M.B. Sturgis, Inc. and Textile Processors, Service Trades, Health Care, Professional & Technical Employees International Union Local 108, Petitioner and Jeffboat Division, American Commercial Marine Service Company and T.T.& O. Enterprises, Inc. and General Drivers, Warehousemen & Helpers Local Union 89, affiliated with the International Brotherhood of Teamsters, AFL–CIO, Petitioner.  Cases 14–RC–11572 and 9–UC–406

August 25, 2000

DECISION ON REVIEW AND ORDER

By Chairman Truesdale and Members Fox, Liebman, and Brame

These cases involve the representational rights of an important segment of the “contingent work force.”  Specifically, in these cases, we address the question of whether and under what circumstances employees who are jointly employed by a “user” employer and a “supplier” employer1 can be included for representational purposes in a bargaining unit with employees who are solely employed by the user employer.  Our consideration of this issue has caused us to reexamine two key Board decisions in this area:  Greenhoot, Inc., 205 NLRB 250 (1973), and Lee Hospital, 300 NLRB 947 (1990).  As explained more fully below, Greenhoot stands for the proposition that where two or more otherwise separate user employers obtain employees from the same supplier employer, and a union is seeking to represent the employees in a single unit for the purposes of collective bargaining with the user employers, the unit sought is a multiemployer unit and, under established principles of multiemployer bargaining, cannot be found appropriate absent the consent of the affected employers.  Lee Hospital, decided 17 years after Greenhoot, extended the holding of Greenhoot to situations where a single user employer obtains employees from one or more supplier employers and a union is seeking to represent both those jointly employed employees and the user’s solely employed employees in a single unit.  The Board ruled that such units are also multiemployer in nature and therefore also require employer consent. 

Upon careful consideration, we have decided to reaffirm the decision in Greenhoot insofar as it requires employer consent for the creation of true multiemployer units involving separate user employers.  We have, however, also concluded that the Board erred in treating the unit at issue in Lee Hospital as a multiemployer unit.  As a consequence of this error, a growing number of employees who are part of what is commonly described as the “contingent work force” are being effectively denied representational rights guaranteed them under the National Labor Relations Act.  To restore these rights to them, we are today overruling Lee Hospital and its progeny.  We are also clarifying the decision in Greenhoot to provide better guidance on unit questions to those engaged in future representation proceedings involving contingent workers.

The critical nature of the issue we have reconsidered in these cases is highlighted by ongoing changes in the American work force and workplace and the growth of joint employer arrangements, including the increased use of companies that specialize in supplying “temporary” and “contract workers” to augment the work forces of traditional employers.  We note that Greenhoot and Lee Hospital were decided before the growth of these types of alternative employment arrangements.  It was not until 1995 that the U.S. Department of Labor, Bureau of Labor Statistics (BLS), began collecting and analyzing survey data regarding contingent and alternative employment arrangements in the labor force.  The results of BLS’s most recent surveys indicate that so-called “contingent” and “alternative employment arrangements” accounted for as much as 4.3 percent of all employment in February 1999, or 5.6 million employees.  Nearly 1 percent of this nation’s work force, or 1.2 million employees, worked for “temporary help agencies,” and another 0.6 percent (nearly 800,000 employees) worked for “contract firms.”  See Bureau of Labor Statistics, News Release USDL 99-362, Tuesday, Dec. 21, 1999.  In addition, a recent General Accounting Office (GAO) study reports a tremendous growth in the “temporary help supply industry” during the past two decades.  In Contingent Workers: Income and Benefits Lag Behind Those of the Rest of Workforce, GAO/HEHS-00-76, issued July 26, 2000, the GAO reports at page 16 that according to BLS data, from 1982 to 1998 the number of jobs in the temporary help supply industry rose 577 percent, while the total number of jobs in the work force grew only 41 percent.  The GAO report also noted that “certain industries and communities have begun to rely heavily on agency temps.”  Id.

i.  background

On October 20, 1995, the Regional Director for Region 14 issued a Decision and Direction of Election in M.B. Sturgis, Inc., Case 14–RC–11572, in which he found  appropriate a petitioned-for unit consisting of all employees employed by M.B. Sturgis at its Maryland Heights, Missouri plant, with the exception of 10–15 “temporary” employees used by Sturgis and supplied by Interim, Inc.  The Regional Director found that the temporary employees were jointly employed by Sturgis and Interim, but that under Lee Hospital, they could not be included in the same unit with employees employed solely by Sturgis absent the consent of both Sturgis and Interim.2  The Regional Director subsequently denied a motion by Sturgis to reopen the hearing to ascertain whether Interim would consent to the inclusion of the temporary employees in the unit.  Thereafter, in accordance with Section 102.67 of the Board’s Rules, Sturgis filed a timely request for review of the Regional Director’s Decision, contending that the Regional Director’s exclusion of the temporary employees from the unit raised substantial issues regarding Greenhoot and its progeny, and that the Regional Director erred by denying its motion to reopen the hearing.3  On November 20, 1995, the Board granted Sturgis’s request for review.

In the meantime, on November 8, 1995, the Acting Regional Director for Region 9 had issued a Decision and Order in Jeffboat Division, Case 9–UC–406, in which he dismissed a unit clarification petition by which the petitioning union, Teamster Local 89, had sought to clarify the bargaining unit of Jeffboat employees covered by its existing collective-bargaining agreement with Jeffboat to include employees supplied by T.T.& O. Enterprises (TT&O) for use by Jeffboat.  The Acting Regional Director found that Jeffboat and TT&O are joint employers of the TT&O supplied-employees.  Without reaching any other issues presented by the petition, he then further found that under Greenhoot and Lee Hospital the jointly employed employees could not be included in the existing unit.  He reached this conclusion because Jeffboat and TT&O would not consent to joint bargaining.  Thereafter, Local 89 filed a request for review of the Acting Regional Director’s dismissal of the petition, contending that a substantial issue is raised by the Acting Regional Director’s reliance on Greenhoot and Lee Hospital.  Jeffboat filed a conditional request for review, contending that the Regional Director erred by finding that it is a joint employer of the TT&O-supplied employees.  Alternatively, Jeffboat argued that the Acting Regional Director erred by failing to reach the Employer’s other asserted grounds for dismissing the petition.  On May 3, 1996, the Board granted Local 89’s request for review and Jeffboat’s conditional request for review.  The Board held in abeyance Jeffboat’s alternative arguments for granting review. 

On October 4, 1996, the Board issued a notice that it would hold oral argument in these cases.4  The notice of hearing requested that the parties address several questions regarding Greenhoot and Lee Hospital, and the appropriate test for determining joint employer status.  The parties in both cases and a number of amici curiae participated in the oral argument held on December 2, 1996.  Preargument and/or postargument briefs were filed by oral argument participants and others.5  In view of the common issues raised by these two cases, we consolidate them for the purpose of decision.6  After carefully reviewing the record and all the briefs submitted by the parties, the Board7 affirms the joint employer finding in Jeffboat and reverses the dismissal of the petitions in Sturgis and Jeffboat.  Sturgis’ motion to reopen the hearing is granted. 

ii.  facts and contentions of the parties

A. Terminology

To ensure the use of common terminology, the Board asked the parties and amici in their oral arguments and in their briefs to refer to the company that supplies employees as a “supplier” employer and the company that uses those employees as a “user” employer.  This decision will use the same terminology.

