The Supreme Court Declines to Enter the Fray with the NLRB over Micro Bargaining Units

September 2017

By William Bevan III

As the last weeks of June ticked down, the typical flurry of activity that accompanies the end of the Supreme Court’s term overshadowed the Court’s denial of certiorari in Macy’s, Inc. v. NLRB (Case No. 16-1016) on June 19, 2017, thus leaving intact the Fifth Circuit decision[1] affirming the Obama Board’s decision[2] finding a small unit of cosmetics and fragrance employees employed at a local Macy’s department store in Saugus, Massachusetts to be appropriate. As discussed more fully below, the Board in Macy’s relied on it’s prior decision in Specialty Healthcare & Rehabilitation Center of Mobile, 357 NLRB No. 83 (2011) enfd. sub. nom., Kindred Nursing Center East LLC v. NLRB, 727 F.3d 552 (6th Cir. 2013). In Specialty Healthcare, the Board sets forth the principles that apply in cases where one party, usually the employer, contends that the smallest appropriate bargaining unit must include additional employees beyond those sought in the petitioned-for unit. In Specialty Healthcare, the Board stated that “…when employees or a labor organization petition for an election in a unit of employees who are readily identifiable as a group (based on job classification, departments, functions, work locations, skills or similar factors) and the Board finds that the employees in the group share a community of interest after considering traditional criteria, the Board will find the petitioned-for unit to be an appropriate unit, despite a contention that the employees in the unit could be placed in a bargaining unit, …unless the party so contending demonstrates that employee in the larger unit share an overwhelming community of interest with those in the petitioned-for unit. 357 NLRB at 945-946 [footnotes omitted].”[3]

The Board’s enunciations of a so-called “overwhelming community of interest” standard does not appear in prior Board precedent but from a phrase based in the D.C. Circuit’s opinion in Blue Man Vegas, LLC v. NLRB, 529 F.3d 417, 421-422, a case involving the issue of whether salaried, musical instrument technicians should be excluded from a traditional hourly craft unit of theatrical stage crew employees.  Blue Man certainly did not involve either an analysis of units in the healthcare industry or the retail store industry.

In Macy’s, the Union sought a unit of 41 full-time, part-time and on-call employees engaged in the sale of cosmetics and fragrances; they were part of an overall group of 120 selling employees. The cosmetic and fragrance employees worked in two separate areas of the store connected by a bank of public escalators – those on the first floor selling women’s cosmetics and fragrances, and those on the second floor selling similar products for men. In addition, employees were assigned to work at specific counters based on specific cosmetic hand products carried by the store. Other selling departments also had vendor specialists for their specific brand or line of products.

The cosmetic and fragrance employees worked the same shifts as the other selling employees, attended daily rallies with other selling employees, entered the store through the same entrance, used the same time clock, and the same break room. Although compensation differed among employees, all selling employees had the same fringe benefits, were subject to the same employee handbook and in-store discipline resolution procedure, were evaluated on the same criteria and subject to the same coaching program.

For many in the management community, the Board’s determination that these employees enjoyed a separate comity of interest and were a separate appropriate bargaining unit appeared to be an arbitrary one, and that these employees were nothing more than a fragmented portion of the department store’s sales force.  Therefore, the Board’s determination was arguably based primarily on the extent of union organization in violation of Section 9(c)(5) of the NLRA. However, with two circuits endorsing the Board’s views on the Board’s application of its Specialty Healthcare test, it was unlikely that the Supreme Court would review the Board’s position, leaving the matter squarely in the hands of either Congress, where legislation has been introduced in both the House[4] and Senate[5], or the Board itself. Given the Congress’ current preoccupation with other initiatives, e.g. healthcare, tax reform, a legislative solution seems far down the list of priorities, and difficult to obtain consensus on. Any change in the Board’s approach to bargaining unit determinations will have to come from a new three person majority and the right cases as vehicles for change. That may well be months away from actually happening.[6]

[1] Macy’s, Inc. v. NLRB, 824 F.3d 557 (5th Cir. 2016).

[2] Macy’s, Inc., 361 NLRB No. 4.

[3] As the case name might suggest, Specialty Healthcare arose in the healthcare industry, and involved a unit of certified nursing assistants in a nursing home and rehabilitation center, which is considered under Board law as a non-acute care facility.

[4] H.R. 2976 (June 6, 2017).

