Court Opinion

ID: 6981976
Source: CourtListenerOpinion
Date Created: 2022-07-24 02:24:03.803495+00
Date Added: 2024-06-11T16:09:14.392355
License: Public Domain

TERENCE T. EVANS, Circuit Judge.
The line that separates employees who can unionize from supervisors who can’t is not always clear. This is particularly true for nurses in the health care field, whose duties and lines of responsibility can sometimes be fuzzy. Our case today concerns licensed practical nurses (LPNs) at a nursing home in Wisconsin. Are they just employees of the home or are they supervisors as that term is defined by the National Labor Relations Act (NLRA), 29 U.S.C. § 152(11)?
GranCare, Inc. operates a 282-bed nursing home in Bayside, Wisconsin, a suburb of Milwaukee. The home, which GranCare calls the Audubon Health Care Center, is divided into several units, the largest being a nursing department consisting of a director of nursing, an assistant director of nursing, 19 registered nurses (RNs), 38 LPNs, 90 certified nursing assistants (CNAs), and a handful of clerical employees we need not consider in our discussion.
At any nursing home, someone has to perform rather basic, though nevertheless important, tasks. Someone must help groom, feed, and toilet the residents and ■ change their bed linens. At Audubon, those tasks primarily fall to CNAs, the largest employee group, and everyone in this case agrees that they are not supervisors under the NLRA Above, and way above, the CNAs are Audubon’s LPNs and RNs. Everyone agrees that the RNs, 19 of them at Audubon, are supervisors under the NLRA But the rubber meets the road with the LPNs, who lie betwixt and between lowly CNAs and lofty RNs.
The differences between Audubon’s three levels of nursing department personnel are largely based on education and training: RNs have more of both, are paid more money, and have, within the pecking order of medical regulations, higher licenses. By virtue of their licenses, RNs can perform advanced tasks. For example, RNs can initiate IVs, and for LPNs that is verboten. RNs regularly attend meetings regarding Medicare staffing and rehabilitation, and they often interact with physicians. If nursing employees are absent, RNs are responsible for scheduling replacements. RNs, unlike LPNs, often work from supervisory offices for which they are given keys. RNs also perform evaluations of the CNAs and attend weekly management meetings with Gran-Care’s director of nursing. Aso, RNs are salaried and do not punch a time clock. CNAs and LPNs, on the other hand, are paid by the hour and punch time clocks to signal their arrival at and departure from work. During the evening hours, when few workers are on hand, a single “house supervisor RN” is in charge of the facility. This is compatible with Wisconsin law, which the parties tell us requires that an RN be present at the home at all times.
LPNs act as “charge nurses,” meaning they are expected to “take charge” by directing the CNAs, using discipline when necessary, and handling complaints. LPNs, according to GranCare, are told that “[t]he role of the Charge Nurse is more than passing meds and doing treatments. The Charge Nurse is a ‘management’ role in assisting the RN, supervision and direction of CNA’s, communicating with MD’s, team work with the CNA’s (i.e. feeding, answering lights, etc.).” Does this make GranCare’s LPNs “supervisors” under the NLRA? The answer to that question will resolve this case.
The Board interprets and applies an ambiguous definition of the term “supervisor” because that is what Congress supplied in 1947 when it removed certain employees from coverage under the NLRA A “supervisor,” starting in 1947, could no longer be in a *665union, and § 2(11) of the NLRA defined a supervisor as
any individual having 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.
29 U.S.C. § 152(11).
We discussed, fully, this definition— particularly its origin and purpose — in light of the overall scheme of the NLRA in N.L.R.B. v. Res-Care, Inc., 705 F.2d 1461, 1465-66 (1988). We need not repeat our observations in that case here, but we emphasize that what we said then is equally true today, 16 years later. We also recognize today, as we did in 1983, that when we review the Board’s application of its understanding of the term “supervisor” we are “in a gray area, where it is necessary to consider whether the balance of power and conflict of interest concerns that lie behind section 2(11) justify the Board’s finding.” Res-Care, 705 F.2d at 1466.
