Jul 26, 2016

Over the last seven+ years, the National Labor Relations Board has consistently expanded collective bargaining rights in a variety of employment settings. Continuing that trend, the NLRB has now reversed over a decade of precedent and ruled that temporary employees supplied by one company (“supplier employer”) to another company (“user employer”) to perform services, can be combined with the user employer’s own workforce to form a single bargaining unit for purposes of collective bargaining.

In a 3 to 1 decision in Miller & Anderson, Inc., 364 NLRB No. 39 (July 11, 2016), the Board majority overruled its own earlier decision in Oakwood Care Center, 343 NLRB 659 (2004) to allow such combinations. This decision follows last year’s Board ruling in Browning-Ferris Industries, which significantly broadened the definition of joint employer, as we discussed in our update.

For many years, the Board followed the rule established in Oakwood that outside temporary employees supplied by a supplier employer and those regular employees employed by a user employer could not be combined in a single unit absent the consent of both employers. This rule was based on the requirement in Section 9(b) of the National Labor Relations Act, that multi-employer bargaining requires the consent of all employers. This rule respected the separate interests of both employers while promoting predictability in the bargaining process. Typically in these settings, a supplier employer dictates all significant terms and conditions of employment over the temporary employees it furnishes, while the user employer controls the wages, hours, and working conditions of its regular workforce.

Joint employer ruling

The Board blurred these lines significantly with its 2015 decision in Browning-Ferris, and held that a user employer could be deemed the joint employer of outside employees furnished by a supplier if it shared or co-determined matters relating to the essential terms and conditions of employment of the supplied employees. The Board held in Browning-Ferris that this rule promoted meaningful collective bargaining by bringing the user employer to the bargaining table in situations where it controlled significant aspects of the terms of employment of supplied temporary employees. With this latest decision in Miller & Anderson, a majority of the Board has gone one step farther. Under the new rule, outside temporary employees and a user’s regular employees will both vote in a single union election as to whether they desire union representation.

Decision creates additional confusion

The Board’s new decision is sure to create additional confusion in the collective bargaining arena. The Board majority blithely asserts that the user employer will have an obligation to bargain over the terms of employment of its regular employees, and “only” has an obligation to bargain over the supplied employees’ terms and conditions which it possesses the authority to control. Similarly, the supplier employer will have no obligation to bargain over the terms and conditions of employment of the user employer’s regular workforce. Yet determining the extent of a user employer’s control over outside temporary employees’ wages, for example, is not as simple as the Board appears to believe. Moreover, the Board takes absolutely no account of the transitory nature of many supplier employees, who might vote in favor of representation at one user employer and then, days or weeks later, move on to a new worksite and never be reassigned to that employer again.

Stinging dissent

In a stinging dissent, Board member Philip A. Miscimarra argued that the majority’s decision would create even more uncertainty with respect to collective bargaining responsibilities. He noted that many user employers contract with multiple supplier vendors, who themselves have multiple clients. Yet under the Board majority’s ruling, supplier employers and the user employer must somehow determine among themselves who is responsible to bargain over which terms and conditions, how disputes between or among them will be resolved, which entity will be responsible for providing information to a union, and how the original contract or contracts between the supplier employer and user employer will impact the bargaining positions being advanced at the table. This will create nothing but chaos, in his view.

Other areas impacted

The decision is also likely to impact other areas of the law. For instance, allowing employees to be combined for purposes of bargaining may make it easier for these same employees to establish joint employment in other areas of the law, including for purposes of wage and hour requirements. Further, joint employment status carries with it additional risks as joint employers may be jointly and severally liable for violations of the law (i.e. the user employer may end up being liable for violations of other laws by the supplier employer and vice versa).

It is likely that the Board majority’s decision in Miller & Anderson will be challenged in the Court of Appeals. In the meantime, employers faced with election petitions seeking to combine outside temporary employees with their regular employees should consider challenging the appropriateness of such combined units. For example, the supplied temporary employees may not share a community of interest with the regular workforce based upon the short duration of their assignment, their unique duties, or other employment attributes, which would justify excluding them from a unit of regular employees.

If you have questions regarding this or any other issue, contact Mike Aldana, (414) 277-5151/, David Kern, (414) 277-5653/, Judi Williams, (414) 277-5439/, or your Quarles & Brady attorney.
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