The Neiman Marcus Group, Inc. d/b/a Bergdorf Goodman

50 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD The Neiman Marcus Group, Inc. d/b/a Bergdorf Goodman and Local 1102 Retail, Wholesale De- partment Store Union. Case 02–RC–076954 July 28, 2014 DECISION ON REVIEW AND ORDER REMANDING BY CHAIRMAN PEARCE AND MEMBERS MISCIMARRA, HIROZAWA, JOHNSON, AND SCHIFFER In this representation case, the Regional Director found that a petitioned-for bargaining unit of all wom- en’s shoe sales associates at the Employer’s retail store was appropriate under Specialty Healthcare & Rehabili- tation Center of Mobile, 357 NLRB 934 (2011), enfd. sub nom. Kindred Nursing Centers East, LLC v. NLRB, 727 F.3d 552 (6th Cir. 2013). Thereafter, in accordance with Section 102.67 of the National Labor Relations Board’s Rules and Regulations, the Employer filed a timely request for review of the Regional Director’s de- cision. The Employer argues that the petitioned-for unit is not appropriate under established law and, moreover, that the petitioned-for employees share an overwhelming community of interest with other selling employees. As a result, the Employer contends that an appropriate unit must include, at a minimum, all selling employees, in- cluding not only all sales associates, but also personal shoppers and sales assistants. Alternatively, the Em- ployer asserts that a storewide unit is appropriate. By Order dated May 30, 2012, the Board granted the Em- ployer’s request for review. An election was held on June 1, 2012, and the ballots were impounded. Having carefully considered the record, including the request for review, the Employer’s supplemental brief, the briefs of interested amici,1 and the answering brief submitted by the Petitioner, we adopt the Regional Di- rector’s findings and recommendations only to the extent consistent with this Decision on Review and Order Re- manding. Facts The Employer is a luxury retailer in Manhattan. Its operation consists of a Women’s store at 754 Fifth Ave- nue and a Men’s store at 745 Fifth Avenue. The Em- ployer employs a total of approximately 354 sales asso- ciates at these stores. The stores are organized into vari- ous departments. As relevant here, the petitioned-for 1 Amicus curiae briefs were submitted by: (1) The Chamber of Commerce and HR Policy Association; (2) The Coalition for a Demo- cratic Workplace, National Association of Manufacturers, National Association of Wholesaler-Distributors, National Federation of Inde- pendent Business, National Retail Federation, National Council of Chain Restaurants, International Foodservice Distributors Association, and International Council of Shopping Centers; and (3) Retail Industry Leaders Association and Retail Litigation Center. women’s shoes sales associates are located in two sepa- rate departments within the Women’s store. Salon Shoes, hereinafter “Salon shoes,” is located on the se- cond floor and is its own department. Contemporary Footwear, hereinafter “Contemporary shoes,” is located on the fifth floor and is part of the larger “Contemporary Sportswear” department, which sells ready-to-wear women’s apparel. There are 35 shoe sales associates in Salon shoes and 11 in Contemporary shoes. Bill Brobston is senior vice president and general manager with responsibility for both the Men’s and Women’s stores. Three directors of sales covering both the Women’s and Men’s stores report to Brobston. Each director of sales is responsible for several departments throughout the stores. One director is responsible for the Contemporary Sportswear department, including Con- temporary shoes, and another director is responsible for Salon shoes. Each floor of the Women’s store has a floor manager who reports to one of the directors and various department managers who report to the floor manager. Because Salon shoes and Contemporary shoes are locat- ed on different floors, they have different floor managers. In addition, as Salon shoes is its own department, it has its own department manager. Contemporary shoes, as part of a larger department, is managed by the Contem- porary Sportswear department manager. Sales associates in Salon shoes and Contemporary shoes share the same terms and conditions of employ- ment. Sales associates in both groups work 38.75 hours per week, have the same vacation and holiday benefits, are covered by the same health plans, and are subject to the same employee handbook. They both have personal lockers and access to an employee cafeteria. Sales asso- ciates in both groups receive monthly productivity goals and are evaluated on these goals, as well as the “soft skills” of creating a welcoming environment, exceeding customer expectations, and business develop- ment/statistics. Sales associates in Salon shoes and Contemporary shoes are paid on a “draw versus commission