[Federal Register Volume 60, Number 188 (Thursday, September 28, 1995)]
[Proposed Rules]
[Pages 50145-50158]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-24001]
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[[Page 50146]]
NATIONAL LABOR RELATIONS BOARD
29 CFR Part 103
Appropriateness of Requested Single Location Bargaining Units in
Representation Cases
AGENCY: National Labor Relations Board (NLRB).
ACTION: Notice of proposed rulemaking.
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SUMMARY: To set forth the decisive factors for the appropriateness of
most single location units, the National Labor Relations Board (the
Board) proposes to amend its rules to include a new provision
specifying the appropriateness of requested single location bargaining
units. This rule, as proposed, would be applicable to all Board cases
in which the issue arises as to whether a unit of unrepresented
employees at a single location is an appropriate unit in all industries
currently under the Board's jurisdiction, excluding the utility
industry, construction industry, and seagoing crews in the maritime
industry. The Board is publishing this notice to seek timely comments
and suggestions from the public, labor organizations, employer groups,
and other interested organizations on how the Board may best fulfill
its statutory obligation to determine an appropriate unit when a single
location bargaining unit is requested. Although the Board has given the
matter considerable thought, we emphasize that the rule we are
proposing is just that--a proposal--and not a final decision on what
the rule, if any, should be. In some sections of this document we are
more tentative than others and have specifically invited commentary or
empirical information. In other sections we have not expressly asked
for comments but nonetheless welcome them.
DATES: All responses to this notice must be received on or before
November 27, 1995.
ADDRESSES: All responses should be sent to: Office of the Executive
Secretary, 1099 14th Street, NW, Room 11600, Washington, DC 20570,
Telephone: (202) 273-1940. All documents shall be filed in eight
copies, double spaced, on 8\1/2\ by 11 inch paper and shall be printed
or otherwise legibly duplicated.
FOR FURTHER INFORMATION CONTACT: John J. Toner, Acting Executive
Secretary, Telephone: (202) 273-1940.
SUPPLEMENTARY INFORMATION: The following is an outline of the contents
of this Notice:
I. Background
II. Validity and Continuing Desirability of Rulemaking
A. Opposition to Rulemaking
1. Adjudication should be retained
2. All factors should be retained
3. Lack of empirical evidence
4. Rule unnecessary
5. Other concerns
6. Summary and tentative conclusions
B. Support for Rulemaking
C. Conclusion
III. The Proposed Rule
A. Scope
1. Generally
2. Industries Covered
a. Reasons
b. Excepted industries
c. Summary
3. Applicability to Board cases
4. Summary and conclusions
B. Content of the Proposed Rule
1. Factors recited in prior single location cases
a. Introduction
b. Non-material factors
1. Introduction
2. Functional integration
3. Centralized control
4. Common skills, functions, and working conditions
5. Permanent transfers
6. Bargaining history
7. Conclusion
c. Material factors
1. Introduction
2. Temporary employee interchange
3. Geographical separation
4. Local autonomy
5. Minimum unit size
d. Summary and tentative conclusions
IV. Extraordinary Circumstances Exception
V. Docket
VI. Regulatory Flexibility Act
VII. Statement of Member Cohen
I. Background
On June 2, 1994, the Board published an Advanced Notice of Proposed
Rulemaking (ANPR) in the Federal Register entitled ``Appropriateness of
Requested Single Location Bargaining Units in Representation Cases.''
59 FR 28501 (June 2, 1994). The ANPR set forth several reasons why the
Board was considering rulemaking to determine the appropriateness of
single location units for initial organizing cases in the retail,
manufacturing, and trucking industries. The Board specifically stated,
however, that it had made no decision on the propriety of rulemaking in
this area.
The Board sought comments on: (a) The wisdom of promulgating a rule
or rules on the appropriateness of single location units in retail,
manufacturing, and trucking industries; and (b) the appropriate content
of such a rule or rules. The ANPR suggested that there could be
separate rules for each industry, or a single rule applicable to all
three industries. To encourage discussion and comments on the scope and
content of a possible rule, the ANPR suggested language for a rule. The
suggested rule was a single rule which set forth factors which would be
necessary for the rule to apply, i.e., to grant a requested single
location unit. The rule also provided for ``extraordinary
circumstances'' which would render the rule inapplicable and require
the case be decided by adjudication. Interested parties also were
invited to address what constitutes a ``single facility.'' Member Cohen
and former Member Stephens filed a separate joint statement in the
ANPR. The comment period ended July 29, 1994.
The Board received 41 written comments. Five comments were received
from unions: Amalgamated Clothing and Textile Workers (ACTWU, C-8 \1\);
Retail, Wholesale and Department Store Union, AFL-CIO (RWDSU, C-14);
International Brotherhood of Teamsters (IBT, C-21); International
Federation of Professional and Technical Engineers (PTE, C-22); and the
AFL-CIO (AFL, C-33).
\1\ C-8 denotes Comment Number 8, for example.
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Trucking industry employers submitted 17 comments. Retail industry
employers submitted 2 comments.
Seven comments were received from trade associations: U.S. Chamber
of Commerce (USCC, C-7); National Association of Manufacturers (NAM, C-
12); American Trucking Associations (ATA, C-13); National Council of
Chain Restaurants (NCCR, C-24); Ohio Grocers Association (OGA, C-29);
National Retail Federation (NRF, C-32); and the International Mass
Retail Association (IMRA, C-41).
Four responses were received from policy organizations: National
Right to Work Legal Defense Foundation (NRW, C-16); Council on Labor
Law Equality (COLLE, C-18); Labor Policy Association (LPA, C-19); and
Society for Human Resource Management (HRM, C-38).
Six comments were submitted by individuals.
II. Validity and Continuing Desirability of Rulemaking
Commentators generally did not take issue with the Board's
statutory authority to engage in rulemaking concerning bargaining
units. The general validity of the Board's statutory power to engage in
rulemaking under Section 6 of the National Labor Relations Act (Act) is
set forth fully in
[[Page 50147]]
the notices of proposed rulemaking for units in the health care
industry. See, Collective-Bargaining Units in the Health Care Industry,
Notice of Proposed Rulemaking, 52 FR 25142, 25143-45 (July 2, 1987);
Second Notice of Proposed Rulemaking, 53 FR 33900, 33901 (September 1,
1988) and Final Rule, 54 FR 16336, 16337-38 (April 21, 1989), reprinted
at 284 NLRB 1516, 1519-20, 1528, 1529-30 and 1582-83. Moreover, in
American Hospital. Association v. NLRB, 499 U.S. 606 (1991), the
Supreme Court upheld the Board's authority under Section 9(b) of the
Act to resolve disputes regarding appropriate bargaining units by using
its rulemaking authority.
The ANPR set forth several reasons supporting the Board's desire to
engage in rulemaking for single location units, including the
historical likelihood in most cases that a single facility unit will be
found appropriate, the extensive litigation currently involved, the
unnecessary delays frequently caused by such litigation, the need for
more certainty in such cases, and the fact that many of the factors
considered in such cases have not affected the outcome of single
location cases.
After carefully examining all the comments, the Board continues to
believe its reasons for desiring to engage in this rulemaking are valid
and appropriate to effectuate the purposes of the Act. This Notice of
Proposed Rulemaking (NPR) clarifies the Board's principal purpose for
engaging in this rulemaking. That purpose is to let the public and
practitioners know what is required for a single location unit to be
found appropriate. The Board will, however, continue to decide novel
and unusual cases by adjudication under the extraordinary circumstances
exception to the rule, and therefore does not foresee a major change in
results of these cases but merely a more expeditious method of deciding
them. The Board believes the major benefit of this rulemaking will be a
reduction in litigation over this issue and more efficient use of Board
resources as well as improved service to the parties. In addition,
because the law in this area will be codified and clarified, we believe
the rule will facilitate the negotiation of stipulated election
agreements.
A. Opposition to Rulemaking
1. Adjudication Should Be Retained.
The major contention of the majority of the commentators opposing
rulemaking was that the case-by-case adjudication approach should be
retained. (USCC, C-7 ; SAIA MotorFreight, C-9; LPA, C-19; COLLE, C-18;
and NCCR, C-24\2\). Commentators maintained that this approach is an
invaluable tool to ensure that all facts and factors are considered in
deciding a particular case. In their view, this approach has worked
well over the many years that the Board has decided single location
cases by adjudication.
\2\ Citation of a particular comment is intended to be
illustrative of the comments made regarding a particular point. Such
citation does not necessarily represent the entirety of the
comments.
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Although it is true that the Board has previously decided these
cases by adjudication, the Act also permits the Board to decide
representation cases by rulemaking. As discussed in great detail in the
health care rulemaking, the courts, commentators, and others have urged
the Board to use its dormant rulemaking authority to decide
representation cases. See Collective-Bargaining Units in the Health
Care Industry, Notice of Proposed Rulemaking, 52 FR 25142, 25144-45
(1987), and Final Rule, 54 16336, 16337-39 (April 21, 1989), reprinted
at 284 NLRB 1516, 1518-20, 1580, and 1583. We believe that a rule
concerning the appropriateness of single location units would be a
proper use of that authority.
