In what has become a yearly tradition, the
Another Tool for Unions: Permitting Micro-Units Under American Steel
Last year, as reported in a previous Alert, the Board signaled its intent to enact a heightened standard for employers who contend that a petitioned-for unit of employees is inappropriate because it excludes certain other employees. On
Organizing small subgroups of employees (i.e., micro-units) is a strategy that unions utilize to get their foot in the door. For example, if a union is looking to organize a department store, it would be easier to start with a subset of employees (who see each other and work together regularly) than to organize the entire store all at once.
Historically, unions who have utilized this tactic have run into issues with showing that the unit is appropriate. Under long-standing Board precedent, for a unit to be appropriate, it must be homogenous, identifiable and sufficiently distinct. A union arbitrarily carving out a unit of employees insufficiently distinct from other employees with whom they share a community of interest was grounds for challenging an election petition.
In 2011, the Obama Board significantly weakened an employer's ability to challenge the appropriateness of a micro-unit. In
The Republican-controlled
What This Means for Employers
Sanctioning the unionization of micro-units creates a number of hurdles for employers. To start, it makes employers more vulnerable to unionization. Under the NLRA, a bargaining unit can be as small as two employees. All a union needs to do is find one small subdepartment vulnerable to organizing and petition for an election to begin a potential domino effect of unionization within a company. Allowing unions to organize micro-units also increases the chance that an employer could have groups of employees organized by different unions, which complicates employee relations and increases legal costs.
Employers, even those in industries that are not typically unionized, may want to consider implementing strategies and training now to get ahead of this reinstated tactic. In the first half of 2022, union election petitions were up 58 percent. Bolstered by a progressive wave of pro-union rhetoric and policies, unions are currently emboldened. At the same time, social media has made it easier than ever for unions to conduct covert organizing drives, which catch employers off guard.
There are strategies that employers can apply to reduce risk of unionization. As the saying goes, the best defense is a good offense, and that is certainly the case when it comes to remaining union-free.
Board Expands Damage Award Categories in
On
This decision significantly alters the way the Board calculates alleged damages and will affect both compensatory damage awards and settlement negotiations. Historically, the Board has sought to make an aggrieved party whole, typically by seeking back pay and reinstatement. With this new directive, the Board now has the ability to seek a higher monetary award for an alleged unfair labor practice. The Board will also be able to use the potential existence of "direct or foreseeable pecuniary harms" as leverage when negotiating settlements on behalf of an aggrieved party. Going forward, employers will very likely end up paying more to resolve unfair labor practice charges if the complainant has alleged financial damages. Of course, the Board's decision here is subject to challenge on the ground that these remedies go beyond the make-whole relief authorized by the NLRA.
What This Means for Employers
This decision gives the Board a broader set of tools to enforce the NLRA in cases where it determines an unfair labor practice has taken place and compensatory damages are appropriate. With the recent infusion of funding for the 2023 fiscal year (which included a
All employers, whether union or nonunion, need to be aware of the expansion of the types of damages that the Board will seek in a case that it deems meritorious because there is greater potential exposure. The stakes are higher now for NLRA violations, even if inadvertent, and the Board will likely seek to actively wield this newfound authority.
The Board is also applying the decision retroactively, so employers who are currently defending unfair labor practice allegations may need to reassess potential exposure to take into account what the Board may now consider compensable "foreseeable harm." Additionally, this new Board directive may complicate and/or delay ongoing settlement negotiations in unfair labor practice cases.
Rounding out the year, on
Consistent with its efforts to reverse Trump-era precedent and reinterpret the NLRA to intensely expand employees' Section 7 rights, the Board overturned its own precedent adopted in Bexar County I, 368 NLRB No. 46 (2019) and returned to the test laid out more than a decade ago under the Obama-era Board in
The Previous Framework in Bexar County I
The underlying case precipitating the Board's recent reversal involved a group of third-party contractor musicians that sought to distribute leaflets on publicly accessible areas of the
In Bexar County I, the Trump-era Board ruled that a property owner may restrict off-duty employees of an on-site contractor from accessing the property to engage in Section 7 activity unless (1) the off-duty contractor employees "regularly" and "exclusively" work on the property and (2) the property owner cannot show that the off-duty contractor employees do not have one or more reasonable, nontrespassory alternative means to communicate their message. This decision favored the rights of private property owners and allowed wide latitude to restrict nonemployees, including contractor employees, from engaging in Section 7 activity.
In Bexar County II, the Board, on remand from the
In an attempt to compensate for infringing on property owners' rights, the Board noted in its decision that a property owner could control access to and use of its property through contractual terms with on-site contractors and exercise its legitimate managerial interests in preventing improper interference with the use of its property.
The Board's decision in Bexar II also applies retroactively to all pending cases.
What This Means for Employers
The Bexar County II decision greatly expands off-duty contractor employees' ability to engage in union organizing and other Section 7 activity at their worksites, despite the fact that their employer does not own the property. Going forward, property owners have the burden of demonstrating that off-duty contractor employees' conduct "significantly interferes" with the use of the property, or that legitimate business reasons support the exclusion. As a result, property owners and/or employers should review their agreements with contractors to ensure there are clearly defined parameters regarding who is responsible for preventing disruptions at the property owner's/employer's location. Property owners and/or employers should also seek the advice of experienced labor counsel before directing or instructing contractors' employees to avoid creating a joint-employer relationship.
Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.
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