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1000.02137 – Subcontracting

PERB generally finds that subcontracting decisions are within the scope of bargaining. To prevail in showing that the Richmond Firefighters balancing test warrants finding a particular subcontracting decision to have been bargainable, a union generally must establish one of three circumstances: (1) the employer’s reasons for subcontracting included labor costs, personnel issues or other issues that are amenable to bargaining; (2) the subcontractors performed substantially the same duties as that traditionally or historically performed by unit employees, even absent evidence of the employer’s motivation; or (3) where the employer unilaterally alters the terms of a written policy or agreement, or applies such policy or agreement in a new way. While the union need only establish one viable theory to bring the employer’s subcontracting decision within the scope of bargaining, the Board found that the union prevailed under all three where the employer began using contract medical assistants to staff newly-opened clinics, without notifying the union or giving it an opportunity to bargain.

Just as a union has no need to establish the employer’s motivation for subcontracting when the employer replaces existing bargaining unit employees with employees of an outside organization, the same is true when an employer opens new operations, if the nature of the subcontracted job duties is sufficiently similar to the duties that bargaining unit employees already perform for the employer. (Mi Pueblo Foods (2014) 360 NLRB 1097, 1098-1099; Overnite Transportation Co. Overnite Transportation Co. (2000) 330 NLRB 1275, 1276, affd. in part, reversed in part mem. (3d Cir. 2000) 248 F.3d 1131.)