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In M.B. Sturgis Inc., 331 NLRB No. 173 (Aug. 25, 2000), the National Labor Relations Board overruled precedent and held that unions can organize mixed units of “temporary” and “regular” employees, even if neither the temporary agency nor “regular” employer consented to multi-employer bargaining. Sturgiscontinues the Clinton board’s trend toward shaping and even reshaping the law to make it easier for unions to organize. Both temporary agencies and “user” employers must be sensitive to this recent, significant development. The NLRB certainly is; it recently directed all NLRB regions to submit any unfair labor practice case requiring application of Sturgis‘ nonconsent rule directly to the NLRB’s Division of Advice. See Office of the General Counsel, OM-0072 (Sept. 13, 2000). BEFORE THE ‘STURGIS’ RULING, ‘GREENHOOT’ WAS THE LAW Before Sturgis, Greenhoot Inc., 205 NLRB 250 (1973), was the seminal decision in this area. In that case, a union sought to represent employees who worked in 14 office buildings Greenhoot managed. Among its arguments, Greenhoot claimed that the proposed unit was inappropriate because, at minimum, it consisted of individuals at Greenhoot and the 14 building owners jointly employed. The NLRB agreed, reasoning that there was “no legal basis” for establishing a multi-employer bargaining unit “absent a showing that the several employers have expressly conferred on a joint bargaining agent the power to bind them . . . or . . . unequivocally manifested a desire to be bound in future collective bargaining by group rather than individual action.” Because the relevant employers had not consented to multi-employer bargaining, the NLRB refused to find the petitioned-for unit appropriate. Later, in Lee Hospital, 300 NLRB 947 (1990), a union sought to represent a unit of certified nurse anesthetists. Although there were other issues, relevant here is the NLRB’s analysis of the union’s claim that the anesthetists should be represented separately from other professionals because the anesthetists allegedly were jointly employed. The NLRB stated that, assuming the anesthetists were jointly employed, a separate unit would be appropriate because the hospital refused to include jointly employed and solely employed professionals in the same unit. Citing Greenhoot, the NLRB reasoned that “as a general rule,” it would “not include employees in the same unit if they do not have the same employer, absent employer consent.” After Lee Hospital, the NLRB refused to combine employees jointly employed by a temporary agency and user employer with those solely employed by one of the entities, absent consent of both employers. See Sturgis, 331 NLRB No. 171, at 7. Sturgisinvolved three cases (one of which was later withdrawn) raising similar legal issues. In one case, a group of employees solely employed by M.B. Sturgis worked alongside a smaller group supplied by a temporary agency. The two groups performed identical work, worked similar hours and were subject to the same supervision. The temporary employees, however, could not work overtime and were hired by the temporary agency, which alone determined their wages and benefits. Sturgis argued that both groups should be included in the same unit, but the temporary agency objected and argued that its nonconsent alone barred inclusion of the temporary employees. In a companion case involving employer Jeffboat, a union sought to accrete, or add, a unit of 30 temporary welders into an existing unit of 600 employees it already represented at the company. Jeffboat supervisors disciplined the temporary employees, monitored their time and assigned them work. Although there was little difference between the temporary employees and their solely employed co-workers, an NLRB regional director refused to find an accretion because the relevant temporary agency refused consent. LIMITING ‘GREENHOOT,’ OVERRULING ‘LEE HOSPITAL’ The NLRB first determined that Sturgis, Jeffboat and the temporary agencies in each of their respective cases were “joint employers” of the temporary employees; however, the NLRB rejected a request to expand the test used to make joint-employer findings. Next, the NLRB reconsidered, and a three-member majority limited Greenhoot. The majority reasoned that Greenhootnever stood for the proposition that, in cases involving a single “supplier” and “user” employer, both employers had to consent to multi-employer bargaining before jointly and solely employed employees could be included in the same unit. Accordingly, the majority held that Lee Hospital, which reached this result, was wrongly decided and should be overruled. The majority reasoned that, in situations involving a single temporary agency and user employer, both jointly and solely employed employees performed all of their work for the user employer. Thus, the situation was not one involving a multi-employer unit, but simply “an employer unit” as the term is used in � 9(b) of the National Labor Relations Act. (In relevant part, � 9(b) provides that the NLRB shall decide whether the unit appropriate for collective bargaining “shall be the employer unit . . . or a subdivision thereof.”) The majority argued that until Lee Hospital, neither the NLRB nor the courts had found that the inclusion of employees supplied by another employer in a unit of the user employer’s solely employed employees involved multi-employer bargaining. Consequently, the majority stated, “we decline to accept the faulty logic of Lee Hospital. . . that a user employer and a supplier employer — both of which employ employees who perform work on behalf of the user employer — are equivalent to completely independent employers in multi-employer bargaining units.” Continuing, the majority emphasized that the NLRB would not always find units of jointly and solely employed employees appropriate. Rather, it would apply its “community of interest” test to such proposed units, examining factors including wages, hours and working conditions to determine whether a sufficient mutuality of interest existed between jointly and solely employed employees to include them in the same unit. The majority declined to apply the test to the cases before it, remanding them for further proceedings. Former NLRB member Robert Brame dissented. (Member Peter Hurtgen did not participate in the case). Reviewing practical and business realities, statutory language and legislative history of the National Labor Relations Act, Brame identified several problems inherent in the majority’s decision. These included potential conflicts of interest between jointly and solely employed employees (e.g., pay, benefits levels); conflicts of interest among the various employers; specialized problems in the accretion context; and specialized problems relating to “secondary activity,” such as picketing. Brame argued that there was no reasoned basis “for disturbing the principle prescribed by statute, long accepted by the Board and the courts, and properly reflected in Greenhoot. . . and Lee Hospitalthat employers may not be coerced into participation in multi-employer bargaining.” Acknowledging the majority’s “laudable goal” of eliminating the “possibility that thousands of employees suffer the effective loss of representation rights guaranteed by the Act,” Brame noted that the union involved with Sturgis opposed the inclusion of temporary workers, while the union involved with Jeffboat sought to include the temporary workers without a vote. MANAGEMENT MUST READ ‘STURGIS’ PROPERLY Even some management attorneys have claimed that Sturgisis “not bad” for employers. Proponents of the decision emphasize that in certain instances, it may be in the user employer’s interest to include temporary employees in a potential voting unit. Including temporary employees, the proponents continue, could determine the outcome in certain election cases. Despite their arguments, management proponents of Sturgisare, at best, misguided. Under the law before Sturgis, employers possessed similar flexibility with regard to the inclusion of temporary workers, assuming the employer had even a fair working relationship with its temporary agencies. Indeed, employers and their temporary-agency partners were able to use the “consent” requirement offensively or defensively and, at times, do so to thwart a union’s organizing efforts. The elimination of this weapon from employers’ arsenals is therefore significant. Also significant is the risk Sturgisposes for employers that already are organized. Many organized employers use unorganized temporary workers to supplement their work force. By eliminating the requirement that the temporary agency consent to multi-employer bargaining with respect to such employees, Sturgisincreases the risk that existing unions will seek to accrete temporary employees to existing units of employees solely employed by the user employer. Accretion of temporary employees not only could increase the user employer’s labor costs, but also could limit its operating flexibility. Before Sturgis, such accretions were all but impossible because either the temporary agency or user employer could refuse to consent. PRACTICAL TIPS FOR EMPLOYERS AFTER ‘STURGIS’ First, user employers should analyze their work force to determine whether temporary/jointly employed workers would be included in a bargaining unit (via either an election or accretion) with their solely employed employees. Evidence of, for example, common day-to-day supervision, identical pay, benefits and work duties, shared equipment, common work and break areas and job interchange will favor including both groups in the same unit. The absence of such evidence will favor keeping the groups separate. Organized employers concerned about possible accretion of temporary workers should investigate whether there is a history of excluding temporary employees from any unit solely employed by the user. If there is, and there has been no change in either group’s duties, the user employer may try to rely on an existing strand of NLRB cases holding accretions inappropriate under such circumstances, i.e., a long history of exclusion and no change in duties. See, e.g., Aerojet General Corp., 185 NLRB 794 (1970). Second, temporary agencies and user employers must ensure that their contracts are consistent with each partner’s labor relations strategy. Whereas in the past, either employer generally could control its destiny regarding multi-employer bargaining concerning jointly employed workers by withholding consent, Sturgishas eliminated this option. Now, the parties must anticipate all the problems that may arise from a mixed unit of jointly and solely employed employees. Third, employers already in bargaining relationships should negotiate language stating that both temporary and jointly employed employees are excluded (or included, if the employer desires) in any existing unit of solely employed employees. Generally, such language would be added to the unit exclusions in the collective bargaining agreement’s recognition clause. Fourth, employers must ensure that any steps they take to bolster their ability to maintain management flexibility can survive scrutiny by the NLRB. Evidence that an employer’s changes were motivated by union animus could lead not only to a finding that the employer committed unfair labor practices, but also to an order undoing the disputed changes. Finally, employers faced with union election petitions for units that may include temporary employees should remember that the NLRB’s rules may be used offensively. In any case that may involve joint employers, due process concerns dictate that the NLRB serve each employer with notice of any representation hearing. The majority opinion in Sturgismade this clear. See 331 NLRB No. 173, at 12 n.23. Some NLRB regions appear to be reading Sturgis‘ elimination of the consent requirement as eliminating the need to serve all interested parties. Employers can use this due process requirement both to lengthen the time required to complete any NLRB representation hearing (giving the employer more time to campaign) and to object to any adverse election result. Kenneth R. Dolin, a partner, is chairman of the labor and employment law practice at Chicago’s Jenner & Block. Scott V. Rozmus, an associate, also is a member of the firm’s labor and employment practice.

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