B.  M.B. Sturgis

The Petitioner (Local 108) filed a petition to represent a unit of “all employees at the company’s plant located on Fee Fee Road” in Maryland Heights, Missouri.  At this plant, Sturgis produces and sells flexible gas hoses.  Sturgis solely employs 34–35 employees and also uses 10–15 so-called “temporary” employees who are supplied to Sturgis by Interim, a national provider of temporary help personnel.  The temporaries work side-by-side with Sturgis’ employees, perform the same work, and are subject to the same supervision.  Interim hires the temporaries, determines their wages and benefits, and pays them.  All employees work the same hours, except temporary employees are not permitted to work more than 40 hours per week.  It is undisputed that Sturgis and Interim are joint employers of the temporary employees.  The Regional Director excluded the temporary employees from the unit because they are not solely employed by Sturgis.  The Regional Director reasoned that although Sturgis consented to include the temporary employees in the unit, Interim did not participate in the hearing and the record contained no evidence that Interim consented to the inclusion of the temporary employees.

Local 108 contends that a unit including the temporary employees is inappropriate.  It argues that the temporary employees should not be included because of the short-term nature of their employment.  Local 108 also contends that the temporary employees must be excluded because the employees are jointly employed and, under the Greenhoot doctrine as applied in Lee Hospital, they cannot be included in the same unit with the 34–35 permanent employees solely employed by Sturgis. 

Sturgis argues that consent by Interim should not be required to include these temporary employees in the unit.  It contends that the Board should look only to whether the employees share a community of interest with its regular employees.  Sturgis argues that Greenhoot “does not stand for the principle that everyone has cited it for, and that [Greenhoot’s] progeny has improperly expanded its underlying meaning.”  Sturgis posits that the unit is not appropriate if the temporary employees are not included.  Sturgis also argues that the Regional Director erred by denying its motion to reopen the record to permit Interim to be a party to the case.  Sturgis contends that it is in the Board’s interest to bring as many interested parties as possible into these kinds of proceedings at the outset. 

Interim stated at oral argument before the Board that it does not consent to including the temporary employees in the unit.  Further, Interim contended that Greenhoot and Lee Hospital control this case.  Interim argued that, under those cases, the Board cannot include the temporary employees without violating the principles of multiemployer bargaining, i.e., that the employers must have expressly consented to joint negotiations or have unequivocally manifested through a course of conduct an intent to be bound by group collective bargaining.  Hughes Aircraft Co., 308 NLRB 82 (1992), citing Greenhoot and Lee Hospital.

C. Jeffboat Division

Jeffboat, an inland river shipbuilder, operates a large shipyard on the Ohio River in Jefferson, Indiana.  TT&O, described at oral argument by its counsel as a “temporary supplier firm,” supplies to Jeffboat 30 first-class welders and steamfitters.  By its petition, Local 89 seeks to accrete these employees to a unit of 600 production and maintenance employees covered by a collective-bargain-ing agreement between Jeffboat and Local 89.

In concluding that Jeffboat and TT&O are joint employers of the TT&O-supplied employees, the Acting Regional Director found that Jeffboat controls practically all aspects of the daily environment of the TT&O-supplied employees.  Jeffboat’s supervisors assign, direct, and oversee the daily work of the TT&O-supplied employees.  The Acting Regional Director also found that Jeffboat supervisors have authority to discipline the TT&O-supplied employees for unsatisfactory performance or any infraction of Jeffboat’s rules and regulations, and are responsible for monitoring the time that TT&O-supplied employees spend on different Jeffboat assignments. 

Although the Acting Regional Director concluded that the jointly employed employees “share a strong community of interest” with the bargaining unit employees, he dismissed the petition because Jeffboat and TT&O do not consent to joint bargaining, relying on Greenhoot and Lee Hospital.  The Acting Regional Director, therefore, found it unnecessary to reach Jeffboat’s several alternative grounds for dismissing the petition.8 

Local 89 contends that the Board should cease adhering to the Greenhoot “doctrine” as a bar to including the jointly employed employees in the contractual unit.  Local 89 argues that a requirement of consent has no basis in this case because the unit is not a “true” multiemployer unit.  With respect to the joint employer finding, Local 89 urges that it be affirmed, but also urges the Board to give Jeffboat’s reserved control over terms and conditions of employment equal weight to the evidence of actual control over terms and conditions of employment. 

Jeffboat and TT&O argue that the Board should adhere to Greenhoot and should not retreat from the broad range of cases in which it has been applied.  They assert that Greenhoot provides the underlying policy reasons for prohibiting any change in this established bargaining unit, absent mutual consent.  TT&O contends that requiring employer consent to include the 30 supplied employees in the unit is appropriate because otherwise, TT&O would become bound by a collective-bargaining agreement without ever having the opportunity to bargain over the terms and conditions contained therein.  Jeffboat and TT&O also argue that TT&O is the sole employer of the supplied employees.  They contend that the evidence is insufficient to support the Acting Regional Director’s joint employer finding. 

D. Amici Curiae

Amicus AFL–CIO contends that Greenhoot must be overruled and the Board must return to the practice that prevailed prior to Greenhoot, which it asserts did not require consent for a combined unit of solely employed employees and jointly employed employees.  The AFL–CIO argues that by granting employers the power to withhold consent to such units, Greenhoot and its progeny bar otherwise appropriate units of employees who share a community of interest.  The result of this veto power over such units is to fragment otherwise appropriate units, deprive employees of their right to organize appropriate units, and frustrate meaningful collective bargaining.  The AFL–CIO also argues that the Board should clarify the application of its current joint employer standard. 

The General Counsel argues that community of interest, not consent, is the appropriate standard for determining whether jointly employed employees should be included in a single unit with employees solely employed by one of the joint employers.  The General Counsel contends further that as long as one of the joint employers controls some working conditions of both of the work forces, such a relationship is not the legal equivalent of multiemployer bargaining. As for the joint employer standard, the General Counsel argues that the Board should return to a test that examines the direct or indirect right to control employment conditions based on the reality of how separate entities structure their commercial dealings with each other.

The amici representing employer groups urge the Board to retain Greenhoot and its progeny.  They argue that Greenhoot is rooted in the consent requirement for multiemployer bargaining.  Permitting such units absent consent will force employers into multiemployer bargaining and thus, they assert, will violate Section 8(b)(4)(A) of the Act.  These amici also allege that abandoning Greenhoot would, as a practical matter, impede collective bargaining, in that an employer would be forced to bargain at the same table with another employer or employers regarding a unit that includes employees who are under the sole control of the other employers.  Amici such as the National Association of Temporary and Staffing Services (NATSS) and the Council on Labor Law Equality (COLLE) note that, while Greenhoot, as they construe it, prohibits Board-determined units that encompass employees of different employers, it does not prohibit those employees from being organized into separate units that are appropriate.  Finally, these amici urge the Board to make no change in its current joint employer standard. 

iii. discussion

A.  Joint Employer Status

1. The test for determining joint employer status

As a threshold matter, we must first consider whether Jeffboat and TT&O are joint employers of the TT&O-supplied employees, for without the requisite control necessary to establish the joint employer relationship, the issue presented here will not arise.  The question of whether to expand the test for determining joint employer status was presented to the Board in Value Recycle, 33–RC–4042, and in Jeffboat.  This issue was briefed and discussed at oral argument.9  As noted above, however, the petitioner in Value Recycle withdrew its petition.10  Further, for the reasons discussed below, we agree with the Regional Director that, under extant Board precedent, Jeffboat and TT&O are joint employers.  Hence, we need not address the contention in Jeffboat that our current joint employer standard should be expanded, and we will forego the opportunity to do so here. 

Under current Board precedent, to establish that two or more employers are joint employers, the entities must share or codetermine matters governing essential terms and conditions of employment.  NLRB v. Browning-Ferris Industries, 691 F.2d 1117, 1123 (3d Cir. 1982); Riverdale Nursing Home, 317 NLRB 881, 882 (1995).  The employers must meaningfully affect matters relating to the employment relationship such as hiring, firing, discipline, supervision, and direction.  Riverdale, 317 NLRB at 882, citing TLI, Inc., 271 NLRB 798 (1984). 

