July 21, 2016Client Alert

Employment of Temporary Workers Supplied by Others: NLRB Increases Risk of Union Organizing and Collective Bargaining

On July 11, 2016, in Miller & Anderson, Inc., the National Labor Relations Board (NLRB) reversed prior NLRB decisions and greatly expanded the rights of “temporary” employees jointly employed by a “user” employer and a “supplier” employer, such as a temporary help agency, to engage in union organization and collective bargaining by no longer requiring the consent of either employer.

In Oakwood Care Center, the NLRB previously held that it would not consider appropriate, for union organizing and collective bargaining purposes, bargaining units that combined (a) employees solely employed by a user employer and (b) employees jointly employed by that same user employer and a supplier employer, without the consent of both employers. In Miller & Anderson, the Board reversed this position and will now consider such units appropriate without the consent of the joint employers, provided the employees share a community of interest.

The key consideration is whether the user employer and the supplier employer are “joint employers,” which, in the new reasoning of the NLRB, makes the bargaining unit a single-employer unit, rather than a multi-employer unit. This is significant due to the increased use of temporary employees and a contingent workforce, and due to the NLRB’s recent decision in Browning-Ferris Industries of California, Inc., which made it far easier for the NLRB or unions to establish that the user and supplier employers are joint employers of the temporary employees.

In Browning-Ferris, the Board held it would be sufficient to establish a joint employer relationship if each employer merely possessed the authority to control some of the employees’ terms and conditions of employment, even if the authority was simply reserved but not exercised and, if exercised, was not exercised directly and immediately, but through intermediaries. In short, the Board rejected the requirement that the joint employer’s control be direct and immediate.

Accordingly, within a workforce consisting of both the user employer’s employees and temporary employees employed and supplied by a staffing agency, the combined employee complement may now organize and bargain jointly or separately, whichever they prefer. If union organizing were successful, both employers would be obligated to be at the bargaining table. According to the NLRB, “Each employer is obligated to bargain only over the employees with whom it has an employment relationship and only with respect to such terms and conditions which it possesses the authority to control.” The NLRB rejected arguments that such joint negotiations—with each joint employer negotiating as to those employees it solely or jointly employs and as to employment terms it has authority to control—will be ineffective and disruptive.

Faced with the uncertainties relating to union organization and collective bargaining with respect to a unit consisting of a user employer’s “own” employees and temporary employees supplied by another, employers utilizing temporary employees supplied by another should carefully review the agreement under which such temporary employees are supplied and, most importantly, the terms and conditions under which such temporary employees are employed, managed, and controlled.

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