2006-20

NLRB Ruling Provides Guidance On Supervisory Status And Removes Certain Nurses From Coverage Of Federal Labor Law.

In Oakwood Healthcare Inc., 348 N.L.R.B. No. 37 (Sept. 29, 2006)(1), the National Labor Relations Board ("NLRB" or "Board") reversed the decision of the Acting Regional Director and ruled that registered nurses who served as charge nurses on a permanent basis were supervisors for the purposes of the National Labor Relations Act ("NLRA" or "Act"), but that "rotating" charge nurses and emergency room charge nurses were not supervisors. Further, the Board provided guidance on supervisory status by defining some of the supervisory functions of Section 2(11) of the NLRA.

In light of the Supreme Court's decision in NLRB v. Kentucky River Community Care, 532 U.S. 706 (2001), the Board sought to define the meaning of the terms "assign," "responsibility to direct," and "independent judgment" used in Section 2(11) of the NLRA. In this case, the employer, Oakwood Heritage Hospital, employed approximately 181 staff registered nurses who provided care to patients in 10 patient care units. Some of the nurses in the hospital served as charge nurses, who, in addition to having their own patient load, were also responsible for overseeing the patient care units, and assigning other nurses and staff to care for various patients. Nurses received an additional $1.50 per hour whenever they served as charge nurses. The hospital employed 12 permanent charge nurses, while other nurses took turns rotating into the charge nurse position. The petitioner sought to include all charge nurses in the petitioned for unit of registered nurses, while the employer argued that the charge nurses should be excluded on the basis that they are supervisors within the meaning of the NLRA because they use independent judgment in assigning and responsibly directing the other nurses and staff members. Initially, the Acting Regional Director found that none of the charge nurses were supervisors under the NLRA and thus should be included in the unit.

Section 2(11) of the NLRA defines a supervisor as an individual who has the authority to perform any of 12 tasks, using independent judgment, and in the interest of the employer. Those tasks include the authority to "assign" and "responsibly direct" employees. In defining the terms "assign," "responsibly direct," and "independent judgment," the Board "intentionally eschewed a results-oriented approach ... [and instead] analyzed the terms of the Act and derived definitions that ... best reflect the meanings intended by Congress ...."

After first stating that legislative history indicated that the terms "assign" and "responsibly direct" were not meant to be synonymous, the Board approached the definition of the term "assign." The Board stated that the term "assign" referred 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." Thus, at a hospital, the term included the responsibility of charge nurses to assign nurses and aides to particular patients. However, the Board clarified that in order for an assignment of an employee to qualify for the purposes of the NLRA, the assignment would have to include a certain department, shift or overall task, and not just the order in which previously determined tasks should be done. Using an example in the health care setting, the Board stated that "if a charge nurse designates an LPN [licensed practical nurse] to be the person who will regularly administer medications to a patient or 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."

The Board next moved to define the term "responsibly direct," adopting the definition outlined in Providence Hospital, 320 N.L.R.B. 717 (1996), which summarized past decisions by several courts of appeals. The Board determined 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, the Board stated that "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." Further, the Board stated the need for "the prospect of adverse consequences" if the employee directing work did not take the prescribed steps of ordering and disciplining the employee. "The directing employee will rightly understand that his interests, in seeing that a task is properly performed, are to some extent distinct from the interests of those under his direction. That is, in directing others, he will be carrying out the interests of management - disregarding, if necessary, employees' contrary interests."

Applying the definitions of "assign" and "responsibly direct" to the case, the Board determined that the duties of the charge nurses at the hospital did not constitute responsible direction, but did fall within the definition of "assign" for purposes of the NLRA. The Board explained that the charge nurses did not perform responsible direction because they did not have the authority to take corrective action for any errors by the other nurses or staff, nor was there any indication that the charge nurses were subject to discipline for the failure of the other staff members in performing the tasks assigned by the charge nurses. However, the Board found that the charge nurses did engage in assignment because the charge nurses assigned nurses to specific patients and gave significant overall tasks to the nurses and staff. Further, in the emergency room, charge nurses assigned nurses and staff to specific geographic locations within the emergency room, which designates "what will be the required work for an employee during the shift, thereby having a material effect on the employee's terms and conditions of employment." Having determined that the charge nurses held the authority to perform the supervisory task of assigning other employees, the Board then moved to determine whether the charge nurses exercised independent judgment in making those assignments.

