Labor Board’s Unit Test Wins a Major Court Endorsement

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By Lawrence E. Dubé

The National Labor Relations Board’s Specialty Healthcare test for determining appropriate voting units in representation elections is valid and consistent with long-standing precedent, the U.S. Court of Appeals for the District of Columbia Circuit held Aug. 11 ( Rhino Nw., LLC v. NLRB , 2017 BL 281082, D.C. Cir., No. 16-1089, 8/11/17 ).

Seven other federal appeals courts had already approved the often-criticized board test, but the D.C. Circuit ruling is particularly significant because employers across the country can challenge NLRB decisions in the D.C. Circuit.

Rhino, a theatrical staging company, contended that the NLRB improperly allowed its equipment “riggers” to vote on unionization while excluding other employees from the election. The riggers voted for International Alliance of Theatrical Stage Employees Local 15, and the NLRB ordered the company to bargain with the union. Rhino, based in Washington state, petitioned for review of the order in the D.C. Circuit.

In Specialty Healthcare, the board found in August 2011 that when a union files an election petition, the NLRB should first determine whether employees in the labor organization’s proposed unit are “readily identifiable as a group” and whether “they share a community of interest using the traditional criteria.” An employer arguing that the requested unit is under-inclusive must demonstrate that the unit excludes employees who share an “overwhelming community of interest” with the workers sought by the union.

Rhino argued that the NLRB test gives too much weight to a union’s preference and runs afoul of an NLRA requirement that in the determination of units, “the extent to which the employees have organized shall not be controlling.”

However, the statutory ban on giving the union’s position controlling weight doesn’t prohibit the board from giving it any weight, Judge Sri Srinivasan said.

Under Specialty Healthcare, the court said, the board’s approach has remained “fundamentally the same” as it was before the decision: “are individual groups of employees so similarly situated that dividing them into separate bargaining units would be irrational?”

The court’s rejection of Rhino Northwest LLC’s argument may close the door on other employers that were hoping to find judicial relief in the D.C. Circuit.

Major Ruling on Labor Board Position

Specialty Healthcare & Rehabilitation Center of Mobile has been controversial since it was announced in August 2011. Business groups and NLRB critics have argued the ruling was intended to make union organizing easier and that it will allow unions to organize in “micro-units” that could lead to fragmented staffs and unstable labor relations.

Republican legislators have repeatedly introduced bills to roll back the NLRB ruling, and trade groups have predicted a GOP majority on the board could eventually reverse it, but the case remains board policy and an important precedent.

Section 10(f) of the National Labor Relations Act allows an employer anywhere in the U.S. to petition for D.C. Circuit review of a final NLRB unfair labor practice decision, but the court’s ruling against Rhino Northwest has changed the landscape for employers hoping to get a sympathetic ear from D.C. Circuit judges.

Daniel Altchek, counsel at Miles & Stockbridge in Baltimore, who represents employers, told Bloomberg BNA that before Rhino Northwest, employers located in jurisdictions where NLRA precedent was adverse could consider appealing a case with Specialty Healthcare issues to the D.C. Circuit. They will now be disappointed to learn their odds may be no better in the District of Columbia than in other courts, he said.

The D.C. Circuit ruling may make Specialty Healthcare “a reality for the foreseeable future,” Altchek said.

The controversial NLRB ruling “has not had the impact a lot of people feared—yet,” the lawyer said. The decision hasn’t resulted in a big increase in organizing or unions bargaining in smaller units than ever before, he said.

However, Altchek warned, the limited impact of Specialty Healthcare could change now that it has received the D.C. Circuit’s “seal of approval.”

Court Cites Other Circuits

Citing decisions from the Second, Third, Fourth, Fifth, Sixth, Seventh, and Eighth circuits, Srinivasan wrote that the D.C. Circuit joins the other circuits in concluding that “ Specialty Healthcare worked no departure from prior Board decisions.”

The court said the NLRB had substantial evidence for its conclusion that Rhino’s riggers could be represented separately from other employees. The riggers, who use motors to hoist and position overhead equipment at concerts and theatrical events, receive specialized treatment and higher pay than the other employees Rhino proposed for the unit, including camera, forklift, lighting, and technical employees.

Rhino made a case that including all of its employees in one unit could have been appropriate under the NLRA, but he wrote “that is not enough to show that the petitioned-for unit is inappropriate.”

Finding the NLRB properly certified Local 15 to represent the riggers, the appeals court enforced the board’s bargaining order.

Attorneys for Rhino Northwest and Local 15 didn’t respond to requests for comment on the decision.

Judges Judith W. Rogers and Harry T. Edwards joined in the opinion.

Timothy A. Garnett of Ogletree, Deakins, Nash, Smoak & Stewart P.C. in St. Louis argued for Rhino Northwest LLC. NLRB attorney Greg P. Lauro argued for the board, and Dmitri Iglitzin of Schwerin Campbell Barnard Iglitzin & Lavitt LLP in Seattle argued for Theatrical State Employees Local 15.

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

To contact the editors responsible for this story: Peggy Aulino at maulino@bna.com; Terence Hyland at thyland@bna.com; Chris Opfer at copfer@bna.com

Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.

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