Court Opinion

ID: 3197885
Source: CourtListenerOpinion
Date Created: 2016-04-26 19:01:05.8494+00
Date Added: 2024-06-11T12:05:35.893477
License: Public Domain

PUBLISHED

                  UNITED STATES COURT OF APPEALS
                      FOR THE FOURTH CIRCUIT

                              No. 14-2222

NESTLE DREYER’S ICE CREAM COMPANY,

                Petitioner,

          v.

NATIONAL LABOR RELATIONS BOARD,

                Respondent,

and

INTERNATIONAL UNION OF OPERATING ENGINEERS LOCAL 501, AFL-
CIO,

                Intervenor.

-------------

NATIONAL ASSOCIATION OF MANUFACTURERS; RETAIL LITIGATION
CENTER, INC.; THE CHAMBER OF COMMERCE OF THE UNITED STATES
OF   AMERICA;   COALITION   FOR  A   DEMOCRATIC   WORKPLACE;
INTERNATIONAL FOODSERVICE DISTRIBUTORS ASSOCIATION; NATIONAL
ASSOCIATION OF WHOLESALER-DISTRIBUTORS; NATIONAL COUNCIL OF
CHAIN   RESTAURANTS;  NATIONAL  FEDERATION   OF  INDEPENDENT
BUSINESS; NATIONAL RETAIL FEDERATION; SOCIETY FOR HUMAN
RESOURCE MANAGEMENT,

                Amicus Curiae.

                              No. 14-2339

NATIONAL LABOR RELATIONS BOARD,

                Petitioner,
           v.

NESTLE DREYER’S ICE CREAM COMPANY,

                Respondent.

-------------

NATIONAL ASSOCIATION OF MANUFACTURERS; RETAIL LITIGATION
CENTER, INC.; THE CHAMBER OF COMMERCE OF THE UNITED STATES
OF   AMERICA;   COALITION   FOR  A   DEMOCRATIC   WORKPLACE;
INTERNATIONAL FOODSERVICE DISTRIBUTORS ASSOCIATION; NATIONAL
ASSOCIATION OF WHOLESALER-DISTRIBUTORS; NATIONAL COUNCIL OF
CHAIN   RESTAURANTS;  NATIONAL  FEDERATION   OF  INDEPENDENT
BUSINESS; NATIONAL RETAIL FEDERATION; SOCIETY FOR HUMAN
RESOURCE MANAGEMENT,

                Amicus Curiae.

On Petition for Review of an         Order   of   the   National   Labor
Relations Board. (31−CA−74297)

Argued:   October 28, 2015                   Decided:   April 26, 2016

Before SHEDD, DIAZ, and HARRIS, Circuit Judges.

Petition for review denied and cross-petition for enforcement
granted by published opinion. Judge Diaz wrote the opinion, in
which Judge Shedd and Judge Harris joined.

ARGUED: Bernard J. Bobber, FOLEY & LARDNER LLP, Milwaukee,
Wisconsin, for Petitioner/Cross-Respondent.       Gregory P. Lauro,
NATIONAL    LABOR    RELATIONS   BOARD,    Washington,   D.C.,   for
Respondent/Cross-Petitioner.     Matthew James Ginsburg, AFL-CIO,
Washington, D.C., for Intervenor.       ON BRIEF: Ryan N. Parsons,
FOLEY & LARDNER LLP, Milwaukee, Wisconsin, for Petitioner/Cross-
Respondent.    Jennifer Abruzzo, Deputy General Counsel, John H.
Ferguson, Associate General Counsel, Linda Dreeben, Deputy
Associate    General   Counsel,   Jill   A.   Griffin,   Supervisory
Attorney, NATIONAL LABOR RELATIONS BOARD, Washington, D.C., for
Respondent/Cross-Petitioner. Brian A. Powers, James B. Coppess,
Washington,    D.C.,   for   Intervenor.      Bernard  P.   Jeweler,

                                 2
Christopher R. Coxson, Harold P. Coxson, OGLETREE, DEAKINS,
NASH, SMOAK & STEWART, P.C., Washington, D.C.; Linda E. Kelly,
Patrick N. Forrest, MANUFACTURERS’ CENTER FOR LEGAL ACTION,
Washington, D.C., for Amicus The National Association of
Manufacturers.     Deborah White, RETAIL LITIGATION CENTER, INC.,
Arlington, Virginia; Jason C. Schwartz, Thomas M. Johnson, Jr.,
Alexander K. Cox, GIBSON, DUNN & CRUTCHER LLP, Washington, D.C.,
for Amicus Retail Litigation Center, Inc.      Mark Theodore, Los
Angeles, California, Ronald Meisburg, Joshua F. Alloy, PROSKAUER
ROSE, LLP, Washington, D.C.; Kate Comerford Todd, Steven P.
Lehotsky, U.S. CHAMBER LITIGATION CENTER, INC., Washington,
D.C.,   for    Amici   Coalition  for   a  Democratic   Workplace,
International Foodservice Distributors Association, National
Association of Wholesaler-Distributors, National Council of
Chain Restaurants, National Federation of Independent Business,
National    Retail    Federation,  Society  for   Human   Resource
Management, and The Chamber of Commerce of the United States.

