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NLRB Gives Unions Another Win, Permitting Outside Temporary Employees to Vote in Union Elections

Labor & Employment Alert Michael Aldana, David B. Kern, Judith A. Williams-Killackey

Over the last seven + years, the National Labor Relations Board (the Board or NLRB) has consistently expanded collective bargaining rights in a variety of employment settings. Continuing that trend, the NLRB has now reversed over a decade of precedent and ruled that outside temporary employees supplied to a "user" employer, and the user employer's own workforce, can be combined in a single bargaining unit for purposes of collective bargaining. In a 3 to 1 decision in Miller & Anderson, Inc., 364 NLRB No. 39 (July 11, 2016), the Board majority overruled its own earlier decision in Oakwood Care Center, 343 NLRB 659 (2004) to allow such combinations. This decision follows last year's Board's ruling in Browning-Ferris Industries, which significantly broadened the definition of joint employer, as we discussed in our update.

For many years, the Board followed the rule established in Oakwood that outside temporary employees supplied by a supplier employer and those regular employees employed by a user employer could not be combined in a single unit absent the consent of both employers. This rule was based on the requirement in Section 9(b) of the National Labor Relations Act, that multiemployer bargaining requires the consent of all employers. This rule respected the separate interests of both employers while promoting predictability in the bargaining process. Typically in these settings, a supplier employer dictates all significant terms and conditions of employment over the temporary employees it furnishes, while the user employer controls the wages, hours, and working conditions of its regular workforce.

The Board blurred these lines significantly with its 2015 decision in Browning-Ferris, and held that a user employer could be deemed the joint employer of outside employees furnished by a supplier if it shared or co-determined matters relating to the essential terms and conditions of employment of the supplied employees. The Board held in Browning-Ferris that this rule promoted meaningful collective bargaining by bringing the user employer to the bargaining table in situations where it controlled significant aspects of the terms of employment of supplied temporary employees. With this latest decision in Miller & Anderson, a majority of the Board has gone one step farther. Under the new rule, outside temporary employees and a user's regular employees will both vote in a single union election as to whether they desire union representation.

The Board's new decision is sure to create additional confusion in the collective bargaining arena. The Board majority blithely asserts that the user employer will have an obligation to bargain over the terms of employment of its regular employees, and "only" has an obligation to bargain over the supplied employees' terms and conditions which it possesses the authority to control. Similarly, the supplier employer will have no obligation to bargain over the terms and conditions of employment of the user employer's regular workforce. Yet determining the extent of a user employer's control over outside temporary employees' wages, for example, is not as simple as the Board appears to believe. Moreover, the Board takes absolutely no account of the transitory nature of many supplier employees, who might vote in favor of representation at one user employer and then, days or weeks later, move on to a new worksite and never be reassigned to that employer again.

In a stinging dissent, Board Member Miscimarra argued that the majority's decision would create even more uncertainty with respect to collective bargaining responsibilities. He noted that many user employers contract with multiple supplier vendors, who themselves have multiple clients. Yet under the Board majority's ruling, supplier employers and the user employer must somehow determine among themselves who is responsible to bargain over which terms and conditions, how disputes between or among them will be resolved, which entity will be responsible for providing information to a union, and how the original contract or contracts between the supplier employer and user employer will impact the bargaining positions being advanced at the table. This will create nothing but chaos, in his view.

It is likely that the Board majority's decision in Miller & Anderson will be challenged in the Court of Appeals. In the meantime, employers faced with election petitions seeking to combine outside temporary employees with their regular employees should consider challenging the appropriateness of such combined units. For example, the supplied temporary employees may not share a community of interest with the regular workforce based upon the short duration of their assignment, their unique duties, or other employment attributes, which would justify excluding them from a unit of regular employees. If you have questions regarding this or any other issue, contact Mike Aldana, (414) 277-5151/michael.aldana@quarles.com, David Kern, (414) 277-5653/david.kern@quarles.com, Judi Williams, (414) 277-5439/judi.williams@quarles.com, or your Quarles & Brady attorney.