November 27, 2006

Employees who assign other employees to overall duties, are held accountable for directing subordinates to undertake specific tasks, and have the discretion to do so without close direction from management will be recognized as "supervisors."  So says the National Labor Relations Board in a trilogy of decisions issued on September 29, 2006. 

Long anticipated and much discussed, the clearly reasoned decisions deliver on the expectation that employers would be given the guidance they need to know who is, and who is not, a "supervisor" within the definition contained in Section 2(11) of the National Labor Relations Act.  The fact that most individuals asserted to be "supervisors" in these cases were deemed to be "employees," and thus protected by the National Labor Relations Act's anti-discrimination provisions, reveals that organized labor's predictions of the demise of bargaining unit eligibility for millions of workers appear to have been greatly exaggerated. 

The Act defines "supervisors" as individuals who possess authority over subordinates in one or more of twelve categories. In July 2003, the Labor Board took the unusual step of calling for briefs by interested parties specifically to address the meaning of "assign," "responsibility to direct," and "independent judgment" within the context of supervisory authority.  Sixteen months earlier, the Board had granted review of a Regional Director's decision that all charge nurses at a Michigan acute care hospital should be included in a bargaining unit to vote whether to be represented by the UAW.  The invitation for briefs also was extended by the Board in two other cases involving questions of supervisory status.  Together, the three became known as "the Kentucky River Trilogy," named for the 2001 decision the U. S. Supreme Court that invalidated the Labor Board's prior interpretation of "supervisor" in a case involving Kentucky River Community Care, a health care provider.  Thomas Walsh and Michael Hekle of the Jackson Lewis White Plains, NY office filed a brief on behalf of several employers and industry groups as "friends of the court."

The resulting decisions in the three cases can be characterized as an honest effort to give effect to the intent of Congress in enacting Section 2(11) of the NLRA, the words of the statute itself, and the holdings of the U. S. Supreme Court in a manner consistent with the actualities of the workplace.  The decisions will give employers more certainty in determining who is a supervisor, and they will help management understand how to structure supervisory responsibilities in a way that satisfies the operational needs of the organization while preserving the prerogatives of management.   The decisions also will assist the local offices of the Labor Board by providing much clearer guidance while allowing flexibility in their determinations of bargaining unit appropriateness. 

Oakwood Healthcare Is Key to Board Rationale

The lead case in the Kentucky River Trilogy is Oakwood Healthcare, Inc.  In a 3-2 decision, the majority opinion articulates standards that provide much needed guidance for employers in structuring their staff functions.  In the Oakwood decision, the Board defines the Section 2(11) terms "assign," "responsible direction," and "independent judgment."

1.         Assign

The term "assign" refers to the act of 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.  These are part of an employee's terms and conditions of employment. Specifically, in the health care setting, the term "assign" encompasses the responsibility of charge nurses to assign nurses and aides to particular patients.  In general, to "assign" for purposes of Section 2(11) refers to the designation of significant overall duties to an employee, not to the discrete instruction to perform a specific task, such as "ordering an LPN to immediately give a sedative to a particular patient."

2.         Responsibly to Direct

In defining "responsible direction," the Board first turned to the Act's legislative history, where there was a concern that the person on the shop floor would not be considered a supervisor, even if that person directly oversaw the work being done and would be held responsible if the work were done badly or not at all.  Consequently, the Board specified that the authority "responsibly to direct" is not limited to "department heads":  "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' (as explained below) and carried out with independent judgment."

Referring to the dictionary definition, the Board acknowledged that for direction to be "responsible," the putative supervisor must be accountable for the performance of the task by the subordinate, such that some adverse consequence may befall the would-be supervisor if the tasks performed by the employee are not performed properly.  To establish accountability, the employer must delegate to the supervisor the authority to direct the work and the authority to take corrective action. Also, it must be shown that the supervisor is held accountable (i.e., adverse consequences will result) if he or she does not take these steps.

3.         Independent Judgment

The law requires that the would-be supervisor not only must possess the authority to "direct" or "responsibly to assign" but also that the authority reflect the exercise of "independent judgment."

In some earlier cases, the NLRB held that the judgment exercised by nurses (or other employees deemed "professionals" by the Board) over subordinates could not be the "independent" judgment needed to satisfy the supervisory test.  The Board clarified that the exercise of "professional judgment" is no bar to the exercise of "independent judgment" for purposes of the Act's definition of "supervisor." They are different standards for different purposes.

In defining "independent judgment," the Board turned again to the dictionary: 

"Independent" means "not subject to control by others."..."Judgment" means "the action of judging; the mental or intellectual process of forming an opinion or evaluation by discerning and comparing."... Thus, as a starting point, to exercise "independent judgment" an individual must at minimum act, or effectively recommend action, free of the control of others and form an opinion or evaluation by discerning and comparing data...."

Significantly, a judgment is not independent if it is dictated or controlled by detailed instructions (in company policies, rules, the verbal instructions by a higher authority, or in collective bargaining agreement provisions). However, if those instructions call for the exercise of discretion, the exercise may still be "independent."  For example, if a nurse weighs the individualized needs of a patient against the skills or special training of available nursing personnel, the nurse's assignment involves the exercise of independent judgment.

Fact Specific Analysis Driven by Oakwood Healthcare Standards

All three decisions ultimately turn on the analysis of the three elements of supervisory status clarified in the Oakwood decision.  Applying those standards to the facts in each of the cases, the Labor Board made its determinations that the permanent charge nurses in question in Oakwood did exercise supervisory authority in assigning employees, while the charge nurses in question in the Golden Crest case neither assigned nor responsibly directed other employees.  In Croft Metals, the Labor Board determined that the lead persons did not exercise independent judgment in directing their crew or line members. 

Importance of the Kentucky River Trilogy

In a press release issued on October 3, 2006, the National Labor Relations Board characterized Oakwood Healthcare as "a major decision."  Explaining the importance of its actions and the care taken in issuing the decisions, the Board said, "In NLRB v. Kentucky River Community Care, 532 U.S. 706 (2001), the Supreme Court criticized the Board's extant interpretation of the Section 2(11) term "independent judgment."  As a result, the Board endeavored in today's Oakwood Healthcare decision to reexamine and clarify its interpretations of the term "independent judgment" as well as the terms "assign" and "responsibly to direct," as those terms are set forth in Section 2(11)."  http://www.nlrb.gov/nlrb/press/releases/R-2603.htm

In its Oakwood Healthcare opinion, the Labor Board acknowledged the weightiness of its task made more so by the U. S. Supreme Court's rebuff of its previous actions in the Kentucky River case.  Stepping up to the plate, the Labor Board hopes this time to have answered the pitch:  "Refined analysis honors our responsibility to protect the rights of those covered by the Act; hews to the language of Section 2(11) and judicial interpretation thereof, most particularly the guidance provided by the Supreme Court in Kentucky River and other decisions; and endeavors to provide clear and broadly applicable guidance for the Board's regulated community."