basis,” meaning that at the end of each week, the associate’s sales are calculated and the associate receives either the commission rate on those sales or the “draw rate,” whichever is higher. Sales associates working in Salon shoes earn a 9 percent commission; sales associates in Contemporary shoes earn a 10 percent commission. All other sales associates in the store earn a 3 to 5 percent commission and are paid on a “salary plus commission” basis, meaning that they are guaranteed a base salary and additionally earn a commission on the merchandise they sell. 361 NLRB No. 11 BERGDORF GOODMAN 51 There is no requirement that sales associates in either Salon shoes or Contemporary shoes have prior experi- ence selling shoes (or any product) in the retail industry, although most hires do have such experience. Newly hired sales associates in the petitioned-for unit attend a 3- to-5-day orientation class and are subject to a 6-month probationary period. There is no formal training pro- gram after the initial orientation. The Employer encourages all sales associates to make sales outside of their “home base,” meaning outside of the department where they work. This arrangement is known as “interselling.” Interselling includes escorting a customer from one department to another and ringing up her transaction in that other department. It also includes situations where a customer picks up a product in one department, walks to another department, and simply asks a sales associate in that department to ring them up there. Sales associates from other departments have made sales in both of the shoe departments, and associ- ates from Salon shoes and Contemporary shoes have sold products from different departments, including the other shoe department. The Employer holds morning meetings each day to enhance product knowledge. All employees are invited to attend, but some of the meetings are department- specific. In addition to the morning meetings, the Em- ployer holds designer and vendor meetings for employ- ees from multiple departments. There are also monthly storewide meetings for all employees, as well as monthly meetings for sales associates only. There have been approximately 38 transfers between departments since 2000. There were four transfers into the Women’s shoe departments, and none out. None of the transfers involved women’s shoe sales associates moving from one shoe department to the other, and sales associates in Salon shoes and Contemporary shoes do not substitute for one another or otherwise interchange. Analysis Specialty Healthcare, above, 357 NLRB 934, sets forth the principles that apply in cases in which a party contends that the smallest appropriate bargaining unit must include additional employees (or job classifica- tions) beyond those in the petitioned-for unit. As ex- plained in that decision, the Board must first assess, as in the usual case, whether the petitioned-for unit is an ap- propriate bargaining unit: the “employees in the peti- tioned-for unit must be readily identifiable as a group and the Board must find that they share a community of interest using the traditional criteria[.]” Id., at 944 fn. 25; see also id., at 941–942. If the petitioned-for unit satis- fies this standard, the burden is on the proponent of a larger unit to demonstrate that the additional employees it seeks to include share an “overwhelming community of interest” with the petitioned-for employees. Id. at 944–9463.2 In determining whether a petitioned-for unit is appro- priate, the Board weighs various community-of-interest factors, including whether the employees are organized into a separate department; have distinct skills and train- ing; have distinct job functions and perform distinct work; are functionally integrated with the Employer’s other employees; have frequent contact with other em- ployees; interchange with other employees; have distinct terms and conditions of employment; and are separately supervised. Id. at 942, quoting United Operations, Inc., 338 NLRB 123, 123 (2002). More than one appropriate bargaining unit can usually be defined from any particu- lar factual setting, and the petitioned-for unit need only be an appropriate unit, not necessarily “the single most appropriate unit.” Id. at 942, quoting American Hospital Assn., 499 U.S. 606, 610 (1991) (emphasis in original). In this case, the petitioned-for employees are readily identifiable as a group by virtue of their function: they comprise all sales associates at the Employer’s retail store who are dedicated to selling women’s shoes.3 However, we find, contrary to the Regional Director, that the petitioned-for unit is inappropriate because sales as- sociates in Salon shoes and Contemporary shoes lack a community of interest. As an initial matter, we acknowledge that the record shows that the