Ghosts Of Micro-Units Past Come To Haunt Employers Again

March 4, 2015Articles Law360

Reprinted with permission from Law360. (c) 2015 Portfolio Media. Further duplication without permission is prohibited. All rights reserved.

Many industrial unions, such as the United Steelworkers, are organizing in nontraditional sectors like nursing. This is a response to the decline in manufacturing across the U.S. and labor’s need to maintain and increase its membership. The advent of micro-units is yet another alternative union strategy in coping with the dramatic decline in unionization and the perception that people do not need union representation.

Micro-units are the big trend in labor union organizational strategy and employers must be cognizant of this phenomenon and be ready to take defensive action. Micro-units are recognized by theNational Labor Relations Board and have been appearing in greater numbers since 2011. The basic concept is simple and very similar to union organization of the past, however, there is one key difference: instead of possible “wall-to-wall” units (i.e., comprised of all rank-and-file workers in a shop, meaning more members) micro-units focus on a discrete component of the workforce, a “micro” number of the total workforce, perhaps confined to a small department.

Although this now seems like a novel approach, this kind of unionization was common in the 1940s and 1950s and then gave way to a union focus on larger, more inclusive units. This once popular trend seems to have come full circle now as unions perceive (with some basis) that such organizing allows greater flexibility for labor organizations as it is often easier to convince a smaller number of employees, rather than a larger group, that representation is in their best interests. Employers are — and should be — concerned about this trend because the results for them can be severely detrimental to operations and overall personnel management.

It is not far-fetched to postulate that if the micro-union movement gains traction in the American workforce it could, and likely would, have a significant effect — and not a good one — on how business and business operations are conducted. Employers could be compelled to deal with several unions, rather than just one and the adverse effects would be numerous. By way of example, “sympathy strikes” could cripple an employer’s operations. If an employer with 50 total employees had even “just” five micro-unions comprised of 10 employees each and one micro-union strikes, the workers in the other micro-unions could possibly choose to honor the picket line of the striking (10-person) union. In this disturbing scenario, a micro-union with but ten employees could effectively shut down an entire business.

Legal Framework

It seems as if labor was waiting for a supportive decision from the NLRB to give impetus to the concept of micro-unions and make it a reality. To the regret of management-side practitioners and business owners, the NLRB has granted that wish in Specialty Healthcare II.[1] The employer in Specialty Healthcare operated a nonacute nursing care and rehabilitation center in Mobile, Alabama. The proposed micro-unit included only the facility’s 53 certified nursing assistants. The employer argued that the appropriate unit should include all of the nonsupervisory, nonprofessional service staff. That unit would include not only the CNAs but also the maintenance and janitorial workers, resident activity assistants, medical records clerks and cooks. The NLRB ruled in favor of the employees and justified the decision by finding that the appropriate standard was one that looked at the “community of interest of the employees, the extent of common supervision, and the interchange of employees.” In 2013, the Sixth Circuit affirmed the NLRB's decision in Specialty Healthcare II and as a result, the labor movement has a renewed sense of relevance as micro-units have been making inroads across many different industries.

The latest major decision affirming the existence of a micro-unit is Macy’s Inc.[2] In Macy’s, a group of 41 cosmetic and fragrance employees voted for union representation. The NLRB found that a micro-unit composed of only the cosmetic and fragrance workers was an appropriate bargaining unit. Macy’s argued that the smallest appropriate unit should include not only the cosmetic and fragrance associates but all sales associates in all departments, including the stock workers and various other employees who served in support roles and determined that the proposed unit was appropriate because the workers all sold cosmetics, worked in the same department, were directly supervised by the same manager, had limited contact with other sales associates, received the same commission-based pay structure and, finally, transfers by other employees in/out of the cosmetics/fragrance department were limited.

Since Specialty Healthcare and Macy’s, micro-unit issues have been springing up across many different industries, including, automobile dealerships, the food industry and at other major retailers. For example, in a grocery store operation this could mean that one union organizes the butchers, another the clerks and yet another the bakers. It is hard to imagine, certainly, any retail environment where employees are not divided into departments with different department supervision and working conditions that would not be appropriate for micro-unit bargaining.

The other side of the coin, however, is that it is hard to imagine any effective corporate structure or general business environment that would function well without employees being divided into departments or job function segments and led by a team leader. This structure is the basis of effective organizational management, yet the NLRB has, in these cases, placed its imprimatur on union attempts to take advantage of such structure in an effort to unionize wherever they can, even if only for a handful of employees. This is, on one level, not surprising, given that only 7 percent of the private sector workforce is unionized today and unionization has been dramatically declining since the late 1950s.


The simple reality is that micro-units create an operational nightmare for employers. For example, a retail employer may have 50 employees and could presumably be forced to deal with and negotiate with five micro-units. Each unit could and probably would have different pay scales, benefits, other terms and conditions of employment and different contract expiration dates, as well having separate labor organizations. A scenario such as this could splinter the workforce and ultimately stunt business operations to a catastrophic degree, not to mention the employer expense involved in “fighting” several small micro-units — such expenses alone could cripple smaller employers.


Unless nonunion employers fully believe that none of their employees would ever be willing seek union representation, they cannot afford to sit idly by and hope unions do not capitalize on this window of opportunity given to them by the NLRB. There are initiatives that can be undertaken to fortify an employer’s legal position before a union seeks representational rights. The employer can fight back by being proactive. The NLRB in Macy’s relied so heavily on the “community-of-interest” standard that it behooves employers to change the way their operations are conducted. In this vein, in a retail setting, the employer can ensure that all employees rotate through various departments and are cross-trained in different areas. The managers of the smaller departments should report to, and themselves be supervised by, a centralized management structure. Another suggestion is to ensure (insofar as possible) that all employees are paid based on the same pay structure, instead of some employees receiving commission and others hourly.

Employers may wish to review and possibly revise their organizational structures. If feasible, departments might be combined under common supervision. Making the demarcations between current departments “grayer” could show a greater or larger community of interest and would thwart the NLRB’s newly enunciated preference for permitting departmental organizing. The greater degree of overlap between employees in what may be currently considered separate departments would allow the employer to more cogently argue that a more inclusive, larger unit is the appropriate unit. Conversely, the more “stand-alone” and independent a discrete department operates or is allowed to operate, the greater the possibility that the NLRB will conclude that the workers in that particular department can stand as a micro-unit and an “appropriate” bargaining unit.


For an employer, a union can be hard enough to deal with and still operate effectively and profitably, even for an employer who has had a great deal of experience in this sphere. This difficulty would be magnified tenfold in the case of a single employer organized by several unions in "micro-fashion." This would not only be an administrative nightmare, but, more tellingly, could undermine the day-to-day operations of the business. Is this the brave new world of micro-unions? It need not be if nonunion employers heed the lessons and guidance in these recent NLRB decisions and enhance the interaction and “mutual dependence” of various departments and subdivisions of their businesses to maximize employee community of interest.

Reprinted with permission from Law360. (c) 2015 Portfolio Media. Further duplication without permission is prohibited. All rights reserved.