NLRB Reverses Course (Again) on Bargaining Units that Include Temporary Employees

Last week, the NLRB issued a widely anticipated decision reversing the existing rule on collective bargaining units including temporary employees. Now, regular employees of the employer and temporary staffing agency employees working for the same employer could be combined in the same bargaining unit without either the employer’s or the staffing agency’s consent. The decision is another in a line of cases from the current NLRB that is friendly to unions, and not so friendly to employers.

The NLRB has changed its thinking on this issue multiple times in recent memory. From the 1970s until 2000, the NLRB consistently held that both employer and staffing agency consent was required to create bargaining units that contained both an employer’s regular employees and the temporary employees supplied by the staffing agency.

In 2000, a Clinton-appointed NLRB changed its position with the M.B. Sturgis decision.  It held that temporary employees supplied by a staffing agency could be included in a single bargaining unit with an employer’s regular employees without the consent of both employers. Under M.B. Sturgis, temporary employees could be included in a single bargaining unit with regular employees if: (1) the staffing agency and the employer were determined to be joint employers, and (2) the temporary employees shared a community of interest with the regular employees.

The M.B. Sturgis decision did not last long. In 2004, a Bush-appointed NLRB overturned M.B. Sturgis, returning to the traditional joint-consent standard. Oakwood Care Center, 343 N.L.R.B. 659 (2004).

The NLRB’s reversal came in the Miller & Anderson, Inc. case.  The NLRB held that Oakwood Care Center was wrongly decided and, at least according to the majority, reinstated the rule from M.B. Sturgis.

The NLRB determined that the broad language of the term “employer unit” in the NLRA necessarily included both sets of employees who, according to the NLRB, are “working side by side, as part of a common enterprise.”  The NLRB also reasoned that the M.B. Sturgis rule better effectuated the policies of the NLRA by affording employees the “fullest freedom” to “choose the unit they wish to organize.”

Member Miscimarra (R) wrote a lengthy dissent, criticizing the majority’s decision in various respects. Most significantly, however, he noted that with the NLRB’s substantial expansion of the joint employer standard in the BFI decision, the NLRB is not returning to a standard that previously existed.  Rather, it has opened up an entirely new and vastly expanded set of bargaining relationships that could surpass what existed under M.B. Sturgis.

For the labor professional, the decision is important for at least three reasons:

1. It underscores the importance of examining existing agreements with temporary agency providers to address the joint employment question.
2. It raises important questions about how employers utilize temporary agency employees in their workplace. How those employees are used (e.g., supervised, disciplined, retained, etc.) will impact the “community of interest” test and thus whether the employees should be included in the same bargaining unit as regular employees.
3. It could complicate the collective bargaining process by requiring both the employer and the staffing agency to bargain with the union and pursue a single collective bargaining agreement.  When combined with the uncertainties of the BFI decision, the bargaining obligation could be quite expansive for both employers.