With regards to "independent judgment," the Board took guidance from the decision in Kentucky River, where the "Court held that it is the degree of discretion involved in making the decision, not the kind of discretion exercised - whether professional, technical, or otherwise - that determines the existence of 'independent judgment' under Section 2(11)." (Italics in original.) Following the Court's decision, the Board focused on whether or not a judgment made by an employee was dictated by detailed instructions such as company rules, or the verbal instructions of a higher authority. The Board explained that "[i]f there is one obvious and self-evident choice, . . . 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."

Applying the definition of independent judgment to the case, the Board determined that in choosing among the members of the staff available on each shift, and matching the staff to specific patients, the charge nurses needed to make an "analysis of an available nurse's skill set and level of proficiency at performing certain tasks, and [apply] that analysis in matching that nurse to the condition and needs of a particular patient . . . ." Thus, the Board found that the level of discretion necessary to make such decisions required the charge nurses to exercise independent judgment as defined for the purposes of the NLRA. The Board noted that "where the charge nurse makes an assignment based upon the skill, experience, and temperature of other nursing personnel and on the acuity of the patients, that charge nurse has exercised the requisite discretion to make the assignment a supervisory function 'requiring the use of independent judgment.'"

Despite the ruling that some charge nurses qualified as supervisors, the Board reached a different conclusion with regards to charge nurses in emergency rooms and rotating charge nurses. The Board found that emergency room nurses did not exercise independent judgment because they merely assigned nurses and staff to specific geographic locations within the emergency room, and did not exhibit the degree of discretion used by other charge nurses in pairing patient needs with nurse skill levels. Further, rotating charge nurses did not qualify as supervisors because they did not have an established pattern or predictable schedule for performing duties as a charge nurse. Without the regular scheduling, the Board could not find that the rotating charge nurses spent a regular and substantial portion of their time performing supervisory functions. Thus, the Board ruled that emergency room charge nurses and rotating charge nurses should be included in the unit.

In their dissent, Members Liebman and Walsh argued that the majority's decision would create a "new class of workers under Federal labor law: workers who have neither the genuine prerogatives of management, nor the statutory rights of ordinary employees." They further argued that the majority's interpretation of "assign" "leads to treating 'minor supervisory employees' as statutory supervisors, a result Congress disclaimed." The dissent also disagreed with the majority's definition of "responsibly direct," arguing that the term should be reserved for "general supervisory authority delegated to the foremen overseeing an operational department and the accountability that goes with it . . . ." The dissent, however, agreed with the majority's test for "independent judgment" and pointed out that the issues of discretion created by the test could only be resolved on a case-by-case basis.

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In Case Handled By BRG&S, NLRB Rules That Employers May Prohibit Union Stickers and Buttons In Certain Areaase.

In W San Diego, 348 N.L.R.B. No. 243 (Sept. 24, 2006)(2), the NLRB found that an employer did not violate Section 8(a)(1) of the NLRA when it prohibited an employee from wearing a union button in public areas of the employer's hotel. The Board also found no violation when the employer prohibited an employee from wearing union stickers in the hotel kitchen. However, the Board did find that the employer violated Section 8(a)(1) when it prohibited an employee from wearing a union button in nonpublic areas of the hotel. The employer in this case was represented by BRG&S partner Matthew T. Wakefield.

The employer operates a 250-room hotel in San Diego and markets itself as a unique hotel experience referred to as "Wonderland." As part of the hotel's endeavor to provide a unique experience, the employer "commissions special uniforms for its public-contact employees in order to achieve a trendy, distinct, and chic look." In particular, the in-room dining servers ("IRD"), who deliver room service from the kitchen to the guest rooms, are required to wear a black t-shirt, black slacks, and a black apron. On July 10, 2004, Sergio Gonzalez, an IRD server, was wearing a union button which contained the phrase "JUSTICE NOW! JUSTICIA AHORA! H.E.R.E. LOCAL 30." Supervisor John Baker, upon noticing Gonzalez with the union button attached to his uniform, ordered Gonzalez to remove the button.

