The National Labor Relations Board is again changing the rules for employers, but the outcome is not really a surprise. The NLRB ruled 3-1 in Miller & Anderson, Inc., that unions can combine in a single bargaining unit consisting not only of a company’s regular employees, but also of temporary employees performing similar work who are jointly employed by the staffing agency and the employer.

The decision is significant particularly in light of the proliferation of “temporary” or “leased” employees in the modern workplace.

Under the standard that has applied for about the past 12 years until now, a combined bargaining unit like this was not allowed unless the employer of the temporary employees (the “supplier” employer) and the employer of the regular employees (the “user” employer) both consented. This standard came from the 2004 case of Oakwood Care Center. However, before Oakwood, the Board had ruled in M.B. Sturgis that “mixed” bargaining units were allowed without the consent of the two employers if the workers had a “community of interest.” In Miller & Anderson, the Board overruled Oakwood and returned to its Sturgis rule.

In Miller & Anderson, the Board majority, consisting of Chairman Mark Gaston Pearce, Kent Hirozawa, and Lauren McFerran, provided a lengthy history of Board precedent and noted that from the 1940s through the 1990s a single unit could consist of a mix of supplier and user employees if there was a “community of interest,” meaning that the employees worked together doing similar jobs under similar conditions. The Board majority cited data from the Bureau of National Labor Statistics and other publications indicating that there may be as many as 4 million temporary workers in the United States by the year 2022, and noted that temporary employees often work alongside regular employees in industrial and blue-collar jobs.

In response to concerns expressed by dissenter Philip Miscimarra that the majority was, in effect, ordering an election in a multi-employer bargaining unit, the majority argued that there was no common user employer in a multi-employer unit. Thus, the majority said, a multi-employer unit would still require consent of the employers.

Unlike employees in a multi-employer unit, the Board said, temporary workers are actually employees of the user employer as well as the staffing agency under a theory of joint employment. Thus, according to the Board majority, all the employees in a Sturgis unit are performing work for the user employer, and all unit employees are employed either solely or jointly by the user employer. The majority said that the creation of Sturgis units will not burden employers because the employer could have had two parallel units of solely employed employees and another unit of the supplier employees in a joint unit under existing law.

The Board noted that in a Sturgis unit, employers will have to bargain only over issues that they control. For example, the user employer would be required to bargain over pay and benefits for its solely-employed employees. However, the question is whether it would have to bargain over the wages and benefits of the jointly employed contingent workers because it possess the authority to control their terms and conditions of employment.

The Miller & Anderson decision follows the Board’s controversial Browning Ferris Industries decision from last year, which liberalized the test for joint-employer status in the temporary worker context. Under BFI, the joint-employer relationship will be found when the supplier and user employer share responsibility for determining the essential terms and conditions of the temporary worker’s employment. Read together, BFI and Miller & Anderson create a one-two punch for employers: BFI makes it more likely that temporary employees will be considered “jointly employed” by the user employer, and Miller & Anderson makes it more likely that the “jointly employed” temps will wind up in the same bargaining unit with regular employees.

Analysis

As a result of the Miller & Anderson decision, an employer’s use of temporary employees now creates a higher risk for union organization attempts. Companies will need to reevaluate their labor relations action plans to include the concerns of temporary employees, including the pay and benefits of temporary employees. Disciplining temporary employees could create potential joint-employer liability.

“For the business community, the Board’s latest decision means that the possibility of a union consisting of both regular employees as well as contract or temporary employees is a real one,” according to the U.S. Chamber of Commerce. “This could occur even if a majority of regular employees votes against unionization. How that possibility might manifest itself is anyone’s guess, but suffice it to say, Miller & Anderson tilts the playing field even more in favor of organized labor.”