In the past four years, the National Labor Relations Board ("NLRB"), the federal agency charged with interpreting and enforcing federal laws regarding collective bargaining, has dealt several times with the issue of the status of outside temporary employees, and whether they can be grouped with a user employer's regular workforce for purposes of collective bargaining. In 2000, the NLRB ruled in M.B. Sturgis that outside temporary employees were eligible to vote with a user employer's regular employees in an election to determine whether the employees would be represented by a union for purposes of collective bargaining. Later, in 2001, the NLRB held in Gourmet Award Foods that outside temporary employees should automatically be covered under a user employer's labor agreement, as to those portions of the labor agreement under the control of the user employer. In each of these decisions, strong dissents were filed arguing that combining a user employer's regular employees with outside temporary employees created a multi-employer bargaining unit without the express consent of both employers, contrary to the National Labor Relations Act. Most recently, in late November, 2004, an increasingly politicized NLRB reversed these decisions. In a 3 to 2 ruling, the NLRB, in H.S. Care LLC, d/b/a Oakwood Care Center, ruled that the Board's prior decisions combining outside temporary employees with regular employees were wrongly decided, and they were reversed.
In Oakwood Care Center, the Service Employees International Union filed a representation petition seeking to represent employees at a nursing home in Oakdale, New York. Some of the employees were employed directly by the Care Center, and others were employed by a temporary help agency, N&W Agency, Inc. The NLRB Regional Director issued a Direction of Election, finding that both the outside temporary employees and the regular employees should be allowed to vote in the election. The matter was appealed by the Care Center to the five member NLRB in Washington. The Care Center argued that the Board's Sturgis decision, combining outside temporary employees and regular employees, was erroneous and should be reversed.
The majority in Oakwood Care Center agreed. They analyzed the history of the Board's decisions dealing with multi-employer units in similar circumstances, and found that for many years, the Board consistently refused to combine groups of employees employed by different employers, on the basis that such a combination would violate Section 9(b) of the Act. That Section provides that the NLRB must determine, in the case of any union representation election, whether the unit appropriate for purposes of collective bargaining should be an "employer unit" or some smaller subdivision of an employer unit. On the basis of that language, the majority found that the Board had consistently held that different groups of employees employed by different employers went beyond an "employer unit," and those groups could only be combined for purposes of collective bargaining with the express consent of each of the employers. No such consent was given in Sturgis or Oakwood Care Center.
In the course of its holding, the majority in Oakwood Care Center noted the problems, from a policy standpoint, with Board's prior approach in Sturgis. To combine employees of separate employers without the consent of those employers would create unnecessary conflicts between those employers. For example, because the temporary agency typically determines the wages to be paid to the employees assigned to the user employer, it made little sense to impose a bargaining obligation on the user employer as to the wages of both regular employees and outside temps, and yet that was the upshot of Sturgis. Similarly, a user employer would likely determine schedules of work at times such as holidays, but the outside temporary agency might well determine what those temporary employees' holiday pay would be. In each case the user employer might be unwittingly changing or increasing the financial obligations of the temporary agency employer, thereby requiring negotiations between these employers as well. In the words of the majority:
These are merely examples of how the bifurcation of bargaining regarding employees in the same unit hampers the give-and-take process of negotiation between the union and an employer, and places the employers in the position of negotiating with one another as well as with the union. The user employer's status as the customer of the supplier may effectively restrict the supplier's options in bargaining as to those subjects that appear to be within its purview. This fragmentation thus undermines effective bargaining.
On the basis of this analysis, the majority reversed the Regional Director's Direction of Election.
In a lengthy and strongly worded dissent, Board members Liebman and Walsh argued that the majority had effectively barred a sizeable group of employees, outside temporary employees, from organizing labor unions. Based largely on their perception that the globalization of the economy has forced many poor and unskilled workers into these "alternative work arrangements", Members Liebman and Walsh argued that Sturgis did not run afoul of Section 9(b) nor well established Board precedent allowing for combinations of groups of employees in these circumstances. The dissent rejected the majority's argument that allowing such combinations would hinder collective bargaining, noting that the majority's concerns were entirely hypothetical, and that resolving the competing interests of employee subgroups is a common byproduct of collective bargaining, even in a single employer setting.
While the Oakwood Care Center decision will likely be met with praise by most employers and employer representatives, the decision does not bode well for stability and predictability in the collective bargaining arena. Instead, it seems clear that both the majority and minority Board members are increasingly willing to rely upon policy justifications for their positions in these controversies. As in the recent NLRB decision in IBM Corp., which reversed a 2000 decision recognizing the right of nonunion workers to representatives during an investigatory interview (and marking the fourth flip-flop on the issue in just over twenty years), the Board's divided decisions give interested stakeholders little long term guidance. Yet, while the Board engages in these reversals, it has not provided interested parties with meaningful guidance on such pressing issues as the right of employers to restrict a union's use of, and access to, its email systems, for purposes of organizing and collective bargaining.
Both union advocates and employer advocates would benefit from more reasoned and principled decision-making from the Board.
For more information about this topic, please contact Dawn Valdivia at 602.229.5291 or your Quarles & Brady attorney.