The National Labor Relations Board (NLRB or Board) recently issued a decision that for the first time provides substantial guidance on how it will interpret the term “supervisor” under the National Labor Relations Act (the NLRA or Act). Oakwood Healthcare, Inc. 384 NLRB No. 37 (Sept. 29, 2006). Supervisors are not considered employees for the purposes of the Act and generally are excluded from collective bargaining units.

Section 2(11) of the Act defines a “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.

Pursuant to this definition, individuals are statutory supervisors if (1) they hold the authority to engage in any one of the 12 supervisory functions (e.g., “assign” and “responsibly to direct”) listed in Section 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.” Supervisory status may be shown if the putative supervisor has the authority either to perform a supervisory function or to effectively recommend the same. The burden to prove supervisory authority is on the party asserting it.

Over the years, the Board and the courts have struggled to apply this rather ambiguous definition of a supervisor. In particular, there has been confusion over three words and phrases: “assign,” “responsibly to direct” and “independent judgment.” In NLRB v. Kentucky River Community Care, 532 U.S. 706 (2001), the U.S. Supreme Court was critical of the Board’s approach to determining supervisory status in the health care industry. Thus, in Oakwood, the Board solicited comments from the parties and interested amici curiae on these and related issues. After considering the record, the Board developed the following standards.

The Meaning of “Assign”

According to the Board, “[t]he ordinary meaning of the term ‘assign’ is “to appoint to a post or duty.” Webster’s Third New International Dictionary 132 (1981). Because this function shares with other 2(11) functions – i.e., hire, transfer, suspension, layoff, recall, promotion, discharge, reward and discipline – the common trait of affecting a term or condition of employment, the NLRB construed the term “assign” to refer to “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.”

The Board held that “[i]n the health care setting, the term ‘assign’ encompasses the charge nurse’s responsibility to assign nurses and aides to particular patients. It follows that the decision or effective recommendation to affect one of these – place, time, or overall tasks-can be a supervisory function.”

The Board reasoned that “[t]he assignment of an employee to a certain department (e.g., housewares) or to a certain shift (e.g., night) or to certain significant overall tasks (e.g., restocking shelves) would generally qualify as ‘assign’ within our construction.” However, 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 the authority to “assign.” “To illustrate our point in the health care setting, 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. On the other hand, the charge nurse’s ordering an LPN to immediately give a sedative to a particular patient does not constitute an assignment.” In sum, “to ‘assign’ for purposes of Section 2(11) refers to the charge nurse’s designation of significant overall duties to an employee, not to the charge nurse’s ad hoc instruction that the employee perform a discrete task.”

The Meaning of “Responsibly to Direct”

The phrase “responsibly to direct” was added to Section 2(11) after the other supervisory functions of Section 2(11) already had been enumerated in the proposed legislation. According to the Board, “the addition was designed to ensure that the statutory exemption of Section 2(11) encompassed those individuals who exercise basic supervision but lack the authority or opportunity to carry out any of the other statutory supervisory functions (e.g., where promotional, disciplinary and similar functions are handled by a centralized human resources department).” Consequently, the authority “responsibly to direct” is not limited to department heads. The “department head” may be a person between the personnel manager and the rank and file employee, but he or she is not necessarily the only person between the manager and the employee. If a person on the shop floor has “men under him,” and if that person decides “what job shall be undertaken next or who shall do it,” that person is a supervisor, provided that the direction is both “responsible” (as explained below) and carried out with independent judgment.

Citing circuit court decisions, the Board held that for direction to be “responsible,” “the person directing and performing the oversight of the employee must be accountable for the performance of the task by the other, such that some adverse consequence may befall the one providing the oversight if the tasks performed by the employee are not performed properly.” Thus, “to 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.”

