As 2011 came to a close, no one was certain whether the NLRB would continue to function into 2012 as Member Becker’s recess appointment came to an end, leaving only two Members.  In those waning days, the NLRB issued a remarkable decision in DTG Operations, Inc., 357 NLRB No. 175 (December 30, 2011) applying its decision in Specialty Healthcare & Rehabilitation Center of Mobile, 357 NLRB No. 83 (2011) to find a small unit sought by the union appropriate.

In DTG Operations, the union petitioned for a unit of 31 rental service agents working at a rental car facility.  The employer contended that all hourly employees working at the facility should be included due to the functional integration of the classifications.  After a hearing, the Regional Director found that the “smallest appropriate unit is a wall-to-wall unit containing all 109 of the Employer’s hourly employees.”  In his decision, the Regional Director expressly concluded, “I find that the smallest appropriate unit must include all hourly employees employed at the Employer’s …..airport location because they share an overwhelming community of interest based on the functional integration of the Employer’s operations.”  The NLRB reversed this decision and gave the union what it sought in its original petition.

Of course, the NLRB’s finding that the petitioned-for unit is appropriate is hardly shocking news these days. As we previously reported, the new standard set forth in Specialty Healthcare, that an employer must demonstrate an “overwhelming community of interest” to change a petitioned for unit, is vague enough that virtually no unit changes would be sanctioned by this NLRB

In DTG Operations, though, the NLRB added two new twists to the process, both of which further illustrate the NLRB’s myopia when it comes to deciding unit issues.

First, the NLRB in DTG Operations applied the new standard retroactively.  The Regional Director’s decision issued January 28, 2011, some seven months before the issuance of Specialty Healthcare.  Thus, there is no way the parties could have anticipated that a new, higher standard would apply.  The parties presented evidence and otherwise made their record based on the law at the time, not the new standard.  Yet, the NLRB used that very record against the employer, noting for example, that evidence on employee interchange was lacking because “there is no evidence regarding how frequently [temporary interchange] has occurred.”  It seems obvious that had the parties known they would be held to a higher standard they would have presented more evidence on this critical issue, yet apparently this opportunity for basic due process was not given to them.  Let’s also point out that the NLRB, which spent the last year criticizing the representation case process as too lengthy itself waited almost one year to issue a decision in a high priority representation case.

Second, and perhaps more important, the NLRB reversed the Regional Director’s finding that an “overwhelming community of interest” existed.  Of course, when the Regional Director found that the larger unit shared an overwhelming community of interest he presumably had no idea the NLRB would come up with a new standard that sounds exactly the same.  What does overwhelming mean, exactly?  One cannot tell anything except that what it does not mean.  We are still left with no guidance as to what must be proven in order to meet the new standard and alter a petitioned-for unit. 

Again, the result is not surprising. but it is more than a bit concerning that a case can be decided months after the fact using a standard that was not in existence at the time the parties tried their case.  

DTG Operations illustrates the NLRB trend in processing bargaining unit questions.  The bar for finding a unit other than that sought by the union is so high as to be virtually impossible to overcome.  This development, coupled with the new pending election regulations, means that employers pretty much will have to accept whatever unit the union seeks to represent regardless of how disruptive that might be to an operation. The term “functional integration” is now meaningless, and it is now possible that an employer such as DTG Operations with only 109 employees can have at least ten separate bargaining units based on the different number of employee classifications.  Ten separate bargaining units means potentially ten separate contracts, and ten separate negotiations.    

One can predict an onslaught of new petitions seeking the smallest unit possible.

The final word goes to Member Hayes, who dissented:

As long as a union does not make the mistake of petitioning for a unit that consists of only a part of a group of employees in a particular classification, department, or function, i.e., a so-called fractured unit, it will be impossible for a party to prove that an overwhelming community of interests exists with excluded employees.

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Photo of Mark Theodore Mark Theodore

Mark Theodore is a partner in the Labor & Employment Law Department. He has devoted his practice almost exclusively to representing management in all aspects of traditional labor law matters throughout the U.S. He is Co-Chair of Proskauer’s Labor-Management and Collective Bargaining Practice…

Mark Theodore is a partner in the Labor & Employment Law Department. He has devoted his practice almost exclusively to representing management in all aspects of traditional labor law matters throughout the U.S. He is Co-Chair of Proskauer’s Labor-Management and Collective Bargaining Practice Group.

Some recent highlights of his career include:

  • Successfully defended client against allegations that it had terminated a union supporter and isolated another. T-Mobile USA, Inc., 365 NLRB No. 15 (2017).
  • Successfully appealed NLRB findings that certain of client’s written policies violated the National Labor Relations Actions Act.  T-Mobile USA, Inc., 363 NLRB No. 171 (2016), enf’d in part, rev’d in part 865 F.3d 265 (5th Cir. 2017).
  • Represented major utility in NLRB proceedings related to organizing of planners.  Secured utility-wide bargaining unit. Bargained on behalf of grocery chain.  After negotiations reached an impasse, guided the company through lawful implementation of five year collective bargaining agreement.
  • Coordinated employer response in numerous strike situations including a work stoppage across 14 western states of the client’s operations.

Mark has extensive experience representing employers in all matters before the NLRB, including representation petitions, jurisdictional disputes and the handling of unfair labor practice charges from the date they are filed through trial and appeal. Mark has acted as lead negotiator for dozens of major companies in a variety of industries, including national, multi-unit, multi-location, multi-employer and multi-union bargaining. Mark has handled lockout and strike situations, coordinating the clients efforts.

In addition, Mark has handled hundreds of arbitrations involving virtually every area of dispute, including contract interest arbitration, contract interpretation, just cause termination/discipline, benefits, pay rates, and hours of work.