Worker’s Choice Avoids Micro-unions

In the private sector, most unions are the exclusive representative for all employees in a unit.  Labor experts, such as former chair of the NLRB and President Clinton appointee William Gould, scholar Charles J. Morris and the Heritage Foundation’s James Sherk, maintain that private sector unions may create “members-only agreements.”[8] Members-only agreements allow unions to negotiate contracts that cover only dues-paying members, effectively eliminating the free/forced rider issue, but these agreements do not grant unions the same privileges as organizing under the NLRA.  

There are developments under way, however, that might allow members-only agreements to gain the power of exclusive representation, and this could pose significant problems for both public and private sector employers. As opposed to the one-or-none component of Worker’s Choice, members-only agreements with the power of exclusive representation could lead to “micro-unions,” which some unions are trying to implement in the private sector through reinterpretations of federal labor law.

A recent ruling by the NLRB may have given micro-unions a jump start. In the Specialty Healthcare decision, the NLRB started to redefine the parameters of the size of a collective bargaining unit. The ruling appears to allow unions to organize hyper-specific units within an employee group in the same business.

For example, in August 2014, the NLRB used the Specialty Healthcare decision to justify allowing 41 cosmetics and fragrances employees in a Macy’s store in Saugus, Mass. to petition to form a micro-union. These 41 employees are only a third of the store’s 120 “selling” employees (sales people in similar positions to the cosmetics and fragrances employees) and just over a quarter of the store’s total employees.[9]

The decision enables the 41 employees to petition for an election to organize a union. Even if every cosmetics and fragrances employee votes to unionize, it will only amount to a fraction of the store’s employees. If the union is formed by a slim margin in the election, less than one in five of the store’s employees will have voted for the union, but Macy’s will, nevertheless, be obligated to negotiate a contract with the union (in this case, the United Food and Commercial Workers).[10]

Michael Lotito, a management-side attorney in San Francisco, told The Wall Street Journal after the decision, “The [NLRB] is very well-positioned to give unions an enormous organizing advantage by determining these small units.”[11]

Micro-unions show the potential for abuse if members-only agreements are given too much power. Many established unions are not likely to adopt these agreements without the privileges of exclusive representation.[*] As a result, members-only agreements in the private sector are currently still rare.

In many states, it is illegal for public sector unions to have members-only agreements, because, as mentioned, state law requires public sector unions to be the “exclusive representatives” of all the employees in an employee group.[†] States with exclusive representation laws for public sector unions creates the one-or-none component of Worker’s Choice and prevents against the creation of micro-unions.

[*] Without exclusive representation, an employer does not have a duty to bargain with a members-only union. The union does not have the protection from so-called “raiding,” or attempts by other unions to organize the same workers. (Unions with exclusive representation privileges are protected against raiding for a certain number of years after they sign a contract with an employer.)

[†] For example, Michigan’s law states, “Representatives designated or selected for purposes of collective bargaining by the majority of the public employees in a unit appropriate for such purposes, shall be the exclusive representatives of all the public employees in such unit for the purposes of collective bargaining in respect to rates of pay, wages, hours of employment or other conditions of employment, and shall be so recognized by the public employer” (emphasis added).

Michigan’s use of “shall be” eliminates the ability for government unions to enter into members-only agreements. The statute also provides individual employees the ability to adjust grievances with their employer, if a grievance is outside the collective bargaining agreement so long as the union has the ability to be present during the grievance adjustment. However, nearly all grievances are likely to fall under the terms of the collective bargaining agreement, and thus the union would represent these employees, even against the employees’ will. MCL § 423.211.