2. Jeffboat and TT&O are Joint Employers

As we indicated above, in Jeffboat, we must first decide whether the TT&O-supplied employees are solely employed by TT&O.  If they are solely employed by TT&O, then they cannot be accreted into the bargaining unit of Jeffboat employees.  After carefully reviewing the record and all the briefs of the parties and amici, we agree with the Acting Regional Director that Jeffboat and TT&O are joint employers of the TT&O-supplied employees.

The record fully supports the Acting Regional Director’s finding that Jeffboat supervisors assign, direct, and oversee the daily work of the TT&O-supplied employees; that Jeffboat supervisors have authority to discipline TT&O-supplied employees; and that Jeffboat’s supervisors are responsible for monitoring the time spent by TT&O-supplied employees on different Jeffboat assignments.  In addition, there is no dispute that the contract between Jeffboat and TT&O grants Jeffboat broad authority over the TT&O-supplied employees, as it provides that they “will be subject to direction of [Jeffboat] as to the assignment of [w]ork, including shift hours and overtime, and to the direction of [Jeffboat] managers, supervisors and foremen.” 

Jeffboat argues that its supervision of the TT&O-supplied employees is routine and insubstantial and, hence, does not support a joint employer finding.  We disagree. The shipyard is a massive operation encompassing approximately six acres along the Ohio River, and includes several subassembly shop areas and four separate production lines.  Jeffboat supervisors assign TT&O-supplied employees to “strategically located areas of the yard” where employees are needed.  Jeffboat supervisors direct the TT&O-supplied employees regarding what work is to be performed at their assigned location.  There is no evidence of any assignment or direction by the onsite TT&O representative.  While these employees are skilled and some assignments do not require “intensive supervision,” other assignments require immediate and “active supervision” by Jeffboat.  This is not a case where the employees usually are left to perform work on their own without any supervision or direction.

In addition, Jeffboat supervisors have authority to discipline the TT&O-supplied employees “as they see fit,” including issuing written and verbal warnings, and suspending employees by directing that they leave the premises of the shipyard.  Jeffboat’s argument regarding discipline also is contrary to the undisputed testimony by James Pope, a first class welder, that Jeffboat’s supervisors have authority to discipline the TT&O-supplied employees, and the fact that a Jeffboat supervisor and a TT&O representative jointly issued a disciplinary warning to TT&O-supplied employees.  We conclude that Jeffboat and TT&O meaningfully affect and codetermine essential terms and conditions of employment, including the supervision, assignment, direction and discipline of the TT&O-supplied employees.11

B. Reconsideration of Greenhoot and its Progeny

1.  Board decisions Prior to Greenhoot

Having found that a joint employer relationship exists in both M.B. Sturgis and Jeffboat, we now address whether, under the statute and Board policy, employer consent is required in order for the Board to combine in one unit employees who are jointly employed by a supplier employer and a user employer, with employees solely employed by the user employer.  We begin with the Board’s historical treatment of units combining jointly employed and solely employed employees.

Prior to Greenhoot, the Board routinely found units of the employees of a single employer appropriate, regardless of whether some of those employees were jointly employed by other employers.  The Board used its traditional community of interest test to decide whether such units were appropriate.  Significantly, the Board identified no statutory impediment to such units, and the issue of employer consent was neither raised nor discussed.  Until Lee Hospital, the Board never held that these units were multiemployer units subject to the consent requirements of multiemployer bargaining.12

Early on, the Board included employees who worked for concessionaires in a unit of the employees of the retail department store where the concessions were located.  The concessionaires in those cases operated departments within the user’s store.  Some of these employees were referred to as “employees” of the concessionaire or as being “retained” by the concessionaire to work in the store.  See Louis Pizitz Dry Goods Co., 71 NLRB 579 (1946); Taylor’s Oak Ridge Corp., 74 NLRB 930 (1947); Denver Dry Goods, 74 NLRB 1167, 1176 (1947).  Although these concessionaires operated whole departments, the Board included the employees in these departments in the unit with the solely employed department store employees.  In these cases the Board found that there was sufficient evidence to conclude that the department store was an employer of the employees, and that the employees shared a community of interest with the store’s solely employed employees.  The Board excluded employees in the leased department, however, if they were solely employed by the concessionaires. In those cases, the Board noted that they did not share “sufficient interests” with the employees in the other departments to be joined for collective bargaining.  See J.M. High Co., 78 NLRB 876, 878 (1948); Block and Kuhl Department Store, 83 NLRB 418, 419 (1949).  In the 1950s, the Board continued to include the employees of the leased departments in units with the store’s employees.  See, e.g., Stack & Co., 97 NLRB 1492 (1952). 

In a series of cases in the 1960s, the Board recognized that control over leased employees may be shared between user and supplier employers and, hence, the employees may be jointly employed.  See Frostco Super Save Stores, Inc., 138 NLRB 125 (1962).  Notwithstanding this shared employment relationship, the Board continued to sanction units combining solely employed department store employees with jointly employed leased employees, applying the community of interest test to decide whether jointly employed employees should be included in the unit.  See id. at 129;13 Thriftown, Inc., 161 NLRB 603 (1966); Jewell Tea Co., 162 NLRB 508 (1966).  In Thriftown, the Board majority included jointly employed employees of leased departments in the same bargaining unit with the solely employed department store employees.  Chairman McCulloch and Member Fanning, in dissent, objected to the joint employer finding, but expressed no concern over the inclusion of the jointly employed employees in the unit with the solely employed store employees.  161 NLRB at 608.  Compare United Stores of America, 138 NLRB 383, 385 (1962), in which a separate unit of jointly employed grocery and meat department employees was found appropriate because of the “indicia of separateness” from solely employed storewide employees. 

In 1969, the United States Court of Appeals for the Sixth Circuit rejected an employer’s challenge to a storewide unit that included jointly employed employees supplied by several employers in a unit with Kresge’s employees.  S.S. Kresge Co., 416 F.2d 1225 (6th Cir. 1969), enfg. in relevant part, S.S. Kresge, 169 NLRB 442 (1968).  The employer contended that “to compel unwilling employers to bargain as joint employers will disrupt the collective bargaining process because each licensee may have independent ideas about appropriate labor policy.”  416 F.2d at 1231.  The court specifically rejected this contention, relying on a similar case from the U.S. Court of Appeals for the Ninth Circuit which rejected an employer’s contention that a user-wide (store-wide) unit would have a “highly disruptive effect upon on the store’s operation, [and] will prejudice the licensees and not produce sound and stable collective bargaining relationships.”  See Gallenkamp Stores Co. v. NLRB, 402 F.2d 525, 531 (9th Cir. 1968).  The Gallenkamp court also had rejected the employer’s contention that the jointly employed employees of one the licensees “lack[ed] a sufficient community of interest” with the store employees to be included in the unit.  Id.

These cases clearly demonstrate that combined units of user and supplier employees are not a novel idea.  At the end of the 1960s, no Board or court decision had barred, absent employer consent, units combining solely employed employees and jointly employed employees on the basis that they constituted multiemployer units.  To the contrary, the Board and the courts perceived no statutory impediments to such units.  Inclusion of the jointly employed employees was subject only to the Board’s traditional community of interest standards.  In 1970, the United States Court of Appeals for the Fifth Circuit pointed out that the Board “often” had found appropriate units of the user’s employees and licensees’ employees, especially when the user employer exercised substantial control over the employment practices of the licensees and “was in practical effect a joint-employer.” NLRB v. Zayre Corp., 424 F. 2d 1159, 1165 (5th Cir. 1970). 

