In Oakwood Healthcare, Inc. (October 3, 2006) the full 5-member National Labor Relations Board issued a long-awaited and very significant decision about the test for "supervisor" status under the National Labor Relations Act. While the case involved a health care facility and the supervisory status of "charge nurses," the new tests announced by the Board are generally applicable to all industries. The controlling majority opinion was issued by Board Chair Battista and members Schaumber and Kirsanow (all of whom are "Republican" Board members). Board members Liebman and Walsh (both of whom are "Democratic" Board members) submitted a dissenting opinion. There will be volumes written about this case. This update is an initial brief summary.
Under the National Labor Relations Act, "supervisors" cannot be unionized without the employer's consent. The statutory definition of the term "supervisor" is detailed but ambiguous:
". . . any individual having the 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."
The Board and the Courts agree that an individual who exercises any one of the enumerated powers is a supervisor, if the exercise "requires the use of independent judgment." In Oakwood Healthcare, the Board focused on the statutory terms "assign," "independent judgment," and "responsibly to direct."
The Board majority ruled that individuals who assign other employees to "significant overall tasks" are exercising supervisory authority if the assignments require "independent judgment." As an example, the majority cited the assignment of a grocery store employee to "restock shelves" as a "supervisory assignment," while a directive to "stock toasters before coffee makers" would not be a "supervisory assignment". By this reasoning, the majority concluded that Hospital charge nurses who assigned other employees to care for specific patients were "assigning significant overall tasks" and therefore making supervisory assignments. The majority also concluded that these assignments required independent judgment because they were based on evaluation of the patients' medical condition and the employees' skill levels. In contrast, the majority concluded that the Hospital's emergency room charge nurses did not use independent judgment because they simply "balanced work load" by assigning employees to specific areas, without matching employee skills to patient needs. The dissent disagreed with the majority's basic approach, and urged that the meaning of "assign" should be limited to changes in "position, work site or work hours."
The majority also concluded that some of the charge nurses were supervisors because they responsibly directed other employees by deciding "what job shall be undertaken next or who shall do it" and, more importantly, that the charge nurses were "held fully accountable and responsible for the performance and work product of the employees." Again, the dissent disagreed, and would have limited the coverage of "responsibly to direct" to individuals who are in charge of an entire department or unit.
It is important to note that the Board majority also ruled that a large group of the involved nurses, who rotated to "charge nurse" positions, were not supervisors. Although the majority concluded that an individual who exercises supervisory authority for as little as 10% of her total work time may be a supervisor, they also concluded that in the absence of any evidence of a rotation schedule there was no way to predict how often a particular nurse would exercise supervisory authority, and that the Hospital had therefore failed to establish that these nurses were supervisors.
In two other decisions issued on Tuesday, the same Board majority further elaborated the applicable new standards. In Beverly Enterprises-Minnesota, Inc. the majority ruled that the employer failed to prove that its nurses were supervisors where the evidence indicated that they had no authority to enforce their assignments or directions by imposing or recommending adverse consequences for failure to follow directives. And in Croft Metals the majority concluded that lead persons were not supervisors where their "assignments" consisted mostly of following posted work schedules and there was insufficient evidence to show authority to issue discipline to or evaluate employees, or to make effective recommendations in these areas.
The Oakwood Healthcare decision will be viewed as an important "employer win" because it rejects the idea that individuals are not supervisors even though they assign work and direct other employees. Indeed, the dissent characterizes the majority opinion as "among the most important in the Board's history," but one that takes a "mistaken approach to statutory interpretation that, not surprisingly, leads it far beyond what Congress contemplated."
The long-term impact of the Oakwood Healthcare decision will depend on several factors. Most importantly, if the next President is a Democrat, a shift of one Board member could reverse the result. It also remains to be seen whether the Circuit Courts of Appeal will agree with the majority's analysis.
In the short run, however, the message to employers is clear. In order for an individual to be a "supervisor" under the NLRA based on assignment of work to other employees, the assignments must involve more than just minor job functions, and must involve independent judgment, not just "equalizing workload." Moreover, in order to be supervisors because they "direct" other employees, individuals must also be accountable for the performance of those whom they direct, which means that the "supervisor" must be subject to discipline or adverse employment evaluations if the other employees fail to perform acceptably. This standard in turn relates to the other wording of the statutory definition, such as the authority to "discipline" or "effectively recommend" discipline and the related authority to evaluate employee performance. While the Oakwood Healthcare decision provides significant new and useful guidance, it almost certainly is not the end of the story. We will continue to monitor how these decisions and the standards set forth in them are applied and will keep you posted of significant developments as they occur.