NLRB Reverses Rule Regarding Temporary Employees

July 14, 2016

In a much-anticipated decision, the National Labor Relations Board (NLRB) on July 11, 2016, reversed its existing precedent on organizing of temporary employees.  In Miller & Anderson, Inc., the NLRB ruled that permanent employees and temporary staffing employees may be combined in the same bargaining unit without the consent of either the employer or the staffing agency. 

Since the 1970s, the NLRB had consistently found that a bargaining unit containing both an employer’s regular employees and the employer’s temporary employees supplied by a staffing agency was inappropriate without the consent of both the employer and the staffing agency. Greenhoot, Inc., 205 NLRB 250 (1973).

The NLRB originally changed its position in 2000 with the M.B. Sturgis decision, holding that temporary employees supplied by a staffing agency could be included in a single bargaining unit with an employer’s regular employees if: (1) the staffing agency and the employer were determined to be joint employers, and (2) the temporary employees shared a community of interest with the regular employees. Employer consent was not required. 

The M.B. Sturgis decision was short-lived, however. In 2004, a Bush-appointed NLRB overturned M.B. Sturgis, returning to the joint-consent standard established in Greenhoot. Oakwood Care Center, 343 NLRB 659 (2004).

In Miller & Anderson, the NLRB changed course yet again. It ruled that Oakwood Care Center was wrongly decided and reinstated the rule from M.B. Sturgis.  Thus, a bargaining unit may again be comprised of both permanent and temporary employees without employer consent as long as the employees in the unit share a community of interest and both the staffing agency and the host employer meet the test for “joint employer” under the National Labor Relations Act.

Citing its “statutory command” to ensure that “employees [have] the fullest freedom in exercising the rights guaranteed by th[e] Act,” the NLRB reasoned that the broad language of the term “employer unit” necessarily included both sets of employees who, according to the NLRB, are “working side by side, are part of a common enterprise.”  Beyond the statutory language, the NLRB reasoned that the M.B. Sturgis rule effectuated the fundamental policies of the Act by affording employees the “fullest freedom” “to choose the unit they wish to organize.”

The NLRB’s latest decision continues its trend of expanding the reach of the Act and facilitating union organizing — which has been compounded by other recent decisions, including the NLRB’s Browning-Ferris decision that dramatically expanded the definition of “joint employer” in the franchise context. And, once again, the NLRB has shown its willingness to upend well-established precedent in pursuit of its policy goals. 

The NLRB’s new decision will likely have the immediate impact of assisting unions to organize sites where employers use both permanent and temporary employees and may enable unions to obtain and win elections based on the support of an employer’s temporary workforce. Where unions are successful at organizing, this new rule will complicate the collective bargaining process by requiring multiple “employers” to bargain with the union and by likely requiring all such “employers” to pursue a single collective bargaining agreement.  An employer concerned about organizing activity should consider that its temporary employees may now become a target and an avenue for union organizers to infiltrate the employer’s workforce. 

Employers should continue to monitor developments from the NLRB closely and seek appropriate legal guidance to assess risks in their current business relationships.  Should you have questions about the NLRB’s new ruling or need assistance in responding to union organizing activities, please contact the authors, your McGuireWoods contact, or any other member of the firm’s labor and employment group.