2. Greenhoot

In early 1973, the Regional Director for Region 5 issued a Decision and Direction of Election for a unit of all licensed and unlicensed engineers, apprentice engineers, and maintenance employees at 14 office buildings managed by Greenhoot in the District of Columbia.  Greenhoot contended that the Regional Director erred in finding that Greenhoot was the sole employer of the employees in the unit.  The Board agreed and reversed the Regional Director.  Greenhoot, Inc., 205 NLRB 250 (1973).

The Board described the unit sought by the petitioner as one consisting of employees in 14 separate office buildings.  Greenhoot argued that the respective building owners were the sole employers of the petitioned-for employees, or in the alternative, that Greenhoot was a joint employer with each of the building owners and, therefore, a combined unit was not appropriate.  The Board agreed with Greenhoot’s alternative contention, finding that “both the individual owner and the management agent, Greenhoot, have significant employer functions.”  205 NLRB at 251.  The Board concluded that “Greenhoot and each of the Building owners are joint employers at each of the respective buildings.”  Id. 

Without further discussion, the Board then found that:

 

In this circumstance, there is no legal basis for establishing a multiemployer unit absent a showing that the several employers have expressly conferred on a joint bargaining agent the power to bind them in negotiations or that they have by an established course of conduct unequivocally manifested a desire to be bound in future collective bargaining by group rather than individual action.  Id. 

 

As there was no consent for a multiemployer unit, the Board found “separate units at each location” to be appropriate, rather than the combined unit sought by the petitioner.  205 NLRB at 251.  In Greenhoot, therefore, the Board essentially found that a unit that combined employees employed by Greenhoot and 14 separate employers—the 14 building owners—constituted a multiemployer unit.14

3. The Lee Hospital extension of Greenhoot

Following Greenhoot, and before Lee Hospital, the Board continued to find appropriate units of solely employed employees and jointly employed employees without suggesting that they implicated any multiemployer bargaining concern.  For example, in Globe Discount City, 209 NLRB 213 (1974), the Board found that the Regional Director erred in excluding jointly employed employees from a unit of Globe’s employees (and other jointly employed employees).  The Board found that the jointly employed employees shared “a substantial community of interest” with the solely employed and other jointly employed store employees and that a unit combining them was an appropriate unit.  In several unfair labor practice cases, the Board also imposed a bargaining obligation on the joint employers of employees in contractual units that included employees solely employed by one of the joint employers.  See, e.g., Sun-Maid Growers of California, 239 NLRB 346, 352–353 (1978), enfd. 618 F.2d 56, 59 (9th Cir. 1980); U.S. Pipe & Foundry Co., 247 NLRB 139, 142 (1980).  The Board found that “no policy of the Act” was offended by imposing a bargaining obligation “for that portion of the overall unit.”  Sun-Maid Growers, 239 NLRB at 353. 

Similarly, the U.S. Court of Appeals for the Seventh Circuit found no impediment to bargaining in units of these mixed groups of employees absent employer consent.  In Western Temporary Services v. NLRB, 821 F.2d 1258, 1265 (7th Cir. 1987), the court found that a user employer, Classic, was not prejudiced by the inclusion of jointly employed part-time employees supplied by Western Temporary Services in a unit with Classic’s solely employed employees.

In 1990, however, 17 years after Greenhoot was decided, the Board in Lee Hospital—without any rationale—changed its analytical course and brought units like those here within the ambit of Greenhoot and the consent requirement of multiemployer bargaining.  Lee Hospital, 300 NLRB 947, 948 (1990).  In Lee Hospital, the petitioner sought a unit of certified registered nurse anesthetists (CRNAs).  The Regional Director found that CRNAs did not constitute an appropriate unit separate from other hospital professionals, because under the “disparity of interest” test applied then to health care institutions, the CRNAs possessed no sharper than usual differences from the other professionals.  The petitioner sought review of this

decision arguing, among other things, that the CRNAs were jointly employed by Lee Hospital and Anesthesiology Associates, Inc. (AAI),15 and that this joint employer relationship further evidenced a disparity of interest between the CRNAs and the other hospital professionals. 

In affirming the Regional Director’s dismissal of the petition, the Board examined the joint employer allegation raised by the petitioner.  The Board reasoned that, if the CRNAs were jointly employed, a separate CRNA unit would be appropriate because Lee Hospital would not consent to include jointly employed CRNAs in a unit with its solely employed professionals.  The Board concluded that the combined unit would run afoul of Greenhoot, but notably did not explain or reconcile the factual or legal differences between Greenhoot and Lee Hospital.  It simply cited Greenhoot in a footnote following the proposition that “as a general rule, the Board does not include employees in the same unit if they do not have the same employer, absent employer consent.” 300 NLRB at 948 fn. 12.  The Board ultimately did not apply this rule in Lee Hospital because it concluded that Lee Hospital and AAI were not joint employers of the CRNAs.

In later cases, the Board applied the “rule” of Lee Hospital to prohibit any unit that would combine jointly employed employees with solely employed employees of one of the joint employers, absent consent of both employers.  See, e.g., International Transfer of Florida, 305 NLRB 150 (1991); Hexacomb Corp., 313 NLRB 983 (1994).  No case since Lee Hospital has discussed, explained, or rationalized this new rule. 

4. Analysis and conclusions

a. Lee Hospital incorrectly decided

We find today that Lee Hospital was incorrectly decided.  Plainly stated, we conclude that Lee Hospital did not involve multemployer bargaining and therefore no consent was required.  We find that a unit composed of employees who are jointly employed by a user employer and a supplier employer, and employees who are solely employed by the user employer, is permissible under the statute without the consent of the employers. 

We begin, as we must, with the statute.  Section 9(b) provides:

 

The Board shall decide in each case whether, in order to assure to employees the fullest freedom in exercising the rights guaranteed by this Act, the unit appropriate for the purposes of collective bargaining shall be the employer unit, craft unit, plant unit, or subdivision thereof.

 

It is beyond dispute that, under this section of the Act, a unit encompassing all of an employer’s employees, or a sub-group of such employees, can constitute an appropriate unit.  The Board does not require “consent” of the employer in order for employees to be represented for collective bargaining in an employer-wide unit.  Rather, the appropriateness of such units is governed by our traditional community of interest test.  See NLRB v. Action Automotive, 469 U.S. 490, 494 (1985); Kalamazoo Paper Box, 136 NLRB 134, 137 (1962); Globe Discount City, 209 NLRB 213 (1974).  But where the unit is multiemployer in scope, the Board has consistently held that such units are not appropriate absent the consent of all parties.  See, e.g., Rayonier Inc., 52 NLRB 1269 (1943); Pacific Metals Co.; 91 NLRB 696, 699 (1950); Chicago Metropolitan Home Builders Assn., 119 NLRB 1184, 1186 (1957); Bennett Stone Co., 139 NLRB 1422, 1424 (1962).  After carefully reviewing our precedent and the policy questions raised, we find that the units at issue—all the employees performing work on behalf of the user employer (e.g., M.B. Sturgis and Jeffboat)—do not constitute multiemployer units requiring consent.

That a unit of all of the user’s employees, both those solely employed by the user and those jointly employed by the user and the supplier, is an “employer unit” within the meaning of Section 9(b), is logical and consistent with precedent.  The scope of a bargaining unit is delineated by the work being performed for a particular employer.  In a unit combining the user employer’s solely employed employees with those jointly employed by it and a supplier employer, all of the work is being performed for the user employer.  Further, all of the employees in the unit are employed, either solely or jointly, by the user employer.  Thus, it follows that a unit of employees performing work for one user employer is an “employer unit” for purposes of Section 9(b).