The Board recognizes one of the most frequently made arguments
favoring adjudication is that it allows the parties to put before the
Board all the available evidence which may be relevant to this issue in
each particular case. While adjudication affords the parties the
opportunity to present voluminous evidence in the hope that some of it
will be found critical, a rule tells the parties, in advance, which
evidence the Board has decided is critical. By announcing an intention
to decide these cases by rule over adjudication, the Board is
tentatively choosing between two legitimate methods of deciding
representation cases. The Board is exchanging what is sometimes thought
of to be the enhanced individual justice of adjudication, with its
vagaries and unpredictability as to which facts are important, for the
clarity and predictability of a rule. This choice may not be
appropriate for all representation cases, but for the many reasons
outlined in the ANPR and this Notice, the Board believes it is
appropriate for the majority of single location cases.
The arguments for retaining adjudication fail to address one of our
major reasons for intending to use rulemaking in this area, most
notably, our desire to reduce extensive litigation and use of Board and
party resources to decide routine single location cases. Although the
Board's only other bargaining unit rulemaking addressed a history of
difficult and inconsistent health care precedent, rulemaking also is
appropriate for other reasons, including the desire to use our limited
and declining resources more efficiently.
A major reason for litigation of this issue is the attempt by the
parties to prove the existence of certain factors and the
``significance'' of those factors. Were the Board to establish a rule
specifying under which fact situations a single location unit will
automatically be found appropriate, there would be considerably less
litigation over the significance or lack of significance of these
facts, and the factors to which they relate.
The desirability of reducing litigation is evident from the current
approach. The Board currently considers a number of factors in single
location cases to determine whether the presumptive appropriateness of
a requested single location has been rebutted. Often, the parties seek
to prove the existence or absence of various factors by introducing
voluminous testimony and documentary evidence concerning a myriad of
facts. The parties litigate the significance of each fact and factor,
and then the Regional Director and, if a request for review is filed,
the Board determines whether the various factors exist and are
significant. The parties and the public are left to their own devices
to deduce which facts and factors may or may not be deemed most
significant in a particular case, although, as indicated, the result in
the majority of cases is that the single facility unit requested is
found appropriate.
We believe our decision to decide these cases under a rule will
have little effect on the substantive results of most routine single
location unit cases. Moreover, as described later in this document, the
rule provides for an extraordinary circumstances exception to address
those novel and difficult cases which should be decided by
adjudication.--------
2. All Factors Should Be Retained
Most commentators also argued that the Board should retain all the
factors historically considered in deciding single location cases by
adjudication. (SAIA, C-9; NAM, C-12; LPA, C-19 and NRF, C-32.) These
factors, they contend, should continue to be determinative in single
location cases. Their comments, however, have not, to date, given
reasons to support this contention. As discussed more fully below in
Section III.B., it seems to us, based both on our experience and a
[[Page 50148]]
reexamination of prior and recent cases, that only a few of the several
factors historically considered in single location cases actually have
made, or in the future should make, a material difference in the
outcome of these cases.
Moreover, the current multi-factor approach is difficult for lay
people and even for lawyers to understand. The current approach
represents itself as a shifting, unpredictable mix of many facts and
factors. No single fact or factor is said to be determinative. Board
decisions weigh the evidence supporting the factors and decide, without
setting forth any precise standards, that there is sufficient evidence
supporting the existence of certain factors in one case, but not in
another. The Board then pronounces that certain factors are
``significant'' or ``substantial'' to support a particular result.
There are no announced, pre-set standards, however, for what is
``significant'' interchange, a ``substantial'' distance between
locations, or local autonomy which is ``severely circumscribed.'' These
imprecise and vague litigation-producing factors are the very
ambiguities which rulemaking appears well-suited to address.
We believe that for many cases this litigation is wasteful and that
this area is ripe for consideration of the alternative approach of
rulemaking. While there remain cases which will benefit from
adjudication and a thorough consideration of all the facts and factors,
our experience indicates that the results of most single location cases
can be made more predictable.
3. Lack of Empirical Evidence
Several commentators challenged the rule because no supporting
empirical evidence regarding the number of single location cases was
cited in the ANPR. (USCC, C-7; NAM, C-12; and IMRA, C-41.) The comments
argued, for example, that because 80 percent of Board elections are by
stipulation and consent, few cases are litigated and still fewer are
likely to involve single location issues. Representatives of the
trucking industry in particular cited the paucity of recent published
decisions in that industry. (SAIA MotorFreight, C-9; ATA, C-13; Viking
Freight et al., C-30.) Commentators from the trucking industry also
disputed that the single location unit is usually found appropriate,
based on cases decided in the 1980's. (Viking Freight, et al., C-30.)
It is commonly recognized, however, that single location unit
issues have arisen with some frequency since the inception of the Act.
See P. Hardin, Developing Labor Law, 468-72 (3d ed. 1992). In any
event, the Board's desire to engage in this rulemaking is not
predicated solely on the number of cases involving this issue. This
proposed rule merely recognizes that a group of cases which are
periodically and repeatedly addressed by the Board are appropriate for
rulemaking for the reasons stated in the ANPR and this Notice.
4. Rule Unnecessary
Several commentators argued that rulemaking is unnecessary because
the circumstances here are unlike those which gave rise to the health
care rules. (NAM, C-12; COLLE, C-18; LPA, C-19; and MotorFreight, C-
35.) The ANPR, however, did not represent that the circumstances here
are the same as those which resulted in the health care rulemaking. As
we indicated above, we do not believe that the reasons supporting this
rulemaking must mirror the circumstances or the reasons which supported
the health care rulemaking. We believe the ANPR and this Notice set
forth a number of legitimate reasons for this rule, particularly the
Board's desire that, in a significant number of cases, the specific
factors necessary for an appropriate single location unit be made clear
and known in advance to all interested parties. There are, however,
common goals and benefits between the two rulemakings. As with the
health care rules, the Board is attempting to bring more clarity to the
issue of appropriateness of bargaining units and to avoid lengthy
litigation, possibly inconsistent results, and unnecessary expenditure
of limited Board resources and the resources of the parties. See
Collective-Bargaining Units in the Health Care Industry, Notice of
Proposed Rulemaking, 52 FR 25142, 25144-45 (1987), reprinted at 284
NLRB 1516, 1518-20.
5. Other Concerns
Some commentators believe that a rule simply will add to the
advantage they claim unions already have in these cases (NAM, C-12);
that the result will be increased legal fees to conduct campaigns and
to negotiate contracts, and impairment of an employer's efficiency and
productivity (TNT Reddaway Truck, C-10; NCCR, C-24; and NAM, C-12; );
that it will be harder to administer contracts and transfer employees
between union and non-union locations (NCCR, C-24; NRF, C-32,); and
that by representing splintered or fragmented units, unions may use
whipsaw strikes to enforce their bargaining demands (NRF, C-32; NCCR,
C-24.).
Most of these concerns, however, exist whenever single facility
units are found appropriate, regardless of whether they would be
decided by adjudication or rulemaking. The major fear of these
commentators appears to be that a rule will exacerbate these perceived
problems by increasing organizing activity. A major purpose of the Act,
however, is to encourage collective bargaining; increased organizing is
not, therefore, a proper basis for not engaging in rulemaking.
Moreover, experience with the health care rules demonstrates that it
cannot be presumed that increased organizing will materialize because
of a rule. See Burda, Hospital Elections Continue to Decline, Modern
Healthcare 26, May 2, 1994, in which it was reported, relying on Board
statistics, that the Board's health care rules ``haven't led to
unbridled organizing efforts at hospitals, as many executives had
feared.'' It has also been our experience that the health care rule has
benefited the Board by reducing the delay in processing health care
cases caused by litigation of unit scope questions. These previous
delays were caused by lengthy hearings and the substantial time
necessary to prepare decisions.
Hence, we do not believe that these concerns about unions'
organizing efforts, which exist even outside of rulemaking, should
preclude the Board's attempt to decide these cases more expeditiously.
Moreover, where novel and unusual situations are presented, the rule
provides for continued decision by adjudication.
6. Summary and Tentative Conclusions
Although the general tenor of many opposing comments was that a
rule would be a radical departure from the Board's current treatment of
these cases, we believe, to the contrary, that for routine cases there
will be little substantive change in results. Thus, under adjudication
the Board applies a presumption that single location units are
appropriate. The presumption is based on Board decisions which note
that Section 9(b) lists the ``plant'' unit as one of the units
appropriate for bargaining. See Dixie Belle Mills, 139 NLRB 629, 631
(1962); Haag Drug Co., 169 NLRB 877 (1968).\3\ This
[[Page 50149]]
presumption of appropriateness is, to some extent, already a ``rule,''
as the Board recognized in the health care rulemaking. See Collective
Bargaining Units in the Health Care Industry, Final Rule, 54 FR 16336,
16338 (1989), reprinted at 284 NLRB 1580, 1583 (1989), in which the
Board noted, in support of those rules, that the Board has long made
use of ``rules'' of general applicability to determine appropriate
units, citing, inter alia, the single facility unit presumption.
