U.S. labor agency approves 'micro-unit' in Macy's bargaining case

WASHINGTON, July 24 Thu Jul 24, 2014 5:33pm EDT

WASHINGTON, July 24 (Reuters) - The U.S. National Labor Relations Board (NLRB) said this week that 41 cosmetics and fragrances workers at a single Macy's department store can vote on whether to join a union.

The NLRB's decision Tuesday further aligns the agency with organized labor in a battle with employers over how small is too small for a workplace bargaining unit.

Macy's sales employees in the cosmetics and fragrances departments in Saugus, Massachusetts can now vote on whether to join the United Food and Commercial Workers Union (UFCW).

The board's move signals its willingness to apply to other industries a standard it set in its 2011 decision in Specialty Healthcare. In that case, the NLRB concluded that a group of nursing assistants at a long-term care facility could pursue unionization.

Business groups and employers said the decision was a shift in NLRB policy that would allow so-called micro-unions to proliferate and fracture workplace relations.

The NLRB is a Depression-era federal agency tasked with overseeing union elections and policing unfair labor practices.

Macy's said it was "disappointed" with the board's decision.

"Organizing a selected portion of a store's selling associates into multiple collective bargaining units is impractical and an impediment to providing a consistent level of customer service," Macy's said in a statement.

The company is considering challenging the NLRB ruling in court.

The Macy's Saugus store has 120 sales employees. The 41 working in the cosmetics and fragrances departments are stationed in two separate areas, according to the board's decision.

The cosmetics and fragrances employees are readily identifiable as a group and share a community of interest, while other employees do not, the board concluded.

Macy's said that a more appropriate bargaining unit would be all store employees or all sales employees at that location. It said that if only cosmetics and fragrances workers unionize, there could be a "proliferation of micro-units" based on the products sold by employees.

The board should overturn Specialty Healthcare or not apply it to the retail industry, Macy's and industry groups argued.

The NLRB said its 3-1 decision along ideological lines would not fracture labor relations at the store because it tracks a departmental line set by the employer. The lone Republican who considered the case dissented.

The National Retail Federation's David French said the industry group has been concerned the NLRB would apply Specialty Healthcare to retailers and expects more such cases.

A dispute over a proposed bargaining unit at luxury retailer Neiman Marcus is pending before the board.

The Macy's unit approved by the NLRB does not reflect how stores operate in the real world and will force employers to deal with multiple unions within a single store, and even impact employers' ability to move workers from department to department, French said.

"It's one thing to be unionized, but it's a completely different thing to be Balkanized within your store by different unions," French said in an interview. (Reporting by Amanda Becker; Editing by Kevin Drawbaugh and Grant McCool)