In Oakwood Healthcare, Inc., the National Labor Relations Board ("the Board") has finally provided much-anticipated guidance on what makes an employee a "supervisor" and therefore exempt from the coverage of the National Labor Relations Act ("NLRA"). The Board’s decision provides guidance in the numerous pending cases held in abeyance following the United States Supreme Court’s 2001 ruling in the case of NRLB v. Kentucky River Community Care. The decision will have an impact beyond healthcare, potentially implicating employees in many unionized and non-unionized industries.
The NLRA defines "supervisor" as anyone who has authority to, among other things, "assign" work to other employees, or who must "responsibly ... direct" other employees, as long as they use "independent judgment" in doing so. An employee found to be a supervisor is usually excluded from a collective bargaining unit represented by a labor union and not allowed to vote in union elections. Prior to Kentucky River, the Board had determined that employees such a nurses, who exercise ordinary professional or technical judgment in directing less-skilled employees, did not qualify as "supervisors" because they did not use "independent judgment." The high court rejected the Board’s narrow interpretation of "independent judgment" as unlawful under the NLRA and directed the Board to clarify its interpretation of "independent judgment" as well as "assign" and "responsibility to direct."
In Oakwood, the Board finally provided the clarification the Supreme Court demanded. In a 3-2 vote, the Board expanded the number of employees likely to meet the statutory definition of "supervisor." The Board defined "independent judgment" to be judgment that is exercised without effective control by another authority, such as another supervisor or by detailed instructions or regulations. Also, the degree of discretion exercised must rise above the "routine or clerical" to constitute "independent judgment" under the NLRA.
The Board defined "assign" as the act of "designating an employee to a place (such as a location, department or wing), appointing an individual to a time (such as a shift or overtime period), or giving significant overall duties, i.e. tasks, to an employee." Further, to "assign" means "the designation of significant overall duties to the employee, not the ... ad hoc instruction that the employee perform a discrete task."
In contrast with the "assign" test — which focuses on broad designations or assignments — the Board determined the requirement that the supervisor "responsibly ... direct" other employees involved determining what tasks would be undertaken in what order, and by whom. However, in order that the supervisor’s act of directing other employees qualify for supervisory status, it must be something for which the supervisor is held accountable. Thus, to constitute "responsible" direction, it must be shown that the "employer delegated to the putative supervisor the authority to direct the work and the authority to take corrective action, if necessary" and that "there is a prospect of adverse consequences for the putative supervisor" arising from his or her direction of other employees.
Oakwood does not appear to be the overreaching decision union advocates had feared (and widely predicted). Applying the new definitions, the Board held that Oakwood’s permanent charge nurses are supervisors exempt from coverage of the NLRA. While Oakwood (like Kentucky River) involved charge nurses, the cases have broader applications to other industries. In two companion cases decided the same day, the Board held that charge nurses in a nursing home and lead persons at a manufacturing facility did not "assign" or "responsibly direct" other employees and therefore were not supervisors under the NLRA. Interestingly, in Oakwood the Board expressly reaffirmed prior Board case law suggesting that a person could be a "supervisor" if he or she regularly performed supervisory functions for as little as 10-15 percent of their total work time.
What does Oakwood mean for employers? For non-union employers facing unionization efforts, the unit the union proposes to represent may now contain statutory supervisors. Following Oakwood, you may be more likely to successfully challenge the union’s inclusion of forepersons or lead employees in proposed units, and organizing efforts by those employees may be objectionable. For employers with union workforces, it may be that your bargaining units already contain employees that should be excluded statutory supervisors. There are procedures an employer can use to challenge the inclusion of supervisors in existing or proposed bargaining units, and your labor attorneys can help you determine what method is likely to succeed.