by Jonathan Segal
Employers are increasingly using temporary workers supplied by temporary agencies to supplement their workforces. Where these temporary employees are jointly employed by the supplier and user employers under the joint employer standards established by the NLRB, the NLRB has made it much easier for unions to organize them.
Until last month, the law was that a union could represent in one bargaining unit employees solely employed by the user employer and employees jointly employed by the supplier and user employers only if both employers consented to multi-employer bargaining. Lee Hospital, 300 NLRB 947 (1990). Not surprisingly, it was rare for both employers to provide such consent.
Last month, the NLRB overruled Lee Hospital in M.B. Sturgis Inc., 331 NLRB No. 173 (2000). In overruling Lee Hospital, the NLRB held that a union could represent in one bargaining unit employees solely employed by the user employer and employees jointly employed by the supplier and user employers, even in the absence of the consent of their employers, if the solely employed and jointly employed employees share a community of interest.
What does this mean in English? Assume an employer employs 100 regular employees. Assume further it also jointly employs 10 temporary employees supplied to it by a temporary agency. The 100 regular employees and the 10 temporary employees could constitute one appropriate bargaining unit, if they share a community of interest.
The decision obviously creates potential bargaining problems for supplier and user employers whose interests often are quite divergent. However, these potential bargaining problems can be mitigated to the extent that the relative responsibilities of the 2 employers are allocated by agreement.
More specifically, the NLRB stated in M.B. Sturgis that the user and the supplier employer must each bargain with the union only with regard to those terms and conditions over which they have control. Accordingly, from the perspective of the user employer, it is ordinarily desirable for the agreement between the user employer and the supplier employer to make explicit that the supplier employer has full and sole control over and responsibility for wages and benefits. If the agreement between the user employer and the supplier employer makes clear that the supplier employer has full and sole control over wages and benefits, then the user employer should have no obligation to bargain with a union regarding these terms and conditions of jointly employed supplied employees.
However, the more immediate concern for most employers is not the bargaining ramifications of the NLRB decision but rather the extent to which the decision increases their vulnerability to organizing drives and accretion petitions.
In a close election involving both regular and jointly employed temporary employees, the temporary employees could tip the election in favor of the union, even though their interests differ significantly from those of the regular employees. Of course, it is also possible that the temporary employees could be the swing votes in helping the employer to remain union free.
To minimize the likelihood that temporary employees have an incentive to unionize, the user employer may wish to establish a requirement with the supplier employer that temporary employees work a maximum of 6 months for the user employer. If they have not become a regular employee after 6 months, then their service with the user employer would terminate. Establishing a 6-month or some comparable limitation for temporary employment minimizes the likelihood that there will be a group of long-term jointly employed individuals who will feel like second class citizens, and with that, have an incentive to organize.
To minimize further the risk of organizing drives and accretion claims involving jointly employed temporary employees, employers who use temporary employees may wish to structure the working relationships to minimize the community of interest between solely employed and jointly employed employees. To the extent that the temporary employees have separate and distinct job responsibilities, working areas, supervision, hours, wages, benefits, etc., it becomes less likely that the NLRB would find that the solely and jointly employed employees share a community of interest.
While this approach minimizes the likelihood that the end user would be required to include supplier employees in a bargaining unit, it also diminishes substantially the operational value of temporary employees by artificially separating them from the business process. Accordingly, employers need to balance the labor risk of integration as against the business risk of separation.
This is an extremely complicated area of law and strategy. Please contact Jonathan Segal or any other member of the Employment Services Group if you wish to discuss the practical impact of the NLRB decision from either the user or supplier perspective.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
