DC Circuit Largely Defers to NLRB's Managerial Test for University Faculty Members; Questions Test's Application to Subgroups | Practical Law

DC Circuit Largely Defers to NLRB's Managerial Test for University Faculty Members; Questions Test's Application to Subgroups | Practical Law

In University of Southern California v. NLRB, the US Court of Appeals for the District of Columbia Circuit generally upheld the National Labor Relations Board's (NLRB) managerial status test for college and university faculty members, but rejected its extension of the "majority status rule" to specific faculty subgroups seeking recognition.

DC Circuit Largely Defers to NLRB's Managerial Test for University Faculty Members; Questions Test's Application to Subgroups

by Practical Law Labor & Employment
Law stated as of 19 Feb 2021 • USA (National/Federal)
In University of Southern California v. NLRB, the US Court of Appeals for the District of Columbia Circuit generally upheld the National Labor Relations Board's (NLRB) managerial status test for college and university faculty members, but rejected its extension of the "majority status rule" to specific faculty subgroups seeking recognition.
On March 12, 2019, in University of Southern California v. NLRB, the US Court of Appeals for the District of Columbia Circuit (DC Circuit) largely deferred to the test adopted by the panel (Board) heading the NLRB's judicial functions in Pacific Lutheran University for determining whether university faculty are managerial employees exempt from coverage under the NLRA. However, the DC Circuit rejected the Board's application of Pacific Lutheran's bright-line majority status rule to specific faculty subgroups as inconsistent with US Supreme Court precedent. ( (D.C. Cir. Mar. 12, 2019).)

Background

A local union of the Service Employees International Union petitioned to represent the full- and part-time non-tenure-track faculty at the University of Southern California's (USC) Gayle Garner Roski School of Art and Design (Roski). USC argued that the Roski non-tenure-track faculty were managerial employees without collective bargaining rights under the NLRA.
Applying the framework for evaluating the managerial status of university faculty articulated in Pacific Lutheran, an NLRB Regional Director determined that this subgroup of USC's faculty were non-managerial (see 361 N.L.R.B. 1404 (2014); for more information on Pacific Lutheran, see Legal Update, NLRB Sets New Jurisdiction Test for Religious Universities, Managerial Test for University Faculty Members). The Board adopted the Regional Director's decision without opinion.
USC ultimately refused to bargain with the union so that it might challenge the Board's certification of the bargaining unit in subsequent unfair labor practice (ULP) proceedings. The Board granted summary judgment in the ULP case. USC filed a petition for review, arguing that:
  • The following aspects of the Board's application of the Pacific Lutheran framework conflicted with the US Supreme Court's decision in NLRB v. Yeshiva University:
    • the threshold requirement that a faculty subgroup must hold a majority of committee seats to exercise effective control (the "subgroup majority status rule");
    • the two-part standard for evaluating "effective control"; and
    • the classification of the significance of five decision-making areas as primary or secondary.
    (444 U.S. 672 (1980).)
  • Pacific Lutheran does not provide a workable framework for determining faculty managerial status, as required by the DC Circuit in LeMoyne-Owen College v. NLRB (357 F.3d 55 (D.C. Cir. 2004)).
  • The Regional Director lacked substantial evidence to classify the Roski non-tenure-track faculty as non-managerial.
The Board filed a cross-application for enforcement of its order.

