Bargaining unit under the National Labor Relations Act

Author: LegalEase Solutions 

RESEARCH FINDINGS

 What are the criteria for excluding employees in the managerial and confidential categories from a bargaining unit under the National Labor Relations Act?

In N.L.R.B. v. Yeshiva Univ., 444 U.S. 672 (1980),  the Court held that the “[p]rimary authority to resolve the conflicts related to employees and to adapt the Act to the changing patterns of industrial relations [is] entrusted to the Board, not to the judiciary.” Id. 444 U.S. at 692 (citing NLRB v. Weingarten, Inc., 420 U.S. 251 (1975)).  The Court also opined that “the function of striking [a] balance to effectuate national labor policy is often a difficult and delicate responsibility, which the Congress committed primarily to the National Labor Relations Board, subject to limited judicial review.” Id. at 693. Furthermore, according to the Supreme Court, “the NLRB possesses the widest possible discretion in determining the appropriate bargaining unit.” Sandvik Rock Tools, Inc. v. N.L.R.B., 194 F.3d 531, 534 (4th Cir. 1999) (citing Arcadian Shores, Inc. v. NLRB, 580 F.2d 118, 119 (4th Cir.1978).

Confidential employee

In N.L.R.B. v. Meenan Oil Co., L.P., 139 F.3d 311(2d Cir. 1998), the Second Circuit reaffirmed that “[t]he Board excludes from collective-bargaining units individuals who fit the definition of “confidential employees.” Id. at 317 (quoting NLRB v. Hendricks County Rural Elec. Membership Corp., 454 U.S. 170, 189, (1981)).  “Status as a confidential employee is a question of fact[,]” that a court reviewing “the Board’s determination” will review “under the deferential standard of substantial evidence.” Id. (citing NLRB v. Case Corp., 995 F.2d 700, 705 (7th Cir.1993)). “‘Substantial evidence’” is no more than ‘such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.’” Id. (quoting American Textile Mfrs. Inst., Inc. v. Donovan, 452 U.S. 490, 522 (1981)).

The Supreme Court has identified two categories of confidential employees who are excluded from the NLRA’s protection:

(i) employees who ‘assist and act in a confidential capacity to persons who formulate, determine, and effectuate management policies in the field of labor relations,’ and (ii) employees who ‘regularly have access to confidential information concerning anticipated changes which may result from collective-bargaining negotiations[.]’

Id. (quoting Hendricks County, 454 U.S. at 189).

“There are arguably some confidential aspects to many employment relationships, but the Board (for that reason) hews strictly to a narrow definition of a confidential employee.” Id. (citing NLRB v. Los Angeles New Hosp., 640 F.2d 1017, 1023 (9th Cir.1981)). “For this purpose, a confidential employee is one who has access to confidential information that is labor-related.” Id. “In Hendricks County, the Supreme Court approved the Board’s use of this ‘labor nexus’ test; so employees who have access to confidential business information are not for that reason excludible from collective-bargaining units.” Id. (citing Hendricks County, 454 U.S. at 190-91). “The Board looks to ‘the confidentiality of the relationship between the employee and persons who exercise managerial functions in the field of labor relations.’” Id. (quoting Ernst & Ernst National Warehouse, 228 NLRB 590, 591 (1977)). “Moreover, the confidential labor-related information available to the employee must be information that is not already known to the union or in the process of being disclosed to it.” Id. (citing The Bakersfield Californian, 316 NLRB 1211, 1212 (1995)).

“The rationale for the exclusion of confidential employees (as so defined) is that management should not be forced to negotiate with a union that includes employees ‘who in the normal performance of their duties may obtain advance information of the [c]ompany’s position with regard to contract negotiations, the disposition of grievances,  and other labor relations matters.’” Id. at 317-18 (quoting Hendricks County, 454 U.S. at 179); see also, Hoover Co., 55 NLRB 1321, 1323 (1944). Moreover, “the term ‘confidential’ . . . embrace[s] only those employees who assist and act in a confidential capacity to person who exercise ‘managerial’ functions in the field of labor relations.” Prudential Ins. Co. of Am. v. N.L.R.B., 832 F.2d 857, 860 (4th Cir. 1987) (quoting Hendricks, 454 U.S. at 177). Thus, “[a]n individual who routinely sees data which would enable the union to predict, understand or evaluate the bargaining position of the employer is therefore excluded from union membership.” Id. at 318.

