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In divided 4-member decision, NLRB nixes proposed micro-unit at Boeing

By Ronald Miller, J.D. and Lisa Milam, J.D.

In the latest significant reversal of Obama-era precedent, a divided NLRB invalidated a petitioned-for “micro-unit” at a South Carolina Boeing plant, adopting a revised community-of-interest standard.

A union’s petitioned-for unit limited to two classifications within Boeing’s 787 aircraft production line was an inappropriate “micro-unit,” the NLRB ruled in a 3-1 decision. The Board determined that the unit was inappropriate because the two classifications in the petitioned-for unit did not share a community of interest with each other, and even if they did, they did not share a community of interest that was sufficiently distinct from the interest of other production and maintenance employees excluded from the unit. Applying and clarifying its traditional community of interest standard, the Board reversed a regional director’s direction of an election, vacated the union’s certification, and dismissed the petition. Member McFerran filed a separate dissenting opinion (The Boeing Co., September 9, 2019).

Production lines. Boeing manufactures the 787 aircraft at its South Carolina facility. The production line employs about 2700 production and maintenance employees, and each aircraft requires about 9000 tasks. Production of various sections of the aircraft occurs across three separate buildings. Each building includes technicians and quality inspectors. After final assembly, the aircraft is towed across a taxiway to the flight line. At the flight line, the aircraft is powered up, finalized, tested, certified, and delivered to the customer.

The union petitioned to represent a unit consisting of the technicians (FRTs) and quality inspectors (FRTIs) permanently assigned to the flight line, a unit consisting of only those two classifications, about 178 employees.

Petitioned-for unit. FRTs belong to the employer’s operations department along with the other technicians throughout the facility. FRTIs are in the quality department with the rest of the production line’s quality inspectors. In addition to being in separate departments, FRTs and FRTIs work under separate supervisory structures.

Excluded employees have never interchanged into either FRT or FRTI roles. Before 2017, FRTs and FRTIs occasionally have been temporarily loaned to production stages when those stages were behind or the flight line lacked work. There has never been any interchange between FRTs and FRTIs.

FRTs and FRTIs earn higher wages than many of the excluded employees. However, beyond a few minor differences, the FRTs and FRTIS share terms and conditions of employment with excluded production and maintenance employees. All production and maintenance employees have the same timekeeping system, the same payroll system, the same performance management system, the same attendance guidelines, the same overtime system, the same discipline system, the same leave policies, the same healthcare benefits, the same life insurance and disability plans, the same badge protocols, and the same alternative dispute resolution program.

Community-of-interest test. In PCC Structurals, Inc., a 2017 decision, the Republican-majority NLRB rejected the “micro-unit” decision issued by the Obama Board in Specialty Healthcare, a 2011 ruling. Instead, the Board announced that it was returning to the traditional community-of-interest test. Under that standard, when a party asserts that the smallest appropriate unit must include employees excluded from the petitioned-for unit, the Board applies its traditional community-of-interest factors to determine whether the petitioned-for employees share a community of interest distinct from employees excluded from the proposed unit to warrant a separate appropriate unit.

In determining whether the petitioned-for unit is appropriate, PCC Structurals makes clear that the Board will consider “both the shared and the distinct interests of petitioned-for and excluded employees.” In addition, the community-of-interest analysis must consider whether excluded employees “have meaningfully distinct interests in the context of collective bargaining that outweigh similarities” with the included employees. Because it did not clearly articulate how that standard should be applied, the Board here clarified that PCC Structurals contemplates a three-step process for determining an appropriate bargaining unit.

In one of the first cases applying the traditional test since PCC Structurals was issued, the Board set forth the three-step analysis for determining whether a petitioned-for unit is appropriate:

1. whether the members of the petitioned-for unit share a community of interest with each other;
2. whether the employees excluded from the unit have meaningfully distinct interests in the context of collective bargaining that outweigh similarities with unit members; and
3. guidelines the Board has established for appropriate unit configurations in specific industries.

Application of three-step analysis. Applying the new standard in the case before it, the Board found that, on balance, the interests shared by the petitioned-for employees were too disparate to form a community of interest within the petitioned-for unit. While they shared nearly identical terms and conditions of employment, had frequent daily contact with each other, and shared many of the same skills and training, they had significantly different interests in the context of collective bargaining. They belonged to separate departments and did not share supervision. Moreover, there has never been any interchange between the classifications.

With regard to the second step, the Board noted that, on balance, the interests of the excluded employees were not meaningfully distinct from and did not outweigh similarities with the interests of the petitioned-for employees. The FRTs and FRTIs had a high degree of functional integration with excluded employees on the production line. They all worked producing a single product, and they aide earlier production stages. Moreover, the petitioned-for unit shared collective bargaining interests with excluded employees, where FRTs were in the same department as excluded technicians and shared supervisors, while FRTIs were in the same department as excluded inspectors and shared supervision.

As to the third step, the Board found no industry-specific guidelines applicable to this case. It rejected the employer’s contention that the Board has established a presumption in favor of a plantwide unit for integrated manufacturing facilities that must be rebutted by a union seeking a smaller unit. Functional integration is only one factor in the community-of-interest analysis.

Accordingly, because the Board determined that the FRTs and FRTIs in the petitioned-for unit did not share an internal community of interest, and did not have sufficiently distinct interests from those employees excluded from the petitioned-for unit, it vacated the union’s certification and dismissed the petition.

Dissent. In a dissenting opinion, Member McFerran argued that it was clear that the petitioned-for unit of FRTs and FRTIs was appropriate under the Board’s “traditional” unit determination standard, and that a combined production and maintenance unit was not required on the facts present here. She would find that the distinct interests of the FRTs and the FRTIs outweigh the interests they shared with the excluded employees. McFerran argued that the majority’s “clarification” of PCC Structurals has fashioned a new standard—embedded in the “three-step process”—that departs from the traditional community of interest test and the unit determination principles that have guided the Board for almost 70 years. Moreover, she concluded that the majority had once again failed to notify and seek input from the public on an important question.