Employers Can Require Separate Bargaining Units for Staffing Agency Employees

The National Labor Relations Board (NLRB or Board), the federal administrative agency that oversees the National Labor Relations Act (NLRA), has once again reversed its position on a critical bargaining issue. Several years ago, the Board held that staffing agency employees who shared essential working conditions with the client-employer’s regular employees could be included in the same bargaining unit, without either the client-employer’s or staffing agency’s consent. The Board has overturned this decision on the basis that such units constitute multi-employer bargaining units, which are statutorily permissible only with all the parties’ consent.

In reaching its decision, the Board closely examined the NLRA’s legislative intent and determined the Act contemplates that employees only be grouped together in bargaining units by common interests and by a common employer. The Board then determined that the non-consensual mixing of employees of different employers contradicted this fundamental statutory requirement. The Board further concluded that employees would be adversely affected if combined in a single bargaining unit over one or more employers’ objections because a single union would be forced to negotiate with two different, non-consenting employers, each of which controls only a portion of the terms and conditions of employment for the unit. This type of non-consensual arrangement would subject employees to fragmented bargaining and inherently conflicting interests.

Taking all these factors into account, the Board concluded that multi-employer bargaining units are only permissible where there is clear evidence that all employers have expressly conferred on the union in question the power to bind them in negotiations, or that they have, by an established course of past conduct, unequivocally manifested a desire to be jointly bound as employers in all collective bargaining matters. The Board found no such evidence in this case and concluded the client-employer had the right to insist the staffing agency employees be represented by a bargaining unit separate and apart from the one that represented its regular employees.

H.S. Care, LLC, NLRB Case No. 29-RC-10101 (11/19/2004)