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PERC Reconsiders Subcontracting and Skimming Standards


When must a public employer bargain its decision to contract out bargaining unit work?

PERC has revisited the rules for deciding when a public employer must negotiate its decision to subcontract out work. Central Washington University, Decision 12305-A (PSRA, 2016). The Commission selected the case for the purpose of reviewing the standard for determining when a decision to contract out bargaining unit work is a mandatory subject of bargaining.

After reviewing the existing rules, the Commission concluded they were confusing and resulted in inconsistent and unpredictable outcomes. Under the prior rules, lawyers and union officials on both sides of the labor-management divide had to twist their brains into hairballs to apply the test, which required the balancing of a five-part test. With the Central Washington University case, decided in March, 2016, the Commission streamlined the analysis, making it easier for parties to know when bargaining is required before a subcontracting decision is made, and when it is not.

The new analysis applies to both contracting out and skimming cases. The Commission thoughtfully defined each in the case: "Contracting out involves an employer contract with another entity and having the contractor's employees perform the work. Skimming involves other, non-bargaining unit employees of the employer, performing bargaining unit work."

The new test is more straightforward than its predecessor and is less likely to twist brains into hairballs.

First, is the work in question bargaining unit work? If not, the employer need not bargain its decision to contract it out. The factors considered in determining if the work is bargaining unit work are 1) have members of the bargaining unit performed the work in the past?, and 2) if not, is the work similar to work members of the unit have traditionally performed? If so, then the second part of the test is considered.

Second, if the work is bargaining unit work, then a balancing test is applied. Employees' interests in wages, hours and working conditions are balanced against the extent to which the decision lies at the core of the public employer's duty to control the management and direction of the governmental unit.

If the decision is deemed not to lie at the heart of the employer's duty to control the direction of the governmental unit, and the balance favors employee's interests in retaining the work, then the employer must give the union notice of its intent contract out the work, and provide the union an opportunity to bargain the decision before it is final. Failure to do so is an unfair labor practice.

As applied in the Central Washington University case , the Commission did not find the employer's interest in doing roof repair work in a hurry and obtaining a warranty for the work - which only a subcontractor could provide - outweighed the employees' interest in keeping the work so they could earn a living.