Unionizing a small business is often overlooked, as many assume federal labor law only applies to large corporations. The legal framework for collective bargaining applies broadly to most private-sector workplaces regardless of the number of people employed. Employees in smaller firms possess the same federally protected right to organize a union, bargain for a contract, and engage in certain workplace activities. Understanding these rights and the organizing process is necessary for anyone considering or facing unionization efforts in a smaller company setting.
Size is Not a Barrier to Unionizing
The National Labor Relations Act (NLRA) provides the legal foundation for the right of private-sector employees to organize and bargain collectively. This federal law is administered and enforced by the National Labor Relations Board (NLRB), which does not use a minimum employee number to determine jurisdiction. Instead, the NLRB applies jurisdiction based on a business’s activity in interstate commerce.
For most private businesses, this commerce standard is met through minimal revenue or purchase thresholds. Retail businesses are generally covered if their gross annual volume is $500,000 or more. Non-retail businesses, such as manufacturers and wholesalers, are usually covered if they have an annual inflow or outflow of at least $50,000 in goods or services across state lines. Since many small businesses meet these thresholds by purchasing supplies or selling products across state lines, the vast majority of private employers fall under the purview of the NLRA.
Defining Who is Covered by Federal Labor Law
While the NLRA covers most private employers, it contains specific exemptions regardless of the business’s size. Individuals working in supervisory or managerial roles are excluded from the law’s protections and cannot be part of a bargaining unit. Supervisors are defined as those who have the authority to hire, fire, discipline, or adjust employee grievances.
Independent contractors are also not covered by the NLRA and cannot join a union. Other major exclusions include government employees (federal, state, and local), agricultural laborers, and domestic workers. The small business workforce must consist of eligible employees for a union election to proceed.
The Steps to Form a Union
The formal process of unionizing begins with employees collecting signed authorization cards. To initiate a formal election, a union must gather signatures from at least 30% of the employees within the proposed bargaining unit. These cards demonstrate a showing of interest and are legal documents signaling an employee’s desire for union representation.
Once the 30% threshold is met, the union files an election petition with the NLRB. The NLRB then investigates to confirm jurisdiction and determine an appropriate bargaining unit. NLRB agents work to secure an election agreement between the employer and the union, setting the date, time, and location for the secret ballot vote. If no agreement is reached, the NLRB Regional Director may order a hearing and set the conditions for the election.
The election is conducted by the NLRB, often at the workplace, with observers from both the employer and the union present. Employees cast a secret ballot vote. If a majority of the employees who vote choose the union, the NLRB certifies the union as the exclusive bargaining representative for all employees in that unit.
Employee Rights During Organizing Efforts
Employees organizing in a small business are protected by Section 7 of the NLRA, which guarantees the right to form, join, or assist a labor organization. A core protection is the right to engage in “concerted activity,” which refers to two or more employees acting together to improve their wages or working conditions. This protection covers activities like discussing pay, hours, or safety concerns with co-workers, extending beyond formal union organizing.
A single employee can also engage in protected concerted activity if they are acting on behalf of co-workers or bringing a group complaint to the employer’s attention. Employers are prohibited from discharging, threatening, or retaliating against employees for exercising these rights. This ensures employees can openly discuss unionizing without fear of discipline from management.
Employer Restrictions and Prohibited Actions
Employers face strict limitations on their conduct during an organizing campaign; actions that interfere with employee rights are categorized as Unfair Labor Practices (ULPs). Employers must not use threats, such as implying a facility will close or jobs will be lost if a union forms. They also cannot interrogate employees about their union activities or the union activities of their co-workers.
The law prohibits employers from making promises, such as offering a raise or new benefits, to discourage support for the union. Management cannot engage in surveillance or spying on employees during their union activities, or even give the appearance of doing so. If an employer commits a ULP, the NLRB can order remedies such as reinstatement, back pay, and the posting of notices detailing the violation.
Unique Challenges for Organizing Small Businesses
Organizing in a small business presents practical challenges compared to a large corporate environment. The close personal relationship between owners or managers and employees often makes union efforts highly visible and can create an emotionally charged atmosphere. In a small setting, maintaining anonymity for employees who sign authorization cards or attend organizing meetings is more difficult.
Employees often feel greater personal pressure from the owner, with whom they may work side-by-side, complicating the decision to organize. The small size of the unit means that the loss or firing of even one or two employees can severely disrupt the organizing momentum. The owner’s immediate knowledge of all employees’ pay and conditions can also lead to more pointed communication during the campaign, though this remains legally restricted.
Collective Bargaining After Certification
Once the NLRB certifies a union as the exclusive representative, the employer and the union enter collective bargaining. Both parties are obligated under the NLRA to meet at reasonable times and confer in good faith regarding wages, hours, and other terms and conditions of employment. This “duty to bargain in good faith” is a behavioral requirement: both sides must demonstrate a sincere resolve to reach an agreement. However, it does not compel either party to make concessions or agree to a final proposal.
The goal of this negotiation is the creation of a Collective Bargaining Agreement (CBA), a legally binding contract covering the terms of employment for the unit. The process is the same for a small business as it is for a large one. The resulting CBA replaces individual employment terms for the represented employees. If an agreement is reached, both the employer and the union are required to execute a written contract incorporating the terms.