The National Labor Relations Board, the main federal labor law enforcement agency, has opened a new front in its battle to reshape workplace rules by indicating that it would soon make it easier for employees of temp agencies to join unions.
The board is considering designating companies that use temp agencies to be ‘joint employers’ of the agencies’ workers. In effect, a corporation that hires an agency for a short-term project could find itself permanently responsible for the latter’s workers if they unionize.
“For manufacturers, this case is yet another example of the NLRB changing well-established and functioning labor laws without a justifiable and sufficient change in circumstance and in how the business community operates,” said Amanda Wood, director of human resources for the National Association of Manufacturers.
This is only the latest example of the board moving to expand its “joint employer” standard to cover businesses that it didn’t previously touch. The moves have been cheered by labor unions and sharply criticized by business groups.
The real motive here, said a lawyer for one trade association who requested anonymity, was to make it possible for unions to target the bigger, wealthier companies during organizing drives.
Currently, temps and other “contingent” workers can unionize but in most cases only under the company that directly employs them — the temp agency.
The NLRB established that standard in 2004 case called Oakwood. The board, which then had a Republican majority, said that all of the workers in a potential union had to have the same employer in order to prevent conflicts in contract negotiations. However, unions involving workers with multiple employers were allowed if those businesses were deemed to be joint employers. The designation was used if the business relationship between two companies was so close that both had effective control over the workers.
For decades the board applied that designation narrowly, saying that both companies had to have direct control over the workers. It was usually limited it to cases where the companies agreed to be designated as joint employers.
The standard meant that temp workers were usually barred from joining unions at companies that employed the temp agency since the temp would have a joint employer while the non-temp workers would have just one boss, a situation prohibited by Oakwood.
NLRB General Counsel Richard Griffin issued a notice earlier this year in a case called Miller and Anderson v. Sheet Metal Workers International seeking legal opinions on whether the Oakwood precedent should be overturned. The deadline for submissions is Wednesday.
Unions have urged that Oakwood be overturned. The Laborers International Union of North America argued in a legal filing with the board that just because an employer may not have complete authority over a group of workers was no reason not to let the workers unionize.
“The fact that no single business enterprise exercises complete control over the terms and conditions of employment for (temp) workers does not provide a reason to deny (the workers) the ability to bargain collectively,” LIUNA argued.
Business groups warn that overturning Oakwood would sow confusion because it could result in multiple employers and different groups workers, none of whom may share the same interests, nevertheless being forced to negotiate contracts together.
“This will inevitably cause problems in bargaining, not only for the joint employers, but also for the union and the employees it represents. It is difficult to see how effective bargaining will be promoted in these circumstances,” the Chamber of Commerce argued in its legal filing.
The board, which currently has a Democratic majority, has made several moves in the last year to expand its power to designate businesses as joint employers. In an August ruling in a case called Browning Ferris, it said a company could be termed a joint employer of a subcontractor’s workers.
In a still pending case, the board has argued that McDonald’s Corp., should be termed a joint employer with its franchisees even though an estimated 90 percent of those restaurants are actually privately-owned businesses that rent out the McDonald’s brand.
The shift has alarmed the business community, which is now facing a vast expansion of legal liability and as well as labor organizing drives involving workers they don’t directly control.