In interpreting § 2(11) the Board considers three questions, and each must be answered affirmatively if an employee is to be deemed a supervisor. First, does the employee have authority to engage in 1 of 12 listed activities? Second, does the exercise of that authority require “the use of independent judgment”? Third, does the employee hold the authority “in the interest of the employer”? Northcrest Nursing Home, 313 N.L.R.B. 491, 493, 1993 WL 513158 (1993).
In our case, the Board’s Regional Director found that GranCare’s LPNs were employees, not supervisors, because their assignment and direction of CNAs was not done in the interests of the employer. The Director then determined that the LPNs could be joined with the CNAs (and a few other employees not at issue here) into a potential bargaining unit, and he ordered a union representation election.
GranCare sought review of the Director’s decision, and while its petition was pending (but before the election) the Supreme Court decided NLRB v. Health Care & Retirement Corp. of America, 511 U.S. 571, 114 S.Ct. 1778, 128 L.Ed.2d 586 (1994) (HCR), which addressed the Board’s test for determining whether LPNs, acting as charge nurses, are supervisors. The Board’s position was, in all similar cases including ours, that a eharge nurse’s “supervisory activity is not exercised in the interest of the employer if it is incidental to the treatment of patients.” 511 U.S. at 576, 114 S.Ct. 1778. The Court rejected the Board’s position as a “strained interpretation” of the phrase “in the interest of the employer,” id. at 583, 114 S.Ct. 1778, and concluded that the four LPNs at issue — who were grouped with five to seven “staff nurses,” including RNs — exercised their authority “in the interest of the employer.” Because the Board sought to affirm its finding of nonsupervisory status only on the basis of its interpretation of that phrase, the LPNs in HCR were held to be supervisors under the NLRA.
The HCR decision prompted the Board to send our case (and others around the country) back for reconsideration. The Regional Director reopened proceedings and allowed additional evidence. He then issued a second decision reaffirming his conclusion that Gran-Care’s LPNs are not supervisors, this time holding that they did not exercise independent judgment in their assignment, direction, and discipline of the CNAs. The Board embraced the Director’s second view of the ease. GranCare disagreed and refused to bargain with the certified union, which caused the NLRB to petition for enforcement of its order that it do so.
It may be troubling to some that the Board, after HCR, switched gears and emphasized a different question (number 2, rather than 3, of the questions that must be affirmatively answered to find supervisory status) in concluding that GranCare’s LPNs were not supervisors. The Fourth Circuit recently observed that the Board’s decision to change its point of emphasis seems to be “based not on the three-pronged test of the Act but on a ‘policy bias.’ ” Beverly Enter*666prises, Virginia, Inc. v. N.L.R.B., 165 F.3d 290 (4th Cir.1999) (en banc). But we decline to look for sinister motives. It is not our task to conjecture about whether the Board has tried to do an end run around an unfavorable Supreme Court decision so it can broaden coverage under the Act. Instead, we must decide if the Board’s post-HCR reason for concluding that GranCare’s LPNs are not supervisors — because they do not exercise independent judgment, as the Board understands that term, in their assignment, direction, and discipline of the CNAs — is a reasonable conclusion to draw from the evidence. We are guided by several solid principles of law as we review this issue.
First, we apply a deferential standard of review to the Board’s determination because it rests, at least in part, on a factual finding. Res-Care, 705 F.2d at 1465. Second, unless we can fairly say that its view is “arbitrary [or] capricious” within the meaning of the Administrative Procedure Act (APA), we owe deference to the Board’s construction of the terms of the statute. See 5 U.S.C. § 706. And, more particularly, we owe the Board deference when it is involved in the construction of an ambiguous provision of a statute it must enforce. Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842-43, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). And the Supreme Court characterized the term “independent judgment” in the statute (§ 2(11)) as ambiguous in HCR, 511 U.S. at 579, 114 S.Ct. 1778.
