NLRB: No more hiding behind temp agencies to avoid unions

An Aug. 28 ruling by the National Labor Relations Board (NLRB) changes how the agency will handle temp agencies and subcontractors. NLRB is the agency that runs union elections and prosecutes violations of the National Labor Relations Act, the nation’s main collective bargaining law.

Companies have increasingly hired outside staffing agencies in recent decades; when workers try to unionize, they’ve had to campaign and negotiate separately.

Under the new ruling, companies and their staffing agencies or subcontractors can be considered joint employers.

“It is not the goal of joint-employer law to guarantee the freedom of employers to insulate themselves from their legal responsibility to workers, while maintaining control of the workplace,” wrote NLRB chair Mark Gaston Pearce. “Such an approach has no basis in the [National Labor Relations] Act or in federal labor policy.”

The ruling took the form of a 3-2 party-line vote in a case known as Browning Ferris. It arose from a 2013 union organizing campaign at a recycling center in Daly City, California by Teamsters Local 350. Browning-Ferris Industries owns the facility, but hired Leadpoint Business Services, a staffing agency, to operate it. The Teamsters asserted that BFI was a joint employer with Leadpoint of the approximately 240 sorters, screen cleaners and housekeepers that work there. At length, the NLRB agreed.

Pearce, writing for the three-person Democrat-appointed majority, said the NLRB’s previous legal standard for joint employers hadn’t kept pace with the shift toward contingent employment, and therefore wasn’t serving the law’s purpose, which is to “encourage the practice and procedure of collective bargaining.”

The decision could have broad impact. It’s estimated that 2.9 million workers are employed through temporary agencies nationwide.

The Browning-Ferris case didn’t address franchising directly, but the new joint employment standard is expected to be applied in a series of labor law violation cases against McDonald’s scheduled for hearing this fall over the question of whether McDonald’s is liable for labor law violations by franchisees.

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