Macy's, Inc. v. Nat'l Labor Relations Bd.

• Decision Date: 02 June 2016
• Docket Number: No. 15-60022,15-60022
• Citation: 824 F.3d 557
• Parties: Macy's, Incorporated, Petitioner Cross–Respondent v. National Labor Relations Board, Respondent Cross–Petitioner.
• Court: U.S. Court of Appeals — Fifth Circuit

824 F.3d 557

Macy's, Incorporated, Petitioner Cross–Respondent

v.National Labor Relations Board, Respondent Cross–Petitioner.

No. 15-60022

United States Court of Appeals, Fifth Circuit.

Filed June 2, 2016

Shay Dvoretzky, Jones Day, Washington, DC, Willis J. Goldsmith, Jones Day, New York, NY, for Petitioner Cross–Respondent.

Linda Dreeben, Esq., Deputy Associate General Counsel, Julie Brock Broido, Supervisory Attorney, Gregory Paul Lauro, Trial Attorney, National Labor Relations Board, Appellate & Supreme Court Litigation Branch, Washington, DC, Jonathan Kreisberg, National Labor Relations Board, Regional Office, Boston, MA, for Respondent Cross–Petitioner.

Alfred Sebastian Gordon, O'Connell, Pyle, Rome, Ehrenberg, P.C., Boston, MA, Matthew James Ginsburg, AFL–CIO, Washington, DC, for Intervenor.

Todd Clifford Duffield, Ogletree Deakins, P.C., Atlanta, GA, for Amicus Curiae Coalition for a Democratic Workplace, Chamber of Commerce of the United States of America, International Foodservice Distributors Association, National Association of Manufacturers, National Association of Wholesaler–Distributors, National Federation of Independent Business, Society for Human Resource Management, National Restaurant Association.

Howard Shapiro, Esq., Proskauer, New Orleans, LA, for Amicus Curiae HR Policy Association.

Jason C. Schwartz, Esq., Gibson, Dunn & Crutcher, L.L.P., Washington, DC, for Amicus Curiae Retail Litigation Center, National Retail Federation.

Before BENAVIDES, DENNIS, and COSTA, Circuit Judges.

JAMES L. DENNIS

, Circuit Judge:

The National Labor Relations Board (NLRB or the Board) certified a collective-bargaining unit consisting of all cosmetics and fragrances employees at the Saugus, Massachusetts, Macy's department store. After Macy's refused to bargain with Local 1445, United Food and Commercial Workers Union (the Union), which was certified as the unit's bargaining representative, the Board filed an unfair labor practices order. Macy's filed a petition for review with this court, contending that (1) the Board applied a legal standard that violated the National Labor Relations Act (NLRA or the Act) and otherwise committed an abuse of discretion; and (2) under the proper legal standard as well as the incorrect legal standard upon which the Board relied, all selling employees must be included in the petitioned-for unit.¹ The Board filed a cross-application for enforcement of its order. Because the Board did not violate the NLRA or abuse its discretion in certifying the unit of cosmetics and fragrances employees, we DENY the petition for review and GRANT the Board's cross-petition for enforcement of its order.

I.

A.

Macy's operates a national chain of department stores, including one in Saugus, Massachusetts. The Saugus store is divided into eleven primary sales departments: juniors, ready-to-wear, women's shoes, handbags, furniture (also known as big ticket), home (also referred to as housewares), men's clothing, bridal, fine jewelry, fashion jewelry, and cosmetics and fragrances. The petitioned-for unit includes all full-time, part-time, and on-call employees employed in the Saugus store's cosmetics and fragrances department, including counter managers, beauty advisors, and all selling employees in cosmetics, women's fragrances, and men's fragrances.

The cosmetics and fragrances department is located in two areas within the Saugus store, on the first and second floors; the two areas are connected by a bank of elevators. Each of the two selling areas is spatially distinct from the other primary sales departments. Cosmetics beauty advisors are specifically assigned to one of eight counters in the first floor cosmetics area, each of which is dedicated to selling products from one of eight primary cosmetics vendors. Cosmetics beauty advisors typically sell only one vendor's products, which they also use to give customers makeovers. Fragrances beauty advisors are assigned to either the men's or the women's fragrances counter, and they sell all available men's or women's products, regardless of the vendor. Cosmetics and fragrances beauty advisors keep lists of their regular customers, which they use to invite customers to product launches or to book appointments to give customers makeovers. Although cosmetics and fragrances employees occasionally assist other departments with inventory, the record is clear that cosmetics and fragrances employees are never asked to sell in other departments, nor are other selling employees asked to sell in the cosmetics and fragrances department.

