NLRB Issues Significant Ruling Expanding Supervisory Status Under the National Labor Relations Act
December 5, 2006
S. Richard "Dick" Pincus- Chicago
In a landmark 3-2 ruling, the National Labor Relations Board (NLRB) recently established new guidelines for determining which employees are supervisors not entitled to protection under the National Labor Relations Act (NLRA), meaning that they are not entitled to have union representation and engage in collective bargaining. Oakwood Healthcare Inc., 348 N.L.R.B. No. 37, 9/29/06 [released 10/3/06]. The new definitions appear to significantly expand the class of supervisors who are not eligible for union protection. This decision likely will also give currently unionized employers the opportunity to reclassify current bargaining unit employees as supervisors and remove them from the NLRA’s protection and the bargaining unit.
Definition of Supervisor
The NLRA defines a supervisor as an employee who has “authority, in the interest of the employer, to hire, transfer, suspend, lay off, recall, promote, discharge, assign, reward, or discipline other employees, or responsibly to direct them, or to adjust their grievances, or effectively to recommend such action, if in connection with the foregoing the exercise of such authority is not of a merely routine or clerical nature, but requires the use of independent judgment.” Thus, a supervisor is anyone who has the authority to perform any of the 12 listed tasks and to do so in the interest of the employer and using independent judgment. The Board’s decision redefines two of the tasks – what it means to “assign” other employees and to responsibly “direct” others – and also redefines the kind of “independent judgment” an employee must use to qualify as a supervisor.
“Assign” Includes Determining Daily Work Tasks In Oakwood Healthcare, the Board majority interpreted the supervisory task to “assign” as the act of “designating an employee to a place (such as a location, department, or wing), appointing an individual to a time (such as a shift or overtime period), or giving significant overall duties, i.e. tasks, to an employee.” However, the Board said that “choosing the order in which the employee will perform discrete tasks within those assignments (e.g., restocking toasters before coffeemakers) would not be indicative of exercising the authority to assign.” The majority rejected an interpretation under which the power to “assign” would be limited to determining an employee’s job title, place of work, or overall work schedule.
“In the health care setting, the term ‘assign’ encompasses the charge nurses’ responsibility to assign nurses and aides to particular patients,” the Board stated. Thus, for example, “if a charge nurse designates an LPN to be the person who will regularly administer medications to a patient or a group of patients, the giving of that overall duty to the LPN is an assignment,” but that “the charge nurse’s ordering an LPN to immediately give a sedative to a particular patient does not constitute an assignment.” “In sum, to ‘assign’ for purposes of Section 2(11) refers to the charge nurse’s designation of significant overall duties to an employee, not to the ... ad hoc instruction that the employee perform a discrete task.”
“Responsible Direction” Involves Authority and Accountability for the Work of Others
The Board interpreted the supervisory task “responsibly to direct” in terms of accountability. It stated that an employee has the authority to “responsibly direct” another if he or she is “accountable for the performance of the task by the other, such that some adverse consequence may befall the one providing the oversight if the tasks performed by the employee are not performed properly.” Put another way, “responsible” direction requires a showing that the “employer delegated to the putative supervisor the authority to direct the work and the authority to take corrective action, if necessary” and that “there is a prospect of adverse consequences for the putative supervisor” based upon the actions of the employees he or she directs.
The Board gave the following example of the kinds of activity that could constitute “responsible direction”: “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, that person is a supervisor, provided that the direction is both ‘responsible’ ... and carried out with independent judgment.” It specifically rejected a definition of “responsible direction” that would limit the term solely to non-working heads of entire departments of a business.
Independent Judgment Involves Independent Selection From Alternatives on Matters of Significance
The Board adopted a definition of “independent judgment” that applies to all 12 of the supervisory functions. The Board initially stated that “judgment” requires a comparison and selection from alternative courses of action – a supervisor needs the authority to weigh the alternatives and make the call.
The Board defined the “independence” requirement by stating what it is not: “a judgment is not independent if it is dictated or controlled by detailed instructions, whether set forth in company policies or rules, the verbal instructions of a higher authority, or in the provisions of a collective-bargaining agreement.” Thus, for example, the Board stated that “a decision to staff a shift with a certain number of nurses would not involve independent judgment if it is determined by a fixed nurse-to-patient ratio. Similarly, if a collective-bargaining agreement required that only seniority be followed in making an assignment, that act of assignment would not be supervisory.”
“On the other hand, the mere existence of company policies does not eliminate independent judgment from decision-making if the policies allow for discretionary choices,” the Board said. It observed that an RN’s hiring recommendations involve the exercise of independent judgment if he or she is “called upon to assess the applicants’ experience, ability, attitude, and character references, among other factors.” “Similarly, if the [RN] weighs the individualized condition and needs of a patient against the skills or special training of available nursing personnel, the nurse’s assignment involves the exercise of independent judgment,” the Board said.
Finally, to be supervisory, “the judgment must involve a degree of discretion that rises above the ‘routine or clerical,’” the Board said. “If there is only one obvious and self-evident choice (for example, assigning the one available nurse fluent in American Sign Language (ASL) to a patient dependent upon ASL for communicating, or if the assignment is made solely on the basis of equalizing workloads, then the assignment is routine or clerical in nature and does not implicate independent judgment, even if it is made free of the control of others and involves forming an opinion or evaluation by discerning and comparing data.”
“By contrast, if the hospital has a policy that details how a charge nurse should respond in an emergency, but the charge nurse has the discretion to determine when an emergency exists or the authority to deviate from that policy based on the charge nurse’s assessment of the particular circumstances, those deviations, if material, would involve the exercise of independent judgment,” the Board reasoned.
Finally, the Board stated that an individual does not have to exercise supervisory duties all the time to qualify as a supervisor. Rather, employees who exercise supervisory duties more than 15 percent of their time can qualify as supervisors.
In applying the guidelines to a unit of 181 registered nurses at Oakwood Heritage Hospital in Taylor, Michigan, operated by Oakwood Healthcare Inc., the Board found that the 12 RNs who serve as charge nurses on a permanent basis are supervisors for purposes of the National Labor Relations Act. It based this conclusion on evidence that the permanent charge nurses regularly assign other personnel to specific patients and exercise independent judgment in doing so. However, it found that the rotating charge nurses do not exercise supervisory authority for a substantial part of their work time.
What It Means to You
Before reaching this decision, the Board requested and received comments from employment and labor from a wide variety of industries. Thus, even though the Oakwood decision involved the health care industry, the Board’s decision and new definition of supervisory tasks apply to all employees and employers.
The importance of the decision can be seen in the reaction from organized labor. For example, John Sweeney, President of the AFL-CIO, stated that the decision “welcomes employers to strip millions of workers of their right to have a union by reclassifying them as ‘supervisors’ in name only.”
In response to this decision, employers should review the tasks performed by mid-level employees to see if they qualify as supervisors or if, with some minor adjustments to job descriptions and tasks, they may qualify under the new decision. Also, there is a procedure, called a unit clarification petition, by which employers can ask the NLRB to rule that certain existing members of a bargaining unit now qualify as supervisors and thus can be removed from the bargaining unit. Both matters are complicated. It is important to fully understand the implications of these decisions to your business so you can take advantage of the new opportunities they provide.
For more information, e-mail Richard Pincus or Todd D. Steenson at richard.pincus@hklaw.com or todd.steenson@hklaw.com, respectively, or call toll free, 1-888-688-8500.