United States: NLRB Deems Micro-Unit An Appropriate Bargaining Unit In Retail Industry

The National Labor Relations Board (the "Board" or NLRB) recently issued a pair of decisions applying its Specialty Healthcare test to determine if petitioned-for units in two large department stores were appropriate for bargaining purposes. The Board reached different outcomes in these cases, relying heavily on how the employers organized their employees for administrative purposes.

The Board ruled on July 22, 2014, that a unit sought by the union—comprising only cosmetics and fragrances employees at a Macy's store—was an appropriate unit despite the retailer's contention that the group was too narrow, and despite the decades-long presumption that the only appropriate unit in retail department store settings is a wall-to-wall unit.

The Board stated that its decision in Specialty Healthcare & Rehabilitation Center of Mobile, 357 NLRB No. 83 (2011), enfd. sub nom. Kindred Nursing Centers East, LLC v. NLRB, 727 F.3d 552 (6th Cir. 2013), applies in cases like this one, in which the union contends that a segment of what could be a larger unit is an appropriate bargaining unit and the employer contends that the unit must include additional employees beyond those in the petitioned-for unit.

The Board explained in Specialty Healthcare that when a union seeks to represent a unit of employees "who are readily identifiable as a group (based on job classifications, departments, functions, work locations, skills, or similar factors), and the Board finds that the employees in the group share a community of interest [], the Board will find the petitioned-for unit to be an appropriate unit ... ." 357 NLRB No. 83, supra, slip op. at 12. If the petitioned-for unit satisfies that standard, the burden is on the employer who seeks a larger unit to demonstrate that the additional employees it seeks to include share an "overwhelming" community of interest with the petitioned-for employees, such that there "is no legitimate basis upon which to exclude certain employees from" the larger unit because the traditional community of interest factors "overlap almost completely." Id. slip op. at 11–13, fn.

Applying the principles of Specialty Healthcare to Macy's, the Board concluded that the cosmetics and fragrances employees were a readily identifiable group who shared a community of interest. Further, the Board emphasized that the unit sought by the union conformed to the departmental lines established by Macy's, comprising all of the sales employees in the cosmetics and fragrances department. The Board further concluded that Macy's had not met its burden of demonstrating that other employees it sought to include in the unit shared an "overwhelming community of interest" with the cosmetics and fragrances employees so as to require their inclusion in the unit.

In so holding, the Board effectively opened the way for multiple "micro-units" within a single workforce.


Macy's had maintained that the cosmetics and fragrances employees were not "readily identifiable as a group" and did not share a community of interest. Instead, Macy's contended that the smallest appropriate unit must include all employees at the store (i.e., a "wall-to-wall unit") or, alternatively, all selling employees at the store. Macy's further maintained that by deviating from the wall-to-wall presumption, the Board would essentially be allowing the extent of organization to control, in violation of Section 9(c)(5) of the National Labor Relations Act.

Macy's also contended that the Board should overrule Specialty Healthcare, or at least refrain from applying it to the retail industry.


In concluding that the petitioned-for unit was an appropriate unit, the majority found that: (1) the cosmetics and fragrances employees were a readily identifiable group and shared a community of interest; (2) other employees did not share an overwhelming community of interest with the cosmetics and fragrances employees; and (3) Board precedent concerning the retail industry did not require a wall-to-wall unit.

Concerning the first and second factors, the Board noted the absence of regular contact between the cosmetics and fragrances employees and other employees, and it highlighted the fact that the cosmetics and fragrances employees worked in the same department and had common supervision. The Board further concluded that there were "clear distinctions between the petitioned-for employees and other selling employees."

Regarding the third factor, the Board maintained that its precedent regarding retail department stores has evolved away from any presumptions favoring wall-to-wall units. The Board stated that as long as the petitioned-for unit is appropriate, "it is not significant that in other cases, based on different facts, the Board has previously approved units of all selling or nonselling employees, or that other less-than-storewide units have involved groups of employees not involved in selling merchandise."


Board member Philip Miscimarra dissented, stating that the petitioned-for unit "is not appropriate under any standard," and that "this case illustrates the frailties associated with the Specialty Healthcare standard regarding what constitutes an appropriate bargaining unit." Miscimarra further stated that he would refrain from applying Specialty Healthcare in this or any other case.

Bergdorf Goodman

In the second case involving the application of the Board's Specialty Healthcare decision, the Board ruled on July 28, 2014, in favor of The Neiman Marcus Group, Inc., which operates Bergdorf Goodman, and concluded that a unit comprising all Salon and Contemporary shoes employees at the retailer's Manhattan store was inappropriate because the petitioned-for employees did not have a community of interest.

Bergdorf made the same arguments as Macy's, namely that the petitioned-for unit was inappropriate under established law, and that the petitioned-for employees shared an overwhelming community of interest with other selling employees. Bergdorf contended that an appropriate unit must include, at a minimum, all selling employees, including not only all sales associates, but also personal shoppers and sales assistants.

Unlike the situation present at Macy's, however, the Board found that the petitioned-for unit did "not resemble any administrative or operational lines drawn by the Employer." The Board explained that, although the Salon shoes employees constituted the whole of their department, the petition sought to "carve out" the Contemporary shoes employees out of a second department, Contemporary Sportswear, excluding other sales associates in that department. Also, unlike the cosmetics and fragrances employees at Macy's, the Salon and Contemporary shoes employees at Bergdorf were located on different floors, and did not have interchange, contact and common supervision.

What This Means for Employers

Both Specialty Healthcare and Macy's allow unions to control the composition of a bargaining unit and permit multiple smaller bargaining units, drawn along such distinct groupings as department, job classification, work location and perhaps even particular shifts.

The Bergdorf decision demonstrated that there are some limits to how far the Board will go in endorsing a union's petitioned-for unit and that the Board will not allow a union to cobble together two departments that are not interrelated out of an entire retail store based on a union's extent of organizing. The decision appears to indicate, however, that had the union sought to include only the Salon shoes employees in the unit, the Board would have approved the petition.

On a practical level, multiple bargaining units within an organization will likely lead to increased labor disputes, work interruptions, competitive and nearly constant bargaining, risk of strikes and so on. Macy's, for example, which has 11 primary sales departments (comprising juniors, ready-to-wear, women's shoes, handbags, furniture, home, men's clothing, bridal, fine jewelry, fashion jewelry, and cosmetics and fragrances), could be compelled to bargain with 11 different unions and be subject to 11 different collective bargaining agreements.

The same situation could apply to all other industries.

In light of the above, employers should consider revisiting their union-free strategies and reviewing their organizational structures to increase the chances that the Board would find that a larger unit shares "an overwhelming community of interest" with a smaller, petitioned-for unit.

Below are some steps for employers to consider:

  • examine the organization to determine which job classifications or departments share skill levels so that they can be combined to make broader identifiable groupings,
  • flatten the management organization so that more employees report to the same managers,
  • develop compensation plans or productivity measurements that cover the larger groupings,
  • cross-train employees in the putative larger unit so that they can move easily across traditional job classifications/departments,
  • permit and facilitate the ability of employees to transfer among departments and
  • establish compensation grids and promotional opportunities that are common for all employees in the larger unit.

If you have any questions about this Alert, please contact any of the attorneys in our Employment, Labor, Benefits and Immigration Practice Group or the attorney in the firm with whom you are regularly in contact.

Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions