Last week, the National Labor Relations Board (NLRB) ruled that contract workers are jointly-employed by both their temporary staffing agencies and the organizations for which they are working; this means both organizations can be held responsible for labor violations committed by contractors. The ruling will also make it easier for contract workers and other temporary employees to unionize.
“This decision has broad implications, as it appears to upend decades of settled law defining who the employer is under the National Labor Relations Act,” Randy Johnson, a senior vice president at the U.S. Chamber of Commerce, told The Hill.
In a 3-2 decision involving Browning-Ferris Industries of California, the NLRB refined its standard for determining joint-employer status. The board said in a statement the revised standard is designed “to better effectuate the purposes of the Act in the current economic landscape.”
To qualify as joint employers, both entities must be “employers within the meaning of the common law” and “share or codetermine those matters governing the essential terms and conditions of employment.”
Labor unions applauded the decision. “We are hopeful this ruling will help crack down on a clear abuse that tramples on the rights of workers and the interests of patients, and hold the CEOs, who dictate employment terms, accountable when they, and all the subsidiaries and contractors whose policies they dictate, violate basic workplace protections and the right of employees to act together to protect their interests,” National Nurses United said in a statement.
According to Modern Healthcare, 9% of all temporary employees were healthcare workers as of last year. But unlike some of the organizations in which those employees work, most temporary staffing agencies aren’t unionized. The new NLRB ruling could make those agencies a really attractive target for labor unions because “what union wants to unionize one shop when it can organize the whole industry?” Bob Bruno, a professor of labor and industrial relations at the University of Illinois Urbana-Champaign, told Modern Healthcare. “If you could successfully unionize these workers you could reach thousands of hospitals.”
The American Staffing Association (ASA) does not believe it is likely to become an issue. “Although we cannot definitively predict the long-term impact of the decision, prior board decisions that effectively made it easier for temporary workers to unionize did not demonstrably result in increased unionization of such workers, and that largely remains the case today," Stephen Dwyer, general counsel for the ASA, said in a statement.
Opponents say that some organizations may end up hiring additional staff instead of using temporary staffing agencies in response to the ruling. “If this decision stands, the economic rationale for hiring a subcontractor vanishes,” Beth Milito, senior legal counsel for the National Federation of Independent Business, told The Wall Street Journal. “It will make it much harder for self-employed subcontractors to get jobs and of course it will drive up operating expenses for the companies that hire them.”
Steve Bernstein, regional managing partner for the Tampa office of labor law firm Fisher & Phillips, told Modern Healthcare the ruling means employers need to at least get serious about scrutinizing their contracts with staffing agencies and other vendors. “It would be wise to continue monitoring developments in this area because we see this as the tip of a bigger iceberg,” Bernstein said.