The Meaning of “Independent Judgment”

Consistent with the Supreme Court’s Kentucky River decision, the Board adopted an interpretation of the term “independent judgment” that applies irrespective of the Section 2(11) supervisory function implicated, and without regard to whether the judgment is exercised using professional or technical expertise. In short, professional or technical judgments involving the use of independent judgment are supervisory if they involve one of the 12 supervisory functions of Section 2(11). Thus, for example, “a registered nurse who makes the ‘professional judgment’ that a catheter needs to be changed may be performing a supervisory function when he/she responsibly directs a nursing assistant in the performance of that work. Whether the registered nurse is a 2(11) supervisor will depend on whether his or her responsible direction is performed with the degree of discretion required to reflect independent judgment.”

To ascertain the contours of “independent judgment,” the Board turned first to the ordinary meaning of the term. “Independent” means “not subject to control by others.” Webster’s Third New International Dictionary 1148 (1981). “Judgment” means “the action of judging; the mental or intellectual process of forming an opinion or evaluation by discerning and comparing.” Webster’s Third New International Dictionary 1223 (1981). Thus, the Board held that as a starting point, to exercise “independent judgment” “an individual must at minimum act, or effectively recommend action, free of the control of others and form an opinion or evaluation by discerning and comparing data.”

Consistent with the Supreme Court’s view, the Board found “that a 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, for example, a decision to staff a shift with a certain number of nurses would not involve independent judgment if it is determined by a fixed nurse-to-patient ratio. Similarly, if a collective-bargaining agreement required that only seniority be followed in making an assignment, that act of assignment would not be supervisory.”

On the other hand, the Board noted that the “mere existence of company policies does not eliminate independent judgment from decision-making if the policies allow for discretionary choices. Thus a registered nurse, when exercising his/her authority to recommend a person for hire, may be called upon to assess the applicants’ experience, ability, attitude, and character references, among other factors. If so, the nurse’s hiring recommendations likely involve the exercise of independent judgment.” Similarly, “if the registered nurse weighs the individualized condition and needs of a patient against the skills or special training of available nursing personnel, the nurse’s assignment involves the exercise of independent judgment.”

As stated above, Section 2(11) contrasts “independent judgment” with actions that are “of a merely routine or clerical nature.” This, according to the Board “provides a baseline for the degree of discretion required to render the exercise of any of the enumerated functions of 2(11) supervisory.” In the words of the Board, “[t]he authority to effect an assignment, for example, must be independent, it must involve a judgment, and the judgment must involve a degree of discretion that rises above the ‘routine or clerical.’ If there is only one obvious and self-evident choice (for example, assigning the one available nurse fluent in American Sign Language (ASL) to a patient dependent upon ASL for communicating), or if the assignment is made solely on the basis of equalizing workloads, then the assignment is routine or clerical in nature and does not implicate independent judgment, even if it is made free of the control of others and involves forming an opinion or evaluation by discerning and comparing data.” By contrast, the Board stated that “if the hospital has a policy that details how a charge nurse should respond in an emergency, but the charge nurse has the discretion to determine when an emergency exists or the authority to deviate from that policy based on the charge nurse’s assessment of the particular circumstances, those deviations, if material, would involve the exercise of independent judgment.”

Part-Time Supervisory Duties

According to the Board, “[w]here an individual is engaged a part of the time as a supervisor and the rest of the time as a unit employee, the legal standard for a supervisory determination is whether the individual spends a regular and substantial portion of his/her work time performing supervisory functions. ” Under the Board’s standard, “regular” means according to a pattern or schedule, as opposed to sporadic substitution. The Board has not adopted a strict numerical definition of substantiality and has found supervisory status where the individuals have served in a supervisory role for at least 10-15 percent of their total work time. The Board found no reason to depart from this established precedent.

Conclusion

Board members Liebman and Walsh, who dissented from the decision, predicted that these definitions will “create a new class of workers” who are excluded from the Act but do not exercise “genuine prerogatives of management.” Organized labor has asserted that the decision provides management with a “roadmap” on how to exclude employees from the protections of the Act. It is too early to tell whether this decision will result in any profound changes in labor management relations. Nevertheless, employers should review their unionized workforces to determine whether any employees could be reclassified as supervisors under the Oakwood standards.

Michael L. Stevens
202.857.6382
stevens.michael@arentfox.com