In a much anticipated decision, the NLRB reversed existing precedent on temporary employees, holding that permanent employees and temporary staffing employees could be combined in the same bargaining unit without either the employer or the staffing agency’s consent. In its July 11, 2016 decision in Miller & Anderson, Inc., the NLRB overturned longstanding precedent, marking yet another example of the NLRB’s continued efforts to increase union participation and facilitate union organizing.

Since the 1970s, the NLRB had consistently found that bargaining units containing both an employer’s regular employees and the employer’s temporary employees supplied by a staffing agency were inappropriate without the consent of both the employer and the staffing agency. Greenhoot, Inc., 205 NLRB 250 (1973).

The NLRB changed its position in 2000 with the M.B. Sturgis decision, holding that temporary employees supplied by a staffing agency could be included in a single bargaining unit with an employer’s regular employees without the consent of both employers. Under M.B. Sturgis, temporary employees could be included in a single bargaining unit with regular employees if: (1) the staffing agency and the employer were determined to be joint employers, and (2) the temporary employees shared a community of interest with the regular employees. The M.B. Sturgis decision was short-lived, however. In 2004, a Bush-appointed NLRB overturned M.B. Sturgis, returning to the joint-consent standard established in Greenhoot. Oakwood Care Center, 343 NLRB 659 (2004).

The Board changed course yet again on July 11, 2016. In Miller & Anderson, Inc., the Board held that Oakwood Care Center was wrongly decided and reinstated the rule from M.B. Sturgis, holding that a bargaining unit could be comprised of both permanent and temporary employees without employer consent as long as the employees in the unit shared a community of interest and that both the staffing agency and the host employer met the test for “joint employer” under the Act.

Citing its “statutory command” to ensure that “employees [have] the fullest freedom in exercising the rights guaranteed by th[e] Act,” the NLRB reasoned that the broad language of the term “employer unit” necessarily included both sets of employees who, according to the NLRB, are “working side by side, are part of a common enterprise.” Beyond the statutory language, the NLRB reasoned that the M.B. Sturgis rule effectuated the fundamental policies of Act by affording employees the “fullest freedom” “to choose the unit they wish to organize.”

The NLRB’s latest decision marks yet another effort to expand the reach of the Act and to facilitate union organizing — all while the fullest expansive reach of the Board’s Browning-Ferris “joint employer” decision and the success of its attack on the franchise business model are still unknown. And, once again, the NLRB has shown its willingness to upend well-established precedent in pursuit of its policy goals.  Where unions are successful at organizing, this new rule will complicate the collective bargaining process by requiring multiple “employers” to bargain with the union and by likely requiring all such “employers” to pursue a single collective bargaining agreement.  Although the long term effects of this rule are still unknown, this rule will likely have an immediate impact in assisting unions to organize sites where employers use both permanent and temporary employees, for example by focusing on the weaker organizations. Employers should continue to monitor developments from the NLRB closely and seek appropriate legal guidance to assess risks in their current business relationships.