\3\ We recognize that two Courts of Appeals have questioned the
presumption. See, NLRB v. Cell Agricultural Manufacturing, 41 F.3d
389 (8th Cir. 1994), denying enf. in relevant part of 311 NLRB 1228
(1993); Electronic Data Systems Corp. v. NLRB, 938 F.2d 570 n.3 (5th
Cir. 1991), enfg. 297 NLRB No. 156 (1990) (not reported in printed
Board volumes). On the other hand, at least seven circuits have
recognized the validity of the presumption. Staten Island University
Hospital v . NLRB, 24 F.3d 450, 456 (2nd Cir. 1994); NLRB v. Aaron's
Office Furniture Co., 825 F.2d 1167, 1169 (7th Cir. 1987); NLRB v.
Child World, Inc., 817 F.2d 1251, 1253 (6th Cir. 1987); Beth Israel
Hospital v. NLRB, 688 F.2d 697 (10th Cir. 1982), modifying and
reaffirming en banc 655 F.2d 1028 (10th Cir. 1981); NLRB v. Living
and Learning Centers, Inc., 652 F.2d 209, 212 (1st Cir. 1981);
Spring City Knitting Co. v. NLRB, 647 F.2d 1011, 1014 (9th Cir.
1981); NLRB v. Western & Southern Life Ins. Co. v. NLRB, 391 F.2d
119, 123 (3d Cir. 1978), cert. denied, 393 U.S. 978 (1968). We note
that the facilities in Cell were less than a mile apart and thus,
the rule we propose would not have applied in that case in any
event. In Electronic Data Systems, the court pointed out in that in
a prior case arising in that Circuit, NLRB v. Purnell's Pride, 609
F.2d 1153, 1160-61 & nn.4 and 5 (1980), that court expressed the
opinion that the presumption was confusing and useless in practice.
Without agreeing with this court's view of the presumption, we
believe our clear delineation as to which factors are critical to
finding a single location unit appropriate will remove much of the
confusion regarding the appropriateness of most requested single
locations units, will be useful in practice, and to that extent may
satisfy some of the court's concerns.
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Moreover, the Board has recognized that a single location unit
furthers certain policy considerations with regard to Section 9(b). In
Haag Drug Co., 169 NLRB 877 (1968), the Board stated that Section 9(b)
directs the Board to ``assure employees the fullest freedom in
exercising the rights guaranteed by this Act'' and, absent sufficient
evidence to destroy the separate identity of the single location, the
employees' ``fullest freedom'' is maximized by treating the single
location unit as normally constituting the appropriate unit.
We recognize, however, that the statutory goal of assuring
employees their fullest freedom in exercising their rights is tempered
by the Board's desire not to unduly fragment an employer's workforce.
Although we continue to believe that a rule is desirable, in view of
the concerns of some commentators about the potential for fragmentation
of an employer's workforce, we solicit comments addressing any
available empirical evidence regarding the feasibility of bargaining as
reflected in the relative success (or lack thereof) of administering
contracts, transfers, etc., in workforces which are partially or
completely organized by location versus those workforces which are
organized on a multi-location basis. We invite these comments as to
each of the specific elements of the rule outlined in Section III.B. of
this proposed rule.
In sum, we believe the net effect on Board law of this proposed
rule is that its results will largely be consistent with our current
treatment of single location cases and, hence, not a significant
departure from current law, although more rationally explained and more
widely disseminated and understood. We believe, therefore, that the
arguments for retention of the current adjudicatory approach appear to
underestimate the benefits of the proposed rule, while overstating its
practical impact on the substantive result in most routine single
location cases. -
B. Support for Rulemaking
All five unions which submitted comments reiterated the reasons
mentioned in the ANPR supporting the decision to promulgate a rule or
rules. The AFL (C-33) and ACTWU (C-8) also cited reasoning from the
Board's health care rulemaking: that case by case analysis should be
abandoned in favor of administrative rulemaking where an industry is
susceptible to rules of general applicability; that courts and
academics have long favored use of the Board's rulemaking powers
because the current method is inefficient; that several state labor
boards determine bargaining units by rules; and that by codifying its
jurisprudence in this area, the Board can make its processes more
understandable.
The AFL noted that the health care rulemaking has met with well
deserved praise from commentators and the Administrative Conference of
the United States. This praise should encourage the Board to continue
to move away from ``Talmudist'' methods of adjudging the
appropriateness of bargaining units and from making it difficult for
the outside world to know which factors, if any, are crucial. The AFL
contends that rulemaking on single location units is a particularly
appropriate next step.
C. Conclusion
The Board believes that a rule will be of service to the public and
the labor bar to set forth more clearly the decisive factors in most
single location cases. Moreover, the public and the labor bar will
know, in advance, which facts and factors are critical for most single
location cases. Members of the labor bar will be better able to advise
their clients about which issues should or should not be litigated.
Parties will not have to engage in drawn out litigation to determine if
a unit is appropriate; in many cases, simple application of the rule
will tell them.
Knowing in advance what facts are determinative will eliminate much
of the confusion and uncertainty inherent in the current approach. We
believe much of the current litigation is driven either by parties'
attempts to persuade the Board that facts and factors exist in support
of a particular result, or by the mistaken belief as to which facts or
factors are critical for finding a single location unit appropriate.
This litigation exists despite the fact that, in the majority of cases,
requested single location units are found appropriate. Through this
proposed rule, we intend to define those facts and factors which will
be determinative. It no longer will be necessary in most cases to
persuade the Board that certain facts exist and then for the parties to
place their interpretation of those facts before the Board, not knowing
which facts or factors will be deemed determinative.
We believe, therefore, that the proposed rule will cut litigation
costs and the time currently and unnecessarily expended by the parties
and the Board in most single location cases. The Board and its Regional
Directors should have fewer and hopefully shorter transcripts to read
and decisions to write. Knowing in advance which facts are necessary to
support a single location finding, the parties can concentrate their
resources on the election or collective bargaining if the unit is
appropriate under the rule.
We also anticipate that the proposed rule may lead to more
stipulated election agreements. Currently, parties seeking to reach a
stipulated election agreement for a single facility unit must negotiate
over a number of often unclear and little understood factors. The
proposed rule, however, codifies what will in most cases establish the
appropriateness of a single facility unit and uses only a few
reasonably clear factors. Because the parties will be better able to
understand this area of the law, they will be in a better position to
negotiate a stipulated election agreement; they will no longer need to
waste time and effort in disputing what we have determined are
essentially immaterial factors.
The parameters of the proposed rule, however, are not designed to
decide every case involving single location units, only the large
percentage of cases that are neither close nor novel. When the
parameters of the proposed rule are met and there are no novel issues,
litigation will be unnecessary. When, however, the parameters are not
met, the rule will not apply. Furthermore, even if the proposed
parameters are met,
[[Page 50150]]
extraordinary circumstances may be shown to exist, and cases will be
adjudicated. It is only these unusual close cases which will benefit
from and, absent stipulation, receive adjudication.
III. The Proposed Rule
A. Scope
1. Generally
The ANPR stated that the Board proposed promulgating a rule, or
rules, to govern single location units in the retail, manufacturing,
and trucking industries. The rationale for these three industries was
that ``large groups of cases have centered'' on them, that factors
considered in these cases are well-settled, and that the outcomes of
single facility cases are reasonably predictable.--------
Many commentators opposed grouping all employers of a single
industry under one rule, and others, particularly the trucking
industry, objected to grouping their industry with retail and
manufacturing. (ATA, C-13; NAM, C-12; NRF, C-32; SAIA, C-9; Con-Way
Southern Express, C-26; Viking Freight System, et al., C-30). These
comments generally asserted that industries and employers are too
diverse to be covered by a single rule. They also contended that it
would be difficult to define coverage of employers under a rule or
rules, presumably because of the common and overlapping functions and
services of employers. None of the commentators opposing a single rule,
however, offered thoughts on how the Board could structure separate
rules covering separate industries.
The AFL (C-33) and IBT (C-21), on the other hand, contended that a
single rule is preferable to three separate rules for the three
industries mentioned in the ANPR. The AFL contended that if the
justification for the rule in the three industries is the large number
of cases centered on them, there would seem to be no reason to
distinguish among them for purposes of a rule. Moreover, the AFL
contended that there was no reason to exclude non-trucking portions of
the transportation industry from the rule.
2. Industries Covered
a. Reasons. The Board's original intention for this rulemaking was
to limit the coverage to these three industries because it was our
belief that the bulk of the single location cases fell into these
categories. Although we approached the coverage issue from a quasi-
statistical point of view, commentators representing unions, industry,
and policy organizations approached this as a practical issue. While
industry, policy organization, and trade association commentators
generally thought any rulemaking was inappropriate, and union
commentators thought rulemaking was appropriate, each discussed the
problem of covering so many diverse employers under rules. All pointed
to the difficulty of classifying industries and then determining which
employers fall under a particular industrial category. All emphasized
that many industries, particularly the transportation industry, are
becoming difficult to categorize as they provide an array of services
beyond their nominal industrial classification.\4\
\4\ This was vividly illustrated by the responses of some
trucking industry commentators who persuasively contended that
``there is no such thing as the trucking industry,'' stating that
the so-called trucking industry is evolving into much broader areas
such as the ``delivery'' or ``transportation'' industry.
