The National Labor Relations Board ("the Board") recently issued decisions in the much-anticipated trio of cases known as the Kentucky River cases.  The three cases were given this label because the Board had previously signaled that it would use them to refine the test for supervisory status – a task that became necessary as the result of the Supreme Court’s 2001 decision in NLRB v. Kentucky River Community Care, Inc.  In that case, the Supreme Court held that the Board had been applying an improper standard when determining whether individuals (especially nurses) are “supervisors” under the National Labor Relations Act (NLRA). 

The issue of supervisory status is an extremely important one.  Statutory supervisors do not have the right to be represented by a union, which means that an employer can have them excluded from all bargaining units.  In addition, an employer may lawfully forbid supervisors from engaging in union activities, and may even require that they participate in implementing the employer’s labor relations strategy.  Further, statutory supervisors are considered “agents” of the employer such that the employer can be held responsible for conduct on their part amounting to unfair labor practices (i.e., violations of the NLRA).

Section 2(11) of the NLRA defines the term “supervisor” to mean—

any individual having 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.

Individuals are “supervisors” if they hold the authority to engage in any one of the twelve listed supervisory functions, provided that the exercise of that authority requires the use of independent judgment.

As mentioned above, the Board recently issued a trio of decisions on this issue.  Of the three, Oakwood Healthcare, Inc. is the lead case.  (The other two cases merely involved the application of the standards from Oakwood Healthcare.)  In Oakwood Healthcare, the Board provided new definitions for the terms “assign” and “responsibly to direct” (two of the twelve indicia of supervisory status), and adopted a refined interpretation of the term “independent judgment.”

Assign.  The Board now construes the term assign “to refer 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.”  The Board contrasted such authority with merely instructing employees to perform a discrete task, or to perform one discrete task before another.

Responsibly to Direct.  The Board now interprets the term responsibly to direct to mean that the individual is accountable and responsible for the performance of the employees that the individual supervises.  According to the Board:  “[T]o establish accountability for purposes of responsible direction, it must be shown that the employer delegated to the putative supervisor the authority to direct the [employees’] work and the authority to take corrective action, if necessary.  It must also be shown that there is a prospect of adverse consequences for the putative supervisor if he/she does not take these steps.” 

Independent Judgment.  The term “independent judgment” applies to all twelve indicia of supervisory status listed in Section 2(11) of the NLRA – not just “assign” and “responsibly to direct.”  In Oakwood Healthcare, the Board stated that “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.”  At the same time, however, the Board was careful to note that “the mere existence of company policies does not eliminate independent judgment from decision-making[.]”  The key issue is whether the individual-at-issue makes discretionary choices while exercising supervisory authority, or whether he/she is making “routine or clerical” decisions.

Labor organizations and pro-labor groups (including the AFL-CIO and the Change to Win federation) have criticized the Board for its decision in the Oakwood Healthcare case, predicting that it will be significantly easier for employers to prove that individuals are supervisors, thereby precluding them from forming or joining a union.  Whether these predictions will turn out to be true is, quite honestly, open to debate.  One point is, however, indisputable:  Each case that involves the issue of supervisory status will hinge upon the specific facts of that particular case. 

Inasmuch as the Board has just provided us with new guidelines on the issue of supervisory status, now is a good time for employers to review and evaluate their labor relations strategy as it relates to this issue.  More specifically—

• An employer that is currently non-union (at least as to the relevant group or bargaining unit of employees) should evaluate the likelihood that borderline individuals would, or would not, qualify as supervisors under the Board’s refined standards.  After performing this analysis, adjustments can be made to ensure that the probable result is consistent with the employer’s labor relations strategy.
  
  
• A similar evaluation should be performed by an employer that employs individuals who are already represented by a union, but who might now qualify as supervisors as the result of the Board’s refined standards.  If a bargaining unit contains individuals who appear to hold supervisory status, you should contact your Felhaber attorney to discuss the best strategy for moving forward.

Although the Board’s refined standards for supervisory status apply to employers in all industries, they are particularly important for health care employers.  Disputes over the supervisory status of nurses have made it to the Supreme Court twice (in 1994 and 2001), and two of the three Kentucky River cases also involved litigation over nurses. 

For more information on issues involving supervisory status under the NLRA, please contact:

Founded in Saint Paul in 1943, Felhaber, Larson, Fenlon and Vogt, P.A. has offices in Minneapolis and Saint Paul. With over 55 attorneys, the firm serves clients in the areas of corporate and commercial law, employee benefits, employment law, estate planning, health care, intellectual property, labor law representing management, litigation, real estate, transportation law, and workers' compensation.