The National Labor Relations Board recognizes the concept of joint employment – that a single employee can have more than one “employer.” As we have previously reported, the Board is considering arguments that the standard for "joint employment" status should be loosened and is expected to relax the standard in one of several pending cases. Countless business and operations models based on use of contingent, leased, or temporary employees, contract operations, franchises, and similar relationships are likely to be disrupted as a result. This is part of the multi-faceted attack on what Obama administration representatives and appointees have called “fissured industries.”
Now, foreshadowing another change in established Board law, the Board has granted a petition for review of a Regional Director’s unit determination in a representation case, Miller & Anderson, Inc., raising the following issue: if an entity is found to be a joint employer with its contractor-supplier, can a union organize and represent employees in a unit where some of the employees are jointly employed and some are not? Under current law, the answer is “No,” on a theory that such a situation involves multiple employers and that multiemployer bargaining requires the “consent” of all employers.
Many commentators suggest the Board will use the Miller & Anderson case to find “appropriate” bargaining units consisting of a mix of jointly employed and non-jointly-employed workers. If so, the Board will probably overrule its 2004 Oakwood Care Center decision and return to the M.B. Sturgis rule that Oakwood Careoverruled.
In 2004, the Board in Oakwood Care found that proposed bargaining units combining (1) directly-employed employees of one employer and (2) temporary (or contract) employees employed by two or more joint employers were inappropriate unless all affected employers consented. Oakwood Care represented a return to the law as it existed before a Board decision in M. B. Sturgis, which reversed longstanding Board precedent in 2000 by holding that such a “mixed” bargaining unit could be appropriate without both employers’ consent, so long as the employees had a community of interest.
The Board, in its May 18, 2015, Order granting review of the Regional Director’s decision in Miller & Anderson, indicated that it will be requesting amicus briefs on the issue, possibly following the well-traveled path of first asking for such briefs and then making big changes in established Board law. Given the current makeup of the Board, we anticipate that the Board majority will resurrect the M.B. Sturgisrule and overrule Oakwood Care. Such a result, coupled with the Board’s expected loosening of the standard for finding joint employment, will give unions seeking representation in jointly employed workforces many more options to target for organizing. Organized labor argues that the M.B. Sturgis rule better takes into account the realities of the modern workplace. Employers, on the other hand, argue that the National Labor Relations Act specially mentions the “employer unit” and that the M.B. Sturgis rule ignores conflicts inherent between “user” and “provider” employers and their employees. Businesses using temporary or contractor employees side by side with their own employees should be prepared for a likely change in the law.