In Union Oil Co. of California, Inc. v. N. L. R. B., 607 F.2d 852 (9th Cir. 1979), the Ninth Circuit held that, “[t]he Board has long recognized that employees who have a confidential relationship to management should be excluded from the bargaining unit.” Id. at 853 (citing Ford Motor Co., 66 N.L.R.B. 1317-1322, 317, 1322 (1946)).  In addition to what the Fourth Circuit said, supra, the Court stated that  “[t]he rationale behind this rule is that employees should not be placed in a position which creates a potential conflict between the interests of the employer and the union.” Id (citing Westinghouse Electric Corp. v. NLRB, 398 F.2d 669, 670 (6th Cir. 1968)).  “[T]he Board has also accorded confidential status to ‘those employees who, in the course of their duties, regularly have access to confidential information concerning anticipated changes which may result from collective bargaining negotiations.’” Id. at 853-54(quoting Pullman Standard Division, 214 N.L.R.B. 762, 762-63 (1974)).

As a specific example, in NLRB v. Quaker City Life Insurance Co., 319 F.2d 690 (4th Cir.1963), the Court held that the secretary of the district manager of a national insurance company was a confidential employee and that ‘[i]t would be patently unfair to require the company to bargain with a union that contain[ed] such an employee.” Id. at 694.

Note: holding similar to N.L.R.B. v. Meenan Oil Co., L.P., see, e.g., Prudential Ins. Co. of America v. N.L.R.B., 832 F.2d 857 (4th Cir. 1987); N.L.R.B. v. Lorimar Productions, Inc., 771 F.2d 1294 (9th Cir. 1985).

Managerial employees

The court in Walla Walla Union Bulletin, Inc. v. N.L.R.B., 631 F.2d 609 (9th Cir. 1980), reaffirmed that “[t]he question whether particular employees are supervisory or managerial and therefore excluded from the bargaining unit is one part of the Board’s determination of the unit composition.” Id. at 612 (citing NLRB v. Adrian Belt Co., 578 F.2d 1304, 1311 (9th Cir. 1978)). Just as it was described above, “[t]he Board’s determination as to any one particular personnel position is one of fact . . .[and] [t]he Boards findings of fact are conclusive if supported by substantial evidence in the record viewed as a whole.” Id. (citing NLRB v. Big Three Industries, Inc., 602 F.2d 898, 901 (9th Cir. 1979)).

The Court also observed that “[i]n contrast to ‘supervisory’ employees who are defined by the Act and excluded (in part) from its coverage, ‘managerial’ employees are not defined nor expressly excluded. Nevertheless, managerial employees have been judicially excluded from the Act’s coverage.” Id; see, NLRB v. Yeshiva University, 444 U.S. 672 (1980); NLRB v. Bell Aerospace, 416 U.S. 267 (1974). In N.L.R.B. v. Yeshiva Univ., 444 U.S. 672 (1980), the Supreme Court held that managerial employees are “‘much higher in the managerial structure’ than those explicitly mentioned by Congress, which ‘regarded [them] as so clearly outside the Act that no specific exclusionary provision was thought necessary.’” Id. at 682 (quoting NLRB v. Bell Aerospace Co., 416 U.S. at 283).

“Managerial employees ‘forumulate and effectuate management policies by expressing and making operative the decisions of their employer.’” Walla Walla, 631 F.2d at 612 (quoting Yeshiva, 444 U.S. at 682). “The specific job title of the employee is not controlling . . . [a reviewing court] must examine the employee’s actual job responsibility, authority, and relationship to management.” Id. “An employee who exercises discretion within or even independently of established employer policy may be aligned with management.” Id. at 612-13 (citing Yeshiva, 444 U.S. at 683). “The Board has established no firm criteria for determining when a[n] employee is so aligned with management. Normally an employee may be excluded as managerial ‘only if he represents management interests by taking or recommending discretionary actions that effectively control or implement employer policy.’” Id. at 613 (quoting Yeshiva, 444 U.S. at 683).

In N.L.R.B. v. Meenan Oil Co., L.P., supra, the Second Circuit held that “[m]anagerial employees are ‘those who formulate and effectuate management policies by expressing and making operative the decisions of their employer and who have discretion in the performance of their jobs independent of their employer’s established policies.’” 139 F.3d at 319 (quoting S.S. Joachim and Anne Residence, 314 NLRB 1191, 1194 n. 6 (1994)). Moreover, the Court also noted, “[l]ike confidential employees, managerial employees are excluded from the protection of the NLRA by an exception established by the Board and approved by the courts.” Id. (citing Yeshiva, 444 U.S. 682-83).

“This exclusion recognizes that managers’ interests are generally aligned with those of the employer.” Id. (citing Northeast Utils. Serv. Corp. v. NLRB, 35 F.3d 621, 626 (1st Cir.1994)). “Therefore, all managerial employees are excluded, not just those in positions which may give rise to labor-related conflicts of interest.” Id. (citing NLRB v. Bell Aerospace Co., 416 U.S. 267, 275, (1974)).The Court also reaffirmed that, “[a]n employee may be excluded as managerial only if he represents management interests by taking or recommending discretionary actions that effectively control or implement employer policy.” Id. at 320 (citing Yeshiva, 444 U.S. at 683).