NLRB Decision Could Complicate ‘Mixed Unit’ Collective Bargaining

Allen Smith, J.D. By Allen Smith, J.D. July 15, 2016
NLRB Decision Could Complicate ‘Mixed Unit’ Collective Bargaining
"Mixed units" may become​ easier to form.

"Mixed units"—bargaining units made up of an employer's workers as well as staffing agencies' employees—will be easier to form thanks to a recent National Labor Relations Board (NLRB) decision.

Overturning prior NLRB precedent, the board's recent decision permits the employer's workers and the employees of a staffing agency to organize in the same unit without the employer's and the staffing agency's consent. Critics of the decision say it will complicate mixed unit collective bargaining.

Overturned Precedent

In Oakwood Care Center, 343 NLRB 659 (2004), the NLRB held that the consent of both the employer and the staffing agency were necessary for the main employer's workers and the staffing agency's employees to form a single bargaining unit.

The NLRB declined to follow that rule in its July 11 decision—Miller & Anderson, 364 NLRB No. 39. Instead, it ruled that sheet metal workers employed by Miller & Anderson at a construction project in Franklin County, Pa., and workers directly employed by staffing agency Tradesman International who were assigned to perform services for Miller & Anderson at the project site could form a bargaining unit without the consent of Miller & Anderson and Tradesman International.

In reaching this conclusion, the board returned to the old rule of M. B. Sturgis, 331 NLRB 1298 (2000), which held that the National Labor Relations Act permits mixed units without the consent of the main employer and staffing agency, provided the employees share a "community of interest." 

As a result of Miller & Anderson, an employer "will no longer simply be bargaining with a union, it will simultaneously be conducting parallel and intertwined negotiations with its own 'joint employer' counterpart," said Brian Hayes, an attorney with Ogletree Deakins in Washington, D.C., and a former NLRB member. "This makes bargaining infinitely more complicated and more likely to fail."

The decision raises several questions, including:

  • Do employers negotiate among themselves before negotiating with the union?
  • Who is the spokesman for the employers and who defines the bargaining strategy?
  • What if one employer can withstand a strike but the other cannot?

When multiple employers are involved, there is always the "potential for a conflict in bargaining goals and strategies," Hayes said. "That potential conflict should not be imposed on employers. It should only be voluntarily accepted by employers that determine the benefits of multiemployer bargaining happen to outweigh the drawbacks in their particular circumstances."

Upholding National Labor Policy

The board in Miller & Anderson saw things differently, however. It said that Sturgis was more consistent with national labor policy "because it permits employees in an otherwise appropriate unit to pool their economic strength and act through a union freely chosen by the majority so that they can effectively bargain for improvements in their wages, hours and working conditions."

The NLRB criticized the Oakwood Care Center decision for diminishing the bargaining power of a company's employees and staffing agency's workers by requiring them to engage in parallel organizing drives and then parallel bargaining relationships, despite their shared community of interest.

The board emphasized that the workforce is changing. The number of jobs in the employment services industry, which includes employment placement agencies and temporary help services, is expected to rise to nearly 4 million by 2022.

While the temporary help services industry has historically been associated with clerical positions, temporary workers who work in clerical positions now represent less than a quarter of those in the temporary help industry, the NLRB noted.

"Industrial and factory staffing is the single largest source of revenue for the employment services industry," the NLRB said.

'Theoretical' Distinction

As for complicating bargaining negotiations, the board asserted that both the main employer's and staffing agency's bargaining obligation would extend solely to the employees it either employs or jointly employs, and only over the terms and conditions of employment that it controls.

However, Hayes called this distinction "theoretical" and said that it "probably doesn't work in the real world."

He remarked, "The reality is that there will always be conflicting interests on the employer side of the bargaining table when you have two employers sitting there."

James Hays, an attorney with Sheppard Mullin in New York City, agreed. He said the most significant difficulty that will arise from this decision will be multiple employers on one side of the table with conflicting interests bargaining over employees that they "may have only limited interest in."



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