The first – though not last – time this happened was in June, and I’m just now getting around to blogging about it. No excuse.
The National Labor Relations Board decided that workers supplied by a temporary staffing agency to clients on a short-term project basis were employees of the staffing firm and constituted a unit appropriate for collective bargaining.
Bergman Brothers Staffing Inc., a North Carolina company provides employees to perform asbestos abatement services for clients on a project basis. The average project lasts between 1 and 2 ½ weeks, although some jobs can be as short as a few hours and some as long as 2 months.
Upon forming a relationship with Bergman Bros., the client signs a 2-page temporary employment agreement that lists the responsibilities of Bergman and the client. Bergman agrees to provide employees to the client for a minimum of 4 hours and their hourly rates will be in effect for 4 months. Bergman provides all the employees’ compensation, including the employer’s portion of payroll taxes.
The client is responsible for the “direction and supervision” of employees, for recording the time worked by each employee, and for verifying the accuracy of the amount of hours shown on their timecards.
All new employees sign a “standards of performance for Bergman Brothers Staffing” document that states the employee will not accept employment directly from Bergman’s clients “until the employee has completed working 120 days or 688 hours” through Bergman. It also states that the worker is an employee of Bergman’s and as a condition of employment, he must contact the company for available work by reporting to Bergman’s within 24 hours of the conclusion of each work assignment.
The client cannot hire the company’s employees directly or through a competing temporary staffing agency. All of Bergman’s employees, however, perform work for competing temporary staffing companies.
Once a job is completed, the client releases the employees, who then are dispatched by Bergman for other projects. If Bergman does not immediately dispatch employees for additional work, they are not fired, but are laid off until there is more work.
According to the NLRB, because employees are laid off at the conclusion of a project rather than terminated, Bergman expects to have an ongoing relationship with these employees beyond its client’s immediate project. The Board also determined:
All of the unit employees are permanent employees of the Bergman (though they may work fluctuating and inconsistent hours); their employment is only temporary vis-à-vis the Employer’s clients. Thus, while the employees’ work for the Employer’s clients may be for a specific project or set duration, their employment with Bergman is indefinite.
Let this be a lesson to staffing companies everywhere. And staffing companies that want to remain union-free should analyze this case for pointers in how to set up and run their companies. As always, competent legal advice should be relied upon during this process.
Matt Austin is a Columbus, Ohio lawyer who owns Austin Legal, LLC, a boutique law firm with offices in central and northeast Ohio that limits its representation to employers dealing with labor, employment, and OSHA matters. Austin Legal’s Concierge Legal Services program is relied upon by companies to remain compliant and competitive. If you have employees, you need Concierge Legal Services. You can call Matt at (614) 285-5342 or email him at Austin@LaborEmploymentOSHA.com.