Bergdorf Goodman Sales Associates From Separate Shoe Departments Lacked Community of Interest: NLRB

Practical Law Legal Update 0-576-3526 (Approx. 6 pages)

Bergdorf Goodman Sales Associates From Separate Shoe Departments Lacked Community of Interest: NLRB

by Practical Law Labor & Employment

Background

Neiman Marcus’s Bergdorf Goodman store is a luxury department store in Manhattan, comprised of a women’s store and a separate men’s store. Local 1102 of the Retail, Wholesale Department Store Union petitioned for an election, seeking to represent a unit of women’s shoes sales associates located in two separate departments in the women’s store. Salon Shoes is located on the second floor and is its own department. Contemporary Footwear is located on the fifth floor and is part of the larger Contemporary Sportswear department. There are 35 shoe sales associates in Salon shoes and 11 in Contemporary shoes. Bergdorf has three sales directors each responsible for several departments in the men’s and women’s stores. One sales director is responsible for the Contemporary Sportswear department, including Contemporary shoes, and another director is responsible for Salon shoes. Salon shoes and Contemporary shoes are located on different floors and therefore have different floor managers. They also have different department managers.

Sales associates in Salon shoes and Contemporary shoes share the same terms and conditions of employment, for example they both:

Work 38.75 hours per week.
Have the same vacation and holiday benefits.
Are covered by the same health plans.
Are subject to the same employee handbook.
Have personal lockers.
Have access to an employee cafeteria.
Share the same monthly productivity goals.
Are subject to the same experience requirement and orientation program for new hires.

However, sales associates in Salon shoes and Contemporary shoes earn a different rate of commission. Sales associates from Salon shoes and Contemporary shoes have engaged in "interselling" (making sales outside of their own department) as they are encouraged to do so by the employer.

Bergdorf holds the following inter-departmental meetings:

Morning meetings each day to enhance product knowledge to which all employees are invited.
Designer and vendor meetings for employees from multiple departments.
Monthly storewide meetings for all employees.
Monthly meetings for sales associates only.

Since 2000, there have been four transfers into the women’s shoe departments and no transfers out. None of the transfers involved women’s shoe sales associates moving between Salon shoes and Contemporary shoes and sales associates in Salon shoes and Contemporary shoes do not substitute for each other or otherwise interchange.

The Regional Director found that the petitioned-for bargaining unit was appropriate under Specialty Healthcare & Rehabilitation Center of Mobile, 357 N.L.R.B. slip op. 83 (Aug. 26, 2011). Neiman filed a request for review, arguing that:

The petitioned-for unit is not appropriate under established law.
That the petitioned-for employees share an overwhelming community of interest with other selling employees.
An appropriate unit must include, at a minimum, all selling employees, including not only all sales associates, but also personal shoppers and sales assistants.
Alternatively, a storewide unit is appropriate.

On May 30, 2012, the Board granted the employer’s request for review. An election was held on June 1, 2012 and the ballots were impounded.

Outcome

The Board (Chairman Pearce and Members Miscimarra, Hirozawa, Johnson and Schiffer, with Member Miscimarra concurring in-part) held, contrary to the Regional Director, that the petitioned-for unit is inappropriate because the sales associates in the petitioned-for unit lack a community of interest under Specialty Healthcare.

The Board found that:

The petitioned-for employees are readily identifiable as a group by virtue of their function. They comprise all sales associates selling women’s shoes at Bergdorf's retail store.
The record shows that the petitioned-for employees share some community-of-interest factors, specifically they:
- are the only employees in the store who specialize in selling women's shoes;
- are the only employees in the store to be paid on a draw against commission basis;
- receive the highest commission rates of any sales associates; and
- share, along with all other employees, the same hiring criteria, employee handbook and appraisal process.
The balance of the community-of-interest factors weighs against finding that the petitioned-for unit is appropriate. Significantly under Specialty Healthcare, the boundaries of the petitioned-for unit do not resemble any administrative or operational lines drawn by Neiman. For example:
- unlike the employees in Macy's Inc. who were all of the sales employees in the cosmetics and fragrances department, those in the petitioned-for unit do not fall within a single Bergdorf department (361 N.L.R.B. slip op. 4 (July 22, 2014); for more information, see Legal Update, Micro-unit of Macy's Cosmetics Employees is Appropriate under Specialty Healthcare: NLRB);
- unlike the employees in Northrup Grumman Shipbuilding, Inc., the employees in the petitioned-for unit were in a separate department and under separate supervision (357 N.L.R.B. slip op. 163, at 4 (Dec. 30, 2011)); and
- unlike the employees in Specialty Healthcare, the employees in the petitioned-for unit did not consist entirely of all the employees in one particular job classification.
Salon shoes and Contemporary shoes sales associates have different department and floor managers and different sales directors. It is only at the highest level of management at the store (the general manager) that the petitioned-for employees share supervision.
Sales associates in Salon shoes and Contemporary shoes do not interchange with each other on either a temporary or a permanent basis and have only limited contact. There is no evidence that any sales associates in one shoe department have been asked to work in the other, and none of the four employees who transferred into one of the shoe departments have moved between the two departments.
Contact among the petitioned-for employees is limited to attendance at storewide meetings and daily incidental contact related to sharing the same locker room and cafeteria.
The extent of contact that the sales associates have with one another, as part of the interselling process encouraged by Bergdorf, is unclear. However, the record shows that the sales associates in Salon shoes and Contemporary shoes make less than one percent of their overall sales in the other shoe department.
Although some factors favor a finding of community of interest, they are ultimately outweighed by the lack of any relationship between the organization of the petitioned-for unit and any of Bergdorf’s administrative or operational lines (such as departments, job classifications or supervision). There were also no related factors that could have mitigated or offset those factors.

Having concluded that the petitioned-for unit was not appropriate for lack of a community of interest among the petitioned-for employees, the Board found it was unnecessary to decide whether any of the other employees the employer asserted should be including in the petitioned-for unit shared an overwhelming community of interest with petitioned-for employees.

Member Miscimarra concurred, agreeing with the result that the petitioned-for unit is not appropriate, but disagreeing that Specialty Healthcare and its "overwhelming community of interest" burden should apply to unit determination cases.

Practical Implications

Employers might at first be encouraged by this decision since it is one of the few decisions after Specialty Healthcare in which the Board found a petitioned-for unit not to be appropriate. However, the decision is less a win than a deferred loss. The Board’s application of Specialty Healthcare to this retail setting:

Does not encourage storewide bargaining units, as were presumed appropriate units in retail operations in now abandoned Board precedent.
Effectively encourages the union in this case to petition for two separate sales associate units from Salon shoes and Contemporary shoes (or the Contemporary department).

The decision also does not suggest that similarities in the employment terms for sales associates across all departments would:

Show that a storewide sales associate bargaining unit has an overwhelming community of interest. The Board declined to address that issue.
Be material to any considerations other than showing that each of the employees in a prospective Salon shoes, Contemporary shoes or Contemporary department unit have a community of interest with each other sufficient to make them an appropriate stand-alone unit.

The presumption that the appropriate bargaining unit for retail stores is a store-wide unit has been overturned by Specialty Healthcare. However, this case sets out an effective blue print for operations and arguments to refute a micro-unit that spans two departments and is based primarily on the category of product a sales associate sells in a post-Specialty Healthcare legal landscape.

Bergdorf Goodman Sales Associates From Separate Shoe Departments Lacked Community of Interest: NLRB | Practical Law