petitioned-for employees share some community-of-interest factors. Specifically, the work of sales associates in Salon shoes and Contemporary shoes has a common purpose, in that they are the only employ- ees in the store who specialize in selling women’s shoes. In addition, the shoe sales associates in Salon shoes and Contemporary shoes are the only employees in the store to be paid on a “draw against commission” basis, and 2 Member Miscimarra agrees that the employees in a petitioned-for unit must be readily identifiable as a group and must share a communi- ty of interest based on the Board’s traditional criteria. However, Mem- ber Miscimarra would not apply Specialty Healthcare or the “over- whelming community of interest” standard to determine whether the petitioned-for unit must include additional employees. Rather, he would ask “whether the interests of the group sought are sufficiently distinct from those of other [excluded] employees to warrant establish- ment of a separate unit.” Wheeling Island Gaming, 355 NLRB 637, 637 fn. 2 (2010 (quoting Newton-Wellesley Hospital, 250 NLRB 409, 411–412 (1980)). In addition, he believes bargaining unit determina- tions should be circumscribed and guided by industry-specific stand- ards where applicable. See generally Macy’s, Inc., 361 NLRB 12, 33– 44 (2014) (Member Miscimarra, dissenting). 3 In Specialty Healthcare, the Board made clear that a petitioned-for unit may be readily identifiable as a group “based on job classifications, departments, functions [as here], work locations, skills, or similar fac- tors.” 357 NLRB at 945. DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 52 they receive the highest commission rates of any sales associates. Further, along with all other employees, the petitioned-for employees share the same hiring criteria, receive the same employee handbook, and have the same appraisal process. Notwithstanding these commonalities, the balance of the community-of-interest factors weighs against finding that the petitioned-for unit is appropriate. The bounda- ries of the petitioned-for unit do not resemble any admin- istrative or operational lines drawn by the Employer. As the Board explained in Specialty Healthcare, [i]t is highly significant that, except in situations where there is prior bargaining history, the community-of- interest test focuses almost exclusively on how the em- ployer has chosen to structure its workplace. As the Board has recognized, “We have always assumed it obvious that the manner in which a particular employer has organized his plant and utilizes the skills of his la- bor force has a direct bearing on the community of in- terest among various groups of employees in the plant and is thus an important consideration in any unit de- termination.” International Paper Co., 96 NLRB 295, 298 fn. 7 (1951). 357 NLRB at 942 fn. 19 (emphasis in original). Thus, in finding the petitioned-for unit appropriate in Macy’s, Inc., 361 NLRB 12 (2014), we found it particularly significant that the unit conformed to the departmental lines established by the employer in comprising all of the sales employees in the cosmetics and fragrances department.4 Similarly, in Northrup Grumman Shipbuilding, Inc., 357 NLRB 2015, 2018 (2011), enf. denied on other grounds sub nom. NLRB v. Enterprise Leasing Co. Southeast, LLC, 722 F.3d 609 4 Member Miscimarra dissented in Macy’s based on his view that the petitioned-for unit (consisting of salespersons in the cosmetics and fragrances department) was not appropriate under the Board’s tradi- tional community-of-interest standard. As noted above, Member Miscimarra in Macy’s also expressed his disagreement with the “over- whelming community of interest” standard articulated in Specialty Healthcare. Unlike Macy’s and Specialty Healthcare, however, the Board here finds that employees within the petitioned-for unit do not share a sufficient community of interest to render the unit appropriate. Therefore, the Board does not decide whether the petitioned-for unit inappropriately excludes other employees, nor does the Board’s dispo- sition depart from standards the Board has historically applied to the retail industry. Member Miscimarra joins in the Board’s decision here, but he does not join in those parts of the decision that discuss different facts that might make the petitioned-for unit appropriate. Member Johnson concurs in finding that the petitioned-for unit is not appropriate for collective bargaining. He did not participate in Macy’s and finds no need here to express his opinion whether that case or the Specialty Healthcare decision upon which the Macy’s majority relied were correctly decided. Further, like Member Miscimarra, Member Johnson does not join in those parts of the current decision that discuss different facts that might make the petitioned-for