• NLRB Overturns Prior Decision - Holds That Bargaining Units of Jointly and Solely Employed Employees Require the Parties' Consent
  • December 5, 2004
  • Law Firm: Ford & Harrison LLP - Atlanta Office
  • The National Labor Relations Board (NLRB), in a 3-2 decision, recently returned to its long-standing precedent that combined units of solely and jointly employed employees are multiemployer bargaining units and are statutorily permissible only with the consent of the parties. See H.S. Care LLC, d/b/a/ Oakwood Care Center, 343 N.L.R.B. No. 76 (November 19, 2004). This decision overrules the Board's 2000 decision in M.B. Sturgis, 331 N.L.R.B. 1298 (2000), which held that bargaining units of solely and jointly employed employees are permissible under the National Labor Relations Act.

    In overruling Sturgis, the Board held "the Sturgis Board's reinterpretation of the concept of an 'employer unit' severed that term from its statutory moorings." The Board further noted this "loss of direction" gave rise to such "anomalous decisions" as Gourmet Award Foods, which applied a collective bargaining agreement between an employer and its employees to employees supplied by a temporary agency.

    In H.S. Care, the Board returned to the precedent set in Greenhoot, Inc., and Lee Hospital and held that the NLRA does not authorize the Board to direct elections in units encompassing the employees of more than one employer. The Board also noted that where the parties voluntarily agree to multiple employer bargaining units, the Board has long recognized the legitimacy of such units. The H.S. Care Board states that by ignoring the bright line between employers and multiemployer bargaining units, Sturgis departed from the directives of the NLRA and decades of Board precedence. The Board further stated, "[w]e find that the new approach adopted in Sturgis, however well intentioned, was misguided both as a matter of statutory interpretation and sound national labor policy."

    The Board also held that the policy implications of Sturgis are as problematic as its interpretation of §9(b) of the NLRA. The Board held that the bargaining structure contemplated in Sturgis gives rise to significant conflicts among the various employers and groups of employees participating in the process, which are exactly the types of conflicts §9(b) and the Board's community-of-interest test are designed to avoid. Additionally, the Board noted that the bargaining regime imposed by Sturgis fails to adequately protect employee rights because it combines jointly and solely employed employees in a single unit, with a single union negotiating with two different employers, each of which controls only a portion of the terms and conditions of employment for the unit. The Board found that "[s]uch a structure subjects employees to fragmented bargaining and inherently conflicting interests, a result that is inconsistent with the Act's animating principles."

    This decision is good news for both users and suppliers of temporary employees.