Nestle Dreyer's Ice Cream Co. v. National Labor Relations Board
2016 U.S. App. LEXIS 7523
| 4th Cir. | 2016Background
- Dreyer’s Bakersfield Operations Center (BOC) employed ~113 maintenance and ~578 production workers; maintenance staff perform skilled repairs, work different shifts, have higher pay, distinct supervision and departmental organization, and rarely perform production work.
- The International Union of Operating Engineers petitioned to represent maintenance employees only; the Regional Director (RD) certified the maintenance-only unit and the Board upheld that decision after review. Maintenance employees voted for union representation; Dreyer’s refused to bargain, triggering unfair labor practice proceedings and Board summary judgment for the Union.
- The RD applied the Board’s community-of-interest analysis (as clarified in Specialty Healthcare) and found maintenance employees form a distinct group appropriate for a separate bargaining unit; Dreyer’s challenged both the unit determination and the Specialty Healthcare framework.
- Dreyer’s argued the Board’s use of the “overwhelming community of interest” test impermissibly gave controlling weight to the extent of union organization (citing Lundy), that Specialty Healthcare repudiated decades of precedent without sufficient explanation, and that adopting the standard by adjudication violated the APA.
- The Fourth Circuit held the RD properly applied traditional community-of-interest factors at step one, then correctly required Dreyer’s to show an ‘‘overwhelming community of interest’’ at step two; it denied Dreyer’s petition for review and enforced the Board’s order.
Issues
| Issue | Dreyer’s Argument | Board/Union Argument | Held |
|---|---|---|---|
| Whether a maintenance-only unit is appropriate | Maintenance and production share enough interests/overlap that production employees must be included | Maintenance employees are a distinct group with different skills, pay, hours, supervision, and little interchangeability | Maintenance-only unit is appropriate; RD’s community-of-interest findings upheld |
| Validity of Specialty Healthcare two-step framework | The overwhelming-community-of-interest test improperly presumes the union’s proposed unit and gives controlling weight to organization (violates NLRA/Lundy) | Specialty Healthcare merely clarifies burden-shifting: step one tests appropriateness; step two requires employers prove excluded employees share an overwhelming community of interest | Specialty Healthcare framework valid as applied here; Lundy distinguished where step-one analysis is rigorous |
| Whether Specialty Healthcare unlawfully repudiated prior precedent or lacked reasoned explanation | Board changed longstanding law without adequate explanation | Board clarified and did not materially alter precedent; explanation sufficed for review | No abuse of discretion; changes were explanatory and consistent with prior precedent |
| Whether adopting the overwhelming-community test required rulemaking (APA) | Adoption was a new binding rule of wide application that should have come via notice-and-comment rulemaking | Board may clarify evidentiary burdens via adjudication; Specialty Healthcare clarified burden in an adjudicative context | No APA violation; adjudication was proper here |
Key Cases Cited
- Sandvik Rock Tools, Inc. v. NLRB, 194 F.3d 531 (4th Cir. 1999) (Board exercises broad discretion in unit determinations)
- NLRB v. Enter. Leasing Co. Se., 722 F.3d 609 (4th Cir. 2013) (employer bears burden to show unit is utterly inappropriate)
- Am. Hosp. Ass’n v. NLRB, 499 U.S. 606 (1991) (Board need not select single most appropriate unit)
- Lundy Packing Co. v. NLRB, 68 F.3d 1577 (4th Cir. 1995) (Board may not give controlling weight to union organization; disapproved exclusion based on meager differences)
- Overnite Transp. Co. v. NLRB, 294 F.3d 615 (4th Cir. 2002) (discusses Board policy on accepting union-proposed units and limits of organization factor)
- Blue Man Vegas, LLC v. NLRB, 529 F.3d 417 (D.C. Cir. 2008) (use of "overwhelming community of interest" formulation endorsed where step-one analysis establishes prima facie appropriateness)