                                3
DIAZ, Circuit Judge:

      The National Labor Relations Board certified a collective-

bargaining unit consisting of all maintenance employees at an

ice-cream production facility operated by Nestle-Dreyer’s Grand

Ice Cream, Inc.       Dreyer’s contends that (1) the Board applied a

legal standard that violated the National Labor Relations Act

(the “NLRA”) and otherwise represented an abuse of discretion;

and (2) under the proper legal standard as well as the incorrect

legal standard upon which the Board relied, production employees

must be included in the petitioned-for unit.             Because the Board

did not violate the NLRA or abuse its discretion in certifying

the maintenance-only unit, we deny Dreyer’s petition for review

and   grant    the   Board’s   cross-petition    for   enforcement   of   its

order.

                                     I.

                                     A.

      At   a   production      facility   in    Bakersfield,   California, 1

Dreyer’s manufactures ice-cream products: cartons, cones, bars,

and other frozen novelties.        Known as the Bakersfield Operations

      1 We have jurisdiction because Dreyer’s operates a
production facility in Maryland.      See 29 U.S.C. § 160(f)
(permitting “[a]ny person aggrieved by a final order of the
Board” to obtain review where the person “resides or transacts
business”).

                                      4
Center (the “BOC”), the facility contains a factory with twenty-

six    production        lines,    a     palletizing       area    and      distribution

center, warehouses for dry goods and frozen goods, and a machine

shop for making and repairing parts for the production lines.

It also houses a research and development center.

       At the time relevant to this litigation, the BOC employed

about 113 maintenance employees and 578 production employees.

Most    production        employees        work     on    the     production       lines,

operating the manufacturing equipment, stacking the product on

pallets, and storing it for distribution.                       Others work in pre-

manufacturing, where they order materials and mix ingredients

for    the   lines.        Production         employees     generally       work      on    a

specific production line, and they do not work in the machine

shop or the research and development center.

       The   majority       of         maintenance       employees      work     on        the

production lines, where they are assigned to multiple production

lines or the adjacent palletizing areas.                        They perform routine

maintenance        and     as-needed          repairs      on     the      manufacturing

equipment.         The   rest     of    the   maintenance       employees      perform      a

variety of tasks throughout the BOC.                      Process technicians, who

work in pre-manufacturing, assist with the computer-controlled

mixing equipment and troubleshoot problems as they arise.                                  The

utilities group maintains the BOC’s refrigeration systems, as

well    as   its    electrical,          heating,    plumbing,       and    ventilation

                                              5
systems.            Other       maintenance          employees       work      as     control

technicians, in facilities maintenance, or in the machine shop.

       On     the        production         lines      and     in     pre-manufacturing,

maintenance        and    production        employees        sometimes      work    together.

While production workers are trained to solve minor or routine

technical problems—for example, simple packaging jams that can

be    fixed    by        removing       the    jammed        material—their         technical

training      is     limited,         and     maintenance       workers      perform     most

repairs     and     routine         maintenance.         When    production         employees

encounter technical problems they cannot solve, they call for

the   assistance          of    a    maintenance       employee.         The   maintenance

employee diagnoses the problem and performs the repair, relying

on    input    from       the       production       worker.        Every    third     shift,

production workers disassemble the equipment for cleaning while

maintenance workers stand by to replace broken parts or address

problems that may occur during reassembly and start-up.

      Maintenance and production employees have similar working

conditions.         They receive the same employment benefits, annual

performance evaluations, and they use the same parking lots,

time clocks, break rooms, and lockers.                          They must also follow

the same workplace policies, including wearing similar uniforms.

      But the two groups are distinguished in several significant

respects.           Maintenance         workers       are     generally      better     paid,

receiving $20–$30 an hour, compared with $15–$22 for production

                                                 6
workers.      This reflects the fact that maintenance employees have

significantly           more    training,          particularly           in     mechanics         and

electronics.            Maintenance          employees         rarely      do       the    work    of

production employees, and they work on a different schedule.

Whereas     maintenance          employees        work       four    ten-hour        shifts       each

week, production employees work five eight-hour shifts, which

results       in       different        overtime,            holiday,         and     sick        pay.

Furthermore,           the     two    groups           are    organized         into       separate

departments with different immediate supervisors.                                     Maintenance

employees are part of the Technical Operations Team; production

employees        are    on     either       the   Manufacturing           Team      or     the    Pre-

Manufacturing Team.               Finally, the BOC shuts down annually for

two    to   four       weeks    for     a    complete        rebuild     of     the       production

lines.      All maintenance employees are required to work during

this period, whereas only a few production employees work if

they volunteer or are selected to participate.