Six of the eight cosmetics counters, the women's fragrances counter, and the men's fragrances counter each have a counter manager who, in addition to selling products, helps organize promotional events, monitors the counter's stock, coaches beauty advisors on customer service and selling technique, ensures that the counter is properly covered by beauty advisors, and schedules visits by vendor employees, such as sprayers and makeup artists. Finally, the department has seven on-call employees who, unlike the beauty advisors, may work at any of the ten counters. There is no indication that any other primary sales department has the equivalent of counter managers, and the record is unclear as to whether the other primary sales departments have the equivalent of on-call employees.

Outside of the cosmetics and fragrances department the Saugus store has approximately thirty non-selling employees (a receiving team, a merchandising team, and staffing employees) and eighty selling employees organized within the other ten primary sales departments. Most, but not all, of the other departments have their own sales manager, and at least some of them are divided into sub-departments. Certain other primary sales departments have specialist sales employees who, like the cosmetics beauty advisors, specialize in selling a particular vendor's products; in those departments, vendor representatives monitor stock and train selling employees on selling technique and product knowledge.

Cosmetics and fragrances employees and other selling employees have some incidental contact: cosmetics and fragrances employees occasionally assist in storewide inventory, and all employees whose shifts correspond with the store's opening attend brief daily “rallies” at which management reviews the previous day's sales figures and any in-store events that are taking place that day. In addition, all selling employees work shifts during the same time periods, use the same entrance, have the same clocking system, and use the same break room. However, the record contains little evidence of temporary interchange between cosmetics and fragrances employees and other selling employees.

Although compensation differs, all selling employees enjoy the same benefits, are subject to the same employee handbook, and have access to the same in-store dispute resolution program. All selling employees are evaluated based on the same criteria. Finally, all selling employees are coached through the same program designed to improve selling techniques and product knowledge.

B.

In October 2012, the Union filed a petition with the Board seeking a representation election among all cosmetics and fragrances employees at the Saugus store. In November 2012, the Board's Acting Regional Director (ARD) issued a Decision and Direction of Election in which he found that a petitioned-for bargaining unit of cosmetics and fragrances employees, including counter managers, employed by Macy's at its Saugus store was appropriate. Thereafter, Macy's filed a timely request for review. Macy's contended that the smallest appropriate unit must include all employees at the Saugus store or, in the alternative, all selling employees at the store. The Union filed an opposition. In December 2012, the Board granted the Employer's request for review.

In making a determination as to the appropriateness of the bargaining unit, the Board applied the “overwhelming community of interest” test set forth in Specialty Healthcare and Rehabilitation Center of Mobile , 357 NLRB No. 83, 2011 WL 3916077 (2011)

, enforced sub nom.

Kindred Nursing Centers East, LLC v. NLRB , 727 F.3d 552 (6th Cir. 2013). The Board determined that the cosmetics and fragrances employees share a community of interest, finding that all of the petitioned-for employees: work in the same department and in the same two connected, distinct work areas; have common, separate supervision; work with a shared distinct purpose and functional integration; have little contact with other selling employees; and are paid on the same basis, receive the same benefits, and are subject to the same employer policies.

The Board then addressed Macy's contention that the smallest appropriate unit must include a wall-to-wall unit of all Saugus store employees, or, alternatively, all selling employees at the store. The Board explained that Specialty Healthcare requires an employer to demonstrate that the excluded employees share an “overwhelming community of interest” with the employees in the petitioned-for unit, such that their community of interest factors “overlap almost completely.” While acknowledging that the petitioned-for unit shared some factors with certain other selling employees, the Board concluded that a storewide unit was not required.

Finally, the Board addressed Macy's contention that Specialty Healthcare deviated from a line of precedent holding that a storewide unit is “presumptively appropriate” within the retail industry. After considering the relevant precedent, the Board concluded that it has, “over time, developed and applied a standard that allows a less-than-storewide unit so long as that unit is identifiable, the unit employees share a community of interest, and those employees are sufficiently distinct from other store employees.” It therefore found that the petitioned-for unit was appropriate under Board precedent even without reference to Specialty Healthcare .

After Macy's...