(MotorFreight, C-35 at 3; Emery Air Freight, C-36 at 3.). The Board
itself has addressed this same problem in recent cases involving
segments of the package handling industry. See United Parcel
Services, 318 NLRB No. 97 (Aug. 25, 1995), and Federal Express, 317
NLRB No. 175 (July 17, 1995); see also, International Longshoremen's
Association, 266 NLRB 230 (1983), where in a similar vein the Board,
inter alia, struggled with the appropriate characterization of
containerization in the shipping industry (whether more like
trucking or more like shipping) with regard to the lawfulness of the
alleged work preservation objectives of the International
Longshoremen's Association.
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The AFL suggested that the solution to these questions of
categorization was to broaden coverage of the rules, while the
industry, policy organization, and trade association commentators
generally offered no specific suggestions on how to classify industries
and employers. The LPA (C-19), however, although opposed to rulemaking
in this area, suggested that if the Board does decide to adopt rules,
``[i]t would not be wise to formulate rules specifically tailored to
each industry.'' The LPA apparently was concerned that industry-
specific rules might lead to ``ever more narrow rules,'' presumably in
other areas. The LPA thought any rule adopted should be as broad as
possible.
The commentators' responses regarding the practical difficulty of
attempting to narrow the scope of coverage reminded us that the Board's
current approach generally does not provide for separate standards, or
``rules,'' for separate industries. With the few exceptions discussed
below, the Board treats all industries the same with regard to single
location units and applies the same standards. The Board applies the
single location presumption to analyze the appropriateness of requested
single location units, and considers the same factors relevant in
determining whether the presumption has been rebutted. When the
standard has been cited in trucking cases, the Board has cited and
applied the same standard applied in retail cases. See Bowie Hall
Trucking, 290 NLRB 41 (1988), citing Sol's, 272 NLRB 621 (1984). When
the standard has been cited in retail cases, the Board has cited and
applied the same standard applied in trucking industry cases. Globe
Furniture Rentals, 298 NLRB 288 (1990), citing Dayton Transport Corp.,
270 NLRB 1114 (1984). The standard cited, therefore, is the same
regardless of the industry. See Esco Corp., 298 NLRB 837 (1990), in
which the Board relied on cases from the manufacturing, retail drug
store, retail apparel shop, and trucking industries; Haag Drug Co.,
supra 169 NLRB at 878, in which the Board applied the presumption to
retail chains, noting that the single location factors are no different
from those applied to manufacturing or insurance industries.
Because the Board currently applies the same single location
standards to most industries, we have concluded it does not make sense
to change that practice and have different rules for different
industries. We, therefore, in response to the comments, propose that
the scope of the rule apply to all industries to which the Board
currently applies the single location presumption. Besides conforming
to the current practice, this coverage will be, practically speaking,
simpler and easier to administer. Even were we to attempt to define
industrial classifications of employers, the comments concerning the
changing functions and services of employers indicate to us that in
many instances we would still encounter difficulty, and parties may
well have to resort to litigation to determine which set of rules
apply. We also believe that a broad based rule will avoid the
possibility of inconsistent findings based on different rules. Finally,
even for cases that do not involve single location units, as for
example cases involving unit placement or composition, the Board
generally has applied the same community of interest standards without
regard to the industries involved. Having a single rule for all
industries for single location issues would be consistent with that
approach as well.
b. Excepted industries. As indicated, we propose a few narrow
exceptions to coverage under the rule, although as discussed below, we
specifically invite comments on other exemptions from the rule and
supporting reasons. The proposed exceptions involve industries or
segments thereof as to which the single facility presumption has not
been applied. Thus, public utilities would be excluded from coverage
because in that industry the Board has traditionally
[[Page 50151]]
regarded a system-wide utility unit to be the ``optimal unit.'' See,
e.g., New England Telephone and Telegraph, 280 NLRB 162 (1986).
Likewise, crews on ocean-going vessels would be excluded, as the
presumptively appropriate unit there historically has been found to be
``fleet-wide'' (which is different from employer-wide). See, e.g.,
Moore--McCormack Lines, Inc., 139 NLRB 796 (1962). The Board proposes
that employers primarily engaged in the construction industry will be
excluded from coverage under the rule because identifying the
``location'' in a construction case would frequently be difficult and
require litigation. Construction industry employers typically have
several ongoing construction projects at different locations, each of
which could be considered a separate site or location. Also, the
separate projects are usually of short duration. Thus, the single
facility presumption is not readily applicable to that industry.-------
-
As we noted above, although we believe a rule with broad scope is
desirable, the Board is open to comments on whether other industries
should be excluded. Although several comments to the ANPR argued that a
single rule would fail to take account of the uniqueness and diversity
of particular industries or employers, we believe that none of these
commentators demonstrated this uniqueness or diversity in any
persuasive manner. Indeed, none suggested a specific rule for their
industry. We hope commentators who argue for an exception will justify
why an industry which currently is subject to a uniform standard under
adjudication nevertheless should not be subject to a uniform standard
under a rule.
Several trucking industry commentators pointed out that unlike
retail and manufacturing, requested single location units in this
industry must be evaluated differently because drivers are mobile while
employees in other industries remain relatively fixed in one location.
(SAIA, C-9; Con-Way Southern Express, C-26; Viking Freight, et al., C-
30.) We are cognizant of this concern and invite more specific
commentary about the ambulatory nature of this industry, and whether
and in what manner the final rule should take account of that
difference.
c. Summary. Having a single rule and broadening the coverage of the
rule to most industries is consistent with the Board's handling of
single location cases by adjudication. Under adjudication, the Board
generally has applied the same factors to all industries. By a single
rule, the Board will avoid the possibility of confusion caused by
different industry rules, and by the inconsistent results that might
follow. Having a single rule also will be consistent with the goals of
creating clear and uniform standards, reducing litigation, and
processing these cases more efficiently.
3. Applicability to Board Cases
The ANPR stated that the proposed rulemaking would be applicable to
``initial organizing petitions.'' We have, however, modified the
applicability of the rule in two respects. First, the proposed rule
substitutes ``unrepresented'' for initial organizing to avoid possible
confusion over the language ``initial organizing.'' We believe this
better expresses our original intention in the ANPR of applying the
rule to locations where the employees currently are not represented for
collective bargaining. Thus, if a union previously but unsuccessfully
attempted to ``organize'' the location separately or as part of a
larger bargaining unit, the rule would still apply to any subsequent
petition the union might file for a single location unit, provided the
employees are not represented. The same would be true where other
locations of the employer are already represented, including those
separately represented on a multi-location basis.
Second, although the rule in the ANPR applied to representation
petitions seeking an election (RC and RM petitions), we propose that it
be applicable to any other type of Board case in which the issue of a
single location unit involving unrepresented employees arises. We
believe this approach is necessary to avoid potentially inconsistent
treatment between single location cases arising under all election
petitions (except decertification petitions), and those arising in
unfair labor practice cases. See, e.g. Gissel bargaining unit cases,
NLRB v. Gissel Packing Co., 395 U.S. 575 (1969). The rule also would
apply in cases presenting an accretion issue, since a group of
separately located employees cannot be accreted if they can be
considered a separate appropriate unit. See, Compact Video Services,
284 NLRB 117, 119 (1987); Gitano Distribution Center, 308 NLRB 1172
(1992). The applicable Board law in these cases would be the rule,
unless extraordinary circumstances could be established.
The proposed rule, however, is subject to a number of limitations:
1. As the rule is limited to requested single facility units, it could
not be invoked to defeat a request for a broader unit; in such
situations the single facility unit presumption is inapplicable. See,
NLRB v. Carson Cable, 795 F.2d 879 (9th Cir. 1986); Capitol Coors Co.,
309 NLRB 322 (1992). Thus, the rule will have no bearing on petitions
for broader units. 2. The rule will not apply to petitions filed under
General Box Co., 82 NLRB 678 (1949), in which a voluntarily recognized
union seeks an election for the benefit of certification. Such an
election would involve employees currently represented, albeit through
voluntary recognition. 3. As proposed, the rule does not address the
question of the appropriate unit within a facility: that is, the
proposed rule does not preclude units that are less than wall-to-wall
at the facility requested. Our current case law does not require a
wall-to-wall unit if the unit is otherwise appropriate.\5\ 4. Although
there were comments urging the Board to apply the rule more broadly to
decertification petitions (NRW, C-16), the Board has long held that the
appropriate unit for decertification elections must be coextensive with
either the unit previously certified or the one recognized as the
collective bargaining unit. Delta Mills, 287 NLRB 367, 368 (1987);
Campbell Soup Co., 111 NLRB 234 (1955). The Board applied this
principle in the Health Care Rulemaking as well. See Collective-
Bargaining in the Health Care Industry, Second Notice of Proposed
Rulemaking, 53 FR 33900, 33930 (1988), reprinted at 284 NLRB 1528, 1570
(1988); North Country Regional Hospital, 310 NLRB 559 (1993). We see no
reason to depart from well-established Board precedent, and thus, the
proposed rule will not apply to decertification petitions.\6\
\5\ Moreover, as with the Health Care Rule, this rule does not
prevent the parties from stipulating to a different unit.
\6\ This also follows from the fact that decertification
elections are by their nature conducted in units already
represented, whereas the rule applies only to requested units of
unrepresented employees.
