The Board eases the path for “micro units”

It is easier for unions to organize smaller groups of employees than larger ones. Thus, one hot-button issue at the Board over the years has been how to determine whether the composition of a proposed bargaining unit is appropriate. 

On December 14, 2022, in American Steel Construction, Inc., 372 NLRB No. 23, the Board reversed a Trump-era standard and reinstated an Obama-era test for determining the appropriateness of a bargaining unit. The Trump-era standard, articulated in PCC Structurals, Inc., 365 NLRB No. 160 (2017), required a union to establish that the employees in a proposed unit had interests that were “sufficiently distinct” from employees who were excluded from the proposed unit, such that a separate bargaining unit was warranted. 

In American Steel, the Board returned to the Obama-era test set forth in Specialty Healthcare, 357 NLRB No. 934 (2011), whereby the Board will approve a proposed unit as long as it “(1) shares an internal community of interest; (2) is readily identifiable as a group based on job classifications, departments, functions, work locations, skills, or similar factors; and (3) is sufficiently distinct.” If there is a dispute that the micro unit is not sufficiently distinct, the Board will “apply its traditional community-of-interest factors to determine whether there is an ‘overwhelming community of interest’ between the petitioned-for and excluded employees, such that there is no rational basis for the exclusion.” In other words, the onus is once again on the employer to show that a proposed unit is inappropriate because it excludes workers who “share an overwhelming community of interest” with workers in the unit. 

There is little doubt that this decision—which the Board will apply retroactively to all pending cases—will make it easier for unions to organize smaller groups of employees. Employers who are concerned should consider what measures they might take to reduce compartmentalization and bring clarity to the interests shared among broader swathes of the workforce.  

The Board enlarges available remedies for labor law violations 

The National Labor Relations Act (Act) limits remedies available to the Board to those that make an aggrieved party whole—i.e., “make whole” relief. The Board cannot exceed this. It cannot, for instance, award emotional distress or punitive damages. Thus, monetary damages have traditionally been limited to backpay and/or reinstatement. 

On December 13, 2022, the Board issued Thryv, and International Brotherhood of Electrical Workers, Local 1269, 372 NLRB No. 22 (2022), which purports to enlarge the definition of “make-whole” relief to include “at a minimum . . . all direct and foreseeable pecuniary harms that are a consequence of” a labor law violation. The Board defined “direct” harm as any harm resulting from violations of the Act, and “foreseeable” harms are those “the respondent knew or should have known would be likely to result from its violation of the Act, regardless of its intentions.” The Board did not give specific examples of such harms, and noted that it would exclude those which are “unquantifiable, speculative, or nonspecific,” but there is little doubt that charged parties will be subject to increased penalties if they are found to commit unfair labor practices.

Board Region 31 asserts that college athletes are employees, jointly employed by their school, their conference, and the NCAA

Another hot-button issue at the Board has been whether and to what extent college athletes could be deemed employees under the Act. In September 2021, the Board’s General Counsel, Jennifer Abruzzo, issued a memorandum to various regional offices that in her view, college scholarship athletes should be classified as employees and protected under Section 7 of the Act. GC Abruzzo decried use of the term “student athlete” as itself problematic and asserted that [scholarship] athletes are employees who should be able to organize and collectively bargain under the Act.

On December 15, 2022, Region 31 of the Board announced that it would pursue a complaint against the University of Southern California, the Pac-12 Conference, and the National Collegiate Athletic Association (NCAA) as “joint employers” who engaged in unfair labor practices by “repeatedly misclassifying” college athletes as nonemployees. 

Region 31’s complaint does not resolve the issue, but it does mean that GC Abruzzo’s position will now be litigated. And even if the NLRB determines that college athletes are employees under the Act, the decision will be subject to multiple appeals before it is resolved conclusively. However, this development does signal to institutions of higher education—as well as their conferences and the NCAA—that they may be subject to unfair labor practice proceedings by not treating their scholarship athletes as employees. 

Authored by Dave Baron as well as Shannon Finnegan and Muhammad S. Burney, who are law clerks in our New York office.