Outcome

The DC Circuit:
  • Denied the Board's cross-application for enforcement.
  • Granted in part USC's petition for review, holding that the Board improperly extended the majority status rule to faculty subgroups.
  • Remanded the matter to the Board for reassessment.
The DC Circuit:
  • Noted that:
    • under Yeshiva, faculty qualify as managerial when they exercise "effective recommendation or control" over central university policies (444 U.S. at 683 n.17); and
    • under Pacific Lutheran, faculty exercise effective control over decision-making when faculty recommendations are "almost always … followed by the administration" and "routinely become operative without independent review by the administration" (361 N.L.R.B. at 1421).
  • Held that the Board's two-prong test for "effective control" is consistent with Yeshiva and entitled to deference because the standard:
    • does not require that the faculty possess ultimate authority over central university policies and decision-making, but rather allows for review and occasional vetoes by the administration; and
    • is appropriately demanding to avoid an overbroad interpretation of the managerial exception that undermines the NLRA's protections.
However, the DC Circuit rejected the Board's application of a bright-line majority status rule to specific faculty subgroups, concluding that the subgroup majority status rule is:
  • Inconsistent with Yeshiva because it:
    • ignores the US Supreme Court's emphasis on the role played by the faculty as a collective body, rather than on particular individuals or subgroups (444 U.S. at 680, 686, and 688-89);
    • fails to properly account for the critical concept of faculty collegiality by ignoring the possibility that faculty subgroups may share common interests and effectively participate as a body on issues relevant to managerial status (444 U.S. at 680); and
    • disregards a line of Board decisions holding that minority employee shareholders may exercise effective control even absent majority control (444 U.S. at 685 n.21; Upper Great Lakes Pilots, Inc., 311 N.L.R.B. 131, 132 n.9 (1993)).
  • Practically unworkable due to regular changes in committee membership that may affect majority status.
The DC Circuit stated that, when assessing the managerial status of a faculty subgroup, the Board instead should evaluate both:
  • Whether a faculty body exercises effective control under the Pacific Lutheran standard.
  • If so, whether the petitioning subgroup is included in that managerial faculty body, including an analysis of whether the subgroup's:
    • interests diverge so substantially from the rest of the faculty that holding a minority of seats on the relevant committees is akin to having no managerial role; and
    • low participation rates stem from a tenuous employment relationship that vitiates any managerial role.
Finally, the DC Circuit rejected USC's remaining arguments, concluding that:
  • The Board's classification of the significance of five decision-making areas as primary or secondary falls within its discretion under the NLRA (NLRB v. Kentucky River Community Care, Inc., 532 U.S. 706, 720 (2001)).
  • The Pacific Lutheran framework is sufficiently precise to satisfy the DC Circuit's instruction in LeMoyne-Owen, particularly given the fact-specific nature of managerial status determinations, and entitled to deference.
  • The matter should be remanded to the Board for reconsideration under the proper legal standard, declining to address USC's argument that the Board's classification of the Roski non-tenure-track faculty as non-managerial was unsupported by substantial evidence.

Practical Implications

In University of Southern California, the DC Circuit reworked and clarified the analysis required when determining whether a specific faculty subgroup has managerial status under the NLRA, rejecting the Board's application of a bright-line majority status rule to the petitioning subgroup. Nevertheless, the DC Circuit generally upheld the broader framework outlined by the Board in Pacific Lutheran for evaluating managerial status, which remains a demanding standard.

UPDATE

On July 12, 2019, the Board, which had accepted the DC Circuit's remand, remanded this case to the NLRB Region 31 for case closure and any other appropriate actions because the union has disclaimed an interest in representing the bargaining unit at the center of the dispute and requested the withdrawal of all ULP charges concerning that bargaining unit ().

UPDATE

On June 10, 2020, the Board overruled in part Pacific Lutheran, and adopted the three-pronged jurisdictional test outlined by the DC Circuit in Great Falls for determining whether the NLRB may exercise jurisdiction over teachers or faculty at religious schools, including colleges and universities. The Board did not review the Pacific Lutheran managerial status test because the issue was not raised, but noted that the managerial status issue will be mooted in any case where a religiously affiliated school is deemed exempt from NLRB jurisdiction under the newly adopted Great Falls standard. (Bethany Coll., 369 N.L.R.B. No. 98 (June 10, 2020); for more information, see Legal Update, NLRB Adopts New Jurisdictional Standard for Faculty at Religious Colleges and Universities.)

UPDATE

On February 19, 2021, in Elon University, the Board modified the Pacific Lutheran University standard for evaluating whether a petitioned-for faculty subgroup at a college or university is managerial, adopting the framework articulated by the DC Circuit in University of Southern California v. NLRB (370 N.L.R.B. No. 91 (Feb. 19, 2021); see 361 N.L.R.B. 1404 (2014); 918 F.3d 126 (D.C. Cir. 2019)). For more information on Elon University, see Legal Update, NLRB Adopts DC Circuit Framework for Evaluating Managerial Status of College and University Faculty Subgroups, Rejects Subgroup Majority Status Rule.