       Near      the    end     of    2009,       Dreyer’s         put   in     place       a    pilot

program, limited to one production line, intended to partially

integrate        the    roles    of     production           and    maintenance           employees.

The purpose of the program was to increase production employees’

ability     to     perform      routine       maintenance           (cleaning,        inspecting,

lubricating),          thereby       allowing      maintenance           employees         to    focus

less   on     breakdowns        and     more      on    preventive        maintenance.            The

                                                  7
program was put on hold sometime in 2011 and was restarted in

early 2012.

                                                  B.

       Late        in     2011,      the        International        Union        of     Operating

Engineers Local 501, AFL–CIO filed a petition with the Board,

seeking to represent the BOC’s maintenance employees.                                     Dreyer’s

objected      to        the    proposed      unit,      arguing      that    it    should       also

include      production          employees.            The   Board’s       Regional       Director

(the       “RD”)    approved         the    maintenance-only          unit    over        Dreyer’s

objections, and the Board denied Dreyer’s request for review.

After maintenance employees voted 56–53 in favor of joining the

Union,       Dreyer’s         refused      to    bargain      and    the     Union       filed    an

unfair-labor-practice charge with the Board. 2

       The     Board          granted      summary      judgment      to    the        Union,    and

Dreyer’s sought review in this court.                             We placed the case in

abeyance pending the Supreme Court’s decision in NLRB v. Noel

Canning, 134 S. Ct. 2550 (2014), which ultimately held that the

appointments of some members of the Board were unconstitutional.

On the Board’s motion, we vacated its order and remanded.

       On     remand,          the    Board       again      found    that        Dreyer’s       had

committed          an     unfair        labor      practice,         and     Dreyer’s           again

       2
       To challenge the Board’s unit determination, “the employer
must refuse to bargain, triggering unfair labor practice
proceedings under Section 8(a)(5).”      Wellman Indus., Inc. v.
NLRB, 490 F.2d 427, 430 (4th Cir. 1974).

                                                   8
petitioned this court for review.                        The Board cross-petitioned

for enforcement.

                                             II.

                                             A.

     The     NLRA    requires          the    Board       to     determine     “the    unit

appropriate    for     the    purposes       of     collective       bargaining.”       29

U.S.C.     § 159(b).         In   making        this     determination,        the    Board

exercises “the widest possible discretion.”                        Sandvik Rock Tools,

Inc. v. NLRB, 194 F.3d 531, 534 (4th Cir. 1999).                          The Board may

approve any appropriate unit; it need not identify and select

“the single most appropriate unit.”                      NLRB v. Enter. Leasing Co.

Se., 722 F.3d 609, 625 (4th Cir. 2013) (quoting Am. Hosp. Ass’n

v. NLRB, 499 U.S. 606, 610 (1991)).                       Therefore, to resist the

Board’s determination that a petitioned-for unit is appropriate,

an employer cannot merely demonstrate that a different unit is

also appropriate, or even more appropriate.                         Sandvik, 194 F.3d

at 537.      Rather, “[a]n employer challenging the Board’s unit

determination . . . has the burden to prove that the bargaining

unit selected is ‘utterly inappropriate.’”                        Enter. Leasing, 722

F.3d at 626-27 (quoting Sandvik, 194 F.3d at 534); see also

Arcadian    Shores,    Inc.       v.    NLRB,      580    F.2d    118,   120   (4th    Cir.

1978).

                                              9
       But despite granting broad discretion, the NLRA prohibits

the Board from blindly deferring to a union’s proposed unit.

NLRB v. Lundy Packing Co., 68 F.3d 1577, 1580 (4th Cir. 1995).

Rather, the NLRA states that “[i]n determining whether a unit is

appropriate . . .        the      extent      to     which      the    employees       have

organized shall not be controlling.”                       29 U.S.C. § 159(c)(5).

This means that the happenstance of a union’s organizing efforts

may    not   be   the   dominant     factor        in   the     Board’s     decision     to

approve the unit.            See Lundy, 68 F.3d at 1580.               Because a union

will     ordinarily      propose        a     unit      controlled        by    organized

employees, the Board violates the statute if it presumes the

appropriateness         of    a   proposed         unit.        See    id.      at     1581.

Nevertheless, the Board may consider the extent of organization

as one relevant factor, which may even be the “determinative”

factor in a “close case.”                   Overnite Transp. Co. v. NLRB, 294

F.3d 615, 620 (4th Cir. 2002).

