In a 3-1 decision issued this week, the National Labor Relations Board (“Board”) reversed current precedent that prohibited the inclusion of temporary employees along with permanent, or “solely employed,” employees in a bargaining unit absent employer consent, as it returned to the previous standard under M.B. Sturgis, Inc., 331 NLRB 1298 (2000), where no such consent was required.

In its July 11, 2016 decision, Miller & Anderson, Inc. and Tradesmen International and Sheet Metal Workers International Association, Local Union No. 19, AFL-CIO, the Board expressly overruled the 2004 decision of Oakwood Care Center, 343 NLRB 659 (2004), which had held that the National Labor Relations Act (“NLRA”) did not authorize the Board to direct elections in units encompassing employees of more than one employer, i.e. a company’s employees and other employees placed at the company via a staffing agency.  The Oakwood Board further held that combining such employees would lead to significant conflicts among the various employers and among groups of employees.

With the Miller & Anderson decision, the Board reversed course again, holding that the terms “employer” and “employer unit,” as used within Section 9(b) of the NLRA, were sufficiently broad to encompass temporary employees performing work for another employer.  The Board also reasoned that the Sturgis standard better effectuated the purposes of the NLRA.

Going forward, the Board will apply the traditional “community of interest” factors when determining if a bargaining unit is appropriate.  The Board will determine whether the temporary employees and solely employed employees have the same or substantially similar interests as to wages, hours or other working conditions.

While the Board described its decision as a return to Sturgis, the landscape has changed since 2004, when Sturgis was last the standard.  Last year, the Board issued the highly contentious Browning-Ferris decision, which overruled two other long-standing joint-employer decisions.

Under Browning-Ferris, the Board greatly expanded the joint-employment standard by abandoning the requirement that an employer exercise “direct and immediate” control over an employee’s terms and conditions of employment and instead including relationships where an employer merely exercised “indirect” control or even where an employer has simply reserved the authority to exercise control.   Thus, between 2000 and 2004, when Sturgis was the standard, the law was much clearer as to when a joint-employer relationship existed.  Now those waters are far murkier, and employers will have to navigate them to make best judgments as to whether a joint-employer relationship exists and, if so, whether a group of temporary employees and solely employed employees have sufficient interests in common in order to create an appropriate bargaining unit.

Employers and other amici cautioned that a return to Sturgis would create confusion and hinder meaningful bargaining.  We will see whether those concerns bear out.