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The Other Shoe Drops – The NLRB’s “Contingent Workforce” Activism Continues

By Timothy C Kamin and provided by Bill Grob, Ogletree DeakinsOgletree Deakins

The National Labor Relations Board (“NLRB”) will now permit a single bargaining unit to include employees who are solely employed by an employer along with other employees who are jointly employed by that employer and a staffing provider, all without the consent of either employer.  The NLRB’s July 11, 2016 decision in Miller & Anderson, Inc. overturns more than a decade of precedent under the NLRB’s 2004Oakwood Care Center decision, in which the NLRB previously held that jointly-employed employees could not be included in a bargaining unit with solely-employed employees unless both employers consent to the multi-employer bargaining arrangement.  In overturning Oakwood Care Center, the NLRB expressly reverted to the NLRB’s rule set forth in its 2000 decision in M.B. Sturgis, Inc.


This decision continues the NLRB’s activism in seeking to empower “contingent workers,” and forms a predictable bookend to the NRLB’s August 2015 decision in Browning-Ferris Industries of California, which relaxed the NLRB’s standards for finding joint employer status.  Tellingly, in both Browning-Ferris and Miller & Anderson, the NLRB expressly claimed “responsibility to adapt the Act to the changing patterns of industrial life.”  In its analysis of the NLRB’s historical treatment of this issue, the NLRB characterizes this move as merely restoring the proper order that existed under NLRB precedent rooted in the 1940s that stood until 1990, and not as one that radically shifts the course of labor law.  Of course, what the NLRB glosses over in this context is that a rule that arose from the retail store concessionaire arrangements of the 1940’s very well may have disastrous consequences when applied to the industrial reality of 2016.  While the NLRB claims “responsibility to adapt the Act to the changing patterns of industrial life,” it seems to celebrate taking the law backward 70 years.


Anticipated Consequences


In non-union workplaces utilizing contingent workforces, this new standard creates the opportunity for labor unions to petition to represent the primary workforce and the contingent workforce in a single bargaining unit, thereby binding the staffing employer and the client employer to a duty to bargain with the union over the terms and conditions of employment for both groups of employees simultaneously.


In the context of workplaces in which the employer’s primary workforce already is represented by a union, and that primary workforce is supplemented by a contingent workforce from a staffing provider, Miller & Anderson creates the opportunity for unit clarification petitions seeking to “accrete” the contingent workforce into the existing bargaining unit without an election.  Additionally, labor unions may seek to have a “Globe-Armour,” self-determination election, in which the contingent workforce would vote on whether to join the existing bargaining unit.


Key Employer Takeaways


The NLRB’s recent activity is a clear threat to the efficiencies that employers have achieved through appropriate use of contingent workforces.  As the NLRB has added yet another significant consequence to its expanded definition of “joint employer,” both users and suppliers of staffing services and contingent workforces should continue to evaluate the nature of their relationships and, where possible, to refine their contracts to clearly define and allocate the respective authorities or rights of control – including potential rights of control.  Users and suppliers should enter into and/or continue their relationships with eyes wide open, fully understanding the unfortunate reality that they may be labeled as “joint employers” and may find themselves together defending against a union organizing campaign, or at a bargaining table across from a union, bargaining over the supposed jointly employed segment of the workforce.  Employers with union-represented primary workforces and also a contingent workforce excluded from the current bargaining unit should evaluate their collective bargaining agreement’s treatment of the contingent workers and evaluate the potential vulnerabilities, including the possibility of accretion into the existing unit through unit clarification or a Globe-Armour election.  Finally, because this change may invigorate labor unions to actively organize such workforces, employers should take a proactive approach to positive employee relations with contingent workforces that may have been neglected in the past, including advising employees in advance of the ramifications of unionization, and properly training supervisors.


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