Returning to a decision it made 16 years ago (but was overturned just 4 years after that), the National Labor Relations Board has once again ruled that it will certify a bargaining unit containing individuals from two or more separate employers without those employers’ consent. In Miller & Anderson, Inc., Case 05–RC–079249 (July 11, 2016), the Board returns to the standard that it created in 2000, in M. B. Sturgis, Inc., 331 NLRB 1298 (2000) (“Sturgis”) and then quickly overturned in Oakwood Care Center, 343 NLRB 659 (2004).

Except for the four years when Sturgis applied, the Board has consistently held that both employers must consent for the creation of bargaining units that combine employees of the two organizations.  This issue most commonly arises in joint employer situations, where a union seeks to represent  a group of similarly situated employees, but some of the employees are solely employed by a single employer and others are deemed to be jointly employed by two employers.    For example, a union could seek a bargaining unit comprised of both regular employees of a company and individuals engaged through a staffing agency.  This may also arise where a company subcontracts out certain services but may have employees on staff who share a community of interest with the individuals employed by the subcontractor.

In its decision, the Board gave two primary reasons for returning to Sturgis.  First, the Board concluded that a unit of both joint and single employed employees “logically falls within the ambit of a 9(b) employer unit” given the breadth of the statutory definition of the terms “employer” and “employee” and the Board’s statutory obligation to “to assure to employees the fullest freedom in exercising the rights guaranteed by th[e] Act[.]” Second, it found that the Sturgis rule does more to effectuate the fundamental policies of the Act. Among other things, the Board noted that the Sturgis rule is “manifestly more responsive . . . to assure to employees the fullest freedom in exercising the rights guaranteed by the Act.” The Sturgis rule, it reasoned, allows employees to best exercise their right to self-organization because it does not require them to obtain employer permission before organizing in their desired unit.

Member Miscimarra penned a passionate dissent. After renewing his objection to the Board’s recent expansion of the joint-employer doctrine in Browning-Ferris Industries of California, Inc., 362 NLRB No. 186 (August 27, 2015) (“BFI”) generally, he outlined several concerns with the majority opinion. He posited that Sturgis units will result in confusion and instability, pose significant administrability problems, and runs contrary to the Act’s requirements and sound policy considerations. He was especially concerned that a return to Sturgis would result in employers being forced to engage in multi-employer bargaining without their consent and without taking into account any potential conflicts of interest. Additionally, he was disturbed by the fact that the Board, under Sturgis, could force employers to bargain with individuals with whom they have no real employment relationship.

The majority decision attempted to address some of the dissent’s concerns, suggesting that Sturgis units are different than traditional multi-employer bargaining units because in multi-employer bargaining units there is “no common user employer,” so conflicts of interest, and other concerns, should not be significant.

The decision is the Board’s logical, yet troubling, progression after the Board’s holding last year in BFI which broadened the standard for assessing joint-employer status under the National Labor Relations Act.  Between BFI and Miller, all companies that supply or purchase services from another entity with absolutely no expectation of creating any potential bargaining relationships, could easily be subjected to unexpected long-term obligations with unions and their business partners – a factor that should be taken into consideration in entering into, renewing, or continuing any such relationships.