Court ruling could pave way for microunits
A little-noticed Aug. 15, 2013, decision by the 6th U.S. Circuit Court of Appeals may make big waves, enabling unions to organize tiny bargaining units called microunits, according to Jonathan Segal, an attorney at Duane Morris in Philadelphia.
The decision looks innocuous enough at first glance, but Segal said it may be the National Labor Relations Board’s (NLRB) “Trojan horse.”
In Kindred Nursing Centers East v. National Labor Relations Board, No. 12-1027/1174 (6th Cir. 2013), Kindred Nursing Centers East argued that the NLRB’s determination that 53 certified nursing assistants constituted a bargaining unit was not appropriate. The nursing home, doing business as Specialty Healthcare and Rehabilitation Center, in Mobile, Ala., said that about 33 other employees, including service and maintenance workers, should have been in the bargaining unit, as well.
The board’s regional director ruled that the certified nursing assistants constituted an appropriate bargaining unit for an election. The region held the election, which the union won. Kindred appealed the regional director’s decision, arguing that the regional director had erred in finding the unit appropriate.
The board decided to apply a traditional community-of-interest approach to determine the suitability of a bargaining unit for a nursing home. It also said an employer that believes that a readily identifiable group that shares a community of interest is inappropriate because it does not contain additional employees must demonstrate that the excluded employees share an overwhelming community of interest with the included employees. Applying these tests, the board upheld the appropriateness of the bargaining unit of certified nursing assistants.
Kindred, however, refused to bargain with this unit. After the nursing assistants’ union filed an unfair-labor-practice charge, the board found that Kindred had violated the National Labor Relations Act (NLRA).
After the board upheld the bargaining-unit designation, the nursing home appealed the decision to the 6th Circuit. “We must uphold the board’s bargaining-unit determination unless the employer establishes that it is arbitrary, unreasonable or an abuse of discretion,” the court said. “Furthermore, we must uphold the board’s interpretation of the act if it is reasonably defensible.”
Upholding the board’s decision, the 6th Circuit rejected Kindred’s argument that the application of the community-of-interest test or the overwhelming-community-of-interest test violated the NLRA “by making it impossible for an employer to challenge the petitioned-for unit.” Consequently, the court granted the board’s petition for enforcement.
Fallout for Employers
Segal was surprised by the decision and believes that it will have a far-reaching impact.
“Unions tend to win more, the smaller the unit,” he explained, and the 6th Circuit’s decision will make it easier for unions to “gerrymander and cherry-pick which departments and employees it believes form a bargaining unit.” What’s more, the ruling places a “higher burden on employers to show there is not a bargaining unit.”
A union could look for a disengaged group of workers and seek to organize just them, whether they share a position, shift or department, he predicted.
By organizing in smaller units, unions will have an easier time getting their foot in the door at companies, Segal explained. Operationally, this could lead to the “nightmarish result” of having some departments with the agility of a union-free environment and one with the rigidity that often comes with unionization.
It used to be that HR could say, “If I make 80 percent of employees happy, I’ve done my job,” he noted. But if 20 percent of workers are angry, the employer may wind up with a union. “The 80 percent rule does not cut it” anymore. Thus, he recommends that companies “look at pockets of discontent.”
Encourage supervisors to report to HR warning signs that a union is forming, Segal added. He noted that the board is likely to cut the time for a union election soon, making it more difficult for employers to prevail in elections. If alerted by supervisors, HR can determine if a robust response is necessary.
“The goal is to avoid an election,” he said. To do this, employers need to lawfully have “early detection” of an environment that’s conducive to union organizing.
Allen Smith, J.D., is the manager of workplace law content for SHRM. Follow him @SHRMlegaleditor.
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Economy sputters along, says NRF
In a statement following the recent ho-hum employment situation report, the National Retail Federation (NRF) CEO said the “economy continues to sputter along.”
NRF President and CEO Matthew Shay said. “Employers and retailers are adding to their payrolls and ranks, but still remain guarded. The business community is hiring yet waiting for stronger signs of sustained economic growth before extending too many job offers.”
NRF calculated retail industry job gains at 43,600 in August, with marked increases in clothing, general merchandise and electronics stores.
The Bureau of Labor Statistics employment situation report showed that the economy added 169,000 jobs in August, which lowered the unemployment rate to 7.3%.
“While the jobs numbers weren’t as strong as anticipated, they indicate a more positive trend,” NRF Chief Economist Jack Kleinhenz said. “We are expecting further signs of strengthening in the second half of the year. Retailers are making headway but challenges remain. Slow wage growth and downward jobs revisions continue to indicate a reluctant economy.”
Susan Carter takes on CFO role at Ingersoll-Rand
Ingersoll-Rand appointed Susan Carter as senior VP and chief financial officer, effective Sept. 27.
Carter joins the company from KBR, Inc., where she served for four years as executive vice president and chief financial officer.
Prior to KBR, Carter held the position of executive vice president and chief financial officer at Lennox International Inc. Her 30 years of experience includes prior financial leadership positions at Cummins Inc., Honeywell International, Crane Company and DeKalb Corporation.
Ingersoll-Rand brands include Club Car, Schlage, Thermo King and Trane.
Carter succeeds Steve Shawley who, as announced earlier this year, will stay with the company during a transition period and retire before the end of the year. Shawley has been with Ingersoll Rand and Thermo King, a brand of Ingersoll Rand, for 20 years, serving as chief financial officer for the last five years.
“Sue’s experience for the past nine years as a public company chief financial officer and 30 years in relevant diversified manufacturing and service environments make her a strong fit for Ingersoll Rand,” said Michael W. Lamach, chairman and chief executive officer.
Carter will report to Lamach as part of his executive leadership team and relocate to Davidson, N.C.