The National Labor Relations
Board yesterday issued the long-awaited Macy’s, Inc. decision. The Board
majority consisting of Chairman Pearce and Members Hirozawa and Schiffer
determined that the petitioned-for unit of cosmetics and fragrance employees at
a Macy’s retail store is appropriate, while Member Miscimarra dissented by
asserting that not only is the petitioned-for unit inappropriate, but the Board
should set aside its controversial Specialty Healthcare ruling.
The case reached the Board
after the Acting Regional Director for Region 1 issued a Decision and Direction
of Election (DDE) on November 8, 2012, providing that the United Food and
Commercial Workers’ (UFCW) petitioned-for unit of only the cosmetics and
fragrance employees at a Macy’s retail location in Saugus, MA was an
appropriate unit. Macy’s contested the DDE, arguing that the smallest
appropriate unit must include either all employees at the Saugus location or at
least all selling employees at the store. The Board granted Macy’s
request for review on December 4, 2012.
The Board’s lengthy decision
confirms that Specialty Healthcare is alive and well. Under Specialty
Healthcare, when a union seeks to represent a unit of employees:
“who are readily identifiable
as a group . . . and the Board finds that the employees in the group share a
community of interest after considering the traditional criteria, the Board will
find the petitioned-for unit to be an appropriate unit . . ..”
Once the petitioned-for unit
is deemed an appropriate unit, the proponent of a larger unit must show that
the employees it wishes to include share:
“an overwhelming community of
interest with the petitioned for employees, such that there is no legitimate
basis upon which to exclude certain employees from the larger unit because the
traditional community of interest factors overlap almost
completely.”
The Board found the
petitioned-for unit appropriate for several reasons. First, the cosmetics
and fragrance employees are readily identifiable “based on classification and
function.” Second, the proposed unit “is coextensive with a departmental
line” Macy’s drew, which means that Macy’s chose to create a
cosmetics/fragrance department at the Saugus location. Third and most
importantly, the petitioned-for employees undoubtedly share a community of
interest. According to the Board, they are the only employees who sell
cosmetics and fragrances and rarely come into contact with products sold in
other departments. While the cosmetics and fragrances department is split
into two floors, the Board determined that this was of no moment because the
two areas are connected by an escalator.
Because the UFCW showed that
the petitioned-for employees shared a community of interest, Macy’s bore the
burden of proving that the petitioned-for unit shared an “overwhelming
community of interest” with other employees at the store. The Board found
that Macy’s failed to meet its burden. Not only do the petitioned-for
employees work in a separate department from all other selling employees, but
the petitioned-for employees are separately supervised as well. The
petitioned-for employees also work in their own “distinct selling areas.”
Moreover, the Board found little significant interchange between the
petitioned-for employees and other selling employees. Cosmetics and
fragrance employees do not sell other products in other departments, just like
other sales employees do not sell cosmetics and fragrance products.
Macy’s argued that the
petitioned-for unit was not appropriate because the petitioned-for employees
are “functionally integrated” with the rest of the store pursuant to DTG
Operations. DTG Operations explained that
“functional integration” of employees exists where all employees “pitch in” or
perform the functions of different classifications. The Board noted that
Macy’s reliance on DTG Operations was misplaced. Even if the
petitioned-for unit was “functionally integrated” with the remainder of the
selling employees, “the significance of functional integration is reduced where
. . . there is limited interaction between” the proposed unit and other employees.
The Board also reiterated
that even though two groups of employees may share a community of interest,
that fact by itself would not render a separate unit inappropriate. The
petitioned-for employees and other sellers are subject to the same employee
handbook, maintain similar hours, are evaluated on the same rating system, and
receive the same benefits. But, the distinctions explained above ensure
that Macy’s could not establish “an almost complete overlap.” Macy’s thus
failed to establish that the petitioned-for unit and other sellers share an
overwhelming community of interest.
The Board also rejected
Macy’s claim that the Board’s own precedent requires a store-wide unit of all
employees. The Macy’s decision traces the evolution of the Board’s
reasoning concerning retail establishments. “[O]ver time, the overall
trend [in decision-making] has been an unmistakable relaxation of a presumption
in favor of a storewide unit.” Rather, a less-than-storewide unit would
be found appropriate as long as unit employees share an identifiable community
of interest and are “sufficiently distinct” from other employees.
Member Miscimarra penned a
spirited dissent, finding that the petitioned-for unit is not an appropriate
unit under either pre or post-Specialty Healthcare reasoning.
According to Member Miscimarra, the smallest appropriate unit here must consist
of all selling employees at the Saugus location because the proposed unit
employees are so similarly situated to other sellers.
Member Miscimarra then explained
that long-standing Board precedent presumed that a store-wide unit would be an
appropriate unit. “Employees in a single retail outlet form a homogenous,
identifiable, and distinct group . . . [and] generally perform related
functions under immediate supervision.” In the instant case, a store
manager rates, hires, and fires employees, which effectively demonstrates that
a community of interest exists and affirms the appropriateness of a presumption
of a storewide unit.
Lastly, the dissent faults the
Specialty Healthcare ruling on three grounds. It undercuts the
Board’s “responsibility to evaluate each proposed unit on its own merits
because it upholds petitioned-for units except in limited circumstances.
The decision also throws out the presumption that a store-wide unit is an
appropriate unit in the retail industry. Most damningly, the
“overwhelming community of interest” standard enunciated in Specialty
Healthcare renders the relationship between proposed-unit members and their
excluded coworkers “irrelevant in all but the most exceptional circumstances.”
The Macy’s decision
demonstrates that the current Board is determined to cement Specialty
Healthcare’s place in labor law, and that industry-specific presumptions
for appropriate bargaining units are meeting their demise as we predicted in June 2012. Unfortunately
for employers, the fear that Specialty Healthcare will lead to a
proliferation of micro-units is proving true. As noted in the instant
case, there are several other departments at the Saugus location. If
those departments chose to organize, Macy’s would be forced to bargain with
several different unions within the same store location.
Labor watchers now expect
that the Regional Director’s Decision and Direction of Election in Bergdorf
Goodman, Case No. 2-RC-076954, will also be affirmed and thus
join the Macy’s decision as the death knell of the retail industry’s
presumption of wall-to-wall bargaining units. In that case, the
Regional Director found the petitioned-for unit of women’s shoes associates on
the second and fifth floors of Bergdorf Goodman’s New York City location to be
an appropriate unit.
Source: Labor
Relation’s Today
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