NLRB ruling solidifies stance on joint employment

In a move which strengthens the NLRB’s stance on joint employment announced last year in the case of Browning Ferris Industries, Inc.(BFI), on July 11, 2016, the Board reversed precedent and held that proposed bargaining units that combine solely and jointly employed workers of a single main employer must only share a community of interest in order to be deemed appropriate, and such units no longer require the consent of the single main employer to be considered an appropriate unit for bargaining.

In the case of Miller & Anderson, Inc. and Tradesmen Intl. and Sheet Metal Workers Intl. Assoc., Local Union No. 19, AFL-CIO, the petitioner requested that the Board review and overturn the Regional Director’s dismissal of its petition seeking to represent a unit of “all sheet metal workers employed by Miller & Anderson, Inc. and/or Tradesmen International as either single employers or joint employers on all job sites in Franklin County, Pennsylvania.”  The Board granted review to consider the issue of whether under the National Labor Relations Act (Act) the employees who work for a user employer, both those employees the user alone employs and those it jointly employs, must obtain employer consent if they wish to be represented for purposes of collective bargaining in a single unit, even if both groups of employees share a community of interests.  In a 3-1 decision with Board Member Philip Miscimarra dissenting, the Board held that proposed bargaining units that combine solely and jointly employed workers need only satisfy the traditional community of interests test in order for the unit to be considered appropriate.  The Board determined that employer consent to such a unit is not necessary.  The Board further explained that the additional requirement of consent is disconnected from the reality of today’s workforce and denies employees in an otherwise appropriate unit the freedom to associate and be represented for purposes of collective bargaining in the same unit. 

With this decision, the Board reversed the 2004 decision in Oakwood Care Center, which held that jointly employed workers and solely employed workers of a single main employer could not be in the same bargaining unit without the consent of the employer.  In that case, the Board reasoned that Congress had not authorized it to direct elections in units encompassing employees of more than one employer, which would constitute multi-employer bargaining and require the consent of all parties.  The Oakwood Care Center  decision, however, supplanted the 2000 Board decision of M.B. Sturgis  which held that such consent was not required in order to combine employees solely employed by a single main employer and those jointly employed.  It is the standard announced in M.B. Sturgis  to which the Board now returns.

The Board majority’s reasoning in Miller & Anderson, Inc. echoes the Board’s decision in BFI to expand the joint-employer standard by relying on reserved control and indirect control as indicia of joint-employer status.  The Board notes its responsibility to adapt the Act to the changing patterns of industrial life, which has produced a diverse workplace of contingent workers, for why it revisited the joint employer standard in BFI, and now returns to the standard articulated in M.B. Sturgis.  As outlined in M.B. Sturgis, an employer is obligated to bargain over all terms and conditions of employment for unit employees it solely employees, and over those terms and conditions which it possesses the authority to control for workers which it jointly employs.  As is pointed out by Board Member Miscimarra in dissent, such a bargaining relationship may well result in confusion over employer bargaining responsibilities and instability among employees, some of who lack a substantial employment relationship with the employer and may have competing interests.

As with BFI, legal challenges to this renewed standard are expected.  In the meantime, we anticipate uncertainty regarding appropriate bargaining units and proper subjects of bargaining with a unit containing a mix of solely and jointly employed workers.  Therefore, consultation with an attorney not only during a union organizing campaign but through negotiations for a collective bargaining agreement, should the unit be deemed appropriate and the union win the election, is highly recommended.