Our view is consistent with well-settled precedent that both precedes and postdates Greenhoot.  We adhere to these cases with the knowledge that, until Lee Hospital, neither the Board nor the courts ever found the inclusion, in a unit of the user’s employees, of employees supplied by other employers and jointly employed by the user to involve multiemployer bargaining.  Breaking with this historical treatment of such units, the Board’s analysis in Lee Hospital implicated multiemployer bargaining by in effect treating “the employer” of the jointly employed employees as a completely separate and distinct employer from either the user employer or the supplier employer. Only in this way could the Board conclude that combining the jointly employed employees in a unit with the employees of the user employer could violate the statute’s preclusion of units broader than employer-wide.  We decline to accept the faulty logic of Lee Hospital (and our dissenting colleague) 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 the completely independent employers in multiemployer bargaining units.  No pre-Lee Hospital Board conceived of such units as multiemployer units, and neither do we.

In contrast, cases like Greenhoot involve multiple user employers whose only relationship to each other is that they obtain employees from a common supplier employer. In such cases, the union seeks to represent a unit that includes employees of all of the users.  Thus, it is clear that the unit is a multiemployer unit and therefore consent of the separate user employers would be required before the Board could direct an election.

Our dissenting colleague contends that the units at issue in the cases before us constitute multiemployer units.  They do not.16  The dissent flatly ignores Board precedent permitting such units without consent, before and after Greenhoot.  It attempts to distinguish S.S. Kresge v. NLRB, on the basis that it involved a joint venture, but ignores that the court did not rely on this rationale or otherwise limit its holding in this manner.  It is beyond dispute that S.S. Kresge, and the numerous similar cases cited above, permitted jointly employed employees to be included in units with employees of one of the joint employers without regard to whether the employers consented. 

Our colleague also contends that the jointly employed employees and the solely employed employees in each unit do not have the “same” employer as a matter of law and logic.  Unlike true multiemployer bargaining, however, all the employees in fact share the same employer, i.e., the user employer.  Separating “regular” employees—i.e., the solely employed—from the “temporaries” who may (as in the instant cases) share the same classifications, skills, duties, and supervision, creates an artificial division that is not required by the statute.  We therefore overrule Lee Hospital and find no statutory requirement of employer consent to a unit combining solely and jointly employed employees of a single user employer.  As we noted at the outset of this section, prior to Lee Hospital the Board applied the community of interest test to decide whether to include jointly employed employees in units with solely employed employees.  See Globe City Discount, 209 NLRB 213 (1974).  As we find no statutory obstacles to such units today, we will return to the application of this traditional test to determine the appropriateness of these units. 

b. Community of interest analysis applies

The community of interest test examines a variety of factors to determine whether a mutuality of interests in wages, hours, and working conditions exists among the employees involved. Kalamazoo Paper Box, 136 NLRB 134, 137 (1962); Swift & Co., 129 NLRB 1391 (1961); Continental Baking Co., 99 NLRB 777, 782-783 (1952); 15 NLRB Ann. Rep. 39 (1950).  This test is both well-settled in our case law and accepted by the courts.  See, e.g., NLRB v. Action Automotive, 469 U.S. at 494.  The Supreme Court has stated that our unit determinations applying this standard lie “largely within the discretion of the Board, whose decision, if not final, is rarely to be disturbed.”  South Prairie Construction v. Operating Engineers, 425 U.S. 800, 805 (1976) (per curiam). 

Under Section 9(b) of our statute, a group of an employer’s employees working side by side at the same facility, under the same supervision, and under common working conditions, is likely to share a sufficient community of interest to constitute an appropriate unit.  See Swift & Co., 129 NLRB 1391 (1961); Kalamazoo Paper Box, 136 NLRB 134 (1962).  That some of the employees working for that employer may have some differing terms and conditions of employment from those of their colleagues does not ordinarily mean that those employees cannot be included in the same unit, although it might, in some circumstances, permit them to be represented in a separate unit.  See, e.g., Berea Publishing Co., 140 NLRB 516, 518 (1963).

By our decision today, we do not suggest that every unit sought by a petitioner, which combines jointly employed and solely employed employees of a single user employer, will necessarily be found appropriate.  As in the Board’s pre-Greenhoot cases, application of our community of interest test may not always result in jointly employed employees being included in units with solely employed employees.  See, e.g., United Stores of America, 138 NLRB 383 (1962); Franklin Simon & Co., 94 NLRB 576 (1951).  We do not prejudge the outcome of this analysis in the cases before us.  Having decided above that the statute does not require consent of both employers for the establishment of such units, we simply find that their appropriateness will be decided based on their particular circumstances, using the Board’s traditional analysis.

In the particular unit issues before us, we note that the Regional Director in M.B. Sturgis did not decide whether the jointly employed employees share a community of interest with M.B. Sturgis’ employees.  Similarly, in dismissing the petition in Jeffboat, the Acting Regional Director did not reach the issue whether an accretion of the jointly employed employees to the existing unit is warranted.  We therefore do not determine the appropriate units in the cases before us.  We remand the proceedings to the Regional Directors to decide those issues consistent with this decision and applicable community of interest and accretion principles.

c.  Rejection of arguments opposing the overruling of Lee Hospital

Our dissenting colleague and several of the parties and amici posit a host of concerns about the path we chart today.  We reject the contention that finding these units appropriate presents impediments to meaningful bargaining because employers are compelled to bargain at the table over employees with whom they have no employment relationship.  To the contrary, in these units each employer is obligated to bargain only over the employees with whom it has an employment relationship and only to the extent it controls or affects their terms and conditions of employment.17 

We also reject the contention that an employer that controls only some aspects of the employment relationship cannot engage in meaningful bargaining.  Compare Management Training, 317 NLRB 1355 (1995), in which the Board found that in determining whether to assert jurisdiction over an employer with close ties to a government entity, it only would consider whether the employer meets the statutory definition of “employer” under Section 2(2) of the Act.  The Board observed in that case that the fact that it has no jurisdiction over governmental entities and thus cannot compel them to sit down at the bargaining table does not destroy the ability of the non-exempt employer to engage in effective bargaining over terms and conditions of employment.  317 NLRB at 1358 fn. 16.  It follows here that, despite the absence of an employment relationship between the supplier employer and the solely employed employees of the user employer, the supplier is still able to bargain to the extent that it controls the terms and conditions of employment of the jointly employed employees.  Thus, the joint employers must bargain over the terms and conditions of employment of their employees, and the sole employers are obligated to bargain over the terms and conditions of employment of their employees.  See also Western Temporary Services v. NLRB, 821 F.2d at 1265, in which the court found that a user employer, Classic, and its supplier Western, need only negotiate with the union over their jointly employed employees to the extent that they each control their conditions of employment.  We impose no greater requirement here.

The dissent argues that requiring the joint employers to engage in “involuntary” bargaining together “injects into their relationship duties and limitations beyond those established and allocated in their agreement, creating severe conflicts in the underlying business relationship and rendering impossible the productive collective bargaining the majority envisions.”  Contrary to our colleague, we are confident that bargaining in these units is feasible.  Indeed, two courts of appeals have considered and rejected precisely the concerns raised by the dissent.  Thus, in S.S. Kresge v. NLRB, the Sixth Circuit rejected a similar challenge to a unit combining both jointly employed and solely employed employees, noting that whether such “practical” difficulties will occur is “speculative.”  416 F.2d at 1231, quoting from the Ninth Circuit’s opinion in Gallenkamp Stores v. NLRB, 402 F.2d at 531, in which that court stated that just as the employers there had “worked out their diverse business problems to meet the needs of their joint business enterprise . . . [l]ike efforts should be as effective in their bargaining with the union.’”  Since employers will be obligated to bargain only over those terms and conditions over which they have control, we believe, as did the courts in S.S. Kresge and Gallenkamp¸ that employers and unions will be able to formulate appropriate and workable solutions to logistical issues that may arise.  The collective-bargaining process inherently depends on the parties’ willingness and ability to shape solutions to such problems.  Although it is implied by the dissent and amici that bargaining in such units may well be futile because certain terms are set by different employers, such arguments have been rejected by the Board and the Supreme Court as exaggerated.  See Ford Motor Co. v. NLRB, 441 U.S. 488, 502-503 (1979) (prices of third-party provided vending machine food and beverages, although set by third-party supplier rather than by employer, are mandatory subject of bargaining because employer’s right to change suppliers gives it leverage over such services and prices). 

