As a result of an organizing drive by Teamsters Local 350, the National Labor Relations Board has issued an historic decision clarifying the “joint employer” standard, making it easier for unions to force employers that use contracted labor to sit at the bargaining table to negotiate over the wages and employment conditions for the contracted laborers.
The case started at the BFI recyclery in Milpitas, California. Teamsters Local 350 represents BFI’s garbage and recycling drivers and has negotiated strong wages and pension benefits for them. But BFI subcontracted out the manual sorting work through a temporary staffing agency called Leadpoint, and these sorters were paid minimum wage. The sorters wanted to join and be represented by Local 350. When BFI and Leadpoint refused to recognize Local 350, the union filed a petition with the NLRB to conduct a vote. The petition sought to designate both BFI and Leadpoint as the sorters’ employers, or “joint employers” under labor law.
BFI balked at being included as an employer of the sorters, claiming it did not employ these workers. The union argued that because the sorters worked in BFI’s plant, on BFI’s machinery, operated by BFI, and BFI paid for the sorters’ labor, BFI was as much an employer as the temp agency. Also, under BFI’s arrangement with the staffing agency, BFI paid the staffing agency minimum wage plus a small percentage markup for each hour worked by a sorter, BFI set the hours and numbers of workers, BFI had the power to terminate sorters from working there, BFI set the hiring qualifications, and the sorters followed BFI’s safety rules. Nevertheless, local Board officials initially agreed that only Leadpoint, the temp agency, was the employer. The local Board office conducted an election among the employees in April 2014, but delayed counting the ballots while the union appealed the decision excluding BFI from employer status.
After the union election, the NLRB in Washington, D.C. used the union’s appeal to take a closer look at the question of “joint employment” because of the growth and prevalence of the staffing agency industry in American workplaces. Finally, in August of this year, the NLRB issued a decision siding with the Teamsters; the Board ruled that BFI is a joint employer of the sorters, and must bargain with the union.
In issuing this historic decision, the NLRB re-framed the standard it applies to determine whether there is a joint-employment relationship. This decision has received a lot of media attention, much of it doomsday scenarios from corporations and their representatives. In reality, the NLRB’s decision was a much needed return to a common- sense joint-employer analysis that considers both the indirect and reserved control of a company that might be a joint employer. This decision makes it possible to organize the subcontracted workforce because it is much easier to bring to the bargaining table the company actually controlling employees’ terms and conditions of employment. It also makes it more difficult for companies to structure themselves so that they maintain control over the subcontracted workers but avoid the bargaining obligations of an employer.
After the NLRB’s August decision, the impounded ballots were counted and Local 350 won the election 73 to 17. BFI is challenging the decision by refusing to bargain with Local 350. The case is likely to make it up to the D.C. Circuit Court of Appeals. In the meantime, the NLRB’s new joint-employer standard is in effect.
Crucially, a joint-employer finding makes it much easier to hold a company liable for changing subcontractors in response to unionization and for a staffing company’s unfair labor practices. Further, the joint-employer is a primary employer that can be picketed and struck.
Beeson, Tayer & Bodine — Oakland: 510-625- 9700. Sacramento: 916-325-2100.