October 12, 2006 / Issue No. 2-06
 
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MIDYEAR MEETING
Gulf Coast Labor Supply Discussed at Joint Meeting of Open Shop and Workforce Development Committees
Laborers President Shares Views and Information at Union Contractors Committee Meeting
LABOR LAW
The NLRB Redefines Supervisory Status
Contractor Must Arbitrate Grievance Caused by Overlapping Jurisdiction
IMMIGRATION
DHS Steps Up Immigration Enforcement; AGC Offers New Compliance Assistance Tool
HR PRACTICES
Employer May Reduce Bonus of Employee Who Took FMLA Leave
DOL Launches eLaws Advisor on Health Benefit Laws

  The NLRB Redefines Supervisory Status

The National Labor Relations Board (NLRB) has handed down long-awaited decisions in three cases concerning whether certain employees are considered “supervisors” under the National Labor Relations Act.

The Board sought to “refine the analysis to be applied in assessing supervisory status” in light of criticisms made by the Supreme Court in the 2001 Kentucky River case.  Supervisory status under the Act is important for various reasons.  It determines, for example, who may vote in an election for union representation, who is covered by a collective bargaining agreement, and whose actions may be attributed as actions of the employer.

Section 2(11) of 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.

The Supreme Court has explained that individuals are statutory supervisors if:  (1) they have authority to perform at least one of the 12 supervisory functions listed in §2(11); (2) their “exercise of such authority is not of a merely routine or clerical nature, but requires the use of independent judgment;” and (3) their authority is held “in the interest of the employer.” 

The central issue in the present cases was whether certain classes of employees had authority to “assign” or “responsibly to direct,” and, if so, whether exercise of that authority required the use of “independent judgment” as those terms are used in §2(11).  In the first case, Oakwood Health Care, Inc., the Board established new definitions for the terms.  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.”  The Board further clarified that “assign” refers to the “designation of significant overall duties to an employee, not to the . . . ad hoc instruction that the employee perform a discrete task.” 

In defining the term “responsibly to direct,” the Board focused on the necessity of accountability, explaining:

[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 work and the authority to take corrective action, if necessary.  It also must be shown that there is a prospect of adverse consequences for the putative supervisor if he/she does not take these steps.

In defining the term “independent judgment,” the Board was mindful of the Supreme Court’s holding that “it is the degree of discretion involved in making the decision, not the kind of discretion exercised – whether professional, technical, or otherwise” that matters.   The Board found that the judgment exercised must not be “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.”  However, the mere existence of company policies does not eliminate independent judgment, provided that the policies allow for discretionary choices.  Further, as referenced in §2(11), the degree of discretion exercised must rise above the “routine or clerical.”

While none of the three cases involved the construction industry – two involved nurses in health-care institutions and the third involved lead persons in a manufacturing facility – they have potentially broad implications in the industry, especially with regard to “working foremen” and other employees who oversee the work of less skilled workers but also perform manual labor themselves.  The case brought in a manufacturing context, Croft Metals, Inc., entailed facts most like those that might arise in a construction context.  The Board there found insufficient evidence that the lead persons had authority to “assign” as defined in Oakwood Healthcare.  Although the lead persons occasionally switch tasks among employees on their lines or crew during a shift, they do not designate “significant overall duties to an employee.”  And, while they sometimes direct employees to ensure projects are completed on time, they mostly work alongside their regular line or crew members, and fill in wherever needed.  The Board did find sufficient evidence to show that the lead persons “responsibly direct” other workers, noting that the lead persons are required to manage their assigned teams, to correct improper performance, to move employees around as needed, and to decide the order in which work was to be performed in order to achieve production goals.  Furthermore, lead persons have been disciplined for the shortcomings of their crews, such as their failure to meet production goals.  However, the Board found only “sparse evidence” that the lead persons used “independent judgment” in exercising such “responsible direction.”  The discretion exercised by lead persons was often controlled by pre-established guidelines, such as delivery schedules, or was simply routine.  Accordingly, the Board found that the lead persons were not “supervisors” under the Act.

The actual impact of the rulings in construction remains to be seen.  For nonunion employers, the issue of who is a supervisor most often arises in the context of a formal union organizing campaign, with regard to which employees may vote in the election.  However, such “bottom-up” organizing activities are less common in the construction industry than in other industries due to the availability of pre-hire agreements and other reasons.  For union employers, the issue most often arises with regard to which employees are covered by the terms of a collective bargaining agreement.  In the construction industry, though, many collective bargaining agreements expressly cover foremen and other types of workers that might be deemed statutory supervisors, so those workers must continue to be treated as part of the bargaining unit unless and until properly removed through collective bargaining negotiations or a unit clarification petition.  Concerned contractors are well-advised to review the job descriptions and actual duties of relevant employees to determine whether or not they are statutory supervisors and to consult experienced construction labor counsel as needed.

Oakwood Healthcare, Inc., 348 NLRB No. 37 (9/29/06); Croft Metals, Inc., 348 NLRB No. 38 (9/29/06); Beverly Enterprises-Minnesota, Inc., 348 NLRB No. 39 (9/29/06). [ return to top ]