Among a flurry of recent pro-union decisions, the National Labor Relations Board (Board) issued a decision on December 14, 2022 restoring an Obama-Era test for determining the appropriateness of a bargaining unit in representation proceedings. This recent decision is expected to give unions more power in determining the makeup of bargaining units and enable smaller bargaining units—so-called “micro-units.” Micro-units can give unions the chance to get a foot in the door at an employer where only a small number of employees want to be represented.

In its recent American Steel Construction, Inc., 372 NLRB No. 23 (2022) decision, the Board’s majority stated that an employer attempting to expand a bargaining unit beyond the proposed unit must establish that employees outside of the proposed unit share an “overwhelming” community of interest with the employees in the proposed unit. The decision restores the Board’s 2011 standard, which had been overturned by PCC Structurals, a Trump-era ruling that lowered the bar for employer seeking to expand bargaining units beyond a union’s proposed unit.

The Board’s decision in American Steel, specifically struck down its prior ruling in PCC Structurals and The Boeing Co. for determining the appropriateness of a bargaining unit. In PCC Structurals, the Board established a new standard under which a petitioner would need to demonstrate that employees in the proposed unit shared interests that were “sufficiently distinct” from excluded employees. The Boeing Co. further clarified this standard and provided a three-pronged approach. Under this test, agency officials would (1) examine the shared interests of workers in the proposed unit, (2) weight these interests against the common interests employees in the proposed unit have with excluded employees, and (3) apply industry-specific rules.

The Board on Wednesday stated that the PCC-Boeing framework suffered from significant flaws. First, the Board stated that the “sufficiently distinct” standard was “vague, confusing and has no support in board precedent” and fails to adequately “articulate a workable alternative to the ‘overwhelming community of interest’ standard.” Second, in eliminating the “overwhelming community of interest” standard, the PCC-Boeing standard removed “an important safeguard that provides employees with the fullest freedom to organize in units of their choosing.” Finally, the Board stated that the PCC-Boeing standard “provided no compelling rationale for why the Board should add employees to units that otherwise possess a rational basis and the requisite mutuality of interests to bargain collectively.”

Under the new standard, which restored the Obama-era standard from 2011 established in Specialty Healthcare, the Board’s regional offices should approve a proposed unit if the petitioner establishes the unit shares an “internal community of interests” and the unit is readily identifiable as a group and sufficiently distinct. An employer may challenge the appropriateness of the proposed unit by establishing that excluded employees share an “overwhelming community of interest” with employees in the proposed unit – a high burden to prove.

In light of the Board’s return to a more union-friendly and deferential standard, employers should prepare for the possibility of micro-units within their workplaces and obtain counsel to determine how to best train managers, mitigate against potential micro-units, and approach union campaigns in their workplace.