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Unionization Loopholes Theyre Tight

With ‘card check’ top of mind, some opponents have dug up an old National Labor Relations Board regulation and claimed that many small businesses are exempt from union activity. That’s not necessarily true.

March 6, 2009
Related Topics: Labor Relations, Workforce Planning
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With "card check" top of mind, some opponents have dug up an old National Labor Relations Board regulation and claimed that many small businesses are exempt from union activity.

    That’s not necessarily true.

    In a 1959 ruling, the NLRB established that it would have jurisdiction only over private companies doing business across state lines and meeting certain minimum sales levels: $500,000 for retail and $50,000 for nonretail (though certain industries have special limits). Those figures remain the same today.

    But that doesn’t mean employees at those companies can’t organize, or protest and attempt to negotiate better working conditions. It does mean, however, that in doing so, they would be on their own, with no NLRB protection against unfair labor practices.

    That said, "It’s actually very easy for us to assert jurisdiction over employers because interstate commerce doesn’t have to be direct," says Gail Moran, assistant to the regional director for the NLRB in Chicago. It could be argued, for instance, that a local restaurant doing business with a cross-state food supplier is engaged indirectly in interstate commerce.

    Which is why, in practice, very few employers are exempt, says Jules Crystal, a former NLRB trial attorney who now represents companies as a partner at Bryan Cave in Chicago.

    And many employers would rather have NLRB involvement anyway.

    "In most cases, when a union comes knocking on an employer’s door, that employer would rather have the [NLRB’s] rules and regulations and case precedent to rely upon, and thus the board’s jurisdiction on its side," he says.

    A bigger issue for workers at many small companies is how the NLRB defines "employees." The NLRB won’t certify a union unless it includes at least two non-supervisory workers, and the definition of "supervisory" is under debate. Thus some small companies could be exempt on those grounds alone.

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