The Fifth Circuit Court of Appeals, in New Orleans, is the latest circuit court to uphold the National Labor Relations Board’s restrictive “micro-unit” approach to voting units in NLRB elections adopted in Specialty Healthcare, 357 NLRB No. 83 (2011). Macy’s Inc. v. NLRB, No. 15-60022 (5th Cir. June 2, 2016).

In Specialty Healthcare, the NLRB held that if a union petitions to represent a group of employees within a workplace and the employer challenges that voting unit as inappropriate, the employer must show that all employees it seeks to add share “an overwhelming community of interest” with the petitioned-for employees in order to prevail. This rule puts the burden on the employer to prove the appropriateness of the voting unit, setting a significant evidentiary hurdle for employers when opposing small “micro-units.” (A small petitioned-for unit often includes only those employees whom the union believes it has the greatest chance of organizing successfully).

In Macy’s, the United Food and Commercial Workers petitioned to represent a unit of about 30 cosmetic and fragrance employees who work on two separate floors in Macy’s Saugus, Massachusetts store. About 110 other employees work in 10 other departments in the store. Cosmetics and fragrance employees have incidental contact with other store employees, assist in store-wide inventory, attend store meetings and training, receive the same benefits, and are subject to the same personnel and labor relations policies as other store employees. There is little, if any, interchange and transfer of these employees with employees in other departments.

The union had lost an election held several years before in a voting unit that included all store employees. However, this time, the union sought to represent employees in just one department. Macy’s contended that a traditional “retail” voting unit of all store employees, or at least all sales employees, was the appropriate unit for an election and bargaining. The NLRB rejected Macy’s position and approved the smaller unit sought by the UFCW, finding that Macy’s had failed to demonstrate an “overwhelming community of interest” among all store employees which would justify that larger voting unit.

Macy’s appealed to the Fifth Circuit Court of Appeals. However, like the Sixth, Eighth, and Fourth Circuit Courts of Appeals, the Fifth Circuit deferred to the NLRB’s policy, and held that even where there is evidence that an alternative voting unit “might also [be] an appropriate bargaining unit, the unit approved by the NLRB will nevertheless be enforced unless it is ‘clearly not appropriate.’” The Court rejected Macy’s argument that the employees at the Saugus store constitute a “homogenous work force.” It noted that there was “little evidence of temporary interchange between the petitioned-for employees and other selling employees.”

The U.S. Supreme Court and the Courts of Appeals historically have granted substantial deference to the NLRB on issues involving the composition of groups of employees appropriate for an NLRB election and collective bargaining. Employers are on notice that they will bear a heavy burden opposing a union’s petition to represent a small group of employees. Even in the face of substantial facts reflecting a strong “community of interest” among groups of employees such as was present in Macy’s, the NLRB presumably will continue to approve a union’s request to carve out a select group for an election, confident that appeals courts  will defer to the NLRB’s decision.