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Employers That Use Temporary or Staffing Agency Employees Face New Legal Challenge

Unions can now petition to hold a union election with temporary and staffing company employees, along with the permanent employees of a company contracting with the staffing company, in a single union election. Because the employment services industry, which includes employment placement agencies and temporary help services, is “one of the largest and fastest growing industries in terms of employment,” the significance of this decision cannot be overstated.

In a recent National Labor Relations Board (“NLRB”) decision, Miller & Anderson, Inc., the Sheet Metal Workers International Association sought to organize Miller & Anderson. In addition to requesting an election for Miller & Anderson’s employees, the union also attempted to include the temporary workers in the same bargaining unit. In essence, the union wanted to have one single election where the company’s regular employees and its temporary employees would vote. The result – whether to be unionized or not – would be binding on both the company and the staffing agency. Miller & Anderson and its staffing company would be required to negotiate the terms and conditions of employment for permanent workers and temporary workers under the same contract.

Generally, a union can request an election by showing that 30% or more of a unit of the employer’s employees wish to be represented by a union. Prior to the NLRB’s finding in Miller & Anderson, temporary employees working at the employer’s site but employed by a different company and regular employees employed by the employer could not be forced to vote together in a union election as a single unit and the employers could bargain separately for the separate contracts. Even under the prior segregation of employers, unions won 65% of these types of elections in 2015.

Miller & Anderson potentially changes the equation on how employers could be exposed to unionization efforts. Even if the employer’s regular employees have little or no interest in a union, temporary employees may drag an employer into the complicated union election process. Specifically, under this new NLRB decision, unions can argue that temp workers (jointly employed by a business and staffing agency) and permanent employees (employed only by the business) are part of the same unit. As a result, the shortest term, lowest paid workers - employees of some other company - could decide whether a company’s own employees and the company become unionized. If the union is successful in the comingled employee election, both the business and the staffing agency would be required to jointly negotiate with the union.

In light of this decision, employers should evaluate the extent to which they use temporary or agency employees, the contracts and agreements with the staffing agency, and the degree of control (both direct and indirect) the company exerts over those workers.

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