United States: Your Employees May Qualify for Supervisory Status under the NLRA

The National Labor Relations Board (the "Board") recently issued three decisions defining what it means to be a "supervisor" that will have a tremendous impact in the formulation and maintenance of bargaining units in the healthcare industry, as well as in all unionized sectors. The Board's newly articulated guidelines now provide employers with a framework for arguing that "employees" who were previously covered by the National Labor Relations Act (the "Act") are properly excludable from the Act's protections as statutory "supervisors."

By way of background, section 2(11) of the Act specifically excludes supervisors from its definition of "employee" and from the rights afforded employees by the Act, such as the right to organize. The Act defines "supervisor" as "any individual having the 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." In other words, an individual is a statutory supervisor if: (1) he holds the authority to engage in any one of the 12 supervisory functions listed in the definition; (2) his "exercise of such authority is not of a merely routine or clerical nature, but requires the use of independent judgment"; and (3) his authority is held "in the interest of the employer."

In its 2001 decision in NLRB v. Kentucky River Community Care, Inc., the U.S. Supreme Court rejected the Board's narrow interpretation of "independent judgment" and asked the Board to clarify not only its interpretation of "independent judgment," but also its interpretation of two of the 12 supervisory functions, namely "assign" and "responsibility to direct." In Oakwood Healthcare Inc., the Board finally responded to the Supreme Court's request to define these three terms in a case considering whether charge nurses were supervisors. In two decisions issued the same day, the Board also applied the new definitions in a healthcare setting in Beverly-Enterprises-Minn. Inc., d/b/a Golden Crest Healthcare Ctr. and to a manufacturing facility in Croft Metals, Inc.

The Board defined "independent judgment" to be judgment that is exercised without recourse to detailed instructions, whether dictated by a higher authority, a company manual or the provisions of a collective bargaining agreement. Likewise, the judgment cannot be simply "routine or clerical," but must require some independent thought and discretion.

The Board also clarified that to "assign" means 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, according to the Board, directing LPNs to perform regular duties satisfies the "assignment" test, while directing the performance of ad hoc ones does not. By way of example, the Board explained that "if a charge nurse designates an LPN to be the person who will regularly administer medications to a patient or a group of patients, the giving of that overall duty to the LPN is an assignment." In contrast, "the charge nurse's ordering of an LPN to immediately give a sedative to a particular patient does not constitute an 'assignment.'"

Further, the Board advised that to establish that a supervisor "responsibly directs" other employees, it must be shown that the supervisor determines what tasks are undertaken, in what order and by whom. It must further be shown that "the employer delegated to the putative supervisor the authority to direct the work and to take corrective action, if necessary," and that "the supervisor is accountable for the actions of his subordinates in that there is a prospect of adverse consequences for the putative supervisor" arising from his subordinates' failure to properly carry out the tasks assigned.

The Oakwood Healthcare Inc. and Golden Crest Healthcare Ctr. decisions are important for employers in the healthcare field because they demonstrate that RNs who use independent judgment to assign nurses and aides to particular patients are supervisors excluded from the Act's coverage, whereas those who lack the authority to either assign or responsibly direct are not.

The Croft Metals, Inc. decision demonstrates application of the new guidelines beyond the healthcare industry. In Croft Metals, Inc., the Board applied its new guidelines to lead persons at a manufacturing facility and found that lead persons at the facility did not have the authority to assign other employees. Further, although they had the authority to responsibly direct the other workers, they did not exercise independent judgment in doing so.

Despite the employer's failure to meet its burden of demonstrating that the lead persons were supervisors, the Croft Metals, Inc. decision provides helpful guidance to employers seeking to exclude lead persons from bargaining units. For example, as the Board points out, lead persons who exercise independent judgment in managing their assigned teams, correcting improper performance, moving employees when necessary to do different tasks, and making decisions about the order in which work is to be performed likely "responsibly direct" under the Act.

Employers should evaluate their workforce and their job descriptions in light of the Board's new guidelines for the application of the terms "assign," "responsibly direct" and "independent judgment." A union attempting to organize a workplace may be proposing to represent a unit that includes workers who can now be successfully challenged as supervisors — a challenge which may make the difference between winning and losing an election. Alternatively, an employer who already has a union in place may be able to take steps to clarify the scope of the bargaining unit so as to exclude workers who fit within the definition of supervisor, thereby improving the management of its workforce. Finally, employers should review and update job descriptions to ensure that supervisory duties are clearly and adequately defined and fully address the Board's new guidelines. You may want to seek out legal counsel to assist you with all of the above strategies, actions and documentation so you can take advantage of the Board's important clarification of supervisory status under the Act.

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