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NLRB used wrong standard to find LPNs were not ‘supervisors’ under NLRA, gets another chance on remand

By Ronald Miller, J.D.

Finding that the NLRB applied a four-part statutory supervisor test squarely at odds with the Third Circuit’s 1999 controlling precedent outlined in NLRB v. Attleboro Associates, Ltd., the divided appeals court vacated an August 26, 2011, order of the Board and remanded for the Board to apply the correct legal test on the merits issue. Accordingly, the court order the Board to determine whether LPNs employed by a nursing home had the authority to effectively recommend discipline of others so as to qualify as statutory supervisors. Judge Greenaway filed a separate opinion concurring in part and dissenting in part (NLRB v. New Vista Nursing and Rehabilitation, LLC , August 29, 2017, Smith, D.).

Objections to bargaining unit. There are three levels of nursing staff at the employer’s nursing care facility: a “nursing supervisor” or “unit manager”; licensed practical nurses (LPNs); and certified nurse aides (CNAs). In January 2011, a union filed a petition to represent the LPNs. The Board approved the bargaining unit and ordered an election. Their employer, New Vista, objected to the bargaining unit because it claimed the LPNs were statutory supervisors under the NLRA’ definition at 29 U.S.C. § 152(11), arguing they had the “authority” to “discipline other employees or effectively recommend such action.” If they were supervisors, the LPNs would not have a statutory right to be represented in collective bargaining.

Test of supervisory status. To determine whether an individual is a supervisor, the Supreme Court had provided a three-part test, asking: (1) if the individual has authority to engage in any one of the 12 listed supervisory functions in Section 152(11); (2) whether the exercise of such authority requires the use of independent judgment; and (3) whether the authority was held “in the interest of the employer.” New Vista argued that its LPNs effectively had the power to discipline other employees because they submitted disciplinary forms that recommended discipline for CNAs.

Factual reports or recommending discipline? An NLRB regional director rejected New Vista’s argument and applied a four-part test based on a vacated NLRB decision. His conclusion rested heavily on his finding that LPNs simply reported factual findings to their supervisors, without any specific recommendation for disciplinary action, and the higher-ups then conducted an independent investigation. A majority of LPNs later voted to be represented by the union. After New Vista refused to bargain with the union, the NLRB granted summary judgment on the refusal-to-bargain charge against the employer. In an interim ruling, the Third Circuit determined that there were an insufficient number of Board members to muster a quorum under the Supreme Court’s ruling in New Process Steel, L.P. v. NLRB. Recess appointments were found to be invalid under NLRB v. Noel Canning.

Merits. Ultimately, the matter reached the Third Circuit for consideration of the merits of the Board’s order. Motions for reconsideration piled up in this case (the court even provided a chart), as New Vista repeatedly asked various incarnations of the Board to reexamine its ruling. While the appeals court decided all of those motions in the Board’s favor, it nevertheless concluded on the merits that the case must be remanded so the Board can apply an appropriate test to determine whether the LPNs have the authority to discipline other employees.

Are LPN’s supervisors? In its August 26, 2011, order, the Board had relied on evidence that management independently investigated the LPN’s written complaints and that few LPNs had submitted written complaints. Because Third Circuit case law holds that those are inappropriate factors on which to rely, the appeals court remanded for the Board to reconsider. The appeals court set out the legal factors the Board must follow on remand: (1) whether the employee has the discretion to take different actions, including verbal counseling or taking no formal action; (2) whether the employee’s action “initiates” the disciplinary action; and (3) whether the employee’s action functions like discipline because it increases severity of the consequences of a future rule violation.

On the other hand, the appeals court noted two factors from Attleboro that do not disprove supervisor status: (1) whether a nurse’s supervisor undertakes an independent investigation; and (2) whether the employees exercise their supervisory authority only a few times.

In this case, the Board had relied on a four-part test that conflicted with the above principles, deriving it from a vacated NLRB precedent requiring nurses’ recommendations be implemented without any independent investigation, and relying heavily on the fact that LPNs here did not frequently exercise their supervisory power. The Board applied the wrong legal standard, concluded the Third Circuit, and under controlling law, remand is appropriate where, as here, remand would not be futile. “Neither side has shown it is entitled to victory on the present record. On the one hand, the Board’s findings are almost entirely inapt because they are directed to the wrong test. On the other hand, New Vista’s entitlement to victory is unclear,” concluded the appeals court.

As a result the Third Circuit denied the Board’s petition for enforcement and granted New Vista’s cross-petitions for review, remanding to the Board to allow it to determine whether the LPNs have the authority to effectively recommend discipline under Attleboro.

Partial concurrence and partial dissent. In a separate opinion, Judge Greenaway disagreed with that portion of the majority’s opinion that said the Board applied the wrong legal standard to determine whether the LPNs were statutory supervisors. He argued that the majority opinion misconstrued the Third Circuit’s ruling in Mars Home for Youth v NLRB , misread Attleboro, and applied the wrong standard of review. Judge Greenaway argued that in finding that the LPNs were eligible to avail themselves of the protections of the NLRA, the Board took an approach previously sanctioned in Mars Home. He further argued that the majority incorrectly claimed that Attleboro rejected NLRB’s approach.