Constellation obtains rare victory in micro-bargaining unit case

Client(s) Constellation Brands U.S. Operations, Inc.

Jones Day client Constellation Brands U.S. Operations, Inc. secured a rare victory in a case challenging a National Labor Relations Board ("NLRB" or "Board") unit determination. The Second Circuit admonished the Board for failing to adequately explain the legal significance of purported factual differences between employees within and outside the petitioned-for unit --here, the "outside cellar" employees at a single Constellation winery. Judge Cabranes, writing for the court, made clear that the Board cannot just rubber-stamp the union's choice of unit. He noted that while Regional Directors have broad discretion in determining the appropriateness of a unit, that discretion is not unlimited. The court confirmed that step one of the standard articulated in Specialty Healthcare & Rehabilitation Center of Mobile, 357 N.L.R.B. 932 (2011), has teeth:  it requires the Board to consider whether members of the proposed unit have interests that are "separate and distinct" from excluded employees. In this case, the court found that the Regional Director did not explain why, based on his factual findings, the petitioned-for group had distinct interests, or why any such interests outweighed similarities with excluded employees. In other words, he did not explain the weight or relevance of his factual findings. As such, the court could not rule out the possibility that other employees were arbitrarily excluded from the unit.

This decision should encourage employers concerned that the Board's Specialty Healthcare standard creates a virtually irrebuttable presumption in favor of the union's choice of bargaining unit. The Board is now on notice that its unit determinations may not be enforced if—at step one of the Specialty Healthcare analysis—it does not adequately explain both the community of interest shared by petitioned-for employees and why those interests are sufficiently distinct from those of excluded employees. Employers facing petitions for units excluding similarly situated employees now have a stronger basis to contest a finding that the unit is appropriate if the Regional Director does not offer a thorough analysis that explains the legal significance of any factual distinctions it identifies.

Constellation Brands, U.S. Operations, Inc. v. Nat'l Labor Relations Bd., Nos. 15-2442; 15-4106 (2d Cir. Nov. 21, 2016)