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In Focus: Why the NLRB’s Browning-Ferris Decision Will be a Bad Deal for Manufacturers

The recent NLRB decision that maintains manufacturers are joint employers with temporary staffing agencies will allow unions to get their foot in the door.

Directory 2016
Over the past 30 years many manufacturing companies have seen a decline in union representation at new and existing plants. At the same time, many manufacturers have moved to different staffing models, either using staffing agencies to provide temporary employees to perform discrete low-level tasks or to provide entry-level workers who may end up being hired by the company once they have satisfactorily completed a probationary period.

One distinct advantage of these arrangements is that these workers were the employees of the temp agency or outside contractor and, therefore, could not obtain a union bargaining status with the manufacturer. However, the world is changing rapidly, and employers need to be ready for new union inroads into the manufacturing sector courtesy of the National Labor Relations Board (NLRB).

David C. Burton is the Head of the Labor and Employment Section at the law firm of Williams Mullen.
The outside contractor and temporary labor model worked for manufacturing employers when it came to union organizing activities because it was very difficult for unions to gain a foothold with employees who were assigned to work in a plant on a temporary basis; additionally, it was difficult for a union to assert that the manufacturer was a joint employer. All of this changed with the NLRB’s recent decision in Browning-Ferris Industries, which significantly changed the test for determining whether two employers are actually joint employers.

In the Browning-Ferris case, the company used a temporary staffing agency for personnel to do menial floor tasks at its Newby Island recycling facility. A local Teamster’s union organized the temporary workers and filed an election petition seeking to represent them and, more importantly, asserted that Browning-Ferris was a joint employer with the temporary staffing agency. The NLRB agreed with the Teamster’s position finding that, going forward, the test for joint employer status will focus not on the direct control of the employees, but on whether each or both employers either directly or indirectly “codetermine those matters governing the essential terms and conditions of employment.” Such essential terms include wages, hours, number of workers to be supplied, scheduling, assignment of work, and determining the manner and method of work performance.

Given this new standard, there are precious few temporary staffing situations in the manufacturing industry that will not meet the joint employer status. When the new joint employer test is coupled with the current NLRB’s penchant for approving union organized micro-units, most observers believe the Browning-Ferris decision will be used by labor unions to get a foot into the door of many manufacturing employers by simply going after the small group of temporary employees in a plant and then asserting that the manufacturer is a joint employer with the staffing company. Not surprisingly, those temporary workers are likely to be paid less and receive less in the way of benefits, if any, than the primary employees. A new battleground has been staked in the manufacturing world that may well result in heightened union activity.

It will be important for all employers who use staffing agencies to examine the relationship with the temporary employees to ascertain if it can armor itself against arguments that it is a joint employer, and, if it is at risk, to determine if the temporary employee model is still viable in the long run.
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