       To guide its discretion, and to avoid giving controlling

weight       to   the    extent      of       organization,           the      Board    has

traditionally      asked      whether       “employees     in    the   requested        unit

shar[e] a sufficient community of interest to be included in the

same unit.”       Overnite Transp. Co., 322 N.L.R.B. 723, 725 (1996).

The community-of-interest test incorporates several factors:

       (1) similarity in the scale and manner of determining
       the earnings; (2) similarity in employment benefits,
       hours of work, and other terms and conditions of

                                             10
       employment;    (3) similarity    in    the   kind   of  work
       performed;    (4) similarity    in    the    qualifications,
       skills and training of the employees; (5) frequency of
       contact    or     interchange    among      the   employees;
       (6) geographic       proximity;       (7) continuity      or
       integration     of   production     processes;    (8) common
       supervision    and    determination     of   labor-relations
       policy;    (9) relationship     to     the    administrative
       organization     of    the   employer;     (10) history   of
       collective bargaining; (11) desires of the affected
       employees; [and] (12) extent of union organization.

Enter. Leasing, 722 F.3d at 626 n.8 (quoting Lundy, 68 F.3d at

1580).     The test ensures not only that the employees in the unit

share    common       interests,    but   also   that    these     interests   are

distinct from those of excluded employees.                  See Newton-Wellesley

Hosp., 250 N.L.R.B. 409, 411 (1980).

       In Specialty Healthcare & Rehabilitation Center of Mobile,

357 N.L.R.B. No. 83 (2011), the Board set out to clarify this

longstanding unit-determination analysis.                   The Board explained

that the analysis proceeds in two steps.                     In step one, “the

Board examines the petitioned-for unit . . . .                    If that unit is

an appropriate unit, the Board proceeds no further.”                        Id. at

*12.     In essence, this is the traditional community-of-interest

test outlined above.          See id. at *14 (examining the community-

of-interest      factors    to     determine   that   the    included     employees

“share a community of interest” and “are unlike all the other

employees the Employer would include in the unit”).                       Once the

Board determines in step one that the members of the proposed

unit     share    a    community     of   interest—and      the    unit   is   thus

                                          11
appropriate—the burden then shifts to the employer to show that

the approved unit is inappropriate.              Id. at *15.

       In step two, the employer “is required to demonstrate that

a proposed unit consisting of employees readily identifiable as

a group who share a community of interest is nevertheless not an

appropriate unit because the smallest appropriate unit contains

additional employees.”           Id.     The employer’s required showing is

necessarily “heightened”: because the Board need not select the

most appropriate unit, the employer must do more than show that

its preferred unit is also appropriate.                Id. at *16.

       The Board acknowledged in Specialty Healthcare that it and

the courts of appeals had over time used “different words . . .

to describe this heightened showing,” and it concluded that the

use    of    “slightly     varying     verbal   formulations . . .     [did]    not

serve       the   statutory   purpose”     of   the    NLRA.   Id.    at   *16-17.

Accordingly, to describe the employer’s required showing when

asking the Board to include additional employees in the unit,

the Board settled on a phrase accepted by the D.C. Circuit: “an

overwhelming community of interest.”                  Id. at *16 (quoting Blue

Man Vegas, LLC v. NLRB, 529 F.3d 417, 421 (D.C. Cir. 2008)).

       To summarize the Specialty Healthcare framework: in step

one,    the       Board   performs   a   community-of-interest       analysis   to

determine whether the proposed unit is appropriate; if the unit

is found appropriate, in step two the employer must demonstrate

                                          12
that   the    excluded        employees       it        wishes     to   include        share    an

“overwhelming           community       of     interest”            with        the    included

employees.      Id. (emphasis added).

                                              B.

       We hold that the Board acted within its broad discretion in

certifying the Union’s petitioned-for unit.                              After a thorough

analysis of the facts, the RD applied the traditional community-

of-interest factors to determine not only that the maintenance

employees share a community of interest amongst themselves, but

also   that    maintenance           employees          form   a   group        distinct   from

production employees.                By doing so, the RD did not allow the

extent of organization to control his decision.

       In    applying        the   Specialty        Healthcare          framework,       the    RD

began by determining that the maintenance employees are “readily

identifiable       as    a    separate       group”       from     production         employees.

J.A. 416.       Maintenance employees “are in their own department,

and are in different job classifications, have different skills,

and perform different functions from production employees.”                                    Id.

The RD focused in particular on the “very different skills” of

the    two    employee        groups    and        on    the     fact    that     maintenance

employees have “much more technical knowledge” than production

employees.         Id.         Specifically,             maintenance        employees       “are

required      to   have        one     year[’s]         experience         in    computerized

maintenance         management,              two         years[’]          experience           in

                                              13
troubleshooting         pneumatics,         hydraulics,           and    electrical          and

manufacturing,          and    five    to      seven          years[’]    experience          in

industrial    high       speed     maintenance.”                Id.       None      of     these

requirements apply to production employees.                             Id.    And whereas

“[m]aintenance          mechanics      spend       about         90%     of   their         time

performing skilled maintenance work,” “production employees lack

the    appropriate       skill”     for     such     work       and    make   only        “minor

adjustment[s] or repair[s].”               J.A. 416-17.

