Many organizations use temporary employment services to provide or supplement their workforce. Such arrangements allow an organization to focus on its core strengths and activities while maintaining access to workers as needed. Employees supplied through an agency can, in theory, reduce the legal entanglements and costs associated with direct employment.

Such arrangements, however, have come under challenge in the past several years. Labeling them “fissured” or “fractured” workforces, federal agencies have issued a series of rulings designed to place responsibility for agency employees on the contracting organization. The National Labor Relations Board (NLRB), in fact, has just added another significant wrinkle to the use of temporary workers.

Following its 2015 decision in Browning Ferris Industries that changed the standard for determining when two or more entities are “joint employers” for purposes of federal labor law (see Just in Time for Labor Day – Employees You Didn’t Know Were Yours), the NLRB has further liberalized the standard regarding joint employment to facilitate unionization in workplaces that use temporary employees. In Miller & Anderson, Inc. & Tradesmen International, 364 NLRB No. 39 (July 11, 2016), the NLRB held that a single bargaining unit may properly be composed of both jointly and singly employed employees, even if the two employers do not wish to bargain as a team, so long as all the employees share a “community of interest.”

In this case, Miller & Anderson had apparently employed sheet metal workers, some directly and others through an arrangement with a staffing agency, Tradesmen International. The Sheet Metal Workers Union sought to represent all sheet metal workers employed by Miller & Anderson directly or jointly with Tradesmen International in a particular county in Pennsylvania. The regional office of the NLRB dismissed the petition because the two employers stated that they did not consent to a joint bargaining relationship – the long-standing standard for such cases. The existing rule requiring mutual employer consent was based on rules governing multi-employer bargaining relationships in which different employers in the same industry voluntarily bargain with a single union representing each of their employees. In 2004, the NLRB applied that standard to arrangements in which some employees were jointly employed while others were singly employed by one of the joint employers.

In Miller & Anderson, the NLRB reversed its 2004 decision, holding that the intertwined nature of the situation was substantially different from traditional joint bargaining involving entirely separate employers. The NLRB decided that, so long as the workers were similarly situated enough to share a “community of interest,” a bargaining unit could consist of both the employees directly employed by Miller & Anderson and those jointly employed with Tradesmen International.

As the dissenting Board Member pointed out, this decision has the potential to create difficult situations in which an organization and the agency with which it contracts have different bargaining strategies or business goals, yet are forced into a cooperative bargaining arrangement. While the Board majority noted that business organizations often surmount greater regulatory challenges than this, there is no question that the decision will complicate bargaining when it arises.

An important note to the majority’s decision, however, is the requirement that all the workers share a “community of interest” that would make collective bargaining appropriate. Factors that the NLRB uses in making such a determination include the type of work performed, the contact and interchangeability between employees, the similarity of working conditions, wages and benefits, common supervision and operational integration. It may be that in cases involving agency employees, the regular employees and temporary workers will not share such a community of interest. Employers wishing to reduce the possibility of a joint bargaining requirement may wish to structure arrangements to avoid a community of interest among regular and agency employees.

Miller & Anderson is the latest in a series of NLRB decisions designed to reduce barriers to unionization. In 2011, the NLRB decided in Specialty Healthcare that a union could, within only broad limits, define a potential bargaining unit, and that the burden on an employer proposing a larger or smaller unit was substantial. In April 2015, the NLRB changed election rules so that elections occur twice as quickly as under the old rules – within 21 days as opposed to within 45 days from the union’s filing of a representation petition. Last August, the NLRB decided Browning Ferris, and is expected to issue rulings more directly involving franchises within the next year.

Up to now, none of these rulings, however, have moved the needle very much in terms of organized labor’s overall success in new organizing. The percentage of the private sector workforce who are members of a union remains at about 6.7%, and union wins at the ballot box have not increased over the past several years. Nonetheless, employers need to pay close attention to the pro-union changes being implemented by the NLRB, and employers that make heavy use of staffing agency arrangements should conduct a legal review to assess the risk of whether a particular business structure may be more or less conducive to organizing activities.