The current National Labor Relations Board (NLRB or Board) has done it again, once more overturning existing precedent. In a decision issued July 11, 2016, the Board abandoned its 2004 Oakwood Care Center decision (343 NLRB 659) which stood for the proposition that a unit comprised of the employees of a “supplier” employer (such as a leasing or temporary agency) and those of a “user” employer was not an appropriate unit for collective bargaining purposes, absent the consent of both employers. Miller & Anderson, Inc. and Tradesman International and Sheet Metal Workers International Association, Local Union No. 19, AFL-CIO, 364 NLRB No. 39.

In a 3-1 decision (Member Miscimarra dissenting), the Board held that a proposed bargaining unit which combines employees solely employed by the user entity with those jointly employed by the supplier and user entities is an appropriate unit for election and collective bargaining purposes, even without the consent of both employers, so long as the employees within the proposed unit meet the Board’s traditional community of interest test. In so doing, the Board returned to its 2000 decision in M.B. Sturgis, 331 NLRB 1298.

The Board majority stressed that user entities would be required to bargain over all terms and conditions of employment for those employees that it solely employs, but that, in addition, the user employer would be obligated to bargain over the terms and conditions of employment which it has the authority to control for those employees it jointly employs with the supplier entity. One can imagine the difficulty of such bargaining since the supplier entity actually employs and pays the temporary employees.

As he has in many recent NLRB decisions, Member Miscimarra issued a strong dissent. He argued that the majority’s decision is contrary to the purpose of the National Labor Relations Act to stabilize labor relations. In his view, the majority’s decision, coupled with the Board’s recent expansion of joint employer status in Browning-Ferris Industries of California, 362 NLRB No. 186 (2015), creates confusion as to which entity controls which terms and conditions of employment and will, in fact, destabilize labor relations and the collective bargaining process.

The Board’s decision obviously is important for entities such as staffing agencies, employee leasing companies and providers of temporary employees. But it is equally important to any company which uses leased or temporary employees in its operations.