On top of this, it is important to keep in mind that Congress, in enacting § 2(11), sought to distinguish between true supervisors, those vested with “genuine management prerogatives,” and other employees. NLRB v. Bell Aerospace Co., 416 U.S. 267, 281, 94 S.Ct. 1757, 40 L.Ed.2d 134 (1974). As regards nurses, we observed in Res-Care, Inc. that
although the nurses may have some supervisory authority, the “if’ clause in section 2(11) ... was intended to exclude from the definition of supervisor “straw bosses,” “lead men,” and other low-level employees having modest supervisory authority ... and the fact that these nurses are, if not full-fledged professionals, at least sub-professionals, indicates that their possession of some “supervisory” authority, loosely defined, need not prevent the Board from classifying them as employees rather than supervisors.
705 F.2d at 1466.
Finally, consistent with congressional intent, “the board has a duty to employees to be alert not to construe supervisory status too broadly because the employee who is deemed a supervisor is denied employee rights which the act is intended to protect.” Westinghouse Elec. Corp. v. N.L.R.B., 424 F.2d 1151, 1158 (7th Cir.1970). Accord Holly Farms Corp. v. NLRB, 517 U.S. 392, 116 S.Ct. 1396, 1401, 134 L.Ed.2d 593 (1996) (“administrators and reviewing courts must take care to assure that exemptions from NLRA coverage are not so expansively interpreted as to deny protection to workers the Act was designed to reach”).
In the aftermath of HCR, the Board announced that it would treat LPNs “the same as all other employee classifications and ... apply to them the same test as [it] applies] to all other employees.” Ten Broeck Commons, 320 N.L.R.B. 806, 810, 1996 WL 48265 (1996). The Board has also properly recognized, as we did in Res-Care, that it must take into consideration the fact that charge nurses are employees who, in their day-to-day work, exercise certain judgments which, even though advanced, are not necessarily supervisory in nature. See Providence Hospital, 320 N.L.R.B. 717, 1996 WL 46343 (1996). And as we observed in another of our cases:
The most important point that the Center overlooks in emphasizing the supervisory responsibilities of the charge nurses ... is that nurses are professionals and their exercise of supervision is guided by professional training and norms. The charge nurses in this case are registered nurses, who are highly trained and responsible. Supervision exercised in accordance with professional rather than business norms is not supervision within the meaning of the supervisor provision, for no issue of divided loyalties is raised when supervision is required to conform to professional stan*667dards rather than to the company’s profit-maximizing objectives.
Children’s Habilitation Center, Inc. v. N.L.R.B., 887 F.2d 130, 134 (7th Cir.1989).
In Children’s Habilitation, we also identified two other relevant factors to consider about nurses:
Our analysis of the Board’s determinations in Res-Care and in American Medical Services emphasized two considerations. They will continue to be our guiding lights in charge-nurse eases. The first is the ratio of supervisory to nonsu-pervisory employees under the competing positions of the parties; the second is the disciplinary authority of the alleged supervisors. The first consideration is central to the balance of power concern, the second to conflict of interest.
887 F.2d at 132.
GranCare cites several decisions of the Sixth Circuit, including Caremore, Inc. v. N.L.R.B., where that court, applying tests it developed, rejected Board findings of employee status for charge nurses. 129 F.3d 365 at 369-70 (1997). It asks us to “adopt the conclusions and rationale of the Sixth Circuit,” which are essentially the same as the Fourth Circuit’s view in Beverly Enterprises, Virginia and the Third Circuit’s opinion in Passavant Retirement & Health Center v. N.L.R.B., 149 F.3d 243 (1998). However, as we noted in Children’s Habili-tation, several Sixth Circuit’s cases are “in considerable but unacknowledged tension with our decisions in Res-Care” and other cases. 887 F.2d at 134. We also note that although the Supreme Court, in HCR, affirmed the result reached by the Sixth Circuit on the narrow “patient care” issue, it did not pass on the other tests used by that court. The traditional modes of analysis we used in Res-Care and Children’s Habilitation are, we think, still the best course to take. And our view of the global issue in this ease is consistent with the positions taken by the D.C., Eighth, and Ninth Circuits, see Beverly Enterprises-Massachusetts, Inc. v. N.L.R.B., 165 F.3d 960 (D.C.Cir.1999); Beverly Enterprises-Pennsylvania, Inc. v. N.L.R.B., 129 F.3d 1269 (D.C.Cir.1997); Beverly Enterprises, Minnesota, Inc. v. N.L.R.B., 148 F.3d 1042 (8th Cir.1998); and Providence Alaska Med. Ctr. v. N.L.R.B., 121 F.3d 548 (9th Cir.1997), and the views expressed by Judge Phillips in persuasive dissents to the Fourth Circuit opinions, Beverly Enterprises, Virginia and its companion, Beverly Enterprises, West Virginia, 165 F.3d 307 (4th Cir.1999).
