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  September 18th, 2015 | Written by

Will NLRB Ruling Apply to Warehousing?

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  • Big U.S. retailers use facilities to store their merchandise where staffing agencies provide the workforce.
  • Under a recent NLRB decision, retailers may have to negotiate wages, benefits, and conditions of warehouse workers.
  • Labor law provides that company that controls the conditions of work can be considered a joint employer.

The U.S. National Labor Relations Board recently came down with a decision that determined that Brown-Ferris Industries, the owner and operator of a California recycling facility, is a “joint employer” with a temporary employment agency that actually supplied the workers.

As such, the recycler could be required to bargain collectively with workers under United States labor law.

The same kind of logic could be applied to the warehousing and distribution industry, leading to see an increase in union organizing activities in those sectors. Workers would first have to vote the union in as their representative.

The business model that led the NLRB to rule in the Brown-Ferris case, also prevails in warehouse operations. Companies like Walmart, Amazon, and Home Depot use facilities to store their merchandise where a third-party staffing agency provides the workforce.

These days, warehouse work doesn’t bear much resemblance to the well-paid unionized factory jobs that they, in effect, sometimes replace. Researchers at the University of California found that the majority of blue-collar warehouse jobs typically pay less than a living wage, are often temporary, and do not provide health-care benefits.

Up until now, the companies that use the staffing agencies have not had to answer for the conditions under which warehouse workers toil. But with the recent NLRB decision, they may have to sit across the table from unions to negotiate wages, benefits, and conditions of warehouse workers. Unions would prefer to organize against companies like Walmart, rather than going against the smaller and shakier staffing agencies.

Experts agree that the Browning-Ferris decision will make it easier to bring warehouse users to the bargaining table as joint employers.

Under U.S. labor law, an employer controls the conditions of work such as setting production goals and  scheduling work shifts. Retailers often manage warehouses in that way and if they continue to do so could face successful union drives.

Besides that, if government agencies pick up on the NLRB’s “joint employer” concept, companies could find themselves on the hook for wage-hour violations, worker safety issues, and employment discrimination by staffing agencies.

How might the industry react? Relocating warehouses to another state wouldn’t make a difference and offshoring them would be ridiculous. They put pass increased costs along to consumers, or, more likely, invest in warehouse automation technology that would reduce the required headcount at a facility.


Peter Buxbaum is web editor of Global Trade.