National Labor Relations Board Decision Will Affect Many Government Contractors

Yesterday, the National Labor Relations Board (NLRB) issued a decision that refined its standard for determining joint-employer status. According to the Board's press release, the revised standard is designed to better effectuate the purposes of the Act in the current economic landscape. With more than 2.8 mullion of the nation's workers employed through temporary agencies (as of August 2014) the Board held that its previous joint employer standard has failed to keep apce with changes in the workplace and economic circumstances.

In the decision, the Board applied the long-established principles to find that two or more entities are joint employers of a single workforce if (i) they are both employers with the meaning of the common law; and (2) they share or co-determine those matters governing the essential terms and conditions of employment. In evaluating whether an employer possesses sufficient control over employees to qualify as a joint employer, the Board wil consider whether an employer has exercised control over terms and conditions of employment indirectly through an intermediary, or whether it has reserved the authority to do so.

The specific decision involved Houston-based BFI (Browning-Ferris Industries) and a Phoenix-based staffing agency, Leadpoint Business Services it hired to staff a recycling facility in California. In its decision, The Board found that BFI was a joint employer with Leadpoint, the company that supplied employees to BFI to perform various functions for BFI, including cleaning and sorting of recycled products. In finding that BFI was a joint employer with Leadpoint, the Board relied on indirect and direct control that BFI possessed over essential terms and conditions of employment of the employees supplied by Leadpoint as well as BFI's reserved authority to control such terms and conditions.

So what does this really mean? It could affect the growing number of temporary workers and independent contractors who do not receive the same protections as full-time employees. Many companies have been using staffing agencies to supply temporary works or contract with other companies to complete tasks. Now, both companies are responsible as joint employers because they share or co-determine those matters government the essential terms and conditions of employment.

Unions are happy with this ruling. Not too many other people or organizations willing to comment are pleased.

Labor Day 2014

The other day, we reported on the revised FAR cost principle that implemented a Presidential Executive Order (EO) that disallows any costs associated with preventing or discouraging employees from organizing and joining unions. See: Rights to Organize and Bargain Collectively. Did you ever wonder just how many workers are represented by unions? We did. 

Based on data published earlier this year by the Department of Labor, Bureau of Labor Statistics (BLS), the union membership rate in 2013 was 11.2 percent. However, for private sector, the percentage was only 6.7 percent. Public-sector workers had a union membership rate that was five times higher than that of the private sector at 35.3 percent.

This means that more than half of unionized workers in the US get their paychecks from the government.

Bill Introduced to Limit Union Preferences

Last week, identical bills were introduced into the House and Senate (H.R. 436 and S. 109) which would ostensibly level the playing field for construction workers applying for federal contracts and those funded by federal dollars. According to the bill sponsors, Executive Order 13502 introduced in 2009 strengthened project labor agreements (PLAs) which favored union-based construction workers over non-union construction workers. The result has been a de-facto discrimination against non-union construction workers, costlier projects,and longer completion time.

A PLA is a job-specific collective bargaining agreement with multiple construction unions. When mandated by a government agency on a taxpayer-funded project, construction contracts are awarded only to companies that agree to recognize unions as the representatives of their employees on that job; use the union hiring hall to obtain workers at the expense of existing qualified employees; obtain apprentices through union apprenticeship programs; follow inefficient union work rules; and pay into union benefit and multi-employer pension plans.

Studies indicate government-mandated PLAs increase the cost of construction projects in numerous markets between 12 and 18 percent compared to similar non-PLA projects. That, to us, is not surprising, nor is it necessarily a bad thing.

Similar bills were introduced last year and did not make it out of committee. This time around, the House version has 55 sponsors while the Senate bill has eight.