On Monday, July 11, the National Labor Relations Board gave a big gift to unions trying to organize staffing company employees and employees in workplaces combining supplied employees and employees working solely for a user employer. In Miller & Anderson, Inc., 364 NLRB No. 39 (July 11, 2016), the Board ruled, 3-1, to overturn a long-standing decision that when bargaining units combine employees who work solely for a user employer with employees who work jointly for a staffing employer and the user employer, the consent of all involved employers must be obtained to organize any grouping within the unit. Miller now makes it easier for unions to organize within a workplace that consists of both user and staffing company employees, as employer consents to such organizing are no longer required.

In Oakwood Care Center, 343 NLRB 659 (2004), a unit of non-professional employees, consisting of both Oakwood employees and employees of a staffing company working at Oakwood, was sought by the union. However, the Board rejected the unit, overruling a then-recent prior precedent, M. B. Sturgis, 331 NLRB 1298 (2000). In Oakwood the Board held that it had no authority to direct elections in what it termed a multi-employer unit absent the consent of all employers involved. The Oakwood decision precluded most attempts to organize all employees of a staffing company, because consents were required from the employers using those supplied employees. Similarly, even employees of the user company could be blocked from unionization when working together in a unit with supplied employees. In those circumstance, the user and supplier companies would both need to consent to the organizing. The practical effect was to block most unionization of staffing company employees and of workplaces that employed both user and supplied employees.

In Miller & Anderson, the Board overruled Oakwood, and returned to the M. B. Sturgis standard. Thus, employer consent is not required for unions wishing to organize units that combine jointly employed staffed employees with employees solely employed by the user employer. And, unions can now organize entire staffing companies, without regard to the wishes of the user employers to which those employees are supplied. Board Member Miscimarra dissented on both statutory grounds, that the Board lacks authority to direct elections in these multi-employer units, and on policy grounds, that Oakwood creates complex, untenable bargaining situations. It is likely that the decision will be appealed, but it remains the law that the Board will follow, absent reversal in the Supreme Court years from now.

The Miller & Anderson decision is especially bothersome in light of last year’s Browning-Ferris decision, in which the Board greatly expanded its joint employer doctrine (see our Alert “Life After Browning-Ferris: What Employers Need to Know Under the New Joint Employer Regime). The end result is that we expect a spate of organizing occurring within the staffing industry, and this organizing will flow over into those companies using supplied employees. This will include allegations of joint employer status once supplied employees become unionized at the staffing company. Our advice to staffing companies is to step up their employee satisfaction and union avoidance programs … right now! User employers may need to completely reassess their staffed employee business models. At a minimum, user employers need to evaluate both their own and their staffing companies’ vulnerability to union organizing. And in all cases, employers in this situation should be looking at scenarios, including worst case scenarios, in the event of organizing.

We will keep you posted on further developments as they occur.