Contingent Workers to be Included in Same Bargaining Unit with Traditional Employees

LANDMARK NLRB DECISION ALLOWS CONTINGENT WORKERS TO BE INCLUDED
IN SAME BARGAINING UNIT WITH TRADITIONAL EMPLOYEES

by James B. Sherman, Esq.

The Clinton appointed majority in the National Labor Relations Board recently continued its ongoing assault on long-standing labor precedent. This time, the Board overturned prior rulings which held that "temporary" and "contract" workers could not be included in a unit with traditional employees for purposes of collective bargaining except by the consent of their employers. Claiming that "a growing number of employees who are part of what is commonly described as the ‘contingent work force’ are being effectively denied representational rights guaranteed under the National Labor Relations Act," the Board stated that its decision "will restore these rights…." Practically speaking, the Board’s new decision will simply make it easier for unions to organize contingent workers along with traditional employees, either through NLRB conducted elections or through a less democratic process called "accretion."

The Board’s new ruling was issued in consideration of two separate but related cases. In one case an employer argued for inclusion of temporary employees in a petitioned for unit of its employees in response to a union organizing drive (no doubt to dilute the union’s support among the larger unit consisting of both traditional and contingent employees). In the second case it was the union that sought to include contract employees in an existing unit covered by its collective bargaining agreement with the "user" employer (by filing a "unit clarification" petition). The Board held: (1) so long as the user employer and the employer of the temporary or contract workers were "joint employers" under existing law, and (2) the temporary or contract workers shared a "community of interests" with an appropriate unit of traditional employees, all could be included in the same bargaining unit. The Board did not view these circumstances as involving "multi-employer bargaining" even though two joint employers would be involved and, therefore, no employer consent was required before the two groups of employees were blended together.

This decision, unless overturned in the courts, will have a far reaching impact on the contingent workforce industry (which employs nearly 5 percent, or 5.6 million workers) as well as those employers who utilize temporary and/or contract employees along with their own traditional workforce. In many instances unions will be able to "accrete" contingent workers into existing units of represented employees who share the requisite community of interests, simply by filing a so-called "unit clarification" petition with the NLRB. No election would be necessary in such cases. In the context of union organizing drives the Board’s new ruling will require in many instances that unions organize both traditional and contingent workers that do the same type of work for the user employer. This can either benefit or hurt the employers that are subject to the organizing drive (the so-called "user" employer and the joint, supplier employer of the temporary or contract workers), depending on the circumstances.

Once organized the relationship between the joint employers will undoubtedly become very complex. Both the user and the supplier employer will be required to bargain with the recognized union representing their respective employees. While the Board recognized that user and supplier employers will have competing interests at times during bargaining, each is expected to separately bargain its competing interests with the same union. This newly created three-way bargaining relationship should get even more complicated in the context of a labor dispute, for example, a strike.

Circumventing the mess created by the Board’s new ruling will not be easy. Avoiding joint employer status with suppliers of contingent workers, while possible, is very difficult and places great constraints on the user’s ability to manage and direct contingent workers. A better idea involves utilizing contract workers in such a way as to avoid their having a "community of interests" with traditional employees. However, in most instances this would require drastic changes in the way contingent workers are currently being used to supplement and/or augment the traditional workforce. Perhaps the most feasible idea is for user employers to work closely with their suppliers of contingent workers to position themselves, as joint employers, to jointly respond in a unified manner to union organizing attempts. Both user and supplier employers would be well advised to address these issues up front, before entering into any relationship.

James B. Sherman is a shareholder in the law firm of Wessels Pautsch & Sherman P.C. The firm represents employers in labor and employment law matters. Wessels Pautsch & Sherman P.C. maintains offices in St. Charles, Chicago, Milwaukee, Minneapolis and Davenport, Iowa.

Posted 1/17/01