Following a decision last week by the National Labor Relations Board (NLRB), it is likely that all companies that use temporary staff workers will be considered a “joint employer” with the temporary staffing agency if efforts are made by a union to organize the temporary workers.
The use of temporary staff is a significant part of the business plan for many companies. Although it was in the past a strategy used primarily by manufacturing companies, temporary staffing is now common across many industries, including warehousing, logistics and service. The potential advantages to using temporary staff include off-loading human resource responsibilities, lowering unemployment and workers compensation expenses, tax withholding responsibility, and many of the other attendant costs of the employment relationship.
Companies who use temporary staff (I will call them “user” companies here) often take careful measures to limit the risk of being determined a joint employer with the company providing temporary staff. Those steps include having the temporary staffing company (I will call them “temporary staff providers” here) be responsible for all hiring, discipline, and termination decisions. In some cases, the user company relies on the temporary staff provider for on-site supervision and sometimes even human resources support on-site. In most cases, the user company has an indirect impact on wages of the temporary staff by virtue of the negotiated labor rate but, in almost all cases, all other employment benefits are provided solely by the temporary staff provider.
What if a union targets the temporary workers at a user company’s workplace for organization? If the union is successful, who is the “employer” required to recognize and bargain with the union? Until recently, the answer was pretty easy. As long as the user company was careful not to exert direct control over the terms and conditions of employment of the temporary workers, then the employer required to recognize and bargain with the union was the temporary staff supplier only. Efforts made by unions to argue for a joint employment determination were usually unsuccessful. All that has changed.
What does the case say?
Last Thursday, in Browning-Ferris Industries of California, Inc., the NLRB decided that the user company and the temporary staff supplier are a joint employer. The user company was Browning-Ferris (BFI), which operates a recycling facility. The temporary staff supplier was Leadpoint. The Teamsters Union tried to organize a group of 240 Leadpoint employees working at the BFI facility. The temporary staff performed work different than that performed by the BFI regular workforce. The BFI regular workforce was already unionized. Leadpoint provided on-site supervision and an on-site human resource representative. Leadpoint also kept control of hiring decisions, subject to certain broad criteria imposed by BFI. When there were on-site misconduct issues involving temporary staff people, BFI made Leadpoint aware and Leadpoint was responsible to investigate and take action, though BFI retained the right to discontinue the assignment of any of the temporary staffers. In other words, Browning-Ferris did all “right” things in its effort to remain separate from Leadpoint. Continue Reading