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Eleventh Circuit Tosses NLRB's Finding on "Supervisor" Status

Client Bulletin #481
October 17, 2012

For a printer-friendly copy, click here.

In recent years, the National Labor Relations Board has been aggressively seeking to narrow the interpretation of "supervisor" in an effort to expand the opportunities for unions to organize "employees," who, by definition under the National Labor Relations Act, are not "supervisors." The U.S. Court of Appeals for the Eleventh Circuit recently refused to enforce a Board decision against Lakeland Health Care Associates, LLC, a long-term care facility, which had contested a Board election and certification of a bargaining unit of Licensed Practical Nurses. The Eleventh Circuit, in a 2-1 decision, found that the Board had "meticulously excluded or disregarded" evidence that the LPNs were supervisors. Because the Board lacked substantial evidence to support its conclusion that the LPNs were employees rather than supervisors, the court found that the Board had improperly certified a local of the United Food and Commercial Workers union as the LPNs' representative.

The Act's Definition of Supervisor

Under Section 2(11) of the NLRA, a supervisor is

… any individual having authority, 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.

Background

The UFCW already represented the Certified Nursing Assistants at Lakeland and then attempted to organize the LPNs. Lakeland challenged the attempt, arguing that the LPNs had supervisory authority over the CNAs and responsibly directed and assigned their work. Therefore, Lakeland argued, the LPNs were "supervisors," not "employees," under the NLRA, and the proposed bargaining unit of supervisors was not an appropriate unit for an election. The Union disagreed. The Board's Regional Director ordered a unit hearing on the issue and ultimately agreed with the Union. The Regional Director ordered an election in the LPN unit, and the Union won. Lakeland requested that the NLRB review the Regional Director's decision about the LPNs' supervisory status, but the Board declined to do so. Lakeland refused to bargain with the Union, and Lakeland and the NLRB both filed petitions asking to have the case heard by the Eleventh Circuit.

The Case Crossfire

In the pre-election hearing at the Region level, Lakeland had argued and shown, in some instances with uncontradicted evidence, that the LPNs had some supervisory responsibilities, although they were exercised only intermittently, and that the LPNs responsibly directed and assigned the work of the CNAs.

Citing NLRB v. Health Care & Ret. Corp., the Eleventh Circuit's two-judge majority, Judges Gerald B. Tjoflat and Paul C. Huck, applied the commonly-used standard that an individual is a "supervisor" for NLRA purposes if "(1) he or she has the authority to perform one of the twelve supervisory functions described in the statute; (2) the exercise of that authority requires the use of independent judgment; and (3) such authority is held in the interest of the employer."

Lakeland contended that the evidence clearly showed (1) that LPNs had authority to discipline, suspend, and effectively recommend termination of CNAs, and (2) that the exercise of that authority required the use of independent judgment. It also contended that the LPNs responsibly directed and assigned the work of CNAs. The Board's General Counsel, of course, contended otherwise. (There was no dispute that the LPNs' activity was in the interest of Lakeland.)

Judges Tjoflat and Huck found that there was clear, undisputed evidence that Lakeland had a two-level progressive discipline system for its CNAs and that the LPNs had the authority to give coaching and make judgments with respect to conduct by CNAs that could result in discipline. The LPNs had authority to initiate and implement coaching with respect to certain serious offenses, and they had the authority to recommend suspension and termination. The court found that the frequency of exercise of the authority was not the determining factor and faulted the Board for basing its conclusions on the exercise of supervisory authority rather than the presence of such authority. The majority said, "The frequency with which an employee exercises disciplinary authority – authority that, in an ideal workplace, will be exercised infrequently or sparingly – cannot be determinative of the existence of supervisory authority."

The majority, again based in part on undisputed evidence, also rejected the Board's argument that the LPNs merely reported misconduct that they saw and did not exercise "independent judgment" about the conduct. According to the majority, LPNs had "the discretionary authority to determine whether formal discipline [was] warranted in the first place" and were required to exercise judgment about possible offenses.

Finally, the court found that the LPNs' supervisory status was not affected by the fact that no LPN had ever been actually disciplined for failure to direct or supervise a CNA. According to the majority, a supervisor "responsibly" directs or assigns work when the supervisor faces the prospect of adverse consequences for failing to exercise proper supervision. It is not necessary for the employer to show that a supervisor was, in fact, disciplined.

In dissent, Judge William H. Pryor argued that the court was improperly "reweighing the evidence." Noting that there was some evidence supporting the Board's conclusions, Judge Pryor asserted that the Board was entitled to draw reasonable inferences from the evidence and said that he would have enforced the Board's decision.

But Judges Tjoflat and Huck contended that they had applied the proper standard for review: "[T]his is not a case in which we merely disagree with the Board's conclusions. Our review of the record as a whole reveals that the Board meticulously excluded or disregarded record evidence, which, when taken into account, compels a different result."

The Future: More Appeals Court Activity?

Given the continuing and possibly accelerating leftward tilt of the Board and the Regions, we expect an increasing number of petitions to the U.S. Courts of Appeal for review of the Board's expansive interpretations of the NLRA. Employers can be expected to resist and challenge any Board efforts to "meticulously exclude or disregard" evidence. Supervisory status was the issue central to the Lakeland case -- and it is a big issue -- but other areas where the Board positions are vulnerable to court challenge include social media policies, non-unionized workplaces, employee rules, and employment-at-will and other statements in employee handbooks and policy manuals.

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