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4. Summary and Conclusions
The scope of the rule as originally proposed would be revised,
therefore, to make it applicable to all industries under the Board's
jurisdiction, except the construction industry, public utilities, and
the maritime industry with respect to ocean-going crews. The rule would
apply to all Board cases in which an issue is whether a single location
unit of unrepresented employees constitutes a separate appropriate
unit. This would include election petitions, unit clarification
petitions, and unfair labor practice cases. The rule could not be used
to defeat broader units sought by a petitioner or other employee
[[Page 50152]]
representatives. The rule would not apply to decertification petitions.
We believe that we have excluded all those industries to which the
Board does not apply the single facility presumption or that are not
appropriate for this rule. As indicated above, however, the Board
invites comments from other industries or employers which seek to
justify exclusion from the rule. Moreover, as indicated, while the
scope of this rule is broad and covers most industries under the
Board's jurisdiction, if novel issues arise with regard to a particular
industry, and extraordinary circumstances are established, the rule
will not apply and the case will be litigated by adjudication.
B. Content of the Proposed Rule
1. Factors Recited in Prior Single Location Cases
a. Introduction. The Board's recent decision J&L Plate, 310 NLRB
429 (1993), set forth a large number of factors ostensibly applied in
single location cases:
A single plant or store unit is presumptively appropriate unless
it has been so effectively merged into a comprehensive unit, or is
so functionally integrated, that it has lost its separate identity.
Dixie Belle Mills, 139 NLRB 629, 631 (1962). To determine if the
presumption has been rebutted, the Board looks to such factors such
as central control over daily operations and labor relations,
including the extent of local autonomy; similarity of skills,
functions and working conditions; degree of employee interchange;
distance between locations; and bargaining history, if any. Esco
Corp., 298 NLRB 837, 839 (1990).
--------The suggested rule in the ANPR would find a requested
single location unit an appropriate unit where: (a) A given number of
employees were employed; (b) no other facility of the employer was
located within a specified distance; and (c) a supervisor under the Act
was located on the site, presumably to oversee the operation of the
facility requested. A showing of extraordinary circumstances would
render the rule inapplicable, and refer the case to adjudication, such
as where a set percentage of the employees in the unit sought performed
work at another location for a set percentage of the time. -
In proposing the content of the rule, we have set forth those
factors which in our experience have significantly affected the outcome
of single location cases under adjudication. The Board noted in the
ANPR that several factors, while cited and theoretically considered in
single location cases, seldom have made a difference in the outcome. It
would be difficult to prove which factors cited in hundreds of cases
were, in fact, determinative. Nonetheless, part of rulemaking involves
an effort to simplify, codify, and predetermine results by attempting
to isolate the more significant factors. Discussed below are our
reasons for selecting those factors which we believe should be (and for
the most part, have been) most material to deciding single location
cases, and an explanation of the evidence necessary to support the
existence of those factors under the proposed rule. -
Many commentators argued that the Board should retain all the
factors historically said to be considered under adjudication. In the
ANPR, we stated that most of these factors, while cited and
``considered,'' usually are not determinative and that only a handful
of factors have had an important impact and effect on the outcome of
single location cases. In our view, the factors of geographic distance,
temporary employee interchange, and local autonomy as measured by a
statutory supervisor on the site for a regular and substantial period
are almost always material in single location cases. Factors such as
functional integration, centralized control, common skills, permanent
transfers, and bargaining history, while frequently mentioned, have for
the most part not been material factors in deciding single location
cases. Although not a current factor in single location cases, we
propose that for the reasons stated below, the units granted under the
rule should be limited to locations with a minimum number of employees.
At this time we propose to adhere to 15 employees provided in the ANPR
as the minimum size of a unit but are undecided whether this number of
employees is too large or too small and request comments on the
appropriate number.
b. Non-material factors.
1. Introduction. The factors which we have decided are not
substantially material to requested single location units are generally
relevant and material to community of interest issues and to other unit
scope issues; they are particularly relevant and material to requested
multi-facility units. We believe it is largely because of this
relevancy to unit scope issues that the Board has traditionally, but
nominally, included these factors in analyzing the appropriateness of
single facility units. It does not, however, necessarily follow that
because these factors are material to finding multi-facility units
appropriate that they are also material to finding single facility
units inappropriate. Any reasonably complex business enterprise has a
multitude of potentially appropriate units. And a union is not required
to seek the most appropriate unit but only an appropriate unit. P.
Ballentine & Sons, 141 NLRB 1103 (1963). Although these factors may be
material to deciding other unit scope issues, we find for the reasons
discussed below that they are largely not material to deciding whether
a requested single location unit is an appropriate unit. ----
2. Functional integration. -The general standard for single
location cases states that a single plant is presumptively appropriate
``unless it has so effectively merged into a comprehensive unit, or is
so functionally integrated that it has lost its separate identity.''
J&L Plate, supra. Functional integration, therefore, is generally
stated to be relevant to any unit scope issue, including the
appropriateness of a single location unit. When applied, however,
functional integration has been largely subsumed by the specific
factors upon which the rule we now propose relies--geographic
separation, lack of significant temporary interchange, and local
autonomy. To the extent that other aspects of functional integration
exist, we believe they are largely immaterial to determining the
appropriateness of single location cases. -
There have been Board decisions which have purported to rely, in
part, on specific evidence of ``plant integration,'' citing the use of
similar machinery, the transfer of machinery and materials between
plants, and in general, collaboration of two or more plants to produce
a common product. See, e.g., Beaverite Products, 229 NLRB 369 (1977);
Kent Plastics Corp., 183 NLRB 612 (1970); and Kendall Co., 181 NLRB
1130 (1970). Other cases have recited evidence of the ``continuous
flow'' of production or the ``single order flow process'' to find that
there is integration. See, Unelco Electronics, 199 NLRB 1254 (1972);
Neodata Product Distribution, 312 NLRB 987 (1993). In virtually all
these cases, however, integration was supported by evidence of
significant employee interchange, limited distance between plants, or
limited local autonomy. Moreover, in many instances the Board has found
that evidence of ``plant integration'' or the coordinated processing of
orders was insufficient to rebut the single facility presumption in the
absence of the critical factors of significant interchange, close
geographic proximity, or too limited local autonomy. See Courier
Dispatch Group, 311 NLRB 728, 731 (1993); J&L Plate, supra; Hegins
Corporation, 255 NLRB 1236 (1981); Penn Color, 249 NLRB 1117 (1980);
Black & Decker Manufacturing, 147 NLRB 825, 828 (1964). -
[[Page 50153]]
Functional integration then, seems to be less significant as a
separate factor than as another way of stating the conclusion that the
evidence demonstrates that the single location has merged into the more
comprehensive, or multi-facility unit. Thus, while a few Board
decisions conclude that the single facility presumption has been
rebutted because the single plant is ``highly integrated'' with other
facilities, this conclusion is generally based on the more specific
factors we propose now should be in the rule. In our view, it would be
expected that plants that are so integrated as to rebut the presumption
are close together, have significant interchange, and have little local
autonomy. -
Few would disagree that today most companies with more than one
location are more or less functionally integrated in one form or
another. Production may be integrated in the sense that different parts
of the company's products are manufactured in different plants, and
then shipped from one to another to be assembled. Records, orders, and
other information may be integrated via computers or other means of
direct communication. We believe, however, that product,
administrative, or operational integration does not have any necessary
or direct impact on the employees' relationship with their counterparts
at other locations, absent evidence of the separate supporting factors
we have included in the rule. See, Penn Color, 249 NLRB at 1119; Black
& Decker Manufacturing, 147 NLRB at 828. The more significant principle
in determining whether a single location unit is appropriate is not
whether there is functional integration, but whether employees in the
group sought have lost their ``separate identity.'' Our conclusion
that, absent extraordinary circumstances, functional integration is
immaterial to finding the single location unit appropriate is
consistent with this standard. ----
3. Centralized control. -Few businesses today with more than one
location fail to maintain centralized control over the conduct of
operations. In virtually all single location cases, this factor is
essentially presumed and does not affect the Board's determinations.
Centralized control over operations is a matter of good business
practice and does not, in our view, affect the community of interest
between employees at different locations. As with functional
integration, although Board decisions may cite an employer's ``highly
centralized operations'' as evidence supporting the multi-facility
unit, it is our sense that other, more critical factors usually affect
the outcome of the case. See Courier Dispatch Group, 311 NLRB 728, 731,
in which the Board, while acknowledging the employer's centralized
administrative and operational functions, nevertheless affirmed the
Regional Director's finding that the employer had failed to rebut the
single facility unit presumption, noting in particular the lack of
significant employee interchange. Accord: Haag Drug Co., 167 NLRB at
878. Moreover, even though personnel decisions ultimately may be
decided at an employer's headquarters, that does not preclude the
existence of sufficient local autonomy to support a single facility
unit. See J&L Plate, 310 NLRB 429, in which personnel policies, as in
most cases, were centrally determined but the single location unit was
found appropriate as there were local autonomy, minimal interchange,
and, as might be expected, separate functions performed at each plant.
