The Labor Board’s Knockdown of the Joint Employer Relationship

By Robert E. Entin

On July 11, 2016, a combination punch thrown by the National Labor Relations Board (“NLRB”) scored a technical knockout of a decades old joint employer relationship test. The uppercut landed against employers who use temporary/contracted employees and, combined with the left cross of last year’s Browning Ferris decision, may leave some employers in pain.

In  Miller & Anderson, Inc., 364 NLRB No. 39 (2016), the NLRB held that a Union seeking to organize employees of a primary (or user) employer and employees from a staffing/ contracting firm, in the same bargaining unit, does not need employer consent before an election is conducted. By doing so, it overturned its 2004 decision in Oakwood Care Center, 343 NLRB 659 (2004), which held that unions seeking to represent employees in bargaining units that combine traditional employees with contracted employees must first obtain consent from both the employer and the staffing agency before an election can be conducted. The primary beneficiaries are temporary/contracted workers, who now may have an easier time seeking union representation.

Monday’s decision aligns with last year’s decision in Browning-Ferris Industries of California, Inc., 362 NLRB No. 186 (2015), where the NLRB held that joint employer status can be conferred where an employer exercises indirect control or incidental collaboration. Whereas Browning Ferris lowered the bar for joint employer status and made it easier for a company to be a joint employer with temp agencies, contracting firms, or franchisees, Miller & Anderson makes it easier for Unions to organize temporary workers. Under the old standard, the primary/user employer could withhold consent, which would end the organizing effort. With this decision, primary/user employers can be stuck with a collective bargaining agreement and relationship, even if the temporary employees who pushed for union representation no longer work for them.  

Perhaps the greatest potential problem is that primary/user employers could be liable for actions solely attributable to the temp agency/contracting firm. For example, if the staffing agency fails to pay several of its employees overtime, by virtue of being parties to the same collective bargaining agreement, primary employers now run the risk of being jointly liable for the payment, even though they may have paid the staffing company and ordinarily would not have any duty to pay compensation directly to the temporary employees. Likewise, a primary employer may risk liability for any unfair labor practices committed by the staffing company. 

While Miller & Anderson was remanded to the local NLRB office for further proceedings, there likely will be an appeal. In the interim, employers that currently use staffing firms may want to reconsider the contracts under which they use them. Should temporary employees be necessary, consider the organization of the workforce such that the temporary employees perform separate and distinct duties from the primary employees (so that they do not share the same community of interests). Using a legal professional to avoid the effects of Miller & Anderson and Browning Ferris is advisable.