Affirming the administrative law judge's decision, a majority of the Board panel found that the employer had proved the necessary special circumstances to justify the supervisor's order for Gonzalez to remove the union button. The Board stated that although "[i]t is well established that employees have a statutorily-protected right to wear union insignia . . . [a]n employer may lawfully restrict the wearing of union insignia where 'special circumstances' justify the restriction." (Citations omitted). The Board noted that the employer in this case proved the existence of special circumstances because the "union button would have interfered with the Respondent's use of a particular IRD server uniform (professionally-designed all-black shirt, slacks, and apron) to create a special atmosphere for hotel customers." The Board differentiated the case from United Parcel Service, 312 N.L.R.B. 596 (1993) (finding that an employer's desire to present to the public an image of a neatly uniformed driver was not a special circumstance that justified the prohibition of wearing a union pin), because in United Parcel Service, the employer allowed other uniform adornments unrelated to the business, whereas the employer in this case allowed only a "W" pin which was directly related to the hotel. Member Liebman dissented from this portion of the Board's decision.

Despite finding that the prohibition against the union button in public areas was lawful, the Board further agreed with the administrative law judge's decision that the prohibition was unlawful when applied to Gonzalez wearing the button in nonpublic areas. The Board found that unlike instances when Gonzalez wore the button in public areas, the "union button worn by Gonzalez while he was in nonpublic areas of the hotel accordingly could not - and did not - interfere with the unique atmosphere that the respondent sought to create for hotel guests." Rejecting the employer's contention that it would be impractical to allow Gonzalez to wear the button in nonpublic areas while prohibiting the button in public areas, the Board stated that "simply removing a button - without any other alteration in employee uniform or appearance required - does not seem to present a barrier of impracticability . . . [and] the mere hypothetical impracticability of detaching a removable union insignia when moving between areas [does] not justify a blanket, property-wide prohibition."

The Board then turned to another, similar, incident when a hotel cook, Katie Grebow, was told to remove union stickers from her uniform because they violated the hotel's attire policy. The administrative law judge rejected the employer's contentions that the stickers presented health concerns because of the danger that they would fall into the food, noting that "the Respondent had not introduced governmental regulations addressing stickers on clothing, that the Respondent allowed kitchen employees to keep personal items (including cigarettes) in unbuttoned shirt pockets, and that the Respondent officials mentioned only its attire policy, not health concerns, when they ordered Grebow to remove the stickers." Contrary to the judge's findings, the Board found no violation on the part of the employer because the danger that stickers may fall into the food did constitute special circumstances justifying sticker prohibition. The Board conducted a balancing-of-interests test, noting that "the allegation here is that the prohibition was unlawful because its adverse impact on Grebow's statutory rights outweighed the legitimate management concerns it served . . . [and thus] [a]ll of the legitimate management concerns served by the prohibition, not just those cited to Grebow, are relevant . . . ." Applying the balancing-of-interests test, the Board found that "[w]hile the Respondent did not introduce governmental regulations specifically addressing stickers on clothing, this does not alter the fact that foreign objects in food preparation areas pose a contamination risk for which the Respondent is held responsible."

In partial dissent, Chairman Battista argued that the employer did not violate Section 8(1)(a) by applying a property-wide ban of Gonzalez's union button because the employer had sufficiently proved special circumstances. Chairman Battista stated that it was impractical to limit the prohibition to public areas because "[i]n order to ensure that Gonzalez adhered to this 'on-again, off-again' regiment, the Respondent would have to virtually follow him around. The burden on the Respondent [in such a case] is obviously a substantial one. I would not require such federal micro-management of this Respondent's business."

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Employee Cannot Proceed With California Family Rights Act Claim When There Are Legitimate Nondiscriminatory Reasons For Termination.

In Neisendorf v. Levi Strauss & Co., 2006 DJDAR 13215 (Cal. App. Aug. 29, 2006) (ordered published Sept. 28, 2006)(3), the state Court of Appeal found that an employee cannot proceed with a claim under the California Family Rights Act ("CFRA") when she is legitimately terminated for nondiscriminatory reasons. The court further ruled that the former employee was not entitled to certain bonus payments because she was terminated before she became eligible for the bonus payments.