4. Common skills, functions, and working ------conditions. Although
common skills, functions, and working conditions among locations are
often recited by the Board as factors to be considered in determining
whether the single facility presumption has been rebutted, they seldom
are relied on by the Board to find a requested separate unit
appropriate. Logically, these factors may be relevant to show that
there is a potential for interchanging employees from location to
location; employees could not easily be interchanged if their skills
were not similar. It is, however, the actual extent of temporary
interchange, not its potential, that is material to determining whether
the group of employees sought has retained a separate identity. We do
not believe that, merely because employees at more than one location
perform the same work, and use the same skills, employees necessarily
lose their separate identity. Moreover, some businesses, including most
chain stores, many warehouse and distribution facilities, and some
manufacturers, operate with geographically dispersed but substantially
identical facilities in which employee skills, functions, and working
conditions would predictably be essentially identical. Yet, this does
not mean that such facilities must be combined into a broader unit
merely because of this factor.
5. Permanent transfers. We tentatively conclude that the factor of
permanent transfers is immaterial to the appropriateness of a single
location unit. Unlike temporary interchange, permanent transfers do not
seem to us to demonstrate any continuing link between the employees at
different locations. Even where the Board has stated it has considered
permanent interchange supportive of a multi-facility unit, it is the
temporary interchange which we think has proved significant in the
Board's findings. See, Sol's, 272 NLRB 621, 623 (1984). Moreover, the
Board recently stated in Red Lobster, 300 NLRB 908, 911 (1990), that
permanent transfers are a ``less significant indication of actual
interchange.'' Accord: J&L Plate, 310 NLRB at 430. Frequently,
permanent transfers are voluntary or occur for the convenience of the
employee involved and do not in any significant manner facilitate or
foster a common identity among employees at two or more facilities.
See, e.g., Lipman's, A Division of Dayton--Hudson Corp., 227 NLRB 1436,
1438 (1977).
6. Bargaining history. Bargaining history is given substantial
weight to support the continued appropriateness of an existing unit;
the Board is reluctant to disturb an established unit that is not
repugnant to the Act or does not clearly contravene established Board
policy. Washington Post Co., 254 NLRB 168 (1981). See also Batesville
Casket Co., 283 NLRB 795 (1987), in which the Board declined to clarify
an existing two-company existing unit that had been in existence
without substantial changes for many years. Cf. Rock-Tenn Co., 274 NLRB
772 (1985). Although bargaining history has been cited as a relevant
factor in determining the appropriateness of a single facility unit, we
believe it is, for the most part, immaterial to cases covered by the
proposed rule.
In cases involving petitions to represent single facility units the
proposed rule applies only to unrepresented employees. Thus, there
would be no immediate, current bargaining history affecting the
requested employees, and the rule would not be disruptive of existing
collective-bargaining units. Also the rule would not apply to petitions
seeking to sever a group of employees from a larger group of currently
represented employees, as for example, existing multi-facility units.
Compare, e.g., Kaiser Foundation Hospitals, 312 NLRB 933 (1993).
Past bargaining history affecting currently unrepresented employees
may be material in showing that a multi-facility unit is appropriate,
and to that extent, may have some limited bearing on the
appropriateness of a requested single facility unit. In those cases,
however, we believe that the factors deemed significant by the rule--
geographic separation, local autonomy, and lack of significant
interchange--
[[Page 50154]]
would outweigh any recent, but extinguished, bargaining history.
In a few situations, however, bargaining history may play a
material role in determining the appropriateness of a single-facility
unit. In Joseph E. Seagram & Sons, 83 NLRB 167 (1943), the Board stated
that it would require one group of employees to organize on a multi-
plant basis whenever other classifications of employees of the employer
had organized themselves on that basis. The Board deemed controlling
the overall bargaining pattern in these circumstances. In a later case,
Seagram, 101 NLRB 101 (1952), the Board modified this holding and
concluded that although the bargaining history of one group of
employees was ``persuasive,'' it would not necessarily control the
bargaining pattern for every other group of unorganized employees.
After considering the circumstances, the Board in the second Seagram
case found the petitioned-for employees could constitute an appropriate
unit. Accordingly, if an employer can demonstrate that other
classifications of its employees currently are organized largely or
exclusively on a multi-plant basis, we could arguably consider that as
an extraordinary circumstance. The Board may wish to weigh the
significance of that bargaining history, and hence, the appropriateness
of the unit sought would be decided by adjudication and not under the
rule. We solicit comments concerning these issues.
7. Conclusion. Our overall experience has been that these ``non-
material'' factors have not been determinative in deciding single
location cases, but, at best, have been used as secondary, bolstering
rationale. Although these factors may be relevant to the extent that
they show a requested broader unit to be appropriate, they will not,
under the rule, be considered controlling to establish that a single
location unit is or is not an appropriate unit.
c. Material factors. 1. Introduction. In setting forth the contents
of the proposed rule, we reiterate that we have tried to formulate a
clear and relatively straightforward rule for determining whether a
single location unit is appropriate. Although prior Board decisions
were used as guides for establishing material factors, the Board also
was guided by which factors it believes are objective and easily
ascertainable. We believe the factors chosen are consistent with these
goals, but emphasize again that the rule is a proposal only.
The rule suggested in the ANPR incorporated the factors of
interchange, geographic distance, local autonomy, and number of
employees in the unit. Below are described in greater detail the
reasons the Board believes these factors are material and why the rule
has been drafted in this manner. Virtually none of the industry, policy
organization, or trade association commentators commented on the
factors or the language that was proposed as part of the rule. The
Board expects with the publication of this Notice, however, that more
comments will be forthcoming on the contents. As stated at several
points in this document, this is merely a proposed rule. Comments are
invited as to what should and should not be in the rule, consistent
with our goals for this rulemaking.
2. Temporary employee interchange. In our opinion, no other factor
is more commonly determinative for or against the appropriateness of a
requested single location unit than temporary employee interchange.
Very few cases have been decided without an evaluation of this factor.
See, Executive Resources Associates, 301 NLRB 400 (1991), in which the
Board noted that the lack of significant interchange of the employees
in the requested single facility is a ``strong indicator'' that the
employees enjoy a separate community of interest; Spring City Knitting
Mills v. NLRB, 647 F.2d 1011, 1015 (9th Cir. 1981), stating that
interchange is a ``critical factor'' in determining if employees share
a community of interest. The presence or absence of temporary
interchange is one of the clearest reflections of whether there is
likely to be common or separate identity between two or more locations.
The more that employees from one facility work at a second facility and
with its employees, the greater will be their common interests in the
working conditions of both plants.
Because evidence regarding the level of interchange usually is in
the possession of the employer, we have drafted the proposed rule so
that this element need not be established for the rule to apply, but
rather the employer must prove it, in effect, as an affirmative
defense. Thus, if the level of interchange exceeded a particular level,
it would be an extraordinary circumstance, the rule would be
inapplicable, and the case would be decided by adjudication. As
described more fully in the section describing extraordinary
circumstances (Section IV), the employer would have to demonstrate
affirmatively, first by an offer of proof and then by supporting
evidence, that the level of interchange involves 10 percent or more of
the employees at the requested location for 10 percent or more of the
employees' time. It would be presumed to be below 10 percent unless the
contrary is shown.
We propose measuring interchange by percentage so that the relative
amount of interchange can be compared uniformly. Requiring that
interchange be judged both as to the relative number of employees and
the relative amount of time they spend at the second facility is, we
think, a more precise measurement of interchange. In a slight
modification of the rule suggested in the ANPR, we have added a time
frame of the one preceding year for measuring the interchange, with the
year running from the date the petition is filed for election cases,
and from the date a bargaining obligation would arise for unfair labor
practice proceedings.
Our use of the 10 percent threshold arises from our view that, for
interchange to be an extraordinary circumstance, it must be at a level
greater than de minimis. We propose 10 percent, but are open to
suggestions of alternative levels or measurements. The IBT (C-21)
contended that the 10 percent threshold was too low and should be
increased to 25 percent to be more consistent with Board precedent, but
cited no cases for this assertion. We encourage comments on this
alternative as well as on the entire method of judging interchange in
the proposed rule. For example, the time employees spend at another
location could be measured as percentage of the overall number of work
hours at the requested location. Or, there could be one measure for the
relative number of employees transferring and another measure for the
amount of time the employees spend away from the requested facility.
The interchange also could be measured by the number and frequency of
employees transferring into the requested facility.
We reiterate that a level of interchange which exceeds the proposed
level would not necessarily mean that the unit is inappropriate but
only means that the case be decided by adjudication. The Board has not
set a standard percentage in prior cases.\7\ If there is to be a rule,
however, there must be a standard against which the amount of
interchange is judged, and we specifically invite suggestions and
comments on how best to set forth a reasonable, clear, and workable
standard.
\7\ The Ninth Circuit, however, has characterized levels of
interchange of 10% and 8% as ``relatively low'' in cases enforcing
Board orders to bargain in which the single facility was found
appropriate. See, Spring City Knitting Co. v. NLRB, 647 F.2d 1011
(1981) and cases cited therein.
---------------------------------------------------------------------------
3. Geographical separation.-We also propose that the rule take
account of distance between facilities. As
[[Page 50155]]
proposed, the rule requires that no other facility \8\ be within one
mile of the proposed unit. Although distance is not as significant a
factor as interchange in single location decisions, we believe that
where the facilities are a mile or more apart, there is sufficient
separation to justify a separate unit, if the other factors are met.