With respect to our dissenting colleague’s concern regarding bargaining conflicts among the solely employed and jointly employed employees, or among the user and supplier employers, we are confident that the collective-bargaining process encouraged by the Act, which covers a wide variety of activity, is capable of meeting the changing conditions and challenges posed by bargaining in these units.  See Ford Motor Co. v NLRB, 441 U.S. at 496 fn. 9.  Even in units composed only of solely employed employees, it is common for groups of employees to have differing, even competing, interests.  Unions and employers are routinely called upon to handle such differences, and do so successfully.18

Nor do we agree with our dissenting colleague’s speculation that, unless jointly employed and solely employed employees are represented in separate bargaining units, suppliers of temporary labor will be enmeshed in labor disputes over which they have no control, contrary to the policy of the secondary boycott laws.  If supplier employers are in fact neutrals in labor disputes, they will enjoy such protections as the secondary boycott laws afford.  See National Woodwork Manufacturers Assn. v. NLRB, 386 U.S. 612, 626–627 (1967) (noting that lawful primary picketing may have a severe impact on neutrals).  Whether supplier employers are neutrals will depend on the particular facts.  Cf. Electrical Workers IUE Local 761 (General Electric) v. NLRB, 366 U.S. 667 (1961) (whether contractors working on the situs of a primary dispute are neutrals turns, in part, on whether the work performed by the contractor is unrelated to the normal operations of the primary employer); American Federation of Television and Radio Artists (Baltimore News American Div.), 185 NLRB 593, 598–601 (1970), enfd. 462 F.2d 887 (D.C. Cir. 1972) (whether a corporate division is a neutral person with respect to a union’s dispute with another division at another location turns on the nature of the entities’ day-to-day operations and the locus of control over the labor policies at issue).  See generally NLRB v. International Longshoremen's Assn., 473 U.S. 61, 81 (1985) (relevant inquiry is “whether the union's efforts are directed at its own employer on a topic affecting employees' wages, hours, or working conditions that the employer can control”).  We do not agree with our dissenting colleague’s assumption that our decision today appreciably increases the existing difficulty of distinguishing between primary and secondary activity.  See Electrical Workers IUE Local 761 (General Electric) v. NLRB, 366 U.S. at 673–674 (discussing the difficulty of “drawing lines more nice than obvious”); Railway Trainmen v. Jacksonville Terminal Co., 394 U.S. 369, 388 (1969) (concluding that the “fuzziness” of the primary-secondary distinction “stems from the overlapping characteristics of the two opposing concepts, and from the vagueness of the concepts themselves”).

We also reject our colleague’s view that our alleged one-size-fits-all formula overlooks the divergent temporary employment arrangements in our economy and reaches out to decide issues not before us.  There is but one set of labor laws in our country, and it is our obligation to respond to developing policy issues that come before the Board.  In addition, our return to applying the community of interest test to these units is the antithesis of a one-size-fits-all approach, for it traditionally has been a test that considers all the circumstances.  See, e.g., Kalamazoo Paper Box, 136 NLRB 134, 137 (1962).  While we find no statutory impediment to these units, the employees still must share a community of interest.

The dissent contends that the Board’s decisions in Lee Hospital and Greenhoot “were more protective of employee rights” because they upheld the right of employees to choose their representative and to be represented in a unit of employees of the same employer “with whom they share a community of interest.”  Contrary to our colleague, it is Lee Hospital that has fragmented and splintered appropriate units of employees who would otherwise share a community of interest. From the vantagepoint of the employees, the decision in Lee Hospital fragments groups of employees who share common interests and working conditions into smaller groups with diminished bargaining power. 

Although we do not decide whether the Interim-supplied employees must be included in the unit with the solely employed Sturgis employees, or whether the TT&O-supplied employees are an accretion to the collective-bargaining unit of Jeffboat employees, issues not reached by the Regional Directors’ decisions, both cases are illustrative of this fragmentation of units.  In each case, the record contains at least some facts that could support including the Interim-supplied and TT&O-supplied employees in the units with the Sturgis and Jeffboat employees, respectively.19  But no matter how compelling their community of interest may be with the solely employed employees, Lee Hospital prohibits their inclusion absent consent of all employers. 

For the reasons we have outlined above, we believe the Board’s Lee Hospital policy regarding these units has the potential for denying numerous affected employees the same Section 7 rights to self-organization accorded other employees under the Act.  The Board’s mandate under Section 9(b) is to decide appropriate bargaining unit questions so as to “assure to employees the fullest freedom in exercising the rights guaranteed by this Act.”  In accordance with that mandate, the Board has in the past altered previously-adopted policies where it has found that those policies unfairly prejudice the collective-bargaining rights of employees.  Here too, unless we are to jettison important statutory rights for a growing segment of the work force, we should alter our policy.  See, e.g., Metropolitan Life Insurance Co., 56 NLRB 1635 (1944); Quaker City Life Insurance Co., 134 NLRB 960 (1961); Metropolitan Life Insurance Co., 156 NLRB 1408 (1966) (Board policy allowing only statewide or employer-wide units of insurance agents changed after 17 years because it was apparent to the Board that effect of policy was to frustrate organization and deny insurance company employees the same rights enjoyed by employees in other industries).20  That the holding of Lee Hospital makes it more difficult for employees to obtain union representation, or results in fragmented units if they are successfully organized, raises genuine doubts about the wisdom of its continuation.  In our view, it undermines the Board’s ability to make collective bargaining reasonably possible for the employees affected by this policy. 

d. Clarification of Greenhoot

Having reversed Lee Hospital’s mistaken extension of multiemployer principles from Greenhoot, we return to Greenhoot to clarify its application.  As described above, the application of multiemployer principles in Greenhoot led to rejection of a unit that would have combined the jointly employed employees of the 14 separate employers (the building owners) because of the absence of employer consent.  The Board did not, however, pass on whether consent would have been required had the union sought to be certified only as the employees’ representative for purposes of collective bargaining with Greenhoot alone.  We find that it would not.  If a petitioner seeks to bargain only with the supplier employer, a petitioned-for unit of all the employees of a single supplier is not a multiemployer unit because the petition is seeking to represent the employees vis a vis a single employer.  If the petitioner names only the supplier employer in its petition, there is no statutory impediment to a supplier-wide unit under the Act.21  Hence, while we are today reaffirming Greenhoot, we wish to make clear that Greenhoot’s requirement of employer consent to the creation of a multiemployer unit has no application when the bargaining relationship sought is only with the supplier employer.22  

Hence, we limit Greenhoot: a petition that names as the employers unrelated employers will be treated as seeking an inappropriate multiemployer unit absent the consent of all the employers; a petition that seeks a unit only of the employees supplied to a single user, or seeks a unit of all the employees of a supplier employer and names only the supplier employer, does not involve a multiemployer unit. 

Conclusion

We hold today that consent requirements for multiemployer bargaining among separate and independent employers do not apply to units that combine jointly employed and solely employed employees of a single user employer.  We will apply traditional community of interest factors to decide if such units are appropriate.  For all the reasons set forth in this decision, we overrule Lee Hospital to the extent it is inconsistent with our decision today.  We also clarify Greenhoot to permit units of the employees employed by a supplier employer, such as Greenhoot, provided the units are otherwise appropriate.