unit appropriate. (4th Cir. 2013), petition for writ of cert. filed, No. 13–671 (2013), the Board emphasized that the employer had “placed all [the petitioned-for employees] in a separate de- partment, under separate supervision,” in finding the peti- tioned-for unit appropriate. And in Specialty Healthcare, the petitioned-for unit consisted entirely of all the employ- ees in one particular job classification. Here, while the Salon shoes employees constitute the whole of their department, the petition carves the Con- temporary shoes employees out of a second department, Contemporary Sportswear, excluding the other sales as- sociates in that department. The carved-out Contempo- rary shoes employees are then grouped with the Salon shoes employees, who are located on a separate, nonad- jacent floor. The petition’s departure from any aspect of the Em- ployer’s organizational structure might be mitigated or outweighed by other community-of-interest factors. For example, if the Salon shoes and Contemporary shoes employees shared common supervision despite being located in different departments, that would show that the departmental distinctions were relatively less im- portant in the organization of the work force. No such facts, however, are present here. Rather, Salon shoes and Contemporary shoes sales associates have different de- partment managers, different floor managers, and even different directors of sales. It is only at the highest level of management at the store (the general manager) that the petitioned-for employees can be said to share supervi- sion. Similarly, significant interchange between the Salon Shoes department and the carved-out Contemporary shoes group could support a finding of community of interest notwithstanding the division of the Contempo- rary Sportswear department. However, sales associates in Salon shoes and Contemporary shoes do not inter- change with each other on either a temporary or a per- manent basis and have only limited contact. There is no evidence that any sales associates in Salon shoes have been asked to work in Contemporary shoes, or vice ver- sa, and none of the four employees who have transferred into one of the shoe areas since 2004 was a shoe sales associate moving between the two areas. In addition, contact among the petitioned-for employees is limited to attendance at storewide meetings and daily incidental contact related to sharing the same locker room, cafete- ria, etc. We recognize that the Employer encourages sales associates to sell merchandise in departments other than their own through the interselling process. Howev- er, the extent of contact that the sales associates have with one another, as part of the interselling process, is unclear. Further, the record before us shows that the BERGDORF GOODMAN 53 sales associates in Salon shoes and Contemporary shoes make less than one percent of their overall sales in the other shoe department.5 In conclusion, while some factors favor a finding of community of interest, they are ultimately outweighed, 5 Other factors that might serve to justify dividing the Contemporary Sportswear department to group its shoe sales associates with the Salon Shoes department are shared skills and training. Again, however, there is no evidence in the record establishing that sales associates in Salon shoes and Contemporary shoes share any distinct skills or have re- ceived any specialized training. The Employer does not require that associates in either department have shoe-selling experience or prior training. All newly hired employees attend the same orientation pro- gram that the petitioned-for employees attend, and there is no formal ongoing training program. When asked how he was trained in the women’s shoe department, a sales associate in Salon shoes (the only employee who testified), said that he attended orientation meetings and then “I wasn’t trained, really. Basically, you learn by yourself. No one trains you to sell shoes.” on these facts, by the lack of any relationship between the contours of the proposed unit and any of the adminis- trative or operational lines drawn by the Employer (such as departments, job classifications, or supervision), com- bined with the complete absence of any related factors that could have mitigated or offset that deficit. Accord- ingly, the petitioned-for unit is not appropriate, inasmuch as the petitioned-for employees lack a community of interest. It is therefore unnecessary for us to examine whether any of the other employees whom the Employer proposes including in the unit share an overwhelming community of interest with petitioned-for employees. The petition is dismissed. ORDER IT IS ORDERED that the election held on June 1, 2012, be vacated, and that the case be remanded to the Region- al Director for further appropriate action.