Although the AFL-CIO (C-33) and the International Federation of
Professional and Technical Engineers (PTE, C-22) argued that
interchange should be the only factor considered in single location
cases, considering both the level of interchange and the distance
between locations ensures that there is neither significant actual
interchange nor an immediate potential for interchange. Although we
recognize that there are Board decisions in which there has been
significant interchange despite the distance of 1 mile that we propose
here, or conversely, lack of interchange where the distance between
facilities is less than a mile, we are satisfied that where both
standards are met, a separate facility unit will be appropriate, absent
extraordinary circumstances.
\8\ The Board received virtually no comments on the issue of
whether, and how, the Board should define whether a location is, in
fact, a single or separate location. After carefully considering the
scope of this rulemaking, we have decided that this issue should at
the present time be left to litigation and the rule will not apply
to this issue.
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Although a trucking industry commentator contended that geography
is an unreliable guide in that industry (MotorFreight, C-35), this is
only one factor, and the factor of interchange will help determine if
distance is significant. Another commentator noted that with today's
communication technology, distance should not be a determinative
factor. (NAM, C-12.) Access to communications, however, would not
necessarily negate the possibility of employees having a separate
identity at a separate location.
Other comments contend that reliance on geography will run afoul of
the prohibition of Section 9(c)(5) of the National Labor Relations Act
that ``the extent to which the employees have organized shall not be
controlling.'' (Strauss, C-1; USCC, C-7, NAM, C-12; IMRA, C-41.)
Contrary to this argument, the rule does not place determinative weight
on extent of organization, but contains several objective factors, none
of which is controlling. Moreover, geographical separation may or may
not be related to the extent of organization, but, regardless, the
factors are not the same.
As to our proposed distance of one mile between locations for the
rule to apply, although single location units have been found
appropriate where the distance between locations is less than a mile,
the line for applicability must be drawn somewhere. There is no
logically compelling ascertainable optimum distance for a rule since
single location decisions do not precisely correlate with mileage.
Moreover, although the rule applies to locations a mile or more apart,
that does not mean locations less than a mile apart cannot be
appropriate units. Those units may be found appropriate by
adjudication, but we are not sufficiently sure of their appropriateness
to render them automatically acceptable under the rule. For example,
although many retail chains locate their stores less than a mile apart,
a single store unit may be found appropriate. See Haag Drug Co., 169
NLRB 877 (1968); Sav-on Drugs, 138 NLRB 1032 (1962). We do not intend
for the rule to affect such Board precedent but only that such cases
must be resolved through adjudication.
4. Local autonomy. The suggested rule in the ANPR incorporated
local autonomy by requiring that the single location have a statutory
supervisor on the site. Although the AFL and PTE contended that this
factor is unnecessary, requiring some level of local control is
consistent with the Board's traditional treatment of this factor as
significant in single location decisions. See Executive Resources, 301
NLRB at 402, in which the Board noted that local authority in the form
of separate supervision was an ``important'' factor demonstrating that
the employees enjoy a separate community of interest; see also Haag
Drug, 169 NLRB at 878, in which the Board pointed out the
``significance'' of local autonomy in determining if a single location
unit is appropriate. We continue to believe that the rule must
incorporate evidence of local autonomy in some meaningful way to insure
that there is some degree of independence and control at the requested
location apart from other facilities. We are inclined to adhere to the
requirement that a statutory supervisor be present at the requested
location. Among other reasons, the Section 2(11) standards for
determining supervisory status are generally known and understood.
Board decisions have evaluated local autonomy by an open-ended
inquiry of the authority of local managers versus central managers. The
full range of their authority is often litigated in an effort to
determine the relative scope of local autonomy. See, e.g., Red Lobster,
300 NLRB at 912, in which the Board cited and distinguished seven Board
decisions in evaluating the authority of local managers versus central
managers. Although Board decisions have detailed the extent of local
authority of local managers, virtually all of these managers have been
statutory supervisors. Rather than analyze the relative scope of each
manager's authority, we believe that if a local manager has sufficient
authority to be a statutory supervisor, this is sufficient evidence of
local autonomy for purposes of unit appropriateness under the rule. Any
greater inquiry would perpetuate what we believe is wasteful litigation
and unnecessary use of the Board's resources. The purpose of including
this factor in the rule is to insure some level of local independence
from other locations; it is not an attempt to draw fine lines about the
relative authority of local versus central managers. Our inclination,
then, is to find that it is sufficient to establish local autonomy if
the local individual is a statutory supervisor under any of the
indicia.
Yet, we do have some reservations. We are concerned about whether
requiring that a statutory supervisor be present is a better approach
for the rule than the current open-ended approach of examining the full
range of supervisory authority. Will requiring that a statutory
supervisor be present result in more disputes about whether an
individual is a statutory supervisor? Is it likely that the parties
will stipulate in most cases as to the status of a local supervisor, or
will the Regional Director have to decide the supervisory status of the
local person in charge before determining whether the rule applies?
Will requiring a statutory supervisor result in greater litigation than
the open-ended approach now in use? The Board invites comments on
whether this approach to deciding local autonomy will constitute a
satisfactory method of determining whether this element of the rule
exists, or whether, on the other hand, it will unnecessarily complicate
the rule.
We also propose to modify slightly the language requiring that a
local supervisor be on the site of the requested unit. We have added
the requirement that the supervisor be present on the site for a
regular and substantial period. This does not mean that a statutory
supervisor need be present on each and every shift. Our purpose is to
require that the supervisor have more than a casual and sporadic
relationship to the requested location. In most cases this will mean
that his or her supervisory authority will primarily be over the
employees in the requested unit.
5. Minimum unit size. The rule as set forth in the ANPR applies
only to requested units of 15 or more unit employees. It is our
intention that a unit
[[Page 50156]]
appropriate under the rule must contain a minimum number of employees,
or likely eligible voters. The NAM (C-12) argued that in multi-location
cases, the number of employees at a location has never been a factor,
and would result in separating employees despite their strong community
of interest. We agree that seldom has the number of employees been
listed as a factor, but neither has the Board ever used rulemaking on
this issue; we feel more comfortable finding a requested separate
location unit automatically appropriate if it contains more than a mere
handful of employees. The rule was limited to the relatively large
number of 15 employees with the belief that the rule should not apply
to very small units as these are more problematical and their
appropriateness should be left to adjudication. For example, locations
with a smaller number of employees may be more likely to be satellites
of other locations that might not be appropriate separate from the main
facility.\9\
\9\ The rule would not apply if the unit did not contain the
minimum number of employees at the requested location. With regard
to situations where the unit contains a sufficient number of
employees but another location is allegedly a satellite of the
requested location, and by virtue of its very small size or other
characteristics could not be represented separately from the
requested unit, we would find this to be an extraordinary
circumstance which would require the case be decided by
adjudication. If the other location is so closely associated to the
requested unit that it would constitute an accretion to that unit if
it had been newly formed, then the petition would have to be decided
under adjudication. Thus, in situations where it is established that
there is a facility which is a satellite to the requested unit, the
latent inappropriateness of this facility would be directly relevant
to the separate appropriateness of the requested unit.
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Because the specific figure of 15 employees in the requested unit
is not grounded on any mathematical rationale, we invite comments on
possible alternatives to this proposed minimum number of employees. One
possibility is for the Board to reduce the number to 6 or more
employees, which would be consistent with the minimum requisite number
of unit employees to which the health care rule applies. Collective
Bargaining Units in the Health Care Industry, 54 FR 16336, 16341-42
(1989), reprinted at 284 NLRB at 1580, 1589-90. There, the Board stated
that petitions for 5 or fewer employees would be decided by
adjudication. The Board noted that there was ``no ineluctable logic''
to the number five, but indicated it was concerned that units of
smaller numbers of employees would be impractical in the health care
industry and that the employees' concerns for a separate unit might be
outweighed by concerns over disproportionate, unjustified costs, and
undue proliferation of units. Id., 54 FR at 16342, reprinted at 284
NLRB at 1588.
Another alternative figure could be based on statistics from the
Board's annual reports. Those reports contain a table analyzing the
size of units in RM and RC representation elections for closed cases in
each fiscal year. The statistics are not broken down for single
location elections, however. The tables specify the number and relative
percentage of all Board elections based on the sizes of the units the
eligible employees voted in. The size of the various categories of
units begins ``Under 10'' and increases in increments of 10. The Board
does not maintain statistics for any smaller units. For fiscal year
1992, 22.6% of all elections occurred in units of fewer than 10
employees; and 20.8% of elections occurred in units of 10 to 19
employees. Thus, 43.4% of all elections in fiscal year 1992 were in
units of 19 or fewer eligible voters. 57 Ann. Rep. Appendices, Table 17
(RC and RM Elections). For 1993, 19.6% of the elections were in units
of 10 or fewer eligible voters; 20.5% were in units of 10 to 19
eligible voters. 58 Ann. Rep., Appendices, Table 17. For fiscal year
1994, the Board's preliminary statistics indicate that 19.7% of the
elections were in units of 10 or fewer employees, and 19.5% were in
units of 10 to 19 employees. Thus, it could be that a smaller number
should be used as the threshold for the rule's applicability.
Whatever figure ultimately is contained in the rule, smaller single
location units will not be precluded from being found appropriate.
