Suppose your company is a mechanical and electrical contractor. Let’s call it Crackerjack Contractors, Inc., or “Crackerjack” for short. Crackerjack employs sheet metal workers and they belong to the Superior Sheet Metal Workers Union (“Superior”). Crackerjack also has augmented its workforce with some sheet metal workers supplied by Terrific Temps (“Terrific”). You are a manager at Crackerjack. You have just been informed that Superior’s bargaining unit just grew, pretty much overnight. All of Terrific workers are now part of that unit. How can that be? Terrific provides an on-site supervisor ensuring that Crackerjack exercises very little if any control over the temps. Assuming that Crackerjack and Terrific are joint employers, they did not consent to the temps and direct hires forming a single bargaining unit. So the temps can’t join the union, right? Surprise! The NLRB now says they can. What’s up with that? We’re going to find out– you guessed it— after the jump…
If you’ve read my previous posts, (this one, this one and this one for example) you already know that the NLRB has been working very hard to: a) broaden the definition of joint employment; b) blur the lines between joint employers; and c) expand its role and that of labor unions. Regarding joint employment specifically, last year the NLRB overturned long-standing precedent in Browning Ferris by ruling that indirect control and/or the unexercised right to control the working conditions of temporary employees provided by a staffing agency is enough to establish joint employment between a client company and staffing agency. Approximately two weeks ago, in Miller & Anderson, the NLRB went even further, with potentially sweeping implications, particularly for companies that rely on staffing agencies to help them temporarily augment their workforces. If that includes you, then read on to find out what happened and what it may mean for you.
Here’s the lowdown: The Sheet Metal Workers’ International Association petitioned to represent a bargaining unit comprised of all sheet metal workers at Miller & Anderson, consisting of Miller & Anderson’s direct employees and temporary workers supplied by a staffing company, Tradesmen International. The Board found that the two companies both had the right to co-determine the temporary employees’ working conditions, and, relying on its recent ruling in Browning Ferris Industries, determined that they were joint employers. Assuming for the sake of argument that the two entities are joint employers, arguably, the inquiry still should have ended there. Under precedent established in Oakwood Care Center in 2004, consent of both/all joint employers is required before direct hires and temporary workers can form a single bargaining unit. No such consent was present here.
So if NLRB’s own precedent required consent of both joint employers, and neither of the joint employers consented, then, how could the direct hires and temporary employees now suddenly form a single bargaining unit? The NLRB overturned its ruling in Oakwood Care Center. In so doing, it restored its ruling in M.B. Sturgis, a 2000 case that held that direct hires and jointly employed temps of a particular employer can form one bargaining unit without the consent of either joint employer if the unit succeeds in demonstrating a “community of interest”.
So, you’re probably wondering: what’s a “community of interest and how do you determine whether and when it exists? For those of you who asked, those are both great questions! You look to several factors, which include without limitation: functional integration into the work of the “user” employer, similarity of the type of work performed by the direct hires and temps, interaction and interchange between the two groups of workers, similarity of working conditions, benefits and wages and; common supervision. As you can expect no one factor is determinative. Findings are based on a totality of circumstances. For any “user” employers who regularly contract with staffing agencies to augment their existing workforce and who do not want to get entangled with unions on the basis of short-term arrangements, this ruling would seem to spell trouble. Let’s get back to that in a moment.
Why did the NLRB just scrap established precedent? The cynical answer is because that precedent no longer served its current agenda. What was its reasoning in overturning Oakwood Care Center, though? The Board said that similarly situated employees needed the ability to freely exercise the rights granted to them under the NLRA, namely the right to organize a union. The Board indicated it was concerned about temporary workers who would be “vulnerable to a loss of bargaining power”, because they would be more likely to be isolated from their employers and from each other. The Board concluded it was necessary to return to the standard articulated in M.B. Sturgis, in order to “permit employees in an otherwise appropriate unit to pool their economic strength and act through a union freely chosen by the majority so that they can effectively bargain for improvements in their wages, hours and working conditions.”
So now what? One question is realistically, do a lot of temporary workers even want to organize? If the arrangements are truly short-term, then perhaps not — and perhaps this ruling will have little practical effect in those situations. Miller & Anderson is more likely to have impact on “user” employers that employ “temps” on a more long-term basis. For those employers, a few options may be available, such as: a) reworking the contractual arrangement into one more like that of an outside contractor, i.e. where the right to control working conditions rests primarily if not solely with the staffing agency; b) hiring workers with separate skill sets, doing separate work from employees who already comprise or could comprise a bargaining unit; c) only hiring temps for specific, short-term projects; and/or d) using temps on a temp-to-hire basis, where they become direct hires if the project appears to last longer than a few months.
Now, anything having to do with the NLRB is subject to challenge by appeal and therefore could be overturned. So, what else should employers do? Stay tuned for new developments!
Disclaimer: Contents of this post are for educational/informational purposes only, are not legal advice, and do not create an attorney-client relationship. Consult with competent employment counsel in the state(s) in which you employ people with your specific questions.
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