NLRB RULES THAT EMPLOYEES OF LABOR SUPPLIERS CANNOT BE INCLUDED
WITH REGULAR EMPLOYEES UNLESS ALL PARTIES AGREE

Continuing its pattern of reversing some of the more “creative” decisions of the Clinton Board, the NLRB recently held that employees of a labor supplier who are assigned to work at a company cannot be included in a collective bargaining unit with regular employees of the company unless all parties consent to the arrangement. The 3-2 decision in H.S. Care L.L.C., d/b/a/ Oakwood Care Center and N&W Agency, Inc. 343 NLRB No. 76 ( November 19, 2004), overturned a 2000 decision, M.B. Sturgis, 331 NLRB 1298, which had held such units permissible under the Act. In issuing its ruling, the Oakwood Board recognized that the labor supplier and the company to which it supplies employees are two different employers and stated that “No amount of legal legerdemain can alter this fact.”

In the Oakwood case, the Health and Human Service Union petitioned for a unit of “nonprofessional employees” at Oakwood’s facility in Oakdale, New York. The unit the Union sought included both employees employed solely by Oakwood and those working through a personnel staffing agency, N&W. Neither employer consented to bargaining with the other in a multiemployer unit. Therefore, since consent is required to allow multi-employer units under the Act, the Board dismissed the union’s petition.

In our view, this is a welcome decision for employers. The Sturgis case created uncertainty and led to conflicts between employers and the labor suppliers they used. It also did not serve the interest of either set of employees because they rarely, if ever, shared a community of interest. The Oakwood decision ensures that employers will not have such arrangements thrust upon them against their will.

Our recommendation:

As a general rule, employers should not consent to a collective bargaining unit that combines its regular workers with those hired through an outside agency or supplier.

For additional information, please contact us.

Tom Bahrman tbahrman@nsslaw.com
Jeff Chicoine jchicoine@nsslaw.com
Wayne Landsverk wlandsverk@nsslaw.com
Verne Newcomb newcomb@nsslaw.com
Rick Pope rpope@nsslaw.com
Jack Schwartz schwartz@nsslaw.com
Brian Thompson bthompson@nsslaw.com

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