       Having distinguished maintenance and production employees,

the RD next determined that “[t]he maintenance employees share a

sufficient community of interest amongst themselves for purposes

of collective bargaining.”                J.A. 417.           Applying the traditional

community-of-interest             factors,          he         determined          that      the

maintenance employees share similar wages, similar hours, common

supervision, and common functions.                  J.A. 418-19.

       Throughout       this   analysis,       the       RD    continued      to    note     how

maintenance       employees      are   distinct       from       production        employees.

He found that “[t]he greater skill of the maintenance employees

is . . . reflected by the fact that the maintenance employees

are significantly higher paid than the production employees” and

that    “there     is    virtually        no      temporary       interchange            between

maintenance and production employees.”                         J.A. 419–20.         Moreover,

any overlap in wages of the two groups is limited to one of five

classes      of      maintenance            employees           and      is        ultimately

                                             14
“insignificant.”             J.A.    418.      The     two    groups      work       different

shifts, the RD found, and as a result, “[o]vertime is calculated

differently          for      maintenance          employees         than        production

employees,” “maintenance employees tend to work more overtime

than production [employees],” and maintenance employees receive

more hours of sick pay than production employees.                              Id.    The two

groups’     essential         functions        also    differ:       “The       maintenance

employees are primarily in charge of maintaining the Employer’s

machinery, and the production employees are primarily in charge

of   producing        the    ice     cream.”       J.A.      419.        And    while     many

maintenance          employees       “come     into     contact          with    production

employees on the production lines,” some maintenance employees

who do not work on the lines have “more limited” or “very little

contact” with production employees.                   J.A. 420.

        Moving on to step two of the Specialty Healthcare analysis,

the RD found that Dreyer’s could not meet its burden to show

that     the     production          and     maintenance       employees         share     an

overwhelming community of interest.                    J.A. 420–21.             He rejected

several of Dreyer’s arguments.                  First, he found distinguishable

prior    Board       cases    approving        joint    units       of    production      and

maintenance employees.                J.A. 421 (citing Buckhorn, Inc., 343

N.L.R.B.       201    (2004);       TDK    Ferrites    Corp.,       342    N.L.R.B.      1006

(2004)).       Second, he found that the petitioned-for unit is not

arbitrary or fractured because the Union sought “to represent

                                              15
all   classifications      of    the   Employer’s         maintenance        employees.”

Id.    Third, he found the bargaining history at the facility

inconclusive.       Id.    And finally, the RD gave “little weight” to

Dreyer’s    argument      that   its   pilot       program      for   increasing         the

integration of the production and maintenance employees’ work

renders the unit inappropriate.                  J.A. 422.      The success of the

program remained speculative, he found, and even assuming its

success,    the    program   would     not       close    the   significant        gap   in

skill between the two groups.              Id.

      By    properly      applying     the       community-of-interest             factors

before shifting the burden to Dreyer’s, the RD appropriately

exercised    his    discretion       and     did    not    permit     the     extent     of

organization to control.           Cf. FedEx Freight, Inc. v. NLRB, No.

15-1848,    2016    WL    859971,      at    *7     (8th     Cir.     Mar.    7,     2016)

(published) (holding that “the use of an overwhelming community

of interest test at the second step of the Board’s analysis does

not violate section 9(c)(5)”); Kindred Nursing Ctrs. E., LLC v.

NLRB, 727 F.3d 552, 565 (6th Cir. 2013) (enforcing the Board’s

order in Specialty Healthcare); Blue Man, 529 F.3d at 423 (“As

long as the Board applies the overwhelming community-of-interest

standard only after the proposed unit has been shown to be prima

facie appropriate, the Board does not run afoul of the statutory

injunction that the extent of the union’s organization not be

given controlling weight.”).

                                            16
      This conclusion is supported by the fact that the approved

unit tracks Dreyer’s own departmental lines and is consistent

with prior Board unit determinations.                  See, e.g., Ore-Ida Foods,

Inc., 313 N.L.R.B. 1016, 1020 (1994) (finding that maintenance

employees     shared     a     community        of     interest         distinct       from

production     workers       because    of       differences            in     skill     and

compensation, despite “extensive contact with, and, at times the

assistance of, the production employees”).                          And it is of no

consequence that a unit including production employees may also

be   appropriate.        See     J.A.     421        (RD       noting   that     “factors

[Dreyer’s]    points    to   might     show     that       a    combined     unit   is    an

appropriate    unit”).         Dreyer’s       burden       is     to    show    that     the

approved unit is “utterly inappropriate.”                        Enter. Leasing, 722

F.3d at 626-27.        That it cannot do, as we explain in the next

section.

