Rich Meneghello, The Daily Record Newswire
Over the last few months, employers have felt a one-two punch from the National Labor Relations Board (NLRB). The agency issued a pair of union-friendly decisions that will have reverberations for years to come. It’s definitely been a cruel summer for employers so far, and there’s still plenty of time for the NLRB to make it even worse.
First, in early June the board issued an unprecedented decision holding that a California continuing care facility violated the National Labor Relations Act by hiring permanent replacements during an economic strike to punish striking employees and to avoid future strikes. In so holding, the board overturned decades of precedent allowing employers to hire permanent replacements during an economic strike, regardless of motive.
In that case, the employer and union clashed over significant issues such as health care, pensions and disciplinary policies, and approximately 80 of 100 employees went out on strike. To prepare for the strike, the employer engaged a staffing agency and extended temporary employment offers to approximately 70 employees at a cost of over $300,000, and within a matter of days made approximately 44 offers of permanent employment. The union challenged that maneuver.
The employer’s director testified that she made the decision to hire permanent replacements because she did not believe the facility could afford to repeatedly engage the staffing agency if the employees engaged in future strikes, and because she wanted to teach the strikers a lesson. The NLRB concluded that this was not a permissible purpose and ruled that permanent replacements violate the law.
This decision could have a significant impact on labor relations strategy – unless employers navigate this area carefully, they could also run afoul of the new NLRB standard. Under this standard, when evaluating the decision to hire permanent replacement workers instead of temporary replacement workers, it is important to focus on the operational need to continue business.
Avoid focusing attention on the administrative challenges in hiring a temporary workforce. Where the employer in this case went astray, according to the NLRB, was by communicating to the union that it was hiring permanent replacements to avoid future strikes and punish the employees. If an employer is motivated by these interests, the NLRB will now order that employer to rehire the striking workers and make them whole.
Next, in mid-July, the NLRB resurrected a union-friendly standard making it easier for jointly employed temporary workers to join forces with an employer’s existing workforce to form a union. For over a decade, employers had enjoyed a standard that permitted them to block such a combined pairing by refusing to provide consent. Now, however, that standard has been scrapped.
The case involved a request from the sheet metal union to form a collective bargaining unit consisting of workers employed by a construction company along with temporary workers jointly employed by a staffing agency. That petition was rejected because, following a 2004 NLRB decision, the parties needed to get approval from the employer and the staffing agency before organizing into a mixed bargaining unit, and this employer did not give its consent.
The NLRB reversed course, however, and revived an older standard that had most recently been in place during the Clinton administration. Under that standard, employer consent is required for a mixed union grouping of regular employees and temps only when the employers are entirely independent businesses, with nothing in common except the industry in which they operate. When employers are physically and economically separate, their operations are not intermingled, and their employees are not jointly controlled, it makes sense for employer consent to be necessary in order to form a single collective bargaining unit including workers covering separate employers.
However, when those elements are not present, the NLRB held, employer consent will no longer be required. The NLRB said it seemed most logical to allow the two to be combined without employer permission provided that the employees in the unit are performing work for the employer and are employed within the meaning of the common law by that same employer. The NLRB concluded that a variety of factors should be examined to determine whether a mutuality of interests in wages, hours and working conditions exist among the workers involved. Following the resurrected standard, the NLRB pointed out that a group of employees working side by side at the same facility, under the same supervision, and under common working conditions, would likely share sufficient interests to constitute an appropriate collective bargaining unit.
While the NLRB’s decision is clearly intended to assist organized labor, employers (temporary and otherwise) still have options. Consider this latest decision when formulating and implementing an effective employee relations program. As a result of the decision, employers and temporary service providers alike should start by scrutinizing the parameters of their work arrangements to determine whether sufficient shared interests exist among their jointly shared workers.
If so, it is now more likely than not that these workers could be combined to form a single combined collective bargaining unit without their employer’s consent. However, to the extent workers can be segregated by facility, supervision or common working conditions, both the user and supplier employers may be able to attack any attempt to combine their employees based on traditional community of interest grounds.
Therefore, in such a situation, the workers would be free to choose to either join together to form a single union, or could organize separately if they desired. In either event, employers no longer have the ability to block a combined unit by withholding consent, contributing to the cruel summer we are experiencing in 2016.
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Rich Meneghello is a partner in the Portland office of Fisher Phillips, a national firm dedicated to representing employers’ interests in all aspects of workplace law. Contact him at 503-205-8044 or rmeneghello@fisherphillips.com, or follow him on Twitter – @pdxLaborLawyer.
