The NLRB continues to make things more difficult for employers who use temporary workers from staffing agencies. In a 3-1 decision reversing the Board’s prior position, the NLRB issued a July 11, 2016 order holding that temporary workers from staffing agencies can form one bargaining unit with the employer’s permanent workforce. The ruling overturns a 2004 NLRB decision providing that both the employer and staffing agency must consent to such a combined unit.
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How the NLRB Got Here
The present case, Miller & Anderson, came before the NLRB after a sheet metal workers’ union asked the Board to review a regional director’s decision precluding the union from representing as one unit all sheet metal workers permanently employed by a company and those temporarily provided by a staffing agency.
Faced with the same issue in 2004, the NLRB ruled in Oakwood Care Center that bargaining units comprised of employees who are solely employed by a “user employer” ( i.e., traditional permanent employees), and those who are jointly employed by the user employer and a “supplier employer” (i.e., a staffing agency) constitute “multi-employer units.” Because multi-employer units are only allowed with employer consent, the Oakwood board held that both the employer and the staffing agency must consent before permanent employees and temporary employees could be combined in one bargaining unit.
The Oakwood ruling itself represented a reversal of the Board’s decision just four years earlier in M.B. Sturgis. In that case, the Board held employer consent is not required for a unit combining employees solely employed by a user employer with those jointly employed by a user employer and supplier employer. The Sturgis board found that such employees were an “employer unit,” rather than a multi-employer unit because they all performed work for and were employed by the same employer.
The NLRB’s New Ruling
After overruling Sturgis, the Oakwood decision remained the law for 12 years. With Miller & Anderson, the NLRB invited briefing essentially on whether it should continue to follow Oakwood or revert back to its holding in Sturgis. The latter choice prevailed.
The NLRB began its current analysis by examining the National Labor Relations Act and concluding that it was silent as to whether it was appropriate to require employer consent before temporary staffing agency workers and the employer’s permanent workforce could jointly unionize. As such, the Act did not compel the NLRB to follow Oakwood but rather to find a rule that is both consistent with the Act and serves the Act’s central purpose: “to protect and facilitate employees’ opportunity to organize unions to represent them in collective bargaining negotiations.”
The NLRB next held that the Sturgis rule effectuates the Act’s fundamental policies while the Oakwood rule frustrates them. More specifically, according to the NLRB, the Sturgis rule honors the employees’ right to “draw the boundaries” of self-organization “because it does not require employees to obtain employer permission before they may organize in their desired unit.” By contrast, the Oakwood rule requiring employer permission “deprives the solely employed employees of their full ability to associate with their contingent workers,” which, in turn, “dilutes the bargaining power of both groups.” According to the NLRB, such a result “is surely not what Congress intended when it instructed the Board … ‘to assure to employees the fullest freedom in exercising the rights guaranteed by the Act.’”
Where Do Employers Go From Here?
The Miller & Anderson ruling is frustrating to be sure. The NLRB had already begun the process of helping temporary workers unionize in its landmark 2015 Browning-Ferris ruling, which made it much easier for employers and staffing agencies to be deemed joint employers for unionizing purposes. Miller & Anderson adds another union-friendly layer to the equation. Employers who utilize staffing agencies will now need to consider the possibility that the two groups of employees will seek to unionize. If so, employers will be faced with the difficult task of collective bargaining with two groups of employees whose interests may differ in several key areas.
There are, however, other considerations that could benefit employers faced with this dilemma. Even under the new Miller & Anderson standard (or, rather, the return of the Sturgis standard), an employer’s permanent employees and those temporary workers jointly employed by a staffing agency may only form one combined union where there exists a sufficient “community of interest” between them. Employers can take steps to preclude the two groups from meeting this standard. For example, employers may consider utilizing staffing agency employees in different ways, under different conditions, and/or in different locations from its permanent workforce. To the extent that permanent and supplied employees can meet the “community of interest” standard, however, employers must now be prepared for the much greater likelihood that these groups of employees will unionize.