Woodbridge Winery, California
Woodbridge Winery, California (Facebook)

A framework for evaluating proposed bargaining units under the National Labor Relations Act has been adopted by the U.S. Court of Appeals for the Second Circuit.

In an organizing dispute at the Woodbridge Winery in California, the circuit held to be lawful the analysis used by the National Labor Relations Board (NLRB) in examining a potential bargaining unit.

The two-part test, the court said, is whether a proposed bargaining unit consists of employees who share a “community of interests” and does not “arbitrarily exclude other employees.”

The issue arose in Constellation Brands v. National Labor Relations Board, 15-2442-ag, a contest over the organization of the winery’s cellar operations department.

The department has two subgroups: a 46-employee “outside cellar” and an 18-employee “barrel” group, and the question was whether the two groups were sufficiently distinct such that they could be treated separately in collective bargaining.

In 2014, when the Teamsters Local 601 union sought to represent just the outside cellar group, an NLRB regional director, applied the standard outlined in Specialty Healthcare and Rehabilitation Center of Mobile, 357 N.L.R.B. 934 (2011), and found the outside cellar group to be an appropriate bargaining unit.

Cellar employees voted 31-13 to unionize, Constellation refused to bargain and the NLRB concluded it violated the act. Constellation, a New York-based corporation, then petitioned for review.

Judges John Walker Jr., Jose Cabranes and Raymond Lohier said they were joining their fellow circuits in finding that the Specialty Healthcare framework was legal.

Cabranes, writing for the court, said the NLRB “has long disfavored fractured units that may arbitrarily exclude certain groups of employees or could invite ‘gerrymandering’ of interests among employees.”

Opponents of the Specialty Healthcare test, he said, argue that it “essentially creates a presumption in favor of ‘micro’ unions, causing the undue proliferation of bargaining units that make it difficult for employers to settle labor disputes and that arbitrarily exclude certain employees” while increasing costs for employers.

Constellation argued the test is inconsistent with the NLRB, a departure from the NLRB’s past precedents, and basically “rubber stamps a union’s organizing efforts by presumptively approving the petitioned-for unit and creating too high a burden for the objecting party.”

But Cabranes said Specialty Healthcare didn’t significantly redefine the showing required for greenlighting a bargaining unit, nor does it give organizers an “inappropriate degree of control.”

The problem here, he said, was that the regional director misapplied the standard.

From the get-go, he said, the regional director should “(a) identify shared interests among members of the petitioned-for unit, and (b) explain why excluded employees have meaningfully distinct interests … that outweigh similarities with unit members.”

“Merely recording similarities or differences between employees” is not enough, Cabranes said. “Explaining why the excluded employees have distinct interests in the context of collective bargaining is necessary to avoid arbitrary lines of demarcation and to avoid making step one of the Specialty Healthcare framework a mere rubber stamp.”

Shay Dvoretzky, partner at Jones Day, argued for Constellation.

NLRB attorney Greg Lauro argued for the board.

The AFL-CIO’s Matthew Ginsburg and Robert Bonsall, partner, Beeson, Tayer & Bodine in Sacramento represented the intervenors, Local 601.