United States: NLRB Issues New Interpretation Of Supervisory Status

The National Labor Relations Board ("Board") recently issued a long-awaited decision in Oakwood Healthcare Inc., 348 N.L.R.B. No. 37 (2006), which clarifies and further defines the term "supervisor" under Section 2(11) of the National Labor Relations Act ("Act"). This decision is important to both union and non-union employers since under the Act, supervisors generally cannot be included in a bargaining unit or a union.

Section 2(11) of the Act defines who is a supervisor. To be a supervisor under Section 2(11), an employee must have authority to do at least one of 12 specifically enumerated tasks: hire, transfer, suspend, lay off, recall, promote, discharge, assign, reward, discipline, responsibly direct (employees) or adjust employee grievances. An employee may also be a supervisor if the employee has the authority to effectively recommend any of these actions. However, performance of these tasks must be done: (1) in the interest of the employer, and (2) using independent judgment.

The Board’s historic interpretation of "independent judgment" excluded any employee who used "ordinary professional or technical judgment in directing less skilled employees to deliver services," even where the purported supervisor exercised substantial discretion in directing employees. The United States Supreme Court criticized the Board’s interpretation of "independent judgment" in NLRB v. Kentucky River Community Care, 532 U.S. 706 (2001). According to the Court, the Board should have examined the degree of discretion exercised by the purported supervisor rather than the kind of discretion―whether professional, technical, or otherwise. Thus, the Supreme Court ordered the Board to reexamine the meaning of "independent judgment."

After five years, the Board has now issued a new interpretation of what it means to assign employees, responsibly direct other employees, and use independent judgment.

First, the Board interpreted "assign" as 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." However, the Board limited this interpretation by stating that "choosing the order in which the employee will perform discrete tasks within those assignments (e.g., restocking toasters before coffeemakers) would not be indicative of exercising authority to assign."

In Oakwood, a health care setting, the Board held that "assign" encompasses a charge nurse’s responsibility to assign nurses or nursing aides to particular patients, but a charge nurse’s individual instruction to immediately give medication to a particular patient does not meet this definition.

Next, the Board interpreted what "responsibly direct" means. The Board said that if a person on the shop floor has employees "under him" and if that person decides "what job shall be undertaken next or who shall do it," then that person is a supervisor if the direction is both responsible and carried out with independent judgment. For direction to be "responsible," the purported supervisor must have the authority to direct the work and take corrective action if necessary. Additionally, the person directing the work must be accountable for the performance of the task by an employee. The possibility of negative consequences for a supervisor’s failure to ensure performance of the task by those under him must go beyond a mere poor performance evaluation.

The Board also redefined what "independent judgment" means. The Board held that "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." Thus, if a purported supervisor follows any type of detailed instructions in making decisions rather than using his or her discretion, the Board is unlikely to find that independent judgment exists.

These new interpretations by the Board may impact both union and non-union employers. In the union context, some employees who are currently in a bargaining unit may now be viewed as supervisors under the Act. For example, if an employer currently has lead people or foremen in the bargaining unit, those employees might now be supervisors. Depending upon the terms of the labor agreement, an employer may be able to remove employees who are now supervisors under the Board’s new interpretation using a unit clarification process, or may have to wait until the expiration of the labor agreement to remove supervisors from the bargaining unit. Additionally, if an employer’s lead people are reclassified as supervisors, but the employer wants those new supervisors to continue to do bargaining unit work, then there may be a bargaining obligation to make necessary changes in the labor agreement to allow supervisors to perform bargaining unit work.

In the non-union context, the Board’s new interpretation makes it even more crucial for an employer faced with a union petition or organizing activity to accurately analyze who among its employees are supervisors, both to determine which employees are eligible voters and to avoid unfair labor practice charges by misclassifying or improperly disciplining an employee. It is also important to understand how the Board’s clarification of the term "supervisor" may affect an employer’s strategy to remain union free.

The Board’s most recent ruling on supervisory status has the potential to have substantial impact on some employers. If you have questions about how your company might be affected, please contact author Mike Moberg at mmoberg@briggs.com or another member of the firm's labor and employment group, such as John Hauge (jhauge@briggs.com) or Daniel Wachtler (dwachtler@briggs.com).

This publication is circulated to bring useful and timely information to our clients and colleagues. The publication is for general information purposes only and is not legal advice. You should not rely on any information or views contained in the publication in evaluating any specific legal issues you may have. Please consult your Briggs and Morgan attorney for specific legal advice.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.