                                        C.

      Dreyer’s offers several objections, focusing its attack on

Specialty Healthcare rather than on the Board’s decision in this

case. 3   We consider each objection in turn.

      3Dreyer’s focus on Specialty Healthcare rather than on the
RD’s analysis in this case is telling.    Indeed, the dissenting
member of the Specialty Healthcare panel also participated in
this case, and, while he refused to rely on Specialty
Healthcare, he nevertheless found here “that, under the
traditional community-of-interest test, the interests of the
petitioned-for   unit   are  sufficiently   distinct  from   the
(Continued)
                                        17
       First, Dreyer’s contends that the overwhelming-community-

of-interest test in Specialty Healthcare violates the NLRA by

giving controlling weight to the extent of union organization.

For this contention, Dreyer’s relies primarily on our decision

in   Lundy   Packing.         In    Lundy,    the    Board    approved       a   unit    of

production and maintenance employees at a pork-products plant,

rejecting the employer’s argument that industrial engineers and

some quality-control employees should also be included.                           68 F.3d

at 1579.       While the Board conceded that the larger unit might

also be an appropriate unit, it determined that the excluded

employees did not share an “overwhelming community of interest”

with   those    in    the    proposed    unit.        Id.    at    1581.        The   Board

therefore denied the employer’s request to include additional

employees.     Id. at 1579.

       We denied enforcement of the Board’s order, finding several

problems     with    the     decision.       First,    the    Board       permitted     the

exclusion      of     some      employees      on      the        basis    of     “meager

differences,”        which    was   “problematic       under       the    ‘community     of

interest’ standard.”           Id. at 1581.         Second, the Board “adopted a

production employees.” J.A. 426. And at oral argument, counsel
for Dreyer’s conceded that the RD’s community-of-interest
analysis “looks a lot like the . . . historical analysis that
used to be done.”   Oral Argument at 14:15, Nestle Dreyer’s Ice
Cream    Co.    v.    NLRB,     14-2222    (Oct.    28,    2015),
http://coop.ca4.uscourts.gov/OAarchive/mp3/14-2222-20151028.mp3.

                                          18
novel    legal     standard        which          effectively       accomplished         the

exclusion.      Under this new standard, any union-proposed unit is

presumed      appropriate        unless      an     ‘overwhelming          community      of

interest’ exists between the excluded employees and the union-

proposed unit.”       Id.       We held that this use of the overwhelming-

community-of-interest              standard,           which         presumed            the

appropriateness       of    a     proposed        bargaining      unit,     “effectively

accorded controlling weight to the extent of union organization”

in violation of the NLRA.              Id.

       According to Dreyer’s, Lundy held that the overwhelming-

community-of-interest           test    necessarily      violates         the    NLRA   when

used in the context of unit determinations: “Instead of using a

range   of    factors      to     determine        whether    a    proposed       unit    is

appropriate, as the Board did with its traditional [community-

of-interest]     test,      the    overwhelming        test       skews    the    analysis

‘overwhelmingly’ in favor of the union-proposed unit.”                                Pet’r’s

Br. at 41.

       Dreyer’s reads Lundy too broadly.                 Lundy does not establish

that    the    overwhelming-community-of-interest                    test        as     later

applied in Specialty Healthcare fails to comport with the NLRA.

Instead, Lundy prohibits the overwhelming-community-of-interest

test where the Board first conducts a deficient community-of-

interest analysis—that is, where the first step of the Specialty

Healthcare     test   fails       to   guard      against    arbitrary          exclusions.

                                             19
The    “meager      differences”      we       identified    in   Lundy     between    the

excluded quality-control employees and the included production

and maintenance employees were the following: “(1) the method

for calculating their earnings; (2) supervision; and (3) a lack

of    interchangeability          with     other    [production      and   maintenance]

positions.”          Id. at 1580.            And even these distinctions were

questionable:         at     least       one     included     employee’s        pay   was

calculated in the same manner as the excluded employees, and

many of the included employees had different supervisors from

one another.         Id. at 1580–81.            In other words, the petitioned-

for unit was an apparent union gerrymander.                         By rubber-stamping

it    and    then     applying       the       overwhelming-community-of-interest

test, “the Board effectively accorded controlling weight to the

extent of union organization.”                 Id. at 1581.

       But in Lundy we had no occasion to determine whether the

overwhelming-community-of-interest test would offend the NLRA in

a case where the Board properly conducts Specialty Healthcare’s

step-one     analysis        by    determining       that     the    members     of   the

petitioned-for        unit    share      a     distinct     community      of   interest.

With such a case now before us, we find Lundy distinguishable.

