NLRB Rulings Regarding Supervisors

Perspective Regarding the NLRA

The National Labor Relations Act (NLRA) established employees' rights to self-organize, join or assist labor organizations. It also prohibits employers from
interfering with or restraining employees' exercise of these rights and provides that employers cannot attempt to dominate or influence a labor union. With this in mind, the Act expressly excludes supervisors from the definition of an 'employee,' thus making supervisors ineligible for union membership.

Congress recognized that a company may expect strict loyalty from those acting as its agents. Moreover, it recognized that unions and their members should be free from supervisory influences within their ranks. Such concerns, including protecting employees from so-called 'sham unions,' have been critical for years. Thus, an accurate determination as to which employees are supervisors is important to safeguard the interests of both labor and management.

Beyond Job Titles

Job Functions and Autonomy

Congress adopted a somewhat cumbersome definition of a supervisor to distinguish between two classes of workers: 1) those vested with 'genuine management prerogatives,' and 2) 'employees' protected by the Act. It did not intend for 'straw bosses, lead men, and set-up men' to be considered supervisors.

The Kentucky River decisions make clear the fact-specific nature of this analysis. For example, the Board considered several individuals with the same job title, charge nurse. Yet, as explained below, it found that some of these employees were supervisors and others were not, even among full-time charge nurses working at the same hospital.

Generally, healthcare facilities designate a 'charge nurse' on each shift. Charge Nurses normally make some sort of work assignments at the outset of a shift and provide a degree of leadership or decision-making during their shift. The scope of their responsibility may encompass one or more nursing units or even the entire facility.

Fundamental Description Of a Supervisor

The Act defines a supervisor as any individual having the authority, 'in the interest of the employer,' to engage in any of 12 enumerated supervisory functions. These functions include to hire, transfer, suspend, lay off, recall, promote, discharge, assign, reward, or discipline other employees, or 'responsibly to direct them,' to adjust their grievances, or effectively to recommend such action, if the exercise of such authority is not of a merely routine or clerical nature, but requires the use of independent judgment.

Therefore, to be considered a supervisor, an individual must exercise authority to engage in one or more of these activities; they must hold this authority 'in the interest of the employer;' and their exercise of this authority must rise above the 'routine or clerical,' requiring the use of independent judgment. Among the 12 supervisory functions listed in the Act, the two most ambiguous were a focus of the Board's recent decisions. These functions are to 'assign' and 'responsibly to direct' employees.

The Board also revisited what it means to exercise 'independent judgment,' a term the Supreme Court said in 2001 that the NLRB improperly limited in NLRB v. Kentucky River Community Care. This is why the recent group of cases was referred to collectively as the Kentucky River cases.

Cases Decided by the Board

The question of who is considered a supervisor is contentious because the answer is not only important, but it often turns on very specific facts. These questions often arise in the healthcare and construction industries. So it is not surprising that two of the three Kentucky River cases (Oakwood and Golden Crest Healthcare Center, an acute care hospital and a nursing home, respectively) emerged from the healthcare industry and that the other (Croft Metals, Inc.) came from the construction industry.

Oakwood Decision

Regardless of whether they discharge one or more of the 12 supervisory functions listed in the Act, individuals are not supervisors unless they also exercise sufficient independent judgment and supervisory activities comprise a substantial part of their work time. A 'substantial part' of work time could be as little as 15%-20%.

In Kentucky River, the NLRB decided that an individual did not exercise independent judgment (and was therefore not a supervisor) if she exercised 'ordinary professional or technical judgment in directing less-skilled employees to deliver services.' The Supreme Court, however, said that the Board was wrong to consider the kind of discretion exercised (in this case 'ordinary professional or technical judgment'). Instead, it should have focused upon the degree of discretion that the individual exercised in making her decisions. Therefore, in Oakwood, the Board articulated a far less restrictive standard.

Independent Judgment: A Revised Analysis

Without regard to the kind of judgment used, or which supervisory function is exercised, the judgment used must be free from the control of others. This means the action is not dictated by detailed instructions, such as rules, regulations, verbal instructions or a collective bargaining agreement. But the existence of a policy does not mean that no independent judgment is involved, if the individual still assesses and weighs factors in making a judgment.

In applying this standard, the Board explained that making a patient assignment purely on the basis of a policy of equalizing workloads does not implicate independent judgment. Neither does merely following a policy regarding how to respond to an emergency. Having the discretion to determine when an emergency exists or the authority to deviate from policy does involve the exercise of independent judgment. Such discretion, the Board said, rises above being merely 'routine or clerical.' Independent judgment requires not just making a determination that is essentially free from the control of others, but also weighing various factors and comparing and/or assessing alternative courses of action.

