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NLRB Changes the Rules for Union Organizing Yet Again

August 1, 2016
Automotive Blog Post

Cars moving down an assembly lineOn June 11, the National Labor Relations Board ("the Board") again changed the standard for determining bargaining units that combine temporary and permanent work-site employees at a single facility. In Miller & Anderson, Inc., 364 NLRB No. 39 (2016), the Board ruled the traditional community of interest standard, instead of the more recent employer consent standard, should be used to decide the appropriateness of a bargaining unit. With this decision, the Board has resurrected the rule originally established in M.B. Sturgis, Inc., 331 NLRB No. 173 (2000), and for now at least, buried the rule in Oakwood Care Center, 343 NLRB No. 76 (2004).

The Sturgis Standard

In Sturgis, the Board was tasked with deciding – under Section 9(b) of the National Labor Relations Act – the standard to apply in determining the appropriateness of bargaining units in workforces that include both permanent work-site and temporary agency employees. The Board there ruled the appropriateness of such units is governed by its traditional community of interest test.

The community of interest test mandates examination of a variety of factors to determine whether a mutuality of interests in wages, hours, and working conditions exists among a given group of employees. For instance, employees working side by side at the same facility, under the same supervision, and under common working conditions, quite likely share the requisite community of interest and, therefore, constitute a single appropriate bargaining unit.

The Former Oakwood Precedent

Sturgis was later overruled in Oakwood. In Oakwood, the Board determined that units composed of both work-site and temporary agency employees were actually "multi-employer units." A multi-employer unit, according to the Board there, is created when two groups of employees within a unit look to different entities as their employers. The Board's General Counsel had argued temporary employees are employed by both the company owning the facility and the temporary service agency supplying them to that company. They, therefore, look to both entities as their employer and a community of interest is established. Rejecting this argument, the Sturgisprecedent, and the traditional community of interest standard in such situations, the Board found multi-employer bargaining units were permissible only if both the facility-owning employer and the temporary service agency employer consented to the multi-employer unit.

Return To Sturgis

The Board's June 11 decision in Miller & Anderson overrules Oakwood and returns employers to the community of interest standard articulated in Sturgis. In so ruling, the Board made a distinction between a multi-employer unit, two separate employers in competition with each other and operating at separate locations, and a Sturgis unit, where a temporary service agency provides workers to the facility-owning employer and those temporary workers are jointly employed by both entities.

The Board also found the community of interest standard aligns more closely with Congress's original vision when it empowered the Board "to assure to employees the fullest freedom in exercising their rights guaranteed by th[e] Act." 29 U.S.C. §159(b). The Board felt the community of interest standard lets the employees more freely choose the unit they wish to form, regardless of employer consent.

Automotive Industry

The Board's change is particularly important for the large manufacturing plants, warehouses and other logistics facilities that proliferate in the automotive industry. These facilities commonly include the services of workers who are employed directly and temporary agency personnel, who often work side-by-side on the same or similar tasks. On the one hand, these "combination" workforces are now more prone to union organizational activity. On the other, collective bargaining is almost certain to become a more complicated and attenuated process, since the separate employers cannot be forced to cooperate with each other, offer the same terms and conditions of employment, execute the same collective bargaining agreement, or indeed, reach agreement at all with the Union representing the "combination" workforce.

This series of cases illustrates another frustrating dilemma for employers, employees and unions alike. The Board, being the political instrument it is, is subject to ideological change depending upon the party affiliation of our President. If and when a Republican is elected President and obtains the ability to appoint a majority of Board Members, it is predictable the Oakwoodemployer consent standard may be given new life.

This article was co-written by Seth Arthur while Seth was a summer associate at Varnum in 2016. 

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