Here, in addition to the differences cited in Lundy, the RD

identified          several        community-of-interest               factors        that

distinguished maintenance employees from production employees:

higher      wages,    greater        training       and   education        requirements,

                                               20
higher skill levels, and different hours.                             In Lundy, the Board

effectively       assumed        the    proposed-unit                employees       shared    a

community of interest; here, in contrast, the Board rigorously

weighed the traditional community-of-interest factors to ensure

that the proposed unit was proper under the NLRA.

       We need not and do not hold that an application of the

Specialty Healthcare standard will never run afoul of Lundy.

Our    assessment         of     a    prior           Board     policy       regarding      unit

determinations remains applicable here:

       The Board’s announced standard may lead to some
       decisions where the extent of organization will be the
       dominant factor in unit selection (such as in cases
       where the community of interest considerations in
       support of the union’s proposed unit are weak), but
       not all cases will be like that. And that did not
       happen here, where the Board supported its decision to
       exclude the [production employees] from the . . . unit
       with numerous community of interest factors.

Overnite Transp., 294 F.3d at 621 (addressing the Board’s policy

of considering “only whether the unit requested [by the union]

is    an   appropriate         one,   even    though          it    may   not   be   the    most

optimum     or   most     appropriate        unit”).            At   least      on   the   facts

before     us,    the     imposition         of       the     overwhelming-community-of-

interest test did not give controlling weight to the extent of

union organization, unlike in Lundy.

       Next,     Dreyer’s        contends         that        the    Board      in   Specialty

Healthcare       failed    to     provide         a    reasoned      explanation      for     its

adoption of the overwhelming-community-of-interest test, which

                                              21
resulted     in    a    “repudiation       of     more    than     forty     years     of

precedent.”       Pet’r’s Br. at 44.            Dreyer’s overstates the changes

the Board made in Specialty Healthcare.                    Indeed, we agree with

our    sister     circuits     that       the    Board     clarified—rather          than

overhauled—its unit-determination analysis.                     See FedEx, 2016 WL

859971, at *7 (“We conclude that the overwhelming community of

interest standard articulated in Specialty Healthcare is not a

material departure from past precedent . . . .”); Kindred, 727

F.3d at 561 (“The Board has used the overwhelming-community-of-

interest     standard        before,      so     its     adoption      in    Specialty

Healthcare . . .        is   not    new.”);      Blue    Man,    529    F.3d    at    421

(describing       the   Board’s      “consistent         analytic      framework”      as

including the question whether “the excluded employees share an

overwhelming        community        of     interest        with       the     included

employees”).

       We acknowledge that some statements in Specialty Healthcare

may be read to indicate significant changes in Board policy.

For example, some passages suggest that whether employees are

appropriately excluded from the petitioned-for unit is addressed

only    in      step    two,       the    overwhelming-community-of-interest

analysis, not in step one, the traditional community-of-interest

analysis.       Specialty Healthcare, 357 N.L.R.B. No. 83, at *26

(Hayes, dissenting); see also id. at *17 (majority opinion).

This would indeed constitute a significant change, as it would

                                           22
mean   that     the      Board    no   longer    determines      for    itself   whether

employees are arbitrarily excluded from the petitioned-for unit.

Applying      Specialty       Healthcare        in    such   a   manner       might   well

conflict       with        Lundy,      which      requires       that        before    the

overwhelming-community-of-interest test is applied, the Board at

the very least must ensure that employees are not excluded on

the basis of “meager differences.”                   Lundy, 68 F.3d at 1581.

       The RD’s application of Specialty Healthcare here, however,

is entirely consistent with our precedent.                       The analysis of the

proposed unit did not “address[], solely and in isolation, the

question whether the employees in the unit sought have interests

in   common        with    one    another.”          Newton-Wellesley        Hosp.,    250

N.L.R.B.      at    411.         Instead,   the      analysis    “proceed[ed]         to   a

further determination whether the interests of the group sought

[were] sufficiently distinct from those of other employees to

warrant the establishment of a separate unit.”                         Id.    This was a

proper application of the well-worn community-of-interest test,

and it represented a finding that the petitioned-for unit was

appropriate.          At that point, a challenge to the unit faced a

high burden.          In our words, the unit had to be proven “utterly

inappropriate”; in the Board’s newly chosen words, the excluded

employees had to share an overwhelming community of interest

with    those       in     the    unit.         These    standards       are     entirely

consistent.