We remand these cases to the Regional Directors to decide the unit questions without regard to the restriction imposed by Lee Hospital.23  In M.B. Sturgis, the case is remanded to determine whether the Interim-supplied temporary employees must be included in the unit.  In Jeffboat, the case is remanded to the Regional Director to determine whether the TT&O supplied employees are an accretion to the contractual bargaining unit, including the consideration of Jeffboat’s other contentions for dismissing the petition which were held in abeyance for our consideration of the Lee Hospital and joint employer issues. 

ORDER

The Acting Regional Director’s finding that Jeffboat and TT&O are joint employers is affirmed.  The Regional Director’s dismissal of the petition in M.B. Sturgis, and the Acting Regional Director's dismissal of the petition in Jeffboat, are reversed.  M.B. Sturgis’ motion to reopen the record is granted.  The petitions are reinstated and remanded to Region 14 and Region 9, respectively, for consideration consistent with this Decision.

 

   Dated, Washington, D.C.   August 25, 2000

 

 

John C. Truesdale ,                       Chairman

 

 

Sarah M. Fox,                                 Member

 

 

Wilma B. Liebman,                        Member

 

 

(seal)          National Labor Relations Board

 

Member Brame, dissenting in part.

Contrary to the majority’s conclusion, the instant cases provide no basis for disturbing the principle prescribed by the statute, long accepted by the Board and the courts, and properly reflected in Greenhoot, Inc., 205 NLRB 250 (1973), and Lee Hospital, 300 NLRB 947 (1990), that employers may not be coerced into participation in multiemployer bargaining.  Applying this principle, I would find that the units at issue here, by including employees of more than one employer, effectively require multiemployer bargaining and are therefore impermissible under the Act.  Contrary to my colleagues’ assertion, compliance with statutory mandates and Board-established principles does not deprive employees of their representational rights.  Rather, it simply ensures that they would be represented in appropriate units in accordance with the statute.

Congress recognized that a workable framework for stable collective-bargaining relationships requires that the represented parties—employees and employers—have common, if sometimes conflicting, interests.  In order to ensure that bargaining takes place on the basis of such common interests, Section 9(b) of the Act prescribes that collective-bargaining units must be “appropriate,” i.e., the unit must conform to certain statutory standards and the employees must share a community of interest.  For the same reason, the Act precludes the Board from defining units so as to require employers of separate employee groups to bargain jointly and allows for joint bargaining by employers only when they constitute joint employers of the same unit of employees or when they voluntarily enter into a more inclusive bargaining relationship.  In the interest of facilitating union organizing in the modern workplace, however, today’s decision sacrifices this fundamental statutory principle of commonality of interest by forcing employers of different employee groups to bargain together despite their differing and often conflicting interests with respect to the bargaining unit employees.

We have two cases before us.  In Jeffboat, the union seeks to accrete to an existing collective-bargaining unit a separate work force recruited and paid by a temporary agency.  In accordance with the terms of the contract between Jeffboat and the agency, those workers must be recruited at least 150 miles away from the worksite.  The agency pays the employees, inter alia, $50 per diem.[1]  Jeffboat argues that the temporary employees should not be added to the unit because the employers do not consent to multiemployer bargaining and because the temporary employees lack a community of interest with Jeffboat’s permanent employees.

By contrast, M.B. Sturgis involves a union organizing campaign in which Sturgis, presumably in an attempt to dilute the union’s strength in the petitioned-for unit, argues that the temporary workers must be included in the unit.  Unlike in Jeffboat, the union in Sturgis opposes inclusion of the temporary workers on the grounds that they are short-term employees and because they are jointly employed by both Sturgis and another employer.

Greenhoot and its progeny have been relied on for the principle that jointly employed employees may not be included in a bargaining unit with the employees of one of the joint employers, without the consent of the employers.  Using the present two cases, the majority seeks to address a wide range of arrangements involving temporary employment agencies, contract staffing companies, and outsourcing.  However, the facts of these cases, which present one basic scenario of temporary workers working side-by-side with the user employer’s employees at that employer’s facility, are hardly representative of the myriad possible combinations.  Nevertheless, the majority attempts to fashion a broad rule to encompass the wide range of situations in which the employees of two or more employers work together and the employers share control over the working conditions of at least some of the employees.  The result of this endeavor is both bad law and bad policy. 

Although the laudable goal of the majority is to eliminate the “possibility that thousands of employees suffer the effective loss of representation rights guaranteed by the Act,” the facts of the present cases contradict this claim.  In Sturgis, the union opposes the inclusion of the temporary workers, and in Jeffboat the union seeks the inclusion of the temporary workers without a vote.

In justifying its abrupt departure from the longstanding requirement of consent to multiemployer bargaining in these cases, the majority attempts to argue that bargaining by an employer with respect to its own employees, and by the same employer together with a joint employer with respect to jointly employed employees, is not “true” multiemployer bargaining.  Having thus used a verbal formulation to slight the critical importance of employer-based bargaining units under the statutory scheme, the majority ignores statutory mandates and determines that the appropriateness of these units should be considered through the Board’s community of interest analysis.  The majority, however, again overlooks that such an assessment, designed to determine appropriate units among the employees of the same employer, assumes the matters here at issue, i.e., that community among employee begins with the key fact that they are employed by the same employer.

Moreover, the majority contemplates bargaining in which the sole employer as well as each employer in the joint employer relationship will bargain concerning the employees and the subjects under its control.  Such neatly parsed negotiations, however, are unlikely to materialize.  In a more realistic scenario, this forced multiemployer bargaining would produce controversy and confusion as the employers strive to protect their differing interests even as they negotiate jointly with the union.  The error of the notion that each employer would negotiate concerning the subjects it controls is particularly highlighted in the accretion context of Jeffboat, in which the supplier employer, which hires and pays its employees, would at a minimum be initially bound by a collective-bargaining agreement that was negotiated solely by Jeffboat for Jeffboat’s employees.  Forcing an employer to abide by a contract that it did not negotiate flatly contradicts the Supreme Court’s holding in H.K. Porter Co. v. NLRB[2] that the Board lacks the authority to compel an employer to accept even a single contractual provision.

Thus, the majority’s decision today runs counter to the statute, sound labor policy, and the reality of collective bargaining.

i. facts

A. Sturgis

The facts of these cases are relatively straightforward.  Sturgis operates a hose assembly business in Maryland Heights, Missouri, where it employs 34–35 full-time production or assembly employees.  At any given time, Sturgis also has approximately 10–15 additional employees working on a temporary basis through an arrangement with Interim, Inc., a temporary employment agency.

The Regional Director found that Interim controls many of the essential terms and conditions of the temporary employees whom it places at Sturgis.  Interim is responsible for interviewing and hiring these employees.  Interim determines their pay and benefits, and the employees receive their pay directly from Interim.  In fact, Sturgis’ senior production manager, Stan Wolfman, did not know the wage rates of the temporary employees, but only the flat hourly rate that Sturgis pays Interim for their services.  The wages and benefits provided by Sturgis to its own employees differ from those offered by Interim to the temporary employees.

In addition, Interim decides which employees to assign to work at the Sturgis facility each day.  In the 7 months between March 1995 and the issuance of the Regional Director’s Decision and Direction of Election, Interim placed approximately 50 different employees in the 10-15 temporary positions at Sturgis.

After the temporary employees arrive for work at Sturgis, Sturgis determines their duties and controls many of the conditions under which they perform those duties.  These employees thus work alongside Sturgis’ own employees and are supervised by Sturgis’ supervisors.  They perform their duties in the same work area, make the same products, and record their time for each project in the same manner as Sturgis’ own employees.  Full-time and temporary employees take their breaks in the same place and at the same time.  They also work the same hours, although the temporary employees may not work over 40 hours per week.  Sturgis reports to Interim the hours worked by the temporary employees.  Sturgis’supervisors have authority to discharge temporary employees, and have done so, although the record does not show whether or how such action affects the employees’ employment with Interim.

