Bargaining with Combined Units: What It Means for Employers

By Meredith Kirshenbaum August 14, 2017

Combined bargaining units—consisting of temporary workers and regular staff of an employer that uses a staffing agency—are a challenging reality as a result of recent National Labor Relations Board (NLRB) decisions. Some employers are trying—lawfully—to prevent them from being formed because the interests of an employer's staff often conflict with those of temporary employees, complicating collective bargaining.

[SHRM members-only toolkit: Complying with Labor Laws in Nonunion Settings]

The Redefined Joint Employer Standard

The NLRB's August 2015 decision in Browning-Ferris Industries broadly expanded the definition of "joint employer," bringing nearly any company hiring temporary workers (referred to here as user employers) into the fold of "joint employer." The Browning-Ferris decision upended long-standing NLRB precedent, which limited the definition of "joint employer" to those who retained "direct and immediate" control over an employee's terms and conditions of employment.

In Browning-Ferris, however, the NLRB redefined the joint employer standard, holding that "indirect control" or even "unexercised potential" to control working conditions results in joint employment. In the NLRB's August 2016 decision in Retro Environmental, Inc., the agency articulated that such indirect control may exist whenever a user employer dictates the number of workers to be supplied, imposes conditions on hiring qualifications or retains the right to request replacement of temporary workers. Accordingly, following Browning-Ferris, it seems user employers will nearly always be found to be joint employers of temporary workers, subjecting user employers to obligations under the National Labor Relations Act, including the duty to bargain.

Browning-Ferris is on appeal to the U.S. Circuit Court of Appeals for the District of Columbia and legislation has been introduced to overturn it, but the NLRB continues to follow the decision.

Compounding Factor

Less than a year after issuing its decision in Browning-Ferris, the NLRB struck another blow to user employers and staffing agencies by again reversing NLRB precedent and making it easier for temporary labor to organize. In the NLRB's July 2016 decision in Miller & Anderson, Inc., the NLRB held that a user employer's temporary employees may join the same bargaining unit as its regular staff, without seeking employer consent (as previously required), provided that they share a "community of interest." In short, this means that temporary employees and regular staff who have overlapping interests in the terms and conditions of their employment may be part of the same bargaining unit.

The result may be a unionized workforce for user employers, even where the majority of its regular staff are against unionization and where the employees driving the unionizing efforts may be employed only for the short term.

The NLRB's decision in Miller & Anderson, Inc. further complicates bargaining obligations for user employers and staffing agencies. In the event of a combined bargaining unit (consisting of temporary employees and regular staff of a user employer), both the staffing agency and the user employer have bargaining obligations. Those obligations are limited, however, "to such terms and conditions that it possesses the authority to control." This is likely to create uncertainty and confusion over bargaining obligations, particularly where there is shared authority to control certain terms and conditions of employment. Bargaining obligations will further be complicated where combined bargaining units include temporary employees from several staffing agencies, as well as regular staff, resulting in many employers at the bargaining table, none with the authority to bargain over all applicable terms and conditions of employment.

What the Future Holds

In late June 2017, President Donald Trump nominated William Emanuel and Marvin Kaplan to fill vacant seats on the NLRB; Kaplan was confirmed Aug. 2. If Emanuel is confirmed, it is anticipated that the Republican-led NLRB will overturn Obama-era NLRB opinions, specifically those opinions governing joint employer relationships. However, that process can take several years, and there are no guarantees of any specific changes. In the meantime, user employers and staffing agencies may consider the following in response to the NLRB's recent decisions:

Separate functional duties. Under Miller & Anderson, Inc., a combined bargaining unit will be appropriate only if the unit meets the NLRB's traditional community of interest test. Factors considered in determining whether a unit has a community of interest include whether the employees:

  • Are organized into a separate department.
  • Have distinct skills and training, have distinct job functions, and perform distinct work.
  • Are functionally integrated with, have frequent contact with and interchange with other employees.
  • Have distinct terms and conditions of employment.
  • Are separately supervised.

User employers may consider creating separate communities of interest for temporary employees and regular staff, potentially precluding the possibility of a combined bargaining unit.

Thoughtfully structure relationships. User employers and staffing agencies should be thoughtful in considering how to structure their relationships on the front end. In particular, user employers and staffing agencies should clearly articulate their respective authorities or rights of control over temporary employees' terms and conditions of employment. Doing so may have implications both for the joint employer analysis and in determining respective bargaining obligations.

Reassess working conditions for temporary employees. Temporary employees are now more vulnerable to union-organizing efforts than ever before. User employers and staffing agencies should reassess working conditions for temporary employees and consider potential areas for improvement. Employers might also consider improving lines of communication with temporary employees, who are often excluded from opportunities to provide meaningful input.

Meredith Kirshenbaum is an attorney in the litigation group of Goldberg Kohn, based in Chicago, where she primarily focuses on labor and employment law.

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