuse its discretion when it certified a bargaining unit comprised solely of maintenance employees at a Bakersfield, California, ice-cream production facility, the Fourth Circuit held. In so ruling, the appeals court rejected the employer’s challenge to the NLRB’s Specialty Healthcare decision (despite being backed up by a flurry of amicus briefs from business groups) as well as its contention that, even under that decision’s "overwhelming community-of-interest" standard, a maintenance-employee-only unit was improper. As such, the court denied the employer’s petition for review and enforced the Board’s order finding that the employer unlawfully refused to bargain with the union (Nestle-Dreyer’s Grand Ice Cream, Inc., April 26, 2016, Diaz, A.). Same, but different. The facility in question has 26 production lines and employs 578 production workers and about 113 maintenance employees, the majority of whom perform routine maintenance work and repairs on multiple production lines or adjacent palletizing areas. (The remaining maintenance employees handle various tasks throughout the facility.) The maintenance employees working the production lines sometimes work directly with production workers, who call upon the maintenance employees when there is a technical problem they can’t fix themselves. The two groups also work together when, at third shift, production workers disassemble equipment for cleaning, while maintenance employees stand by, ready to replace broken parts or address other problems prior to reassembly. Both groups have similar working conditions—the same employee benefits, they use the same parking lots, time clocks, break rooms, and lockers. They are held to the same workplace policies and are reviewed under the same performance evaluation system. But the groups differ in significant ways, too: Maintenance employees earn $20–$30 an hour, compared with $15–$22 for production workers, in part because they have significantly more training in mechanics and electronics. Maintenance employees rarely do production work, and they work four 10-hour shifts a week, while production workers have a standard five-day a week, 8-hour schedule. Consequently, their overtime, holiday, and sick pay accrual differs as well. The groups are also organized into separate departments, under different supervisors. And, when the facility shuts down for 2-4 weeks each year to completely rebuild the production lines, maintenance employees stay on the job, while only a few production employees are selected to report to work. Maintenance-only unit approved. When the operating engineers’ union showed up in hopes of organizing the facility’s maintenance employees, the company objected, arguing that the bargaining unit should include its production workers too. But the regional director approved the unit, applying the traditional community-of-interest factors to find the maintenance workers shared a community-of-interest among themselves, and formed a "readily identifiable" group distinct from the production workers. The RD noted that the maintenance employees had different classifications, skills, technical knowledge, departments, and supervisors. Moreover, while the two groups of employees come into regular contact, they perform different functions: the maintenance employees are "primarily in charge of maintaining the Employer’s machinery, and the production employees are primarily in charge of producing the ice cream." The RD also concluded that the employer could not meet its burden of showing that the production workers and maintenance employees shared an overwhelming community of interest such that it would be "utterly inappropriate" for the maintenance employees to be in bargaining unit without the production workers. The petitioned-for unit was not arbitrary or fractured, a finding supported by the fact that the unit tracked the employer’s own departmental lines drawn between the two groups. The Board denied the employer’s request for review, and the Fourth Circuit found no abuse of discretion. Specialty Healthcare upheld. The employer also challenged the Board’s 2011 Specialty Healthcare decision head-on, but made no headway in the Fourth Circuit. The appeals court was unconvinced by the employer’s argument that the NLRA’s "overwhelming community-of-interest" standard as set forth in this much-maligned decision violated the Act because it affords controlling weight to the extent of union organization. In support of its contention, the employer had cited NLRB v. Lundy Packing Co., the Fourth Circuit’s 1995 decision; in that case (at least according to the employer), the appeals court ruled that the overwhelming-community-of-interest test necessarily violates the Act when used in the context of bargaining unit determinations. But the employer "reads Lundy too broadly," the appeals court said. The decision prohibited the use of the overwhelming-community-of-interest test when the Board has conducted a deficient initial community-of-interest analysis. "In Lundy, the Board effectively assumed the proposed-unit employees shared a community of interest; here, in contrast, the Board rigorously weighed the traditional community-of-interest factors to ensure that the proposed unit was proper under the NLRA." In other words, in Lundy, there was an apparent union gerrymander, which the Board had simply rubber-stamped. Not so, in Specialty Healthcare. Or here. The court was careful to note here, though, that application of the Specialty Healthcare standard could feasibly run afoul of Lundy. But it had no quarrel with the Board’s application of its controversial test to the facts at hand. It was "entirely consistent with our precedent," the court said, and "a proper application of the well-worn community-of-interest test." Rejecting the employer’s additional arguments in opposition to Specialty Healthcare, the appeals court dismissed pleas that the Board failed to give a reasoned explanation for adopting the overwhelming-community-of-interest test, or had breached the Administrative Procedure Act by "exceeding the reasonable boundaries of the adjudicative process." In fact, in the Fourth Circuit’s view, the employer overstated the significance of the Board’s decision. "Indeed, we agree with our sister circuits that the Board clarified—rather than overhauled—its unit-determination analysis," according to the appeals court. "The Board did not create a new obligation for employers in operating their businesses. Rather, the Board merely clarified the employer’s evidentiary burden when it challenges a union’s proposed bargaining unit in the course of an adjudication." And, to the extent the NLRB departed from its prior precedent, "it provided enough explanation so that a reviewing court could understand what changes the Board intended to make and why." Thus, the Board did not abuse its discretion.

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