[5] S.801 (March 19, 2015).

[6] Board Chairman Philip Miscimarra, one of the dissenting members in Macy’s and a staunch critic of the current majority’s approach, recently announced that he would not seek reappointment for second full-term and will leave the Board when his current term expires in December of 2017.  See Bloomberg BNA Daily Labor Report (August 8, 2017).

Protecting Your Confidential Information & Trade Secrets

October 2015

By Walter P. DeForest and Marie A. DeForest

As a company, we know that you have spent considerable time and money developing your confidential information and trade secrets. Be sure you’ve taken steps to protect your information. At DKYB, we’ve represented companies and their employees in disputes involving confidential information and trade secrets throughout the country. The following advance preparation is very helpful in protecting your organization’s investment in its confidential information and trade secrets. A failure to follow the below guidelines may leave you vulnerable to an argument that your trade secrets and confidential information have not been protected in practice and, thus, are not subject to legal protection.

1. Create a catalog of trade secrets

  • Know what your company considers confidential information and trade secrets.
  • Maintain a catalog or list by generic type of your confidential information and trade secrets, which is an effective way to keep track of this information. You will need this if someone misappropriates your trade secrets or is using your confidential information. A company that is highly reliant upon technology will likely have a more detailed list.

If there is a legal dispute, having a list will be helpful to you. You’ll have a list of information that you can review if there are concerns about a breach. You’ll also have a written record showing that you considered this information to be confidential information and trade secrets. 

2. Develop a handbook or written policy that defines your confidential information and trade secrets and precludes the dissemination of such information to third parties absent an NDA

  • Describe at a high level, by generic type, your confidential information and trade secrets in a written document that is provided to employees.
  • If you have separate employment or IP agreements, include a similar definition.

Having a handbook or written policy that defines your confidential information and trade secrets makes your policy known and documented within your company as to what is confidential information and trade secrets and that such information is not to be disseminated to third parties without an approved NDA. 

3. Actually live to your handbook or written policy on confidential information and trade secrets

  • Make sure it is well known by all your employees that you have a policy and that the policy must be followed.

One element of obtaining protection of confidential information or a trade secret is that your company protects the information from disclosure to third parties and the public.

4. Use a confidential information designation on documents consistently

  • Only documents that are confidential information should have that designation.
  • Be sure none of this information so designated has been made publicly accessible.

Review how your company designates documents as confidential information. Ensure that your company is not over designating or labeling documents as Confidential Information (or Proprietary Information) when such documents do not actually include such information. 

5. Know which employees have access to particular confidential information and trade secrets

  • Only employees with a need should have access to a particular category of trade secrets.
  • Maintain a record of employees that have access to your confidential information and trade secrets.
  • If there are groups of employees that have access to certain trade secrets or confidential information and not others, you should have a record of which employees have access to what information.

Often, only certain employees need access to certain information. Don’t provide access to hard copy files or even files on a central server to an employee or category of employees that doesn’t require such access in order to do their job.   

6. Keep your confidential information and trade secrets secured

  • Make sure your confidential information and trade secrets cannot be easily copied or removed from your premises.

Password protection on files, restricting access to the location where confidential information and trade secrets are stored, requiring visitors to sign-in and preventing visitors from having access to your premises on their own are methods to secure your information. 

7. Be mindful of your confidential information or trade secrets when providing tours of your premises

  • Don’t disclose your confidential information or trade secrets to persons touring your premises unless they have signed an NDA.

Persons visiting your premises should not be able to view, observe, or have access to your confidential information or trade secrets (including any such information in your production processes) unless they have signed an NDA.

8. Use Non-Disclosure Agreements for persons outside your organization that have access to your confidential information or trade secrets

  • A similar definition for confidential information and trade secrets to the one in your handbook or written policies should also be included in your NDAs.
  • Maintain a list of persons or organizations that have signed NDAs with your company.
  • Keep all executed copies of NDAs in one file.
  • Be aware of expiration dates in your NDAs.

A person or entity that receives your confidential information or trade secrets should only be able to do so after they have executed a Non-Disclosure Agreement with your company that prohibits such persons from disclosing the information to third parties.

Comments in DKYB’s Legal Column are not intended to provide legal advice.  Readers should not act or rely on information in DKYB’s Legal Column without seeking specific legal advice from DKYB on matters which concern them.

© 2017 DeForest Koscelnik Yokitis & Berardinelli