This was key in Oakwood, in which the Board determined that certain full-time charge nurses were supervisors and others were not. Oakwood is a 257-bed acute care hospital. The NLRB found that full-time ('permanent') charge nurses in several units exercised independent judgment in discharging one or more supervisory functions.

Charge nurses in the hospital's emergency department (ED) did not meet this test because, unlike their counterparts in other units, they did not weigh patients' needs and nurses' skills in making patient assignments. Instead, they assigned nursing staff to areas of the department pursuant to a predetermined practice. Further, staff nurses in the ED rotated assignments without input from the charge nurses.

In Oakwood, the Board also evaluated whether 112 RNs who occasionally served as charge nurses were supervisors. It found there was not an established pattern or schedule for when and how often these RNs took turns in the charge role. In fact, the nurses often decided among themselves who would assume that responsibility. Absent regularity in performing this role, there was no need to consider whether the nurses held requisite supervisory duties for a 'substantial' part of their work time. Therefore, none of the so-called 'rotating charge nurses' were considered supervisors.

The Meaning of 'Assign'

Addressing one of the key supervisory functions at issue, the Board explained that giving employees significant overall duties, designating employees to work at a particular place or time, or instructing them to work overtime suggest classification as a supervisor, if these functions involve the exercise of independent judgment and constitute a substantial part of the individual's job.

To 'assign' means to determine the time, place or overall work of an individual. This includes giving 'significant overall duties,' such as sending a worker to a particular department or shift or, in healthcare, assigning him a particular group of patients. While delegating a group of tasks is to 'assign,' simply determining the order in which to perform those tasks is not. Designating an employee to be the one to carry out the general duty to administer medication to a group of patients is also to 'assign.' On the other hand, merely instructing the worker to give a sedative to particular patient is not.

The emergency department charge nurses in the Oakwood case 'assigned' other employees within the meaning of the Act by designating them to work in specific areas. Unlike 'straw bosses or lead men' who are not supervisors, these duties were more than 'incidental' to their primary responsibilities. (Ultimately, the ED charge nurses were not found to be 'supervisors' because they did not exercise a sufficient degree of discretion in performing this function.)

Golden Crest

In Golden Crest, the Board found the charge nurses did not 'assign' work in a manner that made them supervisors. Specifically, these charge nurses lacked the authority to send other employees home early or to move workers from one floor to another. These nurses could ask an employee stay at work late, but the employee was not obliged to comply.

Likewise, they could not require an off-duty employee to report to work. Thus, lacking the authority to assign overall tasks or the time or place of the employee's work, these charge nurses were employees, not supervisors.

'Responsibly to Direct'

Even if an individual does not 'assign' other employees, he or she may be a supervisor if he or she 'responsibly' directs others. Like all the of the supervisory functions, the purported supervisor must also hold authority in the interest of the employer and exercise a sufficient level of independent judgment. The key to this analysis is that the supposed supervisor must be held to a meaningful level of accountability.

The individual must have the authority to direct work, take corrective action and most importantly, must face the possibility of adverse consequences for shortcomings in the work. In other words, 'responsible' direction means there must be a chance of disciplinary action or a lower performance evaluation if the ostensible supervisor does not execute this function satisfactorily.

Even in Oakwood, the Board found no evidence that the charge nurses responsibly directed other workers. They were responsible only for their own work. (The 12 'supervisors' were so designated because they carried out the 'assign' function and exercised independent judgment in doing so.)

In Croft Metals, on the other hand, lead persons were held responsible for the direction of others. There, however, the Board found that these individuals were not supervisors because they did not exercise a sufficient level of independent judgment. This is because most of their decisions were, according to the record, either 'pretty routine' or controlled by pre-established guidelines. Likewise, in Golden Crest, the Board found the charge nurses were not held accountable for the work of other employees.

The Board explained that this concept of accountability for the work of others helps create a clear distinction between supervisors (whose interests must align with management) and employees (who may have contradictory interests). In the Board's view, a supervisor sometimes may have a somewhat adversarial relationship to employees.

What These Decisions Mean for Employers

While many union members and advocates have denounced these decisions, they provide useful guidance that makes this analysis more predictable. As has been clear since the Supreme Court's Kentucky River decision, the exercise of a sufficient degree of independent judgment is essential to any supervisory function. The Board cannot insert artificial restrictions as to the kind of discretion being exercised. Further, the Board has provided some fairly specific examples of circumstances that it considers indicative of supervisory status and some that it does not, particularly in healthcare.

A job title does not determine whether someone is considered a supervisor or an employee. On the other hand, an organization's policies and its actual practices are critically important.

