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Unless Congress Acts to Restrain the NLRB, Dog Days Are Ahead for U.S. Manufacturers | Commentary

If the National Labor Relations Board has its way, U.S. manufacturers may have their highly integrated workforces carved up into a multiplicity of collective bargaining units at the behest of unions seeking to unionize their employees.

This is the message delivered when the NLRB — comprising one member and two non-members (according to two U.S. Circuit Courts of Appeal) — ordered an election to go forward that a prior iteration of the NLRB halted. The different treatment accorded the same unit by the two boards is the result of a sweeping change in law engineered in the interim by the Obama-appointed board.

Since the inception of the NLRB, boards controlled by Democrats as well as Republicans have carefully crafted NLRB law to respect the nature and structure of the employer’s business operation and to avoid an undue proliferation of bargaining units. Fixated by the desire to roll back the clock on the decline of unionization in the private sector, the Obama NLRB has turned a blind eye to these well-considered concerns in an effort to make organizing for unions easier.

In the 2011 Specialty Healthcare case, the NLRB adopted a new standard for determining the size and scope of collective bargaining units. The new standard shifts onto the employer the burden of proving by “overwhelming” evidence that the unit sought by the union is inappropriate; moreover, the new standard allows for units as small as two employees doing the same job in the same location.

In recent hearings, the NLRB defended its new standard, claiming that it has not been used to create what critics have called “micro-units.”

Assuming its statistics are correct, that is likely because none have been requested. The NLRB cannot refute the fact that the Specialty Healthcare standard allows for such units whenever requested by a union and, more important, that the new standard authorizes an undue multiplicity of units, which prior board law specifically guarded against.

The recent decision challenges the board’s representation to Congress and underscores the latter point. The case involved a facility of 187 employees owned by a small California non-profit, Guide Dogs for the Blind. The Guide Dogs operation has a high degree of functional integration: its eight small departments are interdependent. They do not and could not function separately because they perform the single mission of breeding, growing, caring and developing guide dogs for the blind. All dog care employees must work cooperatively as they engage in extensive interaction on a regular basis.

Before Specialty Healthcare, the NLRB respected a business operation that was functionally integrated. Decades ago, it held that “if functions and mutual interests are highly integrated, an overall unit alone is appropriate.” And it has consistently said that in functionally integrated operations it is “particularly inappropriate to carve out a disproportionately small portion [of employees] ... as a separate unit.”

That was then. In Guide Dogs, after “[h]aving carefully considered the entire record in light of” its new Specialty Healthcare standard, the board approved a unit made up of only a fragment of the employees (12) working in one department. It did so because the employer did not meet its burden of proving by the “overwhelming” evidence required to show that the unit petitioned for by the union was inappropriate. It rejected the employer’s arguments for a larger unit that contained far less than all the employer’s employees but was consistent with the employer’s business operation.

The board’s decision does not bode well for American manufacturers who have relied on long-standing NLRB law that protected the integrity of production and maintenance departments that are functionally integrated operations, not unlike Guide Dogs. Now, such departments are subject to being broken into multiple units at the behest of an organizing union looking to gain easy access into the employer and organize the balance of its employees. It is easier to convince 12 employees to vote for the union than 40 or 50.

The NLRB’s standard in Specialty Healthcare threatens to wreak havoc on American businesses. Balkanizing an employer’s workforce with an undue multiplicity of units, regardless of the precise size, will drastically increase the employer’s labor relations costs, undermine collective bargaining, and deprive employers and their employees of the stable and harmonious working environments necessary for production.

Congress can protect the American worker and his or her employer by voting to prohibit the NLRB from using appropriated funds for this purpose.

Republican Sen. Lindsey Graham — alerted to the agency’s hyper-partisanship by its unprecedented Boeing complaint (the acting general counsel sought to create more union jobs by closing down Boeing’s new $1 billion plant built in Charleston, S.C.) — has proposed an amendment that will do just that.

Soon, Graham’s amendment will be voted on by the Senate Appropriations Committee. Last year, a similar amendment did not make it out of committee; it received a tie vote 15-15. This year, members of the committee have the benefit of board decisions implementing its new standard such as Guide Dogs, the dramatic change it makes in long-standing respected NLRB law and the harm it poses for the workplace and the economy. The amendment deserves overwhelming committee support.

Peter Schaumber served as chairman of the National Labor Relations Board from 2008-2009.

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