The decision in Browning-Ferris Industries of California, Inc., 362 NLBR 1 (2015) determined that a company (BFI) was a joint employer with a staffing company for purposes of collective bargaining because the company had indirect control and reserved contractual authority over essential terms and conditions of the employees from the staffing company.1
As previously noted, the BFI decision did not affect most clients of staffing companies because those clients were already technically joint employers. The clients both retained and exercised control over temporary employees placed by the staffing companies. Clients who used their own supervisors and/or set work schedules and/or dictated work performance have been held to be joint employers over contingent employees for purposes of collective bargaining for decades before the decision in BFI. Unions simply did not go after those joint employers. One reason why unions did not may be because representing a unit of temporary employees is a hassle with low rewards. Temporary workers are usually paid less and receive less benefits than permanent employees.
Additionally, a union could not represent a bargaining unit of both temporary and permanent employees unless both the staffing company and the client employer agreed to such a unit. The NLRB established the precedent in Oakwood Care Center, 343 NLRB 659 (2004), that a unit combining temporary employees and permanent employees of a staffing company employer and its client employer is appropriate only if both employers consent. The Board will not force multiemployer bargaining for temporary and permanent employees.
However, pending before the Board today is the matter of Miller & Anderson, Inc. (Case No. 05-RC-079249) in which the Board is reexamining its precedent. Specifically, the Board is considering the following:
- Should the Board continue to adhere to the holding of Oakwood Care Center, which disallows inclusion of solely employed employees and jointly employed employees in the same unit absent the consent of the employers?
- If the Board decides not to adhere to Oakwood Care Center, should the Board permit units including both solely employed employees and jointly employed employees without the consent of the employers?
Obviously, this is a case that can (and likely will) dramatically change the collective bargaining landscape pertaining to temporary workers. The current briefing schedule ends on September 30, 2015, and the Board will issue its decision.2
Facts of Miller & Anderson
The Sheet Metal Workers Local 19 petitioned the NLRB to represent, as a single unit, all sheet metal workers employed by Miller & Anderson, Inc. and/or Tradesmen International as either single or joint employers on all job sites in Franklin County, Pennsylvania.
Miller & Anderson is a mechanical and electrical contractor performing work in VA, WV, MD, and PA. Tradesmen International is a construction recruiter that provides contractors with temporary employees. It provided Miller & Anderson with workers for jobs within Franklin County, PA.
Both Miller & Anderson and Tradesmen International refused to consent to multiemployer bargaining of both temporary and full-time workers, and Region 5 Director rejected the petition under the precedent of Oakwood Care Center. The Director noted that the union seeks a three-employer unit consisting of (1) employees employed by Miller & Anderson, (2) employees employed by Tradesmen International, and (3) employees jointly employed by Miller & Anderson and Tradesmen International.
What is an expected outcome of Miller & Anderson?
Based upon the makeup of the Board and its recent decisions, it’s safe to assume that the decision in Miller & Anderson will favor the unions. If the facts show that the temporary workers of Tradesmen International were so closely intertwined with the permanent workers of Miller & Anderson, then a single unit will be deemed appropriate. The Board will find that the temporary employees and permanent staff are hired to accomplish the same goal, and that Miller & Anderson has ultimate control over the wages, hours, terms and conditions of employment of both the temporary employees and permanent staff to require a single unit for collective bargaining. The staffing company will be required to bargain on matters that it retained ultimate control.
The Board may have tipped its hand in the BFI decision when it wrote – “[m]oreover, as a rule, a joint employer will be required to bargain only with respect to such terms and conditions which it possesses the authority to control.” The Board seems inclined to force employers to the bargaining table if the employer possesses the right to control employees.
It’s unlikely that the Board will completely dismantle the multiemployer restriction. For example, one cannot fathom any legitimate rationale for a decision allowing a single unit made of multiple independent employers who obtain temporary employees from the same staffing company.
However, it is likely that the multiemployer restriction will be removed in situations where a single employer obtains employees from one or more staffing companies. The outcome of Miller & Anderson will likely hold that a union can petition to represent both those jointly employed employees and the permanent employees in a single unit.
So Should I Stop Using Contingent Employees?
No. Just because a union can petition for a single bargaining unit of joint employees and permanent employees does not mean that the unit will be approved. The NLRB cannot overturn every single precedent and it still must follow the law. Section 9(b) of the National Labor Relations Act requires that the petitioned-for unit must be compositionally appropriate for collective bargaining.3
What is an Appropriate Bargaining Unit?
To assure employees the fullest freedom in exercising rights guaranteed by the Act, the unit appropriate for collective bargaining shall be the employer unit, plant unit, craft unit, or subdivision thereof. Workers must share a “community of interest” relatively free of conflicts of interest amongst its members.
In determining the community of interest, the similarity in hours, wages, benefits, skills, supervision, terms of employment are the most indicative of mutual interest. Unit composition is designed to protect against fragmented bargaining.
Employers can always argue that temporary workers lack the community of interest with permanent employees to form a collective unit. Some factors for showing the lack of community of interest include the following:
- A difference in method of wages or compensation
- Different hours of work
- Different employment benefits
- Separate supervision
- Different performance rating
- Dissimilar qualifications, training and skills
- Differences in job functions
- Differences in amount of working time spent away from the plant or job site
- Infrequency or lack of contact with other employees
- Lack of integration with the work functions of other employees or interchange with them
The greater the differences in terms and conditions of employment, the less likely that temporary and permanent workers share a community of interest for purposes of a single collective bargaining unit. This gives both the staffing company and the independent employer the ability to challenge a single unit of temporary and permanent employees.
What can a Company do to avoid disruption?
Make sure to employ and enforce the aforementioned terms and conditions of employment in a different manner for temporary and permanent employees. A company can have separate supervision dedicated to temporary employees. It can have different compensation and benefits. The greater the amount of differences, the less likely that a single unit of temporary and permanent employees will be deemed appropriate.