On September 26, 2000, Barbara Neisendorf accepted an offer to become the Vice President, Worldwide Training and Development at Levi Strauss & Co. ("Levi Strauss"). However, within the first two years of her employment at Levi Strauss, Neisendorf's direct supervisor, Fred Paulenich, and several of Neisendorf's subordinates voiced concerns about her performance. Neisendorf's performance deficiencies were discussed during a mid-year review in July 2002 where Paulenich noted that Neisendorf was "self-serving, upward-serving; not supportive; mistrust; lack of sincerity/genuineness; controlling . . . ." However, Neisendorf refused to acknowledge her deficiencies, and instead placed the blame on Paulenich and others. After several meetings in which Paulenich attempted to convince Neisendorf to develop a plan to address her performance issues, Neisendorf offered to resign and requested a severance package of approximately $1.7 million. When Levi Strauss determined that she was not eligible for a severance package, Neisendorf took a four-week disability leave for neurodermatitis, irritable bowel and muscle spasm, and was later also diagnosed with a panic disorder. Levi Strauss then notified Neisendorf of her rights and obligations under the CFRA and Family and Medical Leave Act ("FMLA").

After extending her leave for four more weeks, Neisendorf was medically cleared to return to work provided that she was given certain accommodations, including: (1) hiring a neutral external job coach; (2) a job redesign for one to three months during which Neisendorf could have a 40-hour work week, time off to complete treatment, and would not be required to execute or witness employee terminations; and (3) a reporting relationship to someone other than Paulenich for three months or more. Although Levi Strauss stated that it did not believe that Neisendorf was disabled, the company worked with a return-to-work specialist to negotiate accommodations that would be acceptable to both sides. In addition, Levi Strauss informed Neisendorf that "her successful return to her former position was conditioned on her willingness to accept and address the performance deficiencies set forth in the midyear performance review." Despite efforts to address Neisendorf's past performance issues, the two sides could not come to an agreement, which led Levi Strauss to terminate Neisendorf's employment on November 26, 2002.

Following her termination, Neisendorf sued Levi Strauss, pleading numerous causes of action. Eventually, the claims that were submitted to the jury rested on two theories: "(1) that LS&Co.'s decision to terminate her employment was motivated by disability discrimination in violation of the FEHA; and (2) that LS&Co.'s decision to terminate her employment was in retaliation for taking medical leave under the CFRA." By special verdict, the jury returned a verdict in favor of Levi Strauss, finding that Neisendorf was not terminated in retaliation for having taken medical leave, and that she was not a disabled person entitled to FEHA protection. Neisendorf did not challenge the jury's verdict and instead appealed two rulings made by the trial court, claiming that the court erred in dismissing her cause of action for violation of the CFRA and that the court erred in ruling that she was not entitled to certain bonus payments.

The Court of Appeal affirmed the trial court's ruling that Neisendorf had received all of the substantive protections that she was entitled to under the CFRA. The court agreed with the trial court's finding that "[t]he plaintiff had no basis to proceed under the CFRA because she - when she was ready to return to work, it was on condition that certain accommodations be met, and that that's what took the time that brought - that put her beyond the 12 weeks was the discussions regarding accommodations." The court was unconvinced by Neisendorf's appeal that she should be allowed to pursue her CFRA claim, stating that "Neisendorf has difficulty articulating exactly what type of claim was at issue in the case, and persuading us that a jury question was presented on the challenged issue." The court stated that under the CFRA, Levi Strauss had no obligation to provide accommodations to Neisendorf in order to allow her to return to work within the 12 week period. Nevertheless, after being on medical leave for 14 weeks, Levi Strauss did agree to certain accommodations and Neisendorf was reinstated. The court noted that "prior to Neisendorf's departure on CFRA medical leave, she had well-documented performance issues, which preceded her alleged disability . . . Her employment was promptly terminated the day she returned to work when it became clear that she still could not commit to working on the unacknowledged performance issues." In an effort to address Neisendorf's claims that the trial court had "mischaracterized" her CFRA claim, the court liberally quoted Neisendorf's reply brief, but eventually concluded that "[i]n attempting to generate some sort of jury question under the CFRA, Neisendorf cannot overcome the legitimate, nondiscriminatory reason for LS&Co.'s decision to terminate her employment."

