Monthly Archives: October 2014

October 28, 2014

Defeating Micro-Units: Employer Strategies to Challenge Smaller Bargaining Units

Mumaugh_BBy Brian Mumaugh 

Unions are organizing smaller segments of an entire workforce in order to get their foot in the door and keep organizing efforts alive.  The National Labor Relations Board (NLRB or Board) has approved so-called micro-units, setting employers up for difficult battles over appropriate bargaining units in the future.  Employers should think about the possibility of seeing a micro-unit proposed in their workforce—and how to avoid them. 

Unions Can More Easily Win Representation For Smaller Groups 

As unions press to increase their membership in the United States, unions are looking for new ways to organize workers and remain relevant.  Organizing large workforces requires unions to expend significant resources – money, personnel and time – to collect signatures from at least 30% of the proposed bargaining unit to trigger an election (some unions want to see upwards of 70% signing authorization cards before petitioning for an election).  Then additional resources are needed to get out the vote to ensure a majority of votes cast are in favor of the union.  Large organizing campaigns also give the company time to mount an anti-union campaign. 

Organizing micro-units, however, can be done relatively quickly, cheaply and often without much response from the company.  Think about it – organizing a unit of 30 workers in a single department may need only one or two union organizers to persuade the 15 to 20 employees needed to win the organizing campaign.  Before you know it, you’ve got a segment of your workforce represented by a third party with whom you must collectively bargain.  This can lead to multiple micro-units at your company represented by different unions and the headaches multiply. 

Parameters For Micro-Units Are Evolving 

The NLRB has discretion in representation cases to determine the appropriate bargaining unit, whether an employer unit, craft unit, plant unit or subdivision thereof, pursuant to section 9(b) of the NLRA.  Although decided on a case-by-case basis, the main, long-standing factor for determining an appropriate unit was the “community of interest” of the employees involved.  In 2011, however, the Board significantly changed that analysis in a case called Specialty Healthcare, allowing the unit petitioned-for by the union to govern except in those situations where the employer can establish by “overwhelming evidence” that the requested unit is inappropriate.  This new approach places a high burden on employers who wish to challenge the make-up of the unit proposed by the union. 

In recent months, the Board has decided a couple of micro-unit cases that offer some guidance on what it takes to challenge a micro-unit.  In a case involving a Macy’s Department store in Massachusetts, the Board deemed appropriate a micro-unit made up of only cosmetics and fragrances employees at the store.  Macy’s Inc., 361 NLRB No. 4 (July 22, 2014).  The store argued that the unit was too narrow and that the appropriate unit in a retail store context is a “wall-to-wall unit”  or, alternatively, all selling employees at the store.  The Board did not agree.  It concluded that the cosmetics and fragrances employees were a readily identifiable group that shared a community of interest not shared by other store employees.  Factors weighing in favor of the micro-unit included the fact that the cosmetics and fragrances employees were in the same department and were supervised by the same managers.  In addition, there was little regular contact between the cosmetics and fragrances employees and other store employees.  The NLRB found that Macy’s had not met the high burden of showing that other employees should be included in the unit because they did not share an “overwhelming community of interest.” 

Coming to the opposite conclusion, however, the Board rejected a micro-unit of sales associates who sold shoes at the Manhattan Bergdorf Goodman store.  The union had petitioned for the unit to be made up of 35 women’s shoes sales associates in the Salon shoes department (high end designer shoes) and 11 women’s Contemporary shoes sales associates in the Contemporary Sportswear department (modestly priced shoes).  The Board concluded the proposed unit was inappropriate because the two shoe departments were located on separate floors, did not share the same supervisors and managers, did not have any cross-over or interchange between employees and did not have much contact with employees in other departments storewide.  The Neiman Marcus Group, Inc. d/b/a Bergdorf Goodman, 361 NLRB No. 11 (July 28, 2014). 

Strategies for Attacking Micro-Units 

The Macy’s and Bergdorf Goodman cases offer some guidance to help employers avoid union organizing of micro-units.  Strategies to consider now, before a union organizing campaign begins, include: 

  • Combining departments or job classifications that share skills or tasks
  • Cross-training and cross-utilizing workers across departments, classifications or locations
  • Allowing for promotional and transfer opportunities across department and organizational lines
  • Revising supervisory and managerial structures so that more employees report to the same managers
  • Maintaining pay and bonus structures common to all employees or for all in a larger unit. 