Their appropriateness, however, will not be decided by application of
the rule but rather by adjudication.
d. Summary and tentative conclusions. We believe that when
locations are geographically distant, interchange is minimal, a
statutory supervisor is present, and the requested unit contains 15 or
more employees, in most single location cases, the Board will find the
requested single location unit appropriate; these factors also are
clear and easily ascertainable. The proposed rule sets forth these
factors as standards. We are open to comments on all these factors, as
well as suggestions on possible alternative standards.
This rulemaking is not an attempt to shoehorn all single location
unit cases into decision by rulemaking; it is rather an attempt to
decide the majority of routine single location cases in a more
expeditious manner. Where the stated elements of the rule do not exist,
or the cases otherwise present unusual or novel issues, the rule will
not apply. As discussed in more detail in the next section on the
extraordinary circumstances exception, the novel and unusual cases will
fall outside the rule and will be decided by adjudication.
Finally, we are aware of the paucity of empirical information on
the feasibility or practicality of bargaining in single facility as
opposed to multi-facility units. We specifically invite comments as to
feasibility of bargaining in units based on these proposed elements or
other elements.
IV. Extraordinary Circumstances Exception
In order to ensure due process, the Board has included in the
proposed rule an exception for ``extraordinary circumstances.'' Even
when the rule otherwise applies, the extraordinary circumstances
exception renders the rule inapplicable upon a showing of good cause,
and allows for adjudication, or individual treatment of unique cases so
as to avoid accidental or unjust application of the rule.\10\ While the
petitioner or representative of the employees in the requested unit has
the burden of establishing the elements of the rule, the party seeking
to invoke the extraordinary circumstances exception has the burden of
establishing, at first by an offer of proof and later, if appropriate,
by the introduction of evidence, that the extraordinary circumstances
exist. If the evidence proffered constitutes an extraordinary
circumstance, the case will be decided by adjudication. As is true with
the health care rule, see 53 FR at 33932, reprinted at 284 NLRB 1573,
our intent is to construe the extraordinary circumstances exception
narrowly, so that it does not provide an excuse, opportunity, or
``loophole'' for redundant or unnecessary litigation and the
concomitant delay that would ensue.
\10\ Single location cases may also be decided by adjudication
if one of the elements of the rule is not present, e.g., the
locations are less than one mile apart. This, however, is not an
extraordinary circumstance, but a case to which the rule does not
apply. In extraordinary circumstances, the rule on its face applies,
but once extraordinary circumstances are established, the rule is
inapplicable and the case is decided by adjudication.
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We have codified the definition of extraordinary circumstances in
the rule, as well as the burden, so that it is clear what this
provision means. One common misconception regarding this exception to
the rule is evident from our experience with the health care rules. The
Board decides first whether the proffered evidence is an extraordinary
circumstance. But even where the Board finds that an extraordinary
circumstance
[[Page 50157]]
exists, this does not mean that the requested unit is ``excepted'' from
being an appropriate unit. Rather, establishing extraordinary
circumstances means that the case will be decided by adjudication and
the requested unit may or may not be found appropriate.
We have codified one specific extraordinary circumstance in the
rule: where 10 per cent or more of the unit employees have temporarily
transferred to other facilities of the employer 10 per cent or more of
the time during the prior year. We also have requested comments on
whether this proposed level of interchange is appropriate.
The rule, however, also allows for other extraordinary
circumstances. We have suggested some possibilities in this
supplementary information. In Section III.B.1.b.6, we mentioned the
possibility that a successful history of bargaining on a broader basis
might be an extraordinary circumstance. Section III.B.1.c.5, footnote
9, suggests treating the existence of a small satellite facility as an
extraordinary circumstance. These, however, are merely suggestive of
the type of situations that might raise an extraordinary circumstance.
Invited comments may lead to our reassessing them.
Although we have described possible extraordinary circumstances,
there undoubtedly are others; obviously we cannot foresee all
circumstances involving the appropriateness of a requested single
facility unit. It is for this reason that we have included an
extraordinary circumstances exception. To the extent that there is
concern that by rulemaking we will preclude addressing unusual cases
outside the routine cases, we believe this provision adequately
addresses those concerns. We are not mandating any particular result by
characterizing a circumstance as extraordinary, but are only requiring
that it be decided by adjudication. In inviting comments, however, we
emphasize that it is our intention to construe this provision narrowly.
V. Docket
The docket is an organized and complete file of all the information
submitted to or otherwise considered by the NLRB in the development of
this proposed rulemaking. The principal purposes of the docket are: (1)
To allow interested parties to identify and locate documents so they
can participate effectively in the rulemaking process; and (2) to serve
as the record in case of judicial review. The docket, including a
verbatim transcript of any hearings that may be held, the exhibits, the
written statements, and all comments submitted to the Board, is
available for public inspection during normal working hours at the
Office of the Executive Secretary in Washington, DC.
VI. Regulatory Flexibility Act
As required by the Regulatory Flexibility Act (5 U.S.C. 601, et
seq.), the Board certifies that the proposed rule will not have a
significant economic impact on small entities. Prior to this rule,
parties before the Board were required to litigate the appropriateness
of a single location unit if they could not reach agreement on the
issue. On implementation of this rule, parties will no longer be
required in every case involving this issue to engage in litigation to
determine the appropriateness of units, thereby saving all the parties
the expense of litigation before the Board and the courts in cases
governed by the rule. To the extent that organization of employees for
the purpose of collective bargaining will be fostered by this rule,
thereby requiring small entities to bargain with unions, and that
employees may thereby exercise rights under the National Labor
Relations Act, as amended (29 U.S.C. 151, et seq.), the Board notes
that such was and is Congress' purpose in enacting the Act.
VII. Statement of Member Cohen
On June 1, 1994, the Board issued an Advance Notice of Proposed
Rulemaking (ANPR) with respect to a rule concerning single-facility
units. Although I had reservations about the wisdom and necessity for
such a rule, I joined my colleagues in issuing the ANPR. I did so
because public comment would serve to clarify the issues and to
enlighten the Board's decision-making processes concerning these
matters.
The comments have now been received, and I have studied them
carefully. Having done so, I am still not firmly persuaded that there
is a need for a rule. Further, assuming arguendo that there is such a
need, I have some reservations about the content of the rule proposed
by my colleagues. However, I have decided to withhold final judgment on
these matters, pending public response to the specific rule that is now
being proposed. Accordingly, without necessarily endorsing all that my
colleagues have said about the proposal, I join them in soliciting
further public response to it.
As I see it, the proposed rule departs from the multi-factorial
approach described in J & L Plate, 310 NLRB 429 (1993). Concededly,
that departure has the potential advantage of bringing greater clarity
and expedition to the processing and disposition of these cases. In
addition, it may reduce occasionally burdensome and expensive
litigation. On the other hand, the current system has its own values.
The relevant factors are well known, and they can be applied to
accommodate the peculiarities of individual cases. The Board decisions,
with rare exceptions, have been upheld by the courts. In addition, the
stipulation rate remains high. Finally, even the litigated cases are
usually resolved within a reasonably short period of time.
To be sure, there is always room for improvement, and some cases
linger far too long. As I see it, the issue before the Board is one of
balance: whether the potential benefits of obtaining greater expedition
and clarity under the proposed rule outweigh the potential risks of
jeopardizing the precision, stability, and general judicial acceptance
of the current approach. I welcome the public's experience and
expertise concerning the resolution of this delicate balance.
List of Subjects in 29 CFR Part 103
Administrative practice and procedure, Labor management relations.
Regulatory Text
For the reasons set forth at 59 FR 28501 (June 2, 1994) as
supplemented and modified by this Supplementary Information, 29 CFR
Part 103 is proposed to be amended as follows:
PART 103--OTHER RULES
1. The authority citation for 29 CFR Part 103 is revised to read as
follows:
Authority: 5 U.S.C. 553; 29 U.S.C.156.
2. Section 103.40 is added to subpart C to read as follows:
Sec. 103.40 Appropriateness of single location units.
(a) The rule in this section applies to all employers over which
the Board asserts jurisdiction except: public utilities; employers
engaged primarily in the construction industry; and employers in the
maritime industry in regard to their ocean-going vessels.
(b) An unrepresented single location unit shall, except in
extraordinary circumstances, be found appropriate for the purposes of
collective bargaining; Provided:
(1) That 15 or more employees in the requested unit are employed at
that location; and
(2) That no other location of the employer is located within one
mile of the requested location; and
(3) That a supervisor within the meaning of Section 2(11) of the
National Labor Relations Act is present at the
[[Page 50158]]
requested location for a regular and substantial period.
(c) Whenever a party, first through an offer of proof and then by
supporting evidence, establishes that an extraordinary circumstance
exists or where an employer falls outside the rule in this section, the
Board shall determine the appropriateness of a requested single
location unit by adjudication.
(d) An extraordinary circumstance will be found to exist, inter
alia, if 10 percent or more of the unit employees have been temporarily
transferred to other facilities of the employer for 10 percent or more
of their time during the 12 month period preceding the filing of a
petition for an election or, where no petition for election has been
filed during the 12 month period preceding either the demand for
recognition or the time when a bargaining obligation would arise.
Dated, Washington, DC, September 22, 1995.
By Direction of the Board.
National Labor Relations Board.
John J. Toner,
Acting Executive Secretary.
[FR Doc. 95-24001 Filed 9-27-95; 8:45 am]
BILLING CODE 7545-01-U