Sturgis hires for full-time positions both employees who have not previously worked at the facility and employees who have worked on a temporary basis through Interim.  Between March 1995 and the date of the Regional Director’s decision, a period of approximately 8 months, Sturgis hired nine temporary Interim employees for full-time jobs.  Sturgis typically does not hire temporary employees who have worked at its facility for less than 90 days, because its contract with Interim requires it to pay a fee when an employee is hired before that time.

Sturgis contends that the bargaining unit should include the temporary Interim employees as well as its full-time employees.  Petitioner Textile Processors, Service Trades, Health Care, Professional & Technical Employees International Union Local 108 (Local 108), however, objected, arguing that a unit including these employees would be inappropriate.  Interim did not participate in the hearing, so the record did not demonstrate any consent by Interim to the inclusion of the temporary employees in a unit with Sturgis’ employees.  At oral argument, however, Interim stated that it did not consent to their inclusion.

The Regional Director found that “at most” Sturgis and Interim were the joint employers of the temporary employees.  Relying on Board precedent holding that employees of different employers may be included in the same bargaining unit only with the consent of both employers,[3] the Regional Director concluded that the temporary employees must be excluded from the unit.

B. Jeffboat

The Petitioner in Case 9–UC–406, General Drivers, Warehousemen & Helpers Local 89 (Local 89), currently represents the production and maintenance employees at Jeffboat’s shipyard in Jefferson, Indiana.  In addition to the approximately 608 employees included in the unit, encompassing approximately 31 job classifications, Jeffboat filled an additional 30 first-class welder and steelfitter positions at the shipyard through a contract with TT&O in August 1995.  Local 89 seeks to clarify the existing bargaining unit to include the employees provided by TT&O through accretion.

The record shows that Jeffboat entered into its contract with TT&O as a result of its inability to recruit a sufficient number of qualified employees for its production requirements.  Under the terms of the contract, TT&O must recruit the employees it assigns to Jeffboat from distances of at least 150 miles from the shipyard, in order to prevent competition with Jeffboat’s own hiring efforts.  Jeffboat may hire TT&O-assigned employees after they have worked at least 30 days at the shipyard.  The record does not reveal how many of these employees, if any, were actually hired.[4]

The welders and steelfitters assigned to the shipyard by TT&O possess the same technical skills as Jeffboat’s employees in the same classifications, and work directly with those employees on the second and third shifts.  A representative of TT&O is frequently on site at the shipyard, but the record does not specify his responsibilities or his involvement with the employees.  The work of the TT&O employees is assigned and monitored by Jeffboat supervisors and they are subject to the same rules as Jeffboat employees.

TT&O pays the employees at the Jeffboat shipyard $10 per hour plus $50 per diem.  They receive no fringe benefits.  In contrast, the 1995–1998 collective-bargain-ing agreement covering unit employees prescribes hourly wage rates for first class welders and steelfitters ranging from $10.95 for the first contract year to $11.70 for the third year, and benefits such as paid vacation days and holidays; dental, vision and health insurance; and a pension plan.

The Acting Regional Director determined that Jeffboat and TT&O are joint employers of the TT&O. employees working at the shipyard.  Based on Greenhoot and Lee Hospital, he concluded that, because Jeffboat and TT&O did not consent to the inclusion of the TT&O employees in the unit, the unit clarification petition must be dismissed.

ii. the temporary employment industry

The temporary employment arrangements at issue in these cases, as discussed more fully below, represent just one of the many ways in which employers obtain additional workers to meet their needs in providing goods or services to their customers.  Moreover, reliance on the temporary employment industry to hire and supply these workers is in turn but a single aspect of the broader business trend to outsource by contract many functions that can be carried out efficiently by other business entities.[5] 

The decisions of businesses to outsource specific functions are driven by a variety of factors.[6]  Some businesses, for example, turn to outsourcing in order to focus on their core functions or to enhance their ability to respond quickly to changing circumstances, while others see outsourcing as a means of improving performance by acquiring expertise in new areas.  Financial considerations may also motivate employers to outsource, whether in order to eliminate capital assets required for ancillary functions, to increase their market penetration through the provider’s contacts, or to control costs in periods of market fluctuation.  Some decisions are also driven by employee considerations.  An employer might outsource a noncore function, knowing that it cannot offer the employees performing the function ongoing training and an attractive career path, and that both the employer and the employees benefit from the availability of such long-term opportunities offered by focused staffing firms.[7]

Temporary staffing is the second most commonly outsourced function, surpassed only by building maintenance and cleaning.[8]  In a 1996 survey by the American Management Association (AMA), employers that outsource human resource functions, including temporary staffing, most often cited saving time as their purpose, followed by reducing cost and improving quality.[9]

In temporary employment arrangements, the supplier employer serves as a conduit between the labor force and user employers.  Thus, supplier employers act as intermediaries in the labor market, matching user employers that need additional worker services, and individuals seeking employment in a variety of occupations and with a variety of needs and expectations regarding schedule, tenure, and pay.  In this respect, supplier employers are the functional equivalent and thus a market competitor of hiring halls that similarly match employers and available employees.[10] 

From the employees’ perspective, temporary employment through supplier employers can provide significant benefits.  Workers, particularly those new to a job market, receive job-related training as well as access to a wider range of job opportunities and experience.  Both new and experienced workers also enjoy the benefits of flexible schedules and the availability of employment without a lengthy job search.  In addition, some temporary employees have the opportunity to obtain permanent employment with the employers to which they have been assigned.[11]  

A. Forms and Functions of Temporary Employment

Temporary employment and the supplier employers involved in that industry take many forms.  Although the two cases at issue in these proceedings share similar factual characteristics, the majority leaps from this common scenario to far-reaching conclusions about employer relationships and appropriate units in the entire temporary employment industry.  In fact, my colleagues make sweeping determinations not only about units within the facility of user employers, the question posed here, but also about units of supplier employer employees, a matter not raised and thus inappropriate to decide in these cases. 

The two present cases involve a temporary employment agency providing employees to a user employer, with the supplier employer responsible for hiring the employees, setting their pay, paying them, and determining their place of employment.  Each supplier employer and user employer have an ongoing business relationship that is reflected in a written document, and each supplier employer fills a significant number of temporary positions at the user employer’s facility.  The temporary employees work at the user’s facility, and are directly supervised by the user employer’s supervisors.  Although the record does not specify how long individual employees remain in the temporary positions, the record in Sturgis shows that 50 employees occupied the 10–15 temporary positions in a 7-month period, indicating an average tenure of 6–10 weeks.

1.  Variety of forms.  Contrary to the majority’s apparent assumption that all temporary employment situations follow the factual model of the instant cases, current business arrangements for the supply of temporary or contingent employees take many diverse forms.[12]  In some cases, small employers engage a payroll service company simply to provide certain personnel and payroll functions in order to realize economies of scale in payroll processing, insurance, payroll deductions, recordkeeping, and check writing.  Other employers outsource entire departments, or tasks that do not constitute core functions, to a contractor.  The contractor then provides management, employees, and sometimes equipment, to perform the work either at the user employer’s facilities or offsite.  Some common examples of outsourcing involve warehousing, reproduction, and delivery functions.[13] 

2.  Temporary agencies.  In other arrangements, a temporary agency provides employees to fill in when positions are vacant or employees are absent, or to meet a temporary need to add shifts or otherwise increase staffing.[14]  The tenure of these jobs therefore may be short or long term.  A 1997 Bureau of Labor Statistics (BLS) study showed that the median tenure in a single temporary assignment