The appellate court then turned to Neisendorf's second claim that she was entitled to bonus payments under Levi Strauss' "Annual Incentive Plan" ("AIP") and "Leadership Shares Plan." Both bonus plans required that the employee be an "active employee of the company on the payment date in order to receive payment." Therefore, the trial court had ruled that because Neisendorf was terminated well before the bonus payout dates, she was not entitled to bonus payment. While Neisendorf did not dispute the trial court's conclusion, she argued that "the bonus plans' requirement that she 'remain employed until an unspecified, discretionary future payment date' is unenforceable, because the public policy inherent in the Labor Code section 200 requires certainty in wage provisions." The Court of Appeal disagreed, stating that no promise had been made to Neisendorf that she would earn the bonuses simply by working for Levi Strauss, and that the clear language of both bonus plans required that she be employed with Levi Strauss on the payout date. Because Neisendorf was terminated for poor performance before the date of the payouts, she was not entitled to the bonus payments.

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Employer Cannot Compel Arbitration Of Employee's Wage Claims Which Do Not Arise Under Collective-Bargaining Agreement.s.

In Zavala v. Scott Brothers Dairy, Inc., 2006 DJDAR 13130 (Cal.App. Sept. 28, 2006)(4), the California Court of Appeal found that an employer could not compel arbitration under the collective bargaining agreement because the employee's wage claims were based on statutory rights, not rights arising out of the collective-bargaining agreement ("CBA").

Robert Zavala and a class of employees filed a class action lawsuit against Scott Brothers Dairy, Inc. ("Dairy"), asserting two wage claims under the Labor Code and wage orders issued by the Industrial Welfare Commission ("IWC") concerning itemized wage-statements and rest periods. Zavala alleged that Dairy failed to provide him with statutory rest breaks of at least 10 minutes per four hours worked, failed to pay him one hour of pay for each workday that rest periods were not provided, and failed to provide properly itemized wage-statements in violation of Labor Code sections 226 and 226.7 and IWC wage orders. Dairy moved to compel arbitration, arguing that its employees were represented by the Chino Valley Products Dairy and Teamsters Local Number 62 ("Union") and that the CBA set out a grievance procedure that culminated in final and binding arbitration. Dairy further argued that the Union had already filed a grievance addressing this same issue on behalf of its members, including the plaintiffs, and that the parties had resolved the grievance. The trial court denied Dairy's motion to compel arbitration, ruling that Zavala had the right to pursue his rights in court because those rights did not arise out of the CBA.

Dairy argued that because the plaintiffs were represented by the Union, which had agreed to the CBA with an arbitration clause, any disputes concerning plaintiffs' employment were disputes that arose under the CBA and should be arbitrated. However, the court found that "regardless of whether the CBA includes a broad arbitration provision, that clause is not binding on plaintiffs because the Union could not waive plaintiffs' right to bring statutory labor-rights claims in court and because such claims did not arise under the CBA." The court pointed to the United States Supreme Court's decision in Barrentine v. Arkansas-Best Freight System, 450 U.S. 728 (1981), where the Court determined that "employees could bring their statutory wage claims under the Fair Labor Standards Act in federal court, notwithstanding their prior submission of the same claims to mandatory grievance procedures pursuant to their collective-bargaining agreement." The Court in Barrentine upheld the right of the employees to bring their claims to federal court because the claims were based on rights arising out of a statute, as opposed to a collective-bargaining agreement. The Court stated that statutory rights "are independent of the collective-bargaining process. They devolve on petitioners as individual workers, not as members of a collective organization." Along with Barrentine, the Court of Appeal also cited similar decisions in Valles v. Ivy Hill Corp., 410 F.3d 1071 (9th Cir. 2005), and Cicairos v. Summit Logistics, Inc., 133 Cal.App.4th 949 (2005), to reach the conclusion that although "the parties could resolve the statutory rights violations through arbitration, . . . plaintiffs did not agree to arbitrate their statutory labor claims and the Union could not waive these rights guaranteed to them as individuals."

The court also found that the plaintiffs were not precluded from bringing their claims to court by fact that the Union had already brought a grievance addressing the same issue under the CBA. The court explained that "courts have repeatedly held that the prior submission of certain statutory claims to final and binding arbitration does not bar a subsequent lawsuit where the employees have not waived their statutorily protected rights to a judicial resolution."

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1. Opinion by Chairman Battista, joined by Members Schaumber and Kirsanow. Dissent by Members Liebman and Walsh.

2. Decided by Chairman Battista and Members Liebman and Schaumber.

3. Opinion by Ruvolo, P.J., joined by Reardon and Rivera, JJ.

4. Opinion by Aldrich, J., joined by Croskey, Acting P.J., and Kitching, J.