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Newcomb, Sabin, Schwartz & Landsverk, LLP - E-Mail Advisory

September 13, 2000

 EMPLOYEE LEASING OFFERS NO IMMUNITY TO NONUNION EMPLOYERS FROM THE NATIONAL LABOR RELATIONS ACT

With two recent decisions, the National Labor Relations Board (NLRB) expanded and highlighted nonunion employers’ obligations when leasing employees. In M.B. Sturgis Inc., 331 NLRB No. 173 (2000), the NLRB made it easier for unions to organize a workforce that included leased workers employed through a leasing agency. The NLRB directed that leased employees be included with regular employees in a single bargaining unit, if the "user" employer and the leasing agency qualify as joint employers--the normal case with leased employees. In so ruling, the NLRB overturned its own precedent that had required agreement by the user employer and leasing agency before forming a single unit.

Under M.B. Sturgis, a so-called temporary or contract worker may be lumped together with regular workers in a single bargaining unit. Likewise, where a union already represents regular employees, that union may now be expanded to include the contingent workforce, regardless of designation as temporary, leased, or contract workers.

In a second case, SOS Staffing Services, Inc., 331 NLRB No. 97 (2000), the NLRB held that both a nonunion construction contractor and its leasing agency committed unfair labor practices for discharging a union member in an effort to maintain nonunion status. The NLRB found the "non-acting" employer liable where (1) it knew or should have known of the unlawful reasons for the discharge, and (2) acquiesced in the discharge by failing to protest it or by not exercising contractual rights to resist it. The NLRB imposed joint liability even though the non-acting employer did not learn that the employee was discharged for anti-union reasons until after the discharge was completed.   The NLRB reasoned that the contractor and leasing agency were joint employers and, thus, jointly liable.

The NLRB considers an employer to jointly employ leased employees with a the leasing agency when the employer meaningfully affects matters related to the employment relationship such as hiring, firing, discipline, supervision and direction of work. Under the NLRB standard, joint employment of leased employees is quite common.

If you have any questions regarding this issue, call or email us. Feel free to share this advisory with others. If you would like to be on our e-mail distribution list, please visit our Email Advisory web page and click on the "Subscribe" button.

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© 2001 Newcomb, Sabin, Schwartz & Landsverk, LLP.

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