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NLRB’s New Guidelines For Designating Employees As Supervisors May Provide A Powerful Union-Avoidance Tool

The National Labor Relations Board (“NLRB” or “Board”), in what some have called a landmark 3-2 ruling, has provided guidelines for determining whether an employee has been properly designated as a supervisor under federal labor law.  This is critically important because supervisors covered by the National Labor Relations Act (the “Act”) have no legal right to vote in union elections or to belong to bargaining units covered by collective bargaining agreements.

The decision announcing the new guidelines, Oakwood Healthcare Inc., 348 N.L.R.B. No. 37 (2006), is by Board Chairman Battista and Members Schaumber and Kirsanow, all appointees of President George W. Bush.  The two dissenters, Board Members Liebman and Walsh, are both original appointees of President Clinton.

The new guidelines appear to expand the class of employees who may be designated as a supervisor.  This has led the dissenting Board members to assert:  “Today’s decision threatens to create a new class of workers under Federal labor law: workers who have neither the general prerogatives of management, nor the statutory rights of ordinary employees.”  Organized labor has responded with similar predictions of gloom and doom, claiming that the decision is “devastating,” provides a “road map for excluding workers from a union” and could make 8 million workers lose their right to union representation.

Only time will tell whether Oakwood will have such dire consequences for organized labor.  One thing is clear, however:  For employers who actively plan their labor-relations strategies, the decision may serve as a powerful union-avoidance tool.

Changes in the Law

The Act sets forth a two-part test for designating an employee as a supervisor.  First, the employee must have authority to perform (or to recommend that others perform) any of the following 12 functions:  “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.”  Second, the employee must exercise this authority in the interest of the employer by using “independent judgment.”

In Oakwood, the Board clarified the meaning of “assign” and “responsibly to direct,” two functions that employers often rely upon in designating employees as supervisors under the first part of the test.  In addition, the Board discussed what it means to exercise “independent judgment,” a required element of the second part of the test.  It is critical that employers understand these important changes.

1.  Assign

The Board has interpreted “assign” to mean:  (1) “designating an employee to a place (such as a location, department, or wing)”; (2) “appointing an employee to a time (such as a shift or overtime period)”; or (3) “giving significant overall duties, i.e., tasks, to an employee.”

The third way to “assign”—giving significant overall duties/tasks to an employee—provides the greatest opportunity for management and, correspondingly, is the greatest cause for concern of organized labor.  In this respect, the Oakwood dissent argues that permitting employers to designate workers as supervisors based on “task assignments” will result in treating “minor supervisory employees” as “statutory supervisors.”

The majority rejects the dissent’s view that “it must be the employees who are being assigned, not the tasks” in order for a worker to perform the supervisory function of “assigning.”  In doing so, the majority creates a significant opportunity for employers to expand the ranks of their supervisors.

2.  Responsibly to Direct

Similarly, the Board held in Oakwood that a worker is authorized “responsibly to direct” other employees (and thus satisfies the first part of the statutory definition of supervisor) where:  (1)  “the employer delegated to the putative supervisor the authority to direct the work and the authority to take corrective action, if necessary”; and (2) “there is a prospect of adverse consequences for the putative supervisor if he/she does not take these steps.”

The perceived loophole created by this definition is the ability to designate workers as supervisors just because they direct employees in how to undertake their assigned tasks.  According to the dissent, a worker should satisfy the “responsibly to direct” criterion only where he or she is “in charge” of “ensur[ing] that a work unit achieves management’s objectives.”  Thus, according to the dissent, only shop foremen and their equivalents should satisfy the “responsibly to direct” test.

In adopting a more expansive interpretation of “responsibly to direct,” the majority once again brushes aside the notion that “minor supervisory employees” are not supervisors for purposes of the Act.  This creates yet another opportunity for employers to expand the ranks of their supervisors.

3.  Independent Judgment

Regardless of whether an employee’s job involves “assigning,” “responsibly directing” or performing any of the other ten (10) functions identified in the Act as supervisory functions, however, the function must be performed with “independent judgment” in order for the employee to be properly designated as a supervisor.

In Oakwood, the Board clarifies that “to exercise ‘independent judgment’ an individual must at minimum act, or effectively recommend action, free from the control of others and form an opinion or evaluation by discerning and comparing data.”  Under this new interpretation, a judgment is not independent if it is dictated or controlled by detailed instructions, whether set forth in company policies or rules, the verbal instructions of higher authority or the provisions of a collective bargaining agreement.  However, the mere existence of company policies does not eliminate independent judgment from decision-making if the policies allow for discretionary choices.  Per the Act, the judgment also must exceed the “routine or clerical” in order to be independent.