Turning to our case, we noted early on that GranCare’s nursing department contained, in addition to a director and an assistant director, approximately 19 RNs, 38 LPNs, and 90 CNAs. Of these, it is conceded that 21 are supervisors and 90 are employees, with the 38 LPNs, acting as charge nurses, in the middle. If, as the Board found, the LPNs are not supervisors, the ratio of supervisors to nonsupervisors at the time of the election is a normal appearing 21 to 128. With that ratio, 14 percent of the nursing work force are supervisors. On the other hand, if the LPNs are supervisors, the ratio of supervisors to nonsupervisors becomes an unwieldy 59 to 90, a top-heavy setup that we think would be bizarre to say the least.
Such a highly improbable ratio of bosses to drones “raises a warning flag,” N.L.R.B. v. American Med. Servs., Inc., 705 F.2d 1472, 1473 (7th Cir.1983). As we stated in Res-Care, “[I]f the licensed practical nurses were classified as supervisors, almost one-third of the nursing home’s staff would be barred from the protections of the Act, and the Board could reasonably believe that the balance of power would shift too far toward the employer.” 705 F.2d at 1468. A similar finding in our case would be more drastic, leaving some 40 percent of GranCare’s care-giving work force outside the protection of the NLRA.
The concept of “independent judgment” under § 2(11) is, at its core, concerned with those who work at the margins of supervisory authority. The Board must draw a line separating the lowest level of true supervisors—those who are part of management’s team—from those valuable employees who are just on the other side of the line. Those just on the other side of the line are employees who exercise some authority but not *668enough to be considered more than part of the regular work force. See NLRB v. Bell Aerospace Co., 416 U.S. 267, 280-81, 94 S.Ct. 1757, 40 L.Ed.2d 134 (1974).
It seems that in comparable post-HCR LPN-as-supervisor cases around the country the Board is generally concluding that the supervisory authority typically exercised by LPNs over CNAs is not exercised with “independent judgment” as contemplated by § 2(11). Specifically, the Board has taken the position that the “judgment” of LPNs in exercising their incidental supervisory authority over CNAs is not the “independent judgment” concerned with management prerogatives contemplated by § 2(11). Rather, it is more properly viewed as “professional judgment” exercised in getting their assigned work done with the assistance of CNAs employed for that purpose. It seems to us that, given the nature of the LPN charge nurses’ primary work activity and incidental supervisory function in the classic pattern of these cases, the Board’s construction of “independent judgment” for application to them cannot be declared “arbitrary [or] capricious” under the APA. We think it is a permissible construction of an ambiguous term entitled to deference under Chevron.
The record before the Board supports the conclusion that although GranCare’s • LPNs have some assignment, scheduling, and disciplinary powers over CNAs, they exercise those powers in fairly routine, preordained ways. They act more like “straw bosses” than foremen. We cannot say that the Board’s understanding of the concept of “independent judgment” is arbitrary or capricious, or that the application of that understanding to GranCare’s LPNs as a . factual matter is without evidentiary support. The Board’s view also results, as we just noted, in a more realistic boss-to-worker ratio, which is further evidence of the merit of its interpretation of the concept of “independent judgment.” Because no other significant issues prevent enforcement of the NLRB’s order in this case, Enforcement is ordered.