Header graphic for print
The Labor & Employment Report

Specialty Healthcare Watch: Odwalla Inc.

Posted in Labor Law & NLRB, Unions

In this first edition of Specialty Healthcare Watch, I will examine the first case that applied Specality Healthcare, Odwalla Inc., 357 NLRB No. 132 (2011).

This case starts off by answering an important question that management had following Specialty Healthcare — that is, does Specialty Healthcare apply outside the non-acute healthcare setting?  Remember, Specialty Healthcare was a nursing home case and there was some speculation that perhaps the NLRB intended for that holding to be limited to those facilities.

Odwalla answered that question: Specality Healthcare applies everywhere.   Odwalla involves a juice and fruit bar company in California.   It could not be a  more different work setting than a nursing home. 

Next, let’s delve into the bargaining unit in question.  Possible inclusions fell into the following classifications: 26 route service representatives (RSR’s), who are basically sales and delivery drivers;  an unspecified number of “swing reps” who work as relief drivers and warehouse fill-ins as needed; 3 warehouse associates; 4 cooler technicians — and the controversial group, 5 merchandisers.  The employer has two facilities — a distribution center where it sells and delivers products and a divisional refurbishment center, at which it repairs coolers.

The union wanted the five merchandisers out of the bargaining unit, the employer wanted them in.  The Board looked at the following factors:

Classification — The Board said that the proposed unit excluding merchandisers was not a classification based unit because it “aggregates varied classifications” — RSR’s, swing reps, warehouse associates, cooler techs.    It also includes employees that are considered sales — the RSR’s — and employees considered part of operations, such as warehouse associates and cooler techs.

Function — the Board goes into some detail about what each job classification actually does.   Here, the Merchandisers are described as being assigned to various customer locations, stocking and rotating products, removing expired and unsold products, building and managing displays, hanging price tags, maintaining customer relationships, and communicating service issues to the appropriate managers.  All in all, their work resembled RSRs in many ways.   There were some differences — RSRs for example do not work from home, drive company-owned refrigerated trucks, and do not use handheld computers — but the Board found that, on the whole, the functions are “very similar.”

Supervision — No dice here either for the union.   RSRs and merchandisers have one supervisory structure, whereas, swing reps, warehouse associates and cooler technicians have another.

Pay – The Board found that the RSRs receive a base salary, potentially significant commissions, and sales based bonuses and incentives.  This compensation was “fundamentally different” from the merchandisers, warehouse associates, cooler techcs, and swing reps.

Location – The union almost wins on this argument.  The merchandisers work from home and thus do not spend their time at either facility.   But, the Board found that the “facts sharply reduce the significance of this consideration.”  Which facts?  (1) the cooler techs work in a different building and do not interact with the other employees;  (2) More importantly, the RSRs — which the union wanted to include in the union — spend about 90% of their time away from the facility; (3) Various other employees also spend “significant portions of their worktime” away from the facility.

As a result, the Board found that the merchandisers share an overwhelming community of interest with the recommended unit because “none of the traditional bases for drawing unit boundaries used by the Board supports excluding the merchandisers.”

Some thoughts for employers:

1.) The overwhelming community of interest as applied in this case seems like proving a negative — if you go through all of the traditional bases and there is still no reason to exclude, then you should include, provided the traditional community of interest test is met.   That puts some important meat on the Specialty Healthcare bone that was missing prior to this case.

2.) Classification, Function, Supervision, Pay, and Location — these are five variables that should be considered in a Specialty Healthcare analysis.   If you can make an argument that the excluded employees should not be excluded on any of these bases, this should satisfy the overwhelming community of interest burden.   At least it was enough for the Board in Odwalla.