The Board’s view of independent judgment departs from its previous interpretation, which expressly excluded the exercise of “ordinary professional or technical judgment in directing less skilled employees to deliver services.”  The Board’s new interpretation is consistent with and responsive to a 2001 decision of the U.S. Supreme Court, NLRB v, Kentucky River Community Care, 532 U.S. 706 (2001), which held that it is the degree not the kind of discretion that determines whether independent judgment exists.  Members Liebman and Walsh concurred with this aspect of the Oakwood decision.

Oakwood as a Union Avoidance Tool

Employers interested in union avoidance might implement the teachings of Oakwood by taking the following steps, which could expand the number of employees who may be properly treated as supervisors for purposes of federal labor law:

  • Identify employees who potentially may be designated as supervisors under the Board’s new interpretations of “assign” and “responsibly to direct.”
  • Review and revise (as appropriate) the job descriptions of these employees and their charges.
  • Where the supervisor assigns tasks to other employees, revise all applicable job descriptions to ensure that the tasks are significant and that they are sufficiently comprehensive to constitute the other employees’ “overall duties.”
  • Where the supervisor directs other employees in performing their assigned tasks, revise all applicable job descriptions to make clear that the supervisor has authority to both direct the work and take corrective action.
  • Ensure that the supervisor is responsible for the successful completion of the work by specifying adverse consequences for a failure to supervise (and perhaps heightened benefits, such a merit pay, for a supervisory job well done).
  • Review all applicable workplace literature, e.g., employee handbooks, policies and procedures manuals and the like, to ensure that they are consistent with all revised job descriptions.
  • Ensure that all company guidelines and policies provide for discretionary choices as to matters exceeding the routine or clerical.
  • Provide appropriate orientation and training to all employees affected by these changes to ensure that all new roles are understood and effectively carried out.

Such measures may enable an employer to designate as many employees as possible as supervisors.  Of course, all properly designated supervisors will be ineligible to vote in union elections; in a close election, their votes could provide the margin of victory for the employer, depending upon which way these individuals would case their votes.  In the event that a union nevertheless becomes a certified bargaining representative, all properly designated supervisors will fall outside the bargaining unit and, correspondingly, outside the coverage of any negotiated collective bargaining agreement.

Employers should acknowledge, however, that taking such measures will almost certainly be a significant undertaking.  Moreover, some employers may conclude that the composition of their workforce or the nature of their operations simply does not lend itself to this sort of reorganization.  Thus, while Oakwood may be a helpful union-avoidance tool to some, it is clearly not a panacea that will apply across-the-board to all.

Implications of Oakwood to a Unionized Workforce

Taking advantage of Oakwood may be a tricky proposition for employers whose workplaces are presently unionized.  Although supervisors have no legal right to engage in collective bargaining, the law allows employers to voluntarily recognize bargaining units that include supervisors.  Accordingly, some unions have threatened to strike against any employer that has a contract with the union if the employer attempts to “exploit” the Oakwood decision.  Other unions, sometimes successfully, have sought agreements with employers to preserve the employee status of bargaining-unit members despite the new definition of supervisor.

A further complication for employers with unionized workplaces is that the law generally prohibits the filing of unit-clarification petitions with the Board during the term of a collective bargaining agreement (or during the first three years of a collective bargaining agreement with a longer term).  Thus, employers who are inclined to seek a Board determination that certain employees should be removed from the bargaining unit as supervisors under Oakwood may have to wait until negotiations for a new collective bargaining agreement are under way.  This might put an undue strain on labor-management relations or otherwise impair the negotiations.  Nonetheless, for some employers in this position, seeking a unit clarification from the Board may be a sensible and effective strategy despite these risks.


The NLRB’s Oakwood decision presents employers with an opportunity to potentially expand the ranks of their supervisors and, thus, to reduce the number of employees who may vote in union elections and/or who may be subject to collective bargaining agreements.  However, whether, or to what extent, to apply Oakwood to achieve these ends is a complex question that depends upon many factors, including the employer’s culture and the degree to which the workforce is presently unionized.  Given the importance of the Oakwood decision, the nuances of Board case law, and the potential ramifications of seeking to effectuate a change in employee designations, employers are encouraged to consult with legal counsel to determine how best to incorporate Oakwood into their labor-relations strategies.