Micro-units can be a game-changer when it comes to union organizing so employers have to change their own tactics to combat such bargaining units.  Taking time now to change organizational and reporting structures can go a long way in overcoming a proposed micro-unit in the future.

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October 21, 2014

EEOC’s Failure to Engage in Conciliation Dooms Its Separation Agreement Lawsuit Against CVS Pharmacy

Wiletsky_MBy Mark Wiletsky 

Chalk up a loss for the Equal Employment Opportunity Commission (EEOC) in its lawsuit against CVS Pharmacy’s separation agreements.  As we reported earlier, the EEOC sued CVS alleging that CVS’s separation agreements deterred employees from filing charges and communicating with the EEOC about discrimination and retaliation.  Dismissing the case, a federal judge recently ruled that the EEOC failed to engage in the required procedural steps, including conciliation, before filing its lawsuit. 

EEOC Dismissed Employee’s Charge, Then Went After Employer 

This lawsuit is an example of the aggressive, proactive nature of the EEOC in extending the protections of Title VII to new and novel claims.  The case arose after CVS terminated Tonia Ramos, a pharmacy manager.  Ms. Ramos signed CVS’s standard separation agreement, which included a release of claims and a covenant not to sue.  She then proceeded to file a charge with the EEOC claiming that her discharge was based on sex and race in violation of Title VII.  Almost two years later, the EEOC dismissed Ms. Ramos’s charge.  

The EEOC then contacted CVS asserting that based on the separation agreement, CVS was engaging in a pattern or practice of resistance to their employees’ full enjoyment of rights under Title VII.  In other words, the EEOC concluded that even though the individual employee did not have a valid discrimination claim against CVS, it would bring a pattern or practice case against CVS based on the language in its standard separation agreement used with potentially hundreds of former employees. 

No Conciliation, No Lawsuit 

Under Title VII enforcement procedures, the EEOC has the authority to investigate and act on a charge of a pattern or practice of discrimination, whether filed on behalf of an allegedly harmed employee or by the EEOC itself.  The procedures require that the EEOC try to resolve any alleged unlawful employment practices through informal means before filing a lawsuit.  Such means include conferences, conciliation and persuasion.  Although the EEOC and CVS discussed potential settlement by telephone twice before the EEOC filed suit, the EEOC failed to engage in conciliation, which proved fatal to its case.  Because an attempt at reaching a conciliation agreement is a prerequisite to the EEOC filing suit and it was undisputed that the EEOC did not engage in any conciliation process, the federal court dismissed the EEOC’s case against CVS. 

Judge’s Guidance is in the Footnotes 

The case was dismissed on procedural grounds, but the judge took the opportunity to offer his view on the merits of the EEOC’s arguments in several footnotes in the opinion.  First, the EEOC argued that the term “resistance” as used in Title VII should be interpreted broadly to extend to the language in CVS’s separation agreement even if that language did not amount to discrimination or retaliation under the Act.  The judge rejected that argument, stating that the term “resistance” requires some retaliatory or discriminatory act. 

Second, the judge discussed the “covenant not to sue” provision in CVS’s separation agreement.  Even though the provision stated that an employee could not “initiate or file . . . a complaint or proceeding asserting any of the Released Claims,” the release of claims (in another paragraph of the separation agreement) stated that it did not limit “any rights that the Employee cannot lawfully waive.” In addition, the agreement contained two carve out provisions specifying an employee’s “right to participate in a proceeding with any appropriate federal, state or local government agency enforcing discrimination laws” and that the agreement did not prohibit the employee from cooperating with any such agency in its investigation.  The judge wrote that these provisions would allow an employee to file an EEOC charge.  He went on to write that even if the separation agreement explicitly banned filing charges, those provisions would be unenforceable and could not constitute “resistance” under Title VII. 

One Case Down; One Still Pending 

The dismissal of the CVS lawsuit is good news for employers who use separation agreements, especially in light of the judge’s comments signaling that the EEOC’s arguments were without merit.  However, a similar case filed by the EEOC against College America is still proceeding through the federal court in the District of Colorado.  (We wrote about the College America case here.) Like CVS, College America has asked the court to dismiss the EEOC’s case.  We will let you know when the court rules on that motion.  In the meantime, employers should review their separation agreements to ensure they include a provision that the agreement does not prohibit employees from filing a charge, participating in an investigation or otherwise cooperating with an appropriate federal, state or local government agency that enforces discrimination laws.

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