U.S. labor board adopts business-friendly 'micro union' test

(Reuters) - A U.S. labor agency on Friday made it tougher for workers to form so-called micro unions made up of small groups of a company’s employees, reversing an Obama-era decision that had been sharply criticized by companies.

A man holds his briefcase while waiting in line during a job fair in Melville, New York July 19, 2012. REUTERS/Shannon Stapleton

It was the fifth time this week that the five-member National Labor Relations Board’s (NLRB) Republican majority, which has been in place since late September, upended a decision issued during the Obama administration that business groups said unfairly favored unions.

The NLRB in a 3-2 decision on Friday said a unionized unit of about 100 welders and “rework specialists” at a manufacturing company in Oregon was improper, and should include all 2,500 employees at the company’s facility.

Forming smaller bargaining units can be a key organizing strategy for unions, particularly when they lack support from a majority of an employer’s workforce. But business groups say that smaller bargaining units fracture workplaces.

The board said on Friday that its 2011 decision involving nursing agency Specialty Healthcare gave too much power to unions to decide which workers should be included in a bargaining unit.

In Specialty Healthcare, the NLRB ruled that businesses challenging “micro unions” must show that workers left out of a proposed unit share most of their working conditions with those who were included. That is a high bar for companies to meet since workers with different job titles and duties often have distinct supervisors, working hours, and wages.

The board on Friday said that decision improperly allowed unions to handpick groups of workers who were likely to vote in their favor “in all but narrow and highly unusual circumstances.”

Previously, the burden was on unions to prove that proposed bargaining units were proper. Friday’s decision revived that standard, making it easier for companies to challenge “micro unions.”

David French, the vice president of the National Retail Federation, praised Friday’s decision, saying the board’s 2011 ruling had “undermined retail operations and limited opportunities for hardworking employees for the sole purpose of empowering Big Labor.”

Friday's decision went against rulings by eight federal appeals courts. Courts have approved units of FedEx FDX.N drivers that excluded warehouse workers, and a unit of cosmetic and perfume department workers at a Macy's Inc M.N store in Massachusetts, among others.

An appeals court in Washington is considering Volkswagen AG's VOWG_p.DEs challenge to a bargaining unit of skilled trade workers at the automaker's Chattanooga, Tennessee plant that excluded production workers.

Reporting by Daniel Wiessner in Albany, New York; editing by Noeleen Walder and G Crosse