The National Labor Relations Board recently rendered a decision that has many management side attorneys shaking their heads and wondering if this might open the door to union activity in some companies via their use of temporary staffing agencies.
Browning-Ferris Industries, or BFI, runs a recycling operation that employees union workers. They also use a temporary staffing agency that employees non-union workers. Despite the fact that BFI exercised little to no control over the temporary workers the NLRB in a 3-2 ruling said that the relationship between BFI and the staffing agency made them “joint employers”. According to Seyfarth Shaw this means “an otherwise unrelated entity that does not hire, fire, supervise or determine the wages and benefits of another employer’s employees but that nevertheless bears responsibilities to those employees under the National Labor Relations Act (“NLRA” or the “Act”).” Both Seyfarth Shaw and Fisher Phillips say this new ruling has altered the definition of “joint employer.” In the BFI case this means that the union could now claim those temporary workers are covered by the union workers contract.
Management attorneys see broad implications for this case. For example Seyfarth Shaw feels this decision will affect:
- Any business that regularly uses contractors, such as a cleaning or janitorial services, maintenance services, caterers, or a management company to staff and operates its business;
- Investors, real estate holding companies and general contractors;
- Any entity that outsources some of the non-core work integral to its business model, such as a manufacturer that contracts with a trucking company for shipping;
- Any entity that uses a staffing agency to obtain additional or temporary help;
- Any franchisor that contracts with others via franchise agreements; and
- Any entity with a relationship to a subsidiary or other corporate entity.
Fisher Phillips concludes “Given this new decision, any employer that retains the right to impose even indirect control over the working conditions of temporarily placed employees runs a serious risk of being deemed their joint employer – not only for bargaining purposes, but potentially for unfair labor practice liability as well.”
This means that a nonunion employer that uses temporary workers in any part of their business now provides a potential toe-hold for union activity. If the union has not made any headway with your regular workers they may now try to “backdoor” your company by making promises to temporary workers that management will hear little to nothing about.
What to do
Seyfarth Shaw and Fisher Phillips both recommend a review of any relationship where you use temporary or contract work. Both law firms recommend looking closely at the terms and conditions of employment. Establish payments schedules not based on the wages of the workers. Be sensitive to the fact that you may have to deal with organizing drives from these workers.
This NLRB decision was definitely made for the benefit of unions and is designed to foster union activity. Combined with the “quickie election” rules some organizations may find themselves dealing with a union they never thought they would have to.