NLRB Issues Guidelines for Determining Who is a “Supervisor”

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October 10, 2006

The issue of what duties and responsibilities an individual must perform in order to be considered a “supervisor” as defined by the National Labor Relations Act (the “Act”) has been in a state of flux for several years. In 2001, the U.S. Supreme Court criticized the Board’s interpretation of the section of the National Labor Relations Act which defines the term “supervisor.” In a major decision made public on October 2, 2006, the NLRB by a vote of 3-2 issued a decision involving an acute care hospital finding that permanent charge nurses were supervisors since they exercised supervisory authority in assigning employees. Oakwood Healthcare, Inc., 348 NLRB No. 37 (9/29/06).
 
The issue of whether or not an individual is a “supervisor” under the Act is extremely important for unionized employers and for employers who may be subject to unionization in the future. Supervisors are not “employees” as defined under the Act. Therefore, supervisors can be excluded from a collective bargaining unit. The NLRB’s recent decision is being heavily criticized by organized labor. They fear that the decision will make it easier for employers to establish that lead persons and working foreman in manufacturing and production environments and charge nurses in the healthcare industry are in fact supervisors and should be excluded from collective bargaining units.
 
Section 2(11) of the Act defines the term “supervisor” as:
 

Any individual having the authority, in the interests of the employer, to hire, transfer, suspend, layoff, recall, promote, discharge, assign, reward, or discipline other employees, or responsibility to direct them, or to address their grievances, or to effectively recommend such action, if in the connection with the foregoing to exercise such authority as not of merely routine or clerical nature, but requires the use of independent judgment.

 
Under this definition, individuals are supervisors if: (1) they have the authority to exercise (or to effectively recommend the exercise) of any one of the twelve supervisory functions (e.g., “assign” and “responsibility to direct”); (2) their exercise of such authority is not of a merely routine or clerical nature, but requires independent judgment; and (3) their authority is held “in the interests of the employer.”
 
In Oakwood Healthcare, the NLRB defined the terms “assign,” “responsibility to direct,” and “independent judgment.” “Assign” refers to the act of designating an employee to a specific place such as a location, department, or wing; appointing an employee to work at a designated time such as a shift or overtime period; or assigning specific work tasks to an employee.
 
With respect to the term “responsibility to direct,” the NLRB held that this authority is not limited to department heads. For example, if a worker on the shop floor has “men under him” and if that worker decides “what job shall be undertaken next or who shall do it,” that worker is a supervisor, provided the direction is both “responsible” and carried out without independent judgment. For the direction to be “responsible,” the person directing and performing the oversight of the employee must be accountable for the performance of the task by others such that some adverse consequence may result to the individual providing the oversight if the task performed by employees under him/her are not performed properly.
 
The NLRB then defined the term “independent judgment.” They held that as a starting point, to exercise “independent judgment,” an individual must at a minimum act free of the control of others and form an opinion or evaluation by discerning and comparing data. They specifically held that judgment is not independent if it is dictated or controlled by detailed instructions, whether set forth in company policies or rules, verbal instructions from a higher authority, or pursuant to the provisions of a collective bargaining agreement.
 
On the same day that the NLRB issued its decision in Oakwood Healthcare, it issued another decision involving a manufacturer of aluminum and vinyl windows and doors. In Croft Metals, Inc., the Board found the company’s lead persons did not possess the authority to “assign” but found that the lead persons did have “the responsibility to direct” line and crew members. In this case, the lead persons were required to manage their assigned teams, to correct improper performance, to shift employees from one job to another, and to decide the order in which work was to be performed in order to achieve production goals. The lead persons were also accountable for the performance of their crew or line members. However, the Board found that the employer had failed to meet its burden that the lead persons exercised independent judgment. The Board found that the lead person’s exercise of judgment was either fundamentally controlled by pre-established guidelines, such as delivery schedules, or was simply routine.
 
The NLRB’s recent decision in Oakwood Healthcare provides employers more understandable and predicable guidelines to exclude certain workers from collective bargaining units. It should also assist in managing and making employers more productive and accountable.
 
The Oakwood Healthcare, Inc. and Croft Metals, Inc. decisions along with another case issued on the same date Golden Crest Healthcare Center are available at the NLRB’s website.
If you have questions regarding the above, please contact Sara Ackermann, the author of this article, or any of the attorneys in the Employment, Benefits & Labor Relations Practice Group of Ruder Ware.

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