NLRB Overturns “Overwhelming Community of Interest” Standard and Duty to Bargain Principle

The new Trump National Labor Relations Board issued two more important decisions last week that reverse positions taken by the Obama Board. In PCC Structurals, Inc., the Board rejected  the “overwhelming community of interest” standard for establishing an appropriate bargaining unit. In Raytheon Network Centric Systems, the Board reinstated the standard for determining when there is a change in the terms of employment that triggers the duty to bargain.

Rejection of “Overwhelming Community of Interest” Standard 

In 2011, the Board issued its Specialty Healthcare decision, in which it allowed unions to organize in small units based on “readily identifiable” groupings. This included employees who carried the same job title or classification, without regard to the interrelationships with other job classifications, the particular work environment or how other classifications of employees factor into the unit.  In other words, a union was permitted to organize in as small a unit as it had support (i.e., micro-units).

The Board established a high burden of proof for an employer to show that other employees should be included in the unit: that the employees shared an “overwhelming community of interest” with the unit. As a practical matter, this standard was almost impossible to meet, meaning that employers could be required to bargain with micro-units of employees.

Now, in PCC Structurals, Inc., 365 NLRB No. 160, the Board reinstates the traditional “community of interest” standard, “which permits the Board to evaluate the interests of all employees—both those within and those outside the petitioned-for unit—without regard to whether these groups share an ‘overwhelming’ community of interests.” This change, according to the Board, “better serves the Board in carrying out its responsibility to make unit determinations that assure to employees their “fullest freedom” in exercising their rights under the Act.” The Board specifically noted that it retained the discretion to examine the appropriateness of the proposed unit in individual cases. 

Reversal of Expanded Duty to Bargain Over Changes

Last year, in E.I. du Pont de Nemours, 364 NLRB No 113, the Board held that an employer’s past practice constitutes a “change,” requiring notice to the union and bargaining, if the actions were taken pursuant to a management-rights clause in a collective bargaining agreement that is no longer in effect. The Board also held that, if no CBA exists and employer discretion is involved in the action, bargaining is always required, even if the action is consistent with the employer’s past practice. In so holding, the Board dramatically altered the interpretation of what is “change” and vastly expanded the duty to bargain. As then-Member Miscimarra noted in his dissent to that opinion, “In effect, my colleagues . . . [hold that] whenever a CBA expires, past practices are erased and everything subsequently done by the employer constitutes a “change” that requires notice and the opportunity for bargaining before it can be implemented.”

In Raytheon Network Centric Systems, 365 NLRB No. 161, the Board now overrules the du Pont decision and returns to the definition of “change” that existed for more than 50 years before du Pont. Specifically, the Board held that: “Where . . . the employer takes actions that are not materially different from what it has done in the past, no “change” has occurred” and therefore no bargaining is required, even if the CBA under which the past practices occurred has expired. According to the Board, this reversion is consistent with decades of Board precedent and provides clarity to this issue.

What Next for Employers?

This flurry of activity has come to an end for the moment. With Chairman Miscimarra’s departure, the Board is again at a 2-2 tie between the Republican and Democratic members. While it is clear that there are plans to address other controversial Obama-era decisions, as evidenced by General Counsel Peter Robb’s recent memo identifying particular areas of interest, we will need to await the appointment of a new Board member before such decisions will issue.