                                            23
      Nor is it unreasonable, as Dreyer’s urges, for the Board to

use   the   same       overwhelming-community-of-interest                       test   in   this

context     that       it    has       historically         used     in    the    context      of

accretions.        In an accretion, new employees become part of an

existing bargaining unit without taking part in a representative

election.       Lundy, 68 F.3d at 1581.                    Because these employees lack

the   opportunity           to     vote,    the      Board     will       not    permit     their

addition to a unit unless they share an overwhelming community

of interest with the unit.                    Id.     As we explained in Lundy, the

Board     may    not        import      this        test     to    determine       whether     a

petitioned-for unit is appropriate.                          Id. at 1582.          The proper

analysis    for    that           determination       is     the    community-of-interest

test.     But in determining whether the Board’s approved unit is

“utterly    inappropriate,”             the    overwhelming-community-of-interest

test is reasonable.                As in the accretion context, the question

is    whether     some       employees        share        more    than     a    community     of

interest with the members of the unit.

      Moreover, to the extent the Board in Specialty Healthcare

departed        from        its     prior      precedent,           it     provided       enough

explanation       so    that       a   reviewing       court       could    understand       what

changes the Board intended to make and why.                              See J.P. Stevens &

Co. v. NLRB, 623 F.2d 322, 329 (4th Cir. 1980) (determining that

the Board had not sufficiently explained itself where it was

“difficult to ascertain . . . why the Board apparently departed

                                                24
from its precedents”).             Specifically, the Board explained that

the overwhelming-community-of-interest test, though somewhat new

in name, was consistent with the Board’s prior precedent and

with the precedent of the courts of appeals, and that using

varying    terminology       did    not   serve    the    purposes          of     the    NLRA.

Specialty Healthcare, 357 N.L.R.B. No. 83, at *16-17.                               This was

a sufficient explanation for our review.                      Because the Board did

not     significantly        alter     its      prior     rulings           in     Specialty

Healthcare, and because it reasonably explained the changes it

was making, the Board did not abuse its discretion.

       Finally, Dreyer’s argues that in Specialty Healthcare, “the

Board    exceeded    the     reasonable       boundaries        of    the    adjudicative

process     and    abused     its     discretion,”         in    violation           of     the

Administrative Procedure Act.                Pet’r’s Br. at 59.              This appears

to    encompass     two     sub-arguments:        first,      Specialty          Healthcare

changed the law so significantly that rulemaking rather than

adjudication       was     required;      second,        whether        to       adopt     the

overwhelming-community-of-interest test was not before the Board

in    Specialty    Healthcare,       so   the    Board    was        announcing       a   rule

without     either       proper      adjudication        or     rulemaking.               Both

arguments lack merit.

       Ordinarily, the Board may adopt new regulatory principles

through    adjudication       rather      than    rulemaking.               NLRB    v.    Bell

Aerospace    Co.     Div.    of     Textron,      416    U.S.        267,    294     (1974).

                                          25
However, courts have sometimes found the choice of adjudication

inappropriate where an agency purports to establish a new rule

of widespread application.                 See Ford Motor Co. v. FTC, 673 F.2d

1008, 1009 (9th Cir. 1981).                     In Ford, for example, the FTC was

required to proceed by rulemaking rather than adjudication when

it created a rule that “would require a secured creditor to

credit       the    debtor        with    the     ‘best     possible’         value     of     [a]

repossessed vehicle, and forbid the creditor from charging the

debtor with overhead and lost profits.”                         Id.

       In Specialty Healthcare, by contrast, the Board did not

create       a     new    obligation       for        employers       in    operating        their

businesses.          Rather, the Board merely clarified the employer’s

evidentiary          burden       when    it     challenges           a    union’s    proposed

bargaining         unit    in     the    course       of   an   adjudication.           Such     a

clarification of agency law through adjudication is hardly the

kind    of       abuse    of    discretion      the     Ninth     Circuit     identified        in

Ford.        See FedEx, 2016 WL 859971, at *8 (holding that “the

Board’s decision to proceed by adjudication was not an abuse of

discretion”); cf. Bell Aerospace, 416 U.S. at 295 (finding that

rulemaking was not required for the Board to change course from

prior decisions, when industry reliance on past decisions would

not result in “substantial” adverse consequences).

       We    also        reject    Dreyer’s       contention          that    the     issue     of

whether to adopt the overwhelming-community-of-interest test was

                                                 26
not   before      the    Board    in   Specialty    Healthcare.       Although     the

parties     did    not    raise    the   question     of    what   standard   should

apply, the employer was asking the Board to include additional

employees in a proposed bargaining unit.                    Specialty Healthcare,

357 N.L.R.B. No. 83, at *2.                 The Board was free to clarify the

applicable        standard.        See   Bell     Aerospace,    416   U.S.    at   294

(“[T]he Board is not precluded from announcing new principles in

an adjudicative proceeding . . . .”).

      We therefore conclude that the Board did not violate the

Administrative Procedure Act.

                                          III.

      For    the    reasons       stated,    we    deny    Dreyer’s   petition     for

review and grant the Board’s cross-petition for enforcement.

                        PETITION FOR REVIEW DENIED AND CROSS-PETITION FOR
                                                      ENFORCEMENT GRANTED

                                            27