Macy's "micro-unit" OK'd by 5th Circuit

A storm of criticism came from employer-side folks back in July 2014 when the NLRB approved an election for a bargaining unit made up solely of cosmetics and fragrance employees at a Macy’s retail store. That was Macy's Inc. (NLRB 07/22/2014). Now the 5th Circuit has enforced the Board's order. Macy's v. NLRB (5th Cir 06/02/2016). So there are 41 employees who work in the cosmetics and fragrances department, and there are ten other departments. The NLRB found that the cosmetics and fragrances department was an "appropriate" bargaining unit. Macy's thought the unit should include all employees in the whole store. We all know what's really going on here. The United Food and Commercial Workers Union was able to gain the interest of a majority of the cosmetics and fragrances employees, but could not get a majority of the whole store. So the union went for the smaller unit – what some folks have been calling a "micro-unit."

The legal test is pretty clear. The NLRB is allowed to approve an appropriate unit, even if some other unit might be more appropriate. So it wasn't enough for Macy's to point out that a larger unit was more appropriate. Although there has been a long history of the Board holding that a storewide unit is “presumptively appropriate” within the retail industry, the Board has said that it has

“over time, developed and applied a standard that allows a less-than-storewide unit so long as that unit is identifiable, the unit employees share a community of interest, and those employees are sufficiently distinct from other store employees.”

What if both the smaller unit and the store-wide unit are appropriate? The 5th Circuit explained -

In such a situation, the Board determined that its precedent requires the proponent of the larger unit to demonstrate that all employees “share ‘an overwhelming community of interest’ such that there ‘is no legitimate basis upon which to exclude certain employees from it.’”

In case you didn't read that carefully, what it really means is that an employer will find it nearly impossible to prove that the smaller unit is not appropriate.

All of this is the natural outcome from Specialty Healthcare and Rehabilitation Center of Mobile, 357 NLRB No. 83 (2011), enforced sub nom. Kindred Nursing Centers East, LLC v. NLRB, 727 F.3d 552 (6th Cir. 2013).