8th Cir. Backs NLRB's Specialty Healthcare Standard

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By Lawrence E. Dubé

March 7 — The U.S. Court of Appeals for the Eighth Circuit March 7 found that the NLRB's controversial Specialty Healthcare standard for determining appropriate units in union representation cases is a reasonable interpretation of the law that is entitled to judicial deference.

The decision will be significant not only for transportation companies but for all employers within the Eighth Circuit that face union petitions for National Labor Relations Board elections.

NLRB regional directors relied on Specialty Healthcare in certifying International Brotherhood of Teamsters locals to represent drivers at two FedEx terminals. The company argued the rulings improperly excluded more than 200 dockworkers from voting on union representation, but the Eighth Circuit rejected the claim.

There are “common sense logical distinctions” between FedEx drivers and dock employees, and the NLRB had substantial evidence to support its conclusions that the driver units were appropriate under the National Labor Relations Act, Judge Diana E. Murphy wrote for the court.

North Carolina, Pennsylvania Drivers

According to the decision and NLRB records, Teamsters Local 71 filed a petition to represent a unit of drivers at FedEx's Charlotte, N.C., terminal, while Local 107 filed a similar petition for an election at the company's Croydon, Pa., facility.

FedEx employs city and road drivers at both terminals. City drivers pick up and deliver freight for customers in the local area, while road drivers move freight between FedEx facilities. Dockworkers load and unload trucks and move freight around the FedEx docks.

Murphy said the company has about 115 city drivers, 106 road drivers and 186 dockworkers at its North Carolina facility, while there are 29 city drivers, 14 road drivers and 19 part-time dockworkers at the Pennsylvania terminal, where drivers performed some of the dock work.

FedEx argued that the driver units sought by the unions were not appropriate under the NLRA, but regional directors directed elections in driver units, excluding dockworkers at Charlotte and Croydon. The board denied review of the decisions and later found that FedEx violated the NLRA when it refused to bargain with Local 71 in Charlotte (362 N.L.R.B. No. 74, 203 LRRM 1132 (2015)) and Local 107 in Croydon (362 N.L.R.B. No. 140, 203 LRRM 1905 (2015)).

FedEx Sought Review in Eighth Circuit

FedEx, which does business in the Eighth Circuit, filed for review in the appeals court, and the NLRB asked for enforcement of its bargaining orders.

Murphy wrote that in approving the driver units requested by the unions, the NLRB regional directors relied on Specialty Healthcare & Rehabilitation Center of Mobile, 357 N.L.R.B. No. 83, 191 LRRM 1137 (2011) .

In that case, the board found that in evaluating the appropriateness of the unit sought in the petition, it had to first determine whether employees in the petitioned-for unit are “readily identifiable as a group” and whether “they share a community of interest using the traditional criteria.”

If the board finds that the unit sought is appropriate, then Specialty Healthcare requires the proponent of any larger units to demonstrate that the additional employees it proposes to include in an election share an “overwhelming community of interest” with the workers covered by the petition.

Court Finds NLRB Standard Is Reasonable

The Sixth Circuit in Kindred Nursing Centers East LLC v. NLRB, 727 F.3d 552, 196 LRRM 2545 (6th Cir. 2013) , found that the NLRB acted within its “wide discretion” in adopting the Specialty Healthcare standard.

Murphy said the board's Specialty Healthcare decision comports with the NLRA and is consistent with the Eighth Circuit's decisions interpreting the statute.

Rejecting FedEx's argument that the board test departed from the agency's precedent, the Eighth Circuit said the board's two-step analysis is a “reasonable interpretation” of the NLRA “and is therefore an interpretation to which we must defer.”

The Eighth Circuit also rejected the employer's claim the NLRB standard violates Section 9(c)(5) of the act, which provides that in deciding unit questions, the NLRB should not give “controlling” effect to the “extent to which the employees have organized.” Stating the board determines whether a union's proposed unit is appropriate and does not simply presume its appropriateness, the Eighth Circuit said Specialty Healthcare does not violate Section 9(c)(5) of the act.

Substantial Evidence for Separate Driver Units

“Having approved of the Specialty Healthcare standard,” the appeals court said, the board had substantial evidence to justify its unit determinations at the FedEx terminals.

Murphy noted that FedEx never denied that the city and road drivers share a community of interest and form an identifiable group, and she said the company did not show that the dockworkers had an overwhelming community of interest with drivers that required combining them with the drivers at the FedEx facilities.

Stating that dock and driving positions are “substantially different jobs,” the court enforced the board's certifications and enforced the NLRB's findings that FedEx unlawfully refused to bargain with the two Teamsters locals.

Judges Lavenski R. Smith and Duane Benton joined in the opinion.

FedEx Freight attorney Ivan H. Rich in Memphis argued the case for the company. NLRB attorney Milakshmi V. Rajapakse in Washington argued for the board.

To contact the reporter on this story: Lawrence E. Dubé in Washington at ldube@bna.com

To contact the editor responsible for this story: Susan J. McGolrick at smcgolrick@bna.com