NLRB Says Employer Consent Is Not Required for Bargaining Units of Solely and Jointly Employed Workers

In the U.S. National Labor Relations Board’s (NLRB) recent decision in Miller & Anderson, Inc., 364 NLRB No. 39 (July 11, 2016), the Board continued its expansion of the obligations of entities that do not directly employ workers who perform services for them, ruling that joint employers need not consent to bargaining units comprised of both solely and jointly employed workers. This follows the Board’s liberalization, in Browning-Ferris Industries of California, Inc., NLRB No. 186 (Aug. 27, 2015), of the standard for determining whether two or more entities constitute “joint employers” under the National Labor Relations Act (the “NLRA” or the “Act”).¹ The Board’s 3-1 decision was not unexpected, but nevertheless highlights the increasing risks faced by employers with respect to non-traditional work relationships, such as the retention of workers through professional employer organizations and staffing agencies. 

Miller & Anderson arose in the context of a request for certification of bargaining unit consisting of both employees directly and solely employed by Miller & Anderson and employees jointly employed by Miller & Anderson and Tradesmen International, a staffing agency. At issue was whether the consent of both Miller & Anderson (which the Board referred to as a “user employer”) and Tradesmen International (the “supplier employer”) was required before the bargaining unit could be approved, as the Board had held in Oakwood Care Center, 343 NLRB 649 (2004). Finding that allowing certification without employer consent “effectuates the fundamental policies of the Act,” the majority ruled that Oakwood Care Center was wrongly decided and that the Board should return to the rule of M.B. Sturgis, Inc., 331 NLRB 1298 (2000), which Oakwood Care Center had rejected. 

The majority began its analysis of whether to jettison Oakwood Care Center for a return to M.B. Sturgis by looking at the language of the NLRA, ultimately determining that neither decision’s rule was compelled by the statutory text. Specifically, the majority held that units consisting of jointly and solely employed workers are not “multiemployer units,” and are therefore consistent with the prescription of § 9 of the NLRA that “the appropriate unit…shall be the employer unit, craft unit, plant unit or subdivision thereof.” Turning then to the question of which rule best furthers the purposes of the Act, the majority concluded that “Sturgis permits jointly employed contingent employees to organize in bargaining units with their coworkers who are solely employed by the user employer if they share the requisite community of interest, while also leaving both groups free to organize separately if they would prefer to do so.” On the other hand, the majority wrote, “Oakwood denies employees in any otherwise appropriate unit full freedom of association.” The majority further dismissed concerns about the practical complications of bargaining with respect to the newly permitted units, asserting that under Browning-Ferris it is “clear that each employer is obligated to bargain only over the employees with whom it has an employment relationship and only with respect to such terms and conditions that it possesses the authority to control.” 

As he had in Browning-Ferris, Board Member Miscimarra dissented. In Browning-Ferris, Miscimarra decried the uncertainty and instability that he predicted would result from a scheme where “each entity would be responsible for bargaining over some subjects and not others.” He echoed these concerns in Miller & Anderson, stating that “the majority’s expansion of Browning-Ferris here will only make it more difficult for parties to anticipate whether, when or where this new type of multi-employer/non-employer bargaining will be required by the Board, nor can anyone reasonably predict what it will mean in practice.” Among the particular problematic unresolved issues that the dissent identified were: 1) how employers will determine who is required to bargain over which subjects; 2) how disputes among employers are to be resolved; and 3) what information must be disclosed to the union when the employers have not shared the information among themselves. 

As the dissent aptly pointed out, there can be little question that Miller & Anderson will further complicate the union representation and collective bargaining processes. In addition to dealing with challenges in determining which terms and conditions it controls with respect to jointly employed workers, as required under Browning-Ferris, under Miller & Anderson, a joint employer may now also be required to deal with the inefficiencies and complexities associated with negotiating simultaneously concerning both jointly and solely employed employees. Accordingly, employers who are parties to staffing agency and other types of contingent employment relationships must consider carefully the risks and burdens resulting from the Board’s recent decisions in evaluating those relationships. 

Footnote

_{1) Dechert OnPoint, “National Labor Relations Board’s New Joint Employer Standard Expands Risks for Employers,” (September 2015).}