Shoe salespeople at Bergdorf Goodman have lost their bid to form a bargaining unit this week, as a unanimous National Labor Relations Board (NLRB) dismissed the group's petition for a bargaining unit comprising women's shoes sales workers on two floors of Manhattan's main Bergdorf Goodman store. An NLRB regional director conducted a June 2012 election in the unit of employees at Bergdorf Goodman in Manhattan. However, the ballots were impounded after the board agreed to consider the employer's argument that the unit proposed by a Retail, Wholesale Department Store Union local was inappropriate under the National Labor Relations Act. While the NLRB recently approved a unit consisting of all cosmetics employees at a Macy's retail location, the board distinguished the proposed unit of Bergdorf Goodman shoe sales employees because the petitioning union sought to combine employees from the shoe Salon (which offers a selection of high end brands, such as Prada, Pierre Hardy, Alexander McQueen, Jimmy Choo, and Manolo Blahnik - just to name a few) with a “carved out” set of employees from another department, namely those in a separate Contemporary Shoes section, which stocks Vince, Sophia Webster, Alexander Wang, and Stuart Weitzman. While NLRB Chairman Mark Gaston Pearce and several board members found that sales associates in Bergdorf's Salon Shoe department do, in fact, share many terms and conditions of employment with workers in a separate Contemporary Shoes section, they ultimately found such factors to be “ultimately outweighed [...] by the lack of any relationship between the contours of the proposed unit and any of the administrative or operational lines drawn by the Employer.”
According to the decision, Bergdorf Goodman has a women’s store and a men’s store in the same block, where the company employs approximately 354 sales associates. The stores are organized into departments, including a department named Salon Shoes, located on the second floor of the women’s store, where 35 shoe sales associates are employed. The employer also operates a Contemporary Footwear or Contemporary Shoes section on the fifth floor of the same building; Contemporary Footwear is not itself a department, but is part of a larger Contemporary Sportswear department. There are 11 employees in the Contemporary Shoes sales section. The two shoe sales groupings have different directors and, since they’re located on different floors, they have different floor managers. Salon Shoes has a department manager, while Contemporary Shoes does not.
The board said sales associates in the two units “share the same terms and conditions of employment,” including the number of hours they work, goals they are expected to meet, and procedures for evaluating their attainment of goals. Sales associates in both groups are paid on a “draw versus commission basis,” providing that at the end of each week, the associate receives either the appropriate commission on sales made or a draw, whichever is higher. Salon employees earn a 9 percent commission, while Contemporary Shoes employees earn a 10 percent commission. There is no requirement for new sales associates to have prior experience in shoe sales or any retail sales, although the board said most employees hired do have such experience. All Bergdorf Goodman sales employees are encouraged to make sales away from their regular assigned departments, but the board said those instances, such as when a sales associate takes a customer to another department to complete a purchase, allow only limited interactions with other employees. The board said of approximately 38 transfers between departments since 2000, the company only had four transfers into the women’s shoe departments, and none out of those departments. None of the transfers involved employees moving from one shoe department to another. The board observed that “sales associates in Salon shoes and Contemporary shoes do not substitute for one another or otherwise interchange.”
In approving Local 1102’s petition for a unit of all women’s shoe sales associates, the NLRB regional director relied on Specialty Healthcare & Rehabilitation Center of Mobile, 357 N.L.R.B. No. 83, 191 LRRM 1137 (2011). In that case, the board found that in evaluating the appropriateness of the unit sought in the petition, it had to first determine whether employees in the petitioned-for unit are “readily identifiable as a group” and whether “they share a community of interest using the traditional criteria.” If the board finds that the unit sought is appropriate, then Specialty Healthcare requires the proponent of any larger units to demonstrate that the additional employees it proposes to include in an election share an “overwhelming community of interest” with the workers covered by the petition. At Bergdorf Goodman, the board said, the grouping of employees sought by the union was “readily identifiable as a group” because of the function they performed—selling women’s shoes. However, the board found, the employees lacked the necessary community of interest to constitute an appropriate unit under the NLRA.
Notwithstanding the commonalities between employees in the two sections, the NLRB said, “[t]he boundaries of the petitioned-for unit do not resemble any administrative or operational lines drawn by the employer.” The board contrasted the retail store case with Macy’s, Inc., 361 N.L.R.B No. 4 (2014), in which the board approved a unit of cosmetics and fragrance employees in a department store. Referring to the recentMacy’s decision, the board said, “[W]e found it particularly significant that the unit conforms to the department lines established by the employer in comprising all of the sales employees in the cosmetics and fragrances department.”
In the Bergdorf Goodman case, the board observed, the union was not seeking a single departmental unit, but was seeking to combine employees from the Salon department with a “carved out” set of employees from another department. “In conclusion,” the board said, “while some factors favor a finding of community of interest, they are ultimately outweighed, on these facts, by the lack of any relationship between the contours of the proposed unit and any of the administrative or operational lines drawn by the employer (such as departments, job classifications, or supervision), combined with the complete absence of any related factors that could have mitigated or offset that deficit.” Under the circumstances, the board said, it was unnecessary for the board members to examine whether the shoe sales employees shared any “ overwhelming community of interest” with other employees in the New York store.