Union supporters insist that these decisions give employers a roadmap to deprive millions of workers, especially nurses, of their right to join a union. But in today's competitive environment, it appears unlikely that many employers will make broader business decisions in an effort to classify more workers as supervisors under the NLRA.

One need only look to the recent past for another example of a change in federal law that did not result in the dire consequences predicted by pro-union rhetoric. When the U.S. Department of Labor updated the regulations regarding the so-called 'white collar exemptions' to the Fair Labor Standards Act (FLSA) in 2004, Big Labor blustered that the changes would strip millions of workers of their rights to overtime pay. Two years later, just the opposite has occurred. Employers who updated their practices to comply with the changes now classify more workers as eligible for overtime than they did before.

Nurses unions were among the more vocal opponents of the 2004 changes. However, both before and after the regulations changed, registered nurses (RNs) met the test to be classified as exempt from the FLSA's overtime and minimum wage re-quirements. Moreover, the vast majority of RNs in the workforce remain eligible for and receive overtime pay.

Conclusion

The Kentucky River decisions provide employers with new opportunities to assess job classifications, policies, practices, who to include in supervisory training programs and host of other issues. It also provides opportunities to engage in positive communications with employees and supervisors. Finally, the decisions give both management and labor the opportunity to evaluate the composition of current and prospective bargaining units.

All of these activities can reduce uncertainty, delays and controversy when classifying workers as employees or supervisors. The analysis of who is a supervisor and who is not remains controversial, but all sides should be able to agree that when it comes to the law, predictability is a good thing.

A. Kevin Troutman is an attorney with Fisher & Phillips, LLP, a national law firm practicing exclusively in the field of labor and employment law. He may be reached at 504-529-3856 or [email protected].

Before the National Labor Relations Board (NLRB) issued its recent decisions in the Kentucky River cases, union leaders and activists predicted dire consequences ' potentially stripping millions of workers, especially in the healthcare industry, of their rights to join a union. Unions, which are trying to attract more employees to their ranks, staged rallies and other events to draw attention to these cases.

But the decisions did not dramatically redraw the lines for determining which workers are considered supervisors and which are not. Instead, they provided guidance that will be helpful to employers and unions alike in determining the status of workers whose classification falls into the gray area between supervisor and employee. The analysis remains highly fact-specific and appears unlikely to create the dramatic effects predicted.

Some fundamental facts illustrate that the Board's decisions did not usher in sweeping changes. Among the three companion cases considered, the Board classified disputed employees as supervisors in just one (Oakwood Healthcare, Inc.). In that one case, the NLRB concluded that 12 full-time charge nurses were supervisors. It found that 112 other nurses who rotated in the same job title were not supervisors. It will take a while before the practical impact of these decisions is completely clear, but two things are already certain. First, the decisions add predictability to the classification question regarding some workers; and second, the issue will continue to be a flashpoint for controversy.

Perspective Regarding the NLRA

The National Labor Relations Act (NLRA) established employees' rights to self-organize, join or assist labor organizations. It also prohibits employers from
interfering with or restraining employees' exercise of these rights and provides that employers cannot attempt to dominate or influence a labor union. With this in mind, the Act expressly excludes supervisors from the definition of an 'employee,' thus making supervisors ineligible for union membership.

Congress recognized that a company may expect strict loyalty from those acting as its agents. Moreover, it recognized that unions and their members should be free from supervisory influences within their ranks. Such concerns, including protecting employees from so-called 'sham unions,' have been critical for years. Thus, an accurate determination as to which employees are supervisors is important to safeguard the interests of both labor and management.

Beyond Job Titles

Job Functions and Autonomy

Congress adopted a somewhat cumbersome definition of a supervisor to distinguish between two classes of workers: 1) those vested with 'genuine management prerogatives,' and 2) 'employees' protected by the Act. It did not intend for 'straw bosses, lead men, and set-up men' to be considered supervisors.

The Kentucky River decisions make clear the fact-specific nature of this analysis. For example, the Board considered several individuals with the same job title, charge nurse. Yet, as explained below, it found that some of these employees were supervisors and others were not, even among full-time charge nurses working at the same hospital.

Generally, healthcare facilities designate a 'charge nurse' on each shift. Charge Nurses normally make some sort of work assignments at the outset of a shift and provide a degree of leadership or decision-making during their shift. The scope of their responsibility may encompass one or more nursing units or even the entire facility.

Fundamental Description Of a Supervisor

The Act defines a supervisor as any individual having the authority, 'in the interest of the employer,' to engage in any of 12 enumerated supervisory functions. These functions include to hire, transfer, suspend, lay off, recall, promote, discharge, assign, reward, or discipline other employees, or 'responsibly to direct them,' to adjust their grievances, or effectively to recommend such action, if the exercise of such authority is not of a merely routine or clerical nature, but requires the use of independent judgment.

Therefore, to be considered a supervisor, an individual must exercise authority to engage in one or more of these activities; they must hold this authority 'in the interest of the employer;' and their exercise of this authority must rise above the 'routine or clerical,' requiring the use of independent judgment. Among the 12 supervisory functions listed in the Act, the two most ambiguous were a focus of the Board's recent decisions. These functions are to 'assign' and 'responsibly to direct' employees.

The Board also revisited what it means to exercise 'independent judgment,' a term the Supreme Court said in 2001 that the NLRB improperly limited in NLRB v. Kentucky River Community Care. This is why the recent group of cases was referred to collectively as the Kentucky River cases.

Cases Decided by the Board

The question of who is considered a supervisor is contentious because the answer is not only important, but it often turns on very specific facts. These questions often arise in the healthcare and construction industries. So it is not surprising that two of the three Kentucky River cases (Oakwood and Golden Crest Healthcare Center, an acute care hospital and a nursing home, respectively) emerged from the healthcare industry and that the other (Croft Metals, Inc.) came from the construction industry.

Oakwood Decision

Regardless of whether they discharge one or more of the 12 supervisory functions listed in the Act, individuals are not supervisors unless they also exercise sufficient independent judgment and supervisory activities comprise a substantial part of their work time. A 'substantial part' of work time could be as little as 15%-20%.

In Kentucky River, the NLRB decided that an individual did not exercise independent judgment (and was therefore not a supervisor) if she exercised 'ordinary professional or technical judgment in directing less-skilled employees to deliver services.' The Supreme Court, however, said that the Board was wrong to consider the kind of discretion exercised (in this case 'ordinary professional or technical judgment'). Instead, it should have focused upon the degree of discretion that the individual exercised in making her decisions. Therefore, in Oakwood, the Board articulated a far less restrictive standard.

Independent Judgment: A Revised Analysis

Without regard to the kind of judgment used, or which supervisory function is exercised, the judgment used must be free from the control of others. This means the action is not dictated by detailed instructions, such as rules, regulations, verbal instructions or a collective bargaining agreement. But the existence of a policy does not mean that no independent judgment is involved, if the individual still assesses and weighs factors in making a judgment.

In applying this standard, the Board explained that making a patient assignment purely on the basis of a policy of equalizing workloads does not implicate independent judgment. Neither does merely following a policy regarding how to respond to an emergency. Having the discretion to determine when an emergency exists or the authority to deviate from policy does involve the exercise of independent judgment. Such discretion, the Board said, rises above being merely 'routine or clerical.' Independent judgment requires not just making a determination that is essentially free from the control of others, but also weighing various factors and comparing and/or assessing alternative courses of action.

This was key in Oakwood, in which the Board determined that certain full-time charge nurses were supervisors and others were not. Oakwood is a 257-bed acute care hospital. The NLRB found that full-time ('permanent') charge nurses in several units exercised independent judgment in discharging one or more supervisory functions.

Charge nurses in the hospital's emergency department (ED) did not meet this test because, unlike their counterparts in other units, they did not weigh patients' needs and nurses' skills in making patient assignments. Instead, they assigned nursing staff to areas of the department pursuant to a predetermined practice. Further, staff nurses in the ED rotated assignments without input from the charge nurses.

In Oakwood, the Board also evaluated whether 112 RNs who occasionally served as charge nurses were supervisors. It found there was not an established pattern or schedule for when and how often these RNs took turns in the charge role. In fact, the nurses often decided among themselves who would assume that responsibility. Absent regularity in performing this role, there was no need to consider whether the nurses held requisite supervisory duties for a 'substantial' part of their work time. Therefore, none of the so-called 'rotating charge nurses' were considered supervisors.

The Meaning of 'Assign'

Addressing one of the key supervisory functions at issue, the Board explained that giving employees significant overall duties, designating employees to work at a particular place or time, or instructing them to work overtime suggest classification as a supervisor, if these functions involve the exercise of independent judgment and constitute a substantial part of the individual's job.

To 'assign' means to determine the time, place or overall work of an individual. This includes giving 'significant overall duties,' such as sending a worker to a particular department or shift or, in healthcare, assigning him a particular group of patients. While delegating a group of tasks is to 'assign,' simply determining the order in which to perform those tasks is not. Designating an employee to be the one to carry out the general duty to administer medication to a group of patients is also to 'assign.' On the other hand, merely instructing the worker to give a sedative to particular patient is not.

The emergency department charge nurses in the Oakwood case 'assigned' other employees within the meaning of the Act by designating them to work in specific areas. Unlike 'straw bosses or lead men' who are not supervisors, these duties were more than 'incidental' to their primary responsibilities. (Ultimately, the ED charge nurses were not found to be 'supervisors' because they did not exercise a sufficient degree of discretion in performing this function.)

Golden Crest

In Golden Crest, the Board found the charge nurses did not 'assign' work in a manner that made them supervisors. Specifically, these charge nurses lacked the authority to send other employees home early or to move workers from one floor to another. These nurses could ask an employee stay at work late, but the employee was not obliged to comply.

Likewise, they could not require an off-duty employee to report to work. Thus, lacking the authority to assign overall tasks or the time or place of the employee's work, these charge nurses were employees, not supervisors.

'Responsibly to Direct'

Even if an individual does not 'assign' other employees, he or she may be a supervisor if he or she 'responsibly' directs others. Like all the of the supervisory functions, the purported supervisor must also hold authority in the interest of the employer and exercise a sufficient level of independent judgment. The key to this analysis is that the supposed supervisor must be held to a meaningful level of accountability.

The individual must have the authority to direct work, take corrective action and most importantly, must face the possibility of adverse consequences for shortcomings in the work. In other words, 'responsible' direction means there must be a chance of disciplinary action or a lower performance evaluation if the ostensible supervisor does not execute this function satisfactorily.

Even in Oakwood, the Board found no evidence that the charge nurses responsibly directed other workers. They were responsible only for their own work. (The 12 'supervisors' were so designated because they carried out the 'assign' function and exercised independent judgment in doing so.)

In Croft Metals, on the other hand, lead persons were held responsible for the direction of others. There, however, the Board found that these individuals were not supervisors because they did not exercise a sufficient level of independent judgment. This is because most of their decisions were, according to the record, either 'pretty routine' or controlled by pre-established guidelines. Likewise, in Golden Crest, the Board found the charge nurses were not held accountable for the work of other employees.

The Board explained that this concept of accountability for the work of others helps create a clear distinction between supervisors (whose interests must align with management) and employees (who may have contradictory interests). In the Board's view, a supervisor sometimes may have a somewhat adversarial relationship to employees.

What These Decisions Mean for Employers

While many union members and advocates have denounced these decisions, they provide useful guidance that makes this analysis more predictable. As has been clear since the Supreme Court's Kentucky River decision, the exercise of a sufficient degree of independent judgment is essential to any supervisory function. The Board cannot insert artificial restrictions as to the kind of discretion being exercised. Further, the Board has provided some fairly specific examples of circumstances that it considers indicative of supervisory status and some that it does not, particularly in healthcare.

A job title does not determine whether someone is considered a supervisor or an employee. On the other hand, an organization's policies and its actual practices are critically important.

Union supporters insist that these decisions give employers a roadmap to deprive millions of workers, especially nurses, of their right to join a union. But in today's competitive environment, it appears unlikely that many employers will make broader business decisions in an effort to classify more workers as supervisors under the NLRA.

One need only look to the recent past for another example of a change in federal law that did not result in the dire consequences predicted by pro-union rhetoric. When the U.S. Department of Labor updated the regulations regarding the so-called 'white collar exemptions' to the Fair Labor Standards Act (FLSA) in 2004, Big Labor blustered that the changes would strip millions of workers of their rights to overtime pay. Two years later, just the opposite has occurred. Employers who updated their practices to comply with the changes now classify more workers as eligible for overtime than they did before.

Nurses unions were among the more vocal opponents of the 2004 changes. However, both before and after the regulations changed, registered nurses (RNs) met the test to be classified as exempt from the FLSA's overtime and minimum wage re-quirements. Moreover, the vast majority of RNs in the workforce remain eligible for and receive overtime pay.

Conclusion

The Kentucky River decisions provide employers with new opportunities to assess job classifications, policies, practices, who to include in supervisory training programs and host of other issues. It also provides opportunities to engage in positive communications with employees and supervisors. Finally, the decisions give both management and labor the opportunity to evaluate the composition of current and prospective bargaining units.

All of these activities can reduce uncertainty, delays and controversy when classifying workers as employees or supervisors. The analysis of who is a supervisor and who is not remains controversial, but all sides should be able to agree that when it comes to the law, predictability is a good thing.

A. Kevin Troutman is an attorney with Fisher & Phillips, LLP, a national law firm practicing exclusively in the field of labor and employment law. He may be reached at 504-529-3856 or [email protected].