Board Also Announces New Standard for Determining Whether Faculty are Managers Excluded from Collective Bargaining

In what is certain to be a controversial decision that could spark widespread organizing of faculty in private colleges and universities, the National Labor Relations Board adopted new standards for determining whether to exercise jurisdiction over self-identified religious colleges and universities under the U.S. Supreme Court’s decision in NLRB v. Catholic Bishop, 440 U.S. 490 (1979), and for determining the managerial status of faculty pursuant to the U.S. Supreme Court’s decision in NLRB v. Yeshiva University, 444 U.S. 672 (1980). Pacific Lutheran University, 361 NLRB No. 157 (Dec. 16, 2014).

Background

The Service Employees International Union, Local 925 sought to organize non-tenured contingent faculty teaching at Pacific Lutheran University (“PLU”). The Union filed a petition with Region 19 of the Board to hold a representation election among these faculty members. PLU challenged the petition, arguing that PLU is a church-operated institution exempt from the Board’s jurisdiction under NLRB v. Catholic Bishop (and a Court of Appeals decision, from the District of Columbia,University of Great Falls v. NLRB, 278 F.3d 1335 (D.C. Cir. 2002)), and that the petitioned-for full-time contingent faculty are managers who must be excluded from collective bargaining under NLRB v. Yeshiva University. Following a hearing, the NLRB’s Regional Director issued a Decision and Direction of Election rejecting both arguments. PLU then requested review of the Regional Director’s decision by the Board and the Board granted review.

Board’s Standard for Exercising Jurisdiction Over Religiously Affiliated Universities and Colleges Until Now

In NLRB v. Catholic Bishop, the Supreme Court decided that schools operated by a church to teach both religious and secular subjects are not within the jurisdiction of the National Labor Relations Act. The Court found that neither the language of the Act nor its legislative history disclosed any affirmative intention by Congress that church-operated schools be within the NLRB's jurisdiction. For that reason, the Court