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The Impact of Recent NLRB Decisions on Supervisory Status

    On September 29, 2006, the National Labor Relations Board (NLRB or board) issued a trilogy of landmark decisions that could have significant and far-reaching implications for as many as eight million American workers.1 In these decisions, the board set forth important guidelines for determining whether an employee is a “supervisor” for purposes of the National Labor Relations Act (NLRA). Labeling a worker as a supervisor has important implications for that worker’s rights to unionize because supervisors are not permitted to bargain collectively.

    History of Supervisor Status Under the NLRA
    In 1935, Congress enacted the NLRA to protect the rights of industrial workers.2 The NLRA granted “employees” the rights to self-organize; to form, join, and assist labor organizations; and to bargain collectively through representatives.3 At the time, the NLRA defined the term “employee” expansively to include any employee and both the U.S. Supreme Court and the board interpreted the NLRA as including supervisors.4 Soon after its enactment, however, employers began urging Congress to exclude all workers holding managerial and supervisory positions from the protections of the NLRA. In 1947, Congress responded to these demands by passing the Taft-Hartley Act, which expressly excluded supervisors from the definition of “employee” and changed the NLRB’s requirement that a supervisor both direct the work of other employees and perform another stated function to permitting direction alone to suffice for supervisor status.5 As a result, many workers previously protected by the NLRA lost their authority to unionize and bargain collectively. Since the passage of the Taft-Hartley Act, the NLRB has sought to exclude as many employees as possible from the definition of “supervisor.”

    Currently, supervisors are still specifically excluded from the NLRA’s protection. Whether an individual qualifies as a “supervisor” now depends on three important factors, enumerated in §152(11) of the NLRA.6 First, the individual must have the authority to hire, transfer, suspend, lay off, recall, promote, discharge, assign, reward, discipline, responsibly direct, or adjust grievances of other employees. Second, the individual’s exercise of such authority may not be of a merely routine or clerical nature, but must require the use of independent judgment. Finally, the individual’s authority must be held in the interest of the employer. Thus, whether an employee qualifies as a supervisor is a highly fact-intensive question.7

    Supreme Court’s Decision in Kentucky River Community Care v. NLRB
    Kentucky River Community Care (KRCC) is a nonprofit organization that operates numerous mental health care facilities throughout the state of Kentucky.8 In 1997, a labor union sought to represent 110 employees at KRCC’s Caney Creek Rehabilitation Center, 12 of whom were registered nurses.9 KRCC refused to bargain with the union because it objected to the inclusion of the RNs in the bargaining unit on the grounds that they were “supervisors” excluded from the protection of the NLRA.10

    The NLRB strongly disagreed with KRCC’s position. For years, the NLRB had denied supervisory status to RNs, ruling that these nurses, in directing subordinates, acted in the interest of patients, not in the interest of their employers.11 In response to KRCC’s refusal to bargain, the NLRB’s general counsel filed an unfair labor practice complaint against the health care center, and the board granted summary judgment and ordered KRCC to commence bargaining with the unit.12

    In Kentucky River Community Care, Inc. v. NLRB, 193 F.3d 444 (6th Cir. 1999), the Sixth Circuit Court of Appeals reversed, holding that the RNs were supervisors because their duties, which included ensuring adequate staffing and overseeing the rendering of medical services, were supervisory in nature, were conducted in the interest of their employer, and involved the use of independent judgment.

    In 2000, the U. S. Supreme Court accepted the case on appeal and affirmed the Sixth Circuit’s decision against the NLRB by a 5-4 decision the following year.13 Although the justices agreed with the board that the burden of proof falls on the party asserting supervisory status, the court criticized the board’s conclusion that employees do not use “independent judgment” pursuant to §152(11) of the NLRA when they exercise ordinary technical or professional judgment in directing subordinate employees to deliver services.14 The court found that although the degree of discretion an employee exercises is a relevant factor in determining supervisory status, the board’s interpretation of the term “independent judgment” included determinative factors not pertaining to degree: Even significant judgment only loosely constrained by the employer would not be considered independent if it were professional or technical.15 Ultimately, the court ordered the NLRB to redefine its test for determining supervisory status of RNs and other workers who use professional or technical judgments in directing less skilled workers.16

    Justices Stevens, Souter, Ginsburg, and Breyer felt that the NLRB’s interpretation of “supervisor” clearly comported with the policies underlying the statute as articulated by Congress.17 Justice Stevens, who wrote the dissenting opinion, warned that the Kentucky River decision could lead to the elimination of the right of most professionals to organize.18

    NLRB’s Response in Oakwood Healthcare, Golden Crest Healthcare, and Croft-Metals
    On September 29, 2006, the NLRB decided three cases in response to the Supreme Court’s mandate to redefine its test for determining supervisory status. In the first, and most important case, Oakwood Healthcare, Inc., 348 N.L.R.B. No. 37 (Sept. 29, 2006), the board endeavored to reexamine and clarify its interpretations of the terms “assign,” “responsibly to direct,” and “independent judgment,” as used in §152(11) of the NLRA.

    The facts in Oakwood Healthcare closely resembled the facts in the Kentucky River case. Oakwood Heritage Hospital employed 181 staff RNs, 12 of whom served permanently as charge nurses and 112 of whom took turns rotating into the position of charge nurse. Both permanent and rotating charge nurses were responsible for overseeing their patient care units, assigning other workers to patients, monitoring patients in their unit, and assorted other duties. The union wanted to include all charge nurses in the RN bargaining unit, but Oakwood wanted to exclude them on the grounds that they were “supervisors” who use independent judgment in assigning and responsibly directing employees.19

    In its opinion, the board created new definitions of the terms “assign,” “responsibly to direct,” and “independent judgment.” The board defined “assign” as “designating an employee to a place (such as a location, department, or wing), appointing an employee to a time (such as a shift or overtime period), or giving significant overall duties, i.e., tasks, to an employee.”20 The term refers only to the designation of overall duties to an employee, not to ad hoc instruction that a subordinate perform a particular task.21

    The board stated that the authority of an individual to “responsibly direct” other employees is not limited to department heads, but instead arises “if a person on the shop floor has men under him, and if that person decides what job shall be undertaken next or who shall do it, provided that the direction is both responsible and carried out with independent judgment.”22 The individual directing and overseeing subordinates must be held accountable for their performances.23 To establish accountability, it must be shown that the employer delegated authority to the individual to direct the work of other employees and take corrective action, if necessary.24 Furthermore, the individual must face some adverse consequence if the subordinates do not perform their tasks properly.25

    Finally, the board defined the exercise of “independent judgment” as effectively recommending actions, forming opinions, or making evaluations by discerning and comparing data, free from the control of others.26 Such judgment must involve discretion that is more than merely routine or clerical. Judgment is not independent where it is dictated or controlled by a set of detailed instructions, such as company policies or rules, the verbal instructions of a higher level supervisor, or the provisions of a collective bargaining agreement.27 However, the mere existence of company policies does not eliminate independent judgment from decisionmaking, so long as the policies allow the individual to use his or her discretion in making choices.28

    Applying these new definitions, the board determined that the 12 permanent charge nurses were supervisors who could be excluded from the protections of the NLRA because they delegated authority to assign employees using their independent judgment.29 Conversely, the board determined that the 112 rotating charge nurses were not supervisors because they did not spend a “regular and substantial” portion of their work time performing supervisory functions.30

    The dissenting members strongly disagreed with the majority’s definitions of the terms “assign” and “responsibly to direct.” They argued that the majority had erred in defining “assign” to include the act of assigning overall tasks to employees, a “quintessential function of the minor supervisors whom Congress clearly did not intend to cover in Section 2(11).”31 Instead, the dissent advocated for a definition of “assign” that includes the acts of determining “an employee’s position with the employer,” an employee’s “designated work site,” or an employee’s “work hours.”32 The dissenting members also argued that the majority had erred in defining “responsibly to direct,” suggesting that the drafters of §2(11) intended for the phrase to include only workers who were in charge of a “department-level work unit,” even if those workers did not participate in any of the other supervisory functions enumerated in §2(11) of the NLRA.33 Instead, the dissent suggested alternate methods of establishing that individual workers possess authority to responsibly direct, including whether they have been delegated substantial authority to ensure that their subordinates achieve management’s objectives, whether they are held accountable for the work of their subordinates, and whether they exercise significant discretion and judgment in directing subordinates.34

    In Golden Crest Healthcare Center, 348 N.L.R.B. No. 39 (Sept. 29, 2006), and Croft Metals, Inc., 348 N.L.R.B. No. 38 (Sept. 29, 2006), the board also applied the new definitions to determine whether the workers at issue in those cases were “supervisors” for purposes of unionization. In Golden Crest, the board found that although the charge nurses at issue had authority to responsibly direct charge nurse assistants in performing their jobs, they were not ultimately accountable for the actions of the assistants and did not have the authority to assign employees in several ways.35 Thus, the charge nurses were mere employees, not supervisors. In Croft Metals, the board found that lead persons at an aluminum and vinyl manufacturing plant were not supervisors because they did not possess the authority to assign employees, and although they possessed the authority to responsibly direct employees below them, such authority did not involve a degree of discretion that rose above merely routine or clerical.36 Since the decisions in Golden Crest and Croft Metals, the NLRB has decided almost a dozen cases involving the supervisory status of workers in a multitude of industries.37

    Conclusion: Implications for the Future
    Undoubtedly, the NLRB’s decisions in the Oakwood Healthcare, Golden Crest, and Croft Metals cases will have significant and far-reaching implications for many professional workers who direct the work of less skilled subordinates. In addition to nurses and lead persons, the union rights of over 30 percent of workers in at least 24 professions could be significantly affected by these decisions.38 Just a few of these professions include physicians’ assistants, nuclear engineers, tile setters, underwriters, sheet metal duct installers, power plant operators, physical therapists, recreation workers, registered nurses, pharmacists, dressmakers, actuaries, computer systems analysts, cooks, secretaries, cashiers, electricians, and the advertising and sales occupations.39 As the dissenting members in Oakwood Healthcare stated, these decisions threaten to “create a new class of workers under federal labor law: workers who have neither the genuine prerogatives of management, nor the statutory rights of ordinary employees.”40

    These decisions have also enabled employers to prove more easily that certain types of workers are supervisors exempt from the protections of the NLRA. Essentially, the board’s rulings permit employers to make a supervisor out of any employee who uses independent judgment or has authority to assign or direct other employees. Nonetheless, some employers may choose not to reclassify certain employees as “supervisors” because doing so subjects them to vicarious liability for the supervisors’ actions.41 Labeling employees as supervisors may also require employers to train them on management-related issues such as discrimination, sexual harassment, and sensitivity.42

    In response to these problems, the NLRB most likely will search for other avenues by which to find that employees are not supervisors. Clearly, the guidelines for determining supervisory status established in Oakwood Healthcare must be applied on a case-by-case basis, depending entirely on the specific facts and circumstances of each case.

    Ultimately, employers should expect many more NLRB cases challenging employer classifications of employees as supervisors. In the meantime, employers should take as many precautions as possible to ensure that their supervisors truly are supervisors. Some suggestions include revising job descriptions to reflect all supervisory responsibilities accurately, granting putative supervisors significant authority to engage in the 12 supervisory duties described in §152(11), ensuring that supervisors have independence to exercise discretion and judgment in as many matters affecting other employees as possible, and keeping thorough and current records documenting the exercise of supervisory functions.43

    1 Ross Eisenbrey & Lawrence Mishel, Supervisor in Name Only: Union Rights of Eight Million Workers at Stake in Labor Board Ruling, Econ. Pol’y. Inst. (July 12, 2006), available at www.epi.org/content.cfm/ib225.
    2 29 U.S.C. §151-169 (2006).
    3 Id.
    4 NLRB v. Kentucky River Community Care, Inc., 532 U.S. 706, 717-18 (2001).
    5 29 U.S.C. §52(3) (2006).
    6 29 U.S.C. §152(11) (2006).
    7 Kentucky River Community Care, Inc. v. NLRB, 193 F.3d 444, 453 (6th Cir. 1999).
    8 Kentucky River Community Care, Inc., 323 N.L.R.B. No. 209 (July 10, 1997).
    9 See id.
    10 See id.
    11 John E. Lyncheski, Who’s a Supervisor? U.S. Supreme Court Redefines Supervisors in National Labor Relations Board Case, H.R. Mag. (2001), available at findarticles.com.
    12 Kentucky River Community Care, Inc., 323 N.L.R.B. No. 209 (July 10, 1997).
    13 See Kentucky River Community Care, Inc. v. NLRB, 532 U.S. 706 (2001).
    14 Id. at 712, 714.
    15 Id. at 714-15.
    16 See id. at 720-22.
    17 See id. at 722-30.
    18 See id.
    19 See Oakwood Healthcare, Inc., 348 N.L.R.B. No. 37 at 5-9.
    20 Id. at 18.
    21 Id.
    22 Id. at 27.
    23 Id. at 31.
    24 Id. at 32.
    25 Oakwood Healthcare, Inc., 348 N.L.R.B. No. 37 at 32.
    26 Id. at 36-37.
    27 Id. at 38.
    28 Id. at 39.
    29 Id. at 64.
    30 Id. at 68.
    31 Oakwood Healthcare, Inc., 348 N.L.R.B. No. 37 at 81.
    32 Id. at 85-86.
    33 Id. at 81.
    34 Id. at 101-02.
    35 Golden Crest Healthcare Center, 348 N.L.R.B. No. 39, 25 (Sept. 29, 2006).
    36 Croft Metals, Inc., 348 N.L.R.B. No. 38, at 26-27 (Sept. 29, 2006).
    37 See, e.g., Avante at Wilson, Inc., 348 N.L.R.B. No. 71 (Oct. 31, 2006); Loyalhanna Health Care Assocs., 348 N.L.R.B. No. 54 (Sept. 30, 2006); ADB Util. Contractors, 348 N.L.R.B. No. 53 (Sept. 30, 2006); Terry Mach. Co., 348 N.L.R.B. No. 55 (Sept. 30, 2006); Bay Harbour Elec., Inc., 348 N.L.R.B. No. 59 (Sept. 30, 2006).
    38 Jane M. Von Bergen, Nurse-Supervisor Cases Bear Major Issues for Unions, The Philadelphia Inquirer (Aug. 10, 2006), available at www.philly.com.
    39Id.; Paul Bigman, Kentucky River Threatens to Swamp Labor: An NLRB Ruling Could Eliminate Millions of Workers’ Right to Unionize, Dollars & Sense (Oct. 2006), available at www.dollarsandsense.org/archives/2006/0906bigman.html.
    40 Oakwood Healthcare, Inc., 348 N.L.R.B. No. 37, at 70 (Sept. 29, 2006).
    41 Lyncheski, supra note 11.
    42Susan Davis, Cynthia E. Nance, and Jeff Starling, Kentucky River: The Impact of the NLRB’s New Interpretation of Supervisory Status Under the NLRA and Beyond, ABA Center for Continuing Legal Education, Live Webcast (Oct. 31, 2006).
    43Lyncheski, supra note 11

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    Scott T. Silverman is a partner in Zinober & McCrea, P.A., Tampa, where he represents management in labor and employment matters. He is board certified as a specialist in labor and employment law.
    Jennifer L. Watson is an associate with Zinober & McCrea, P.A., Tampa, where she represents management in labor and employment matters.

    This column is submitted on behalf of the Labor and Employment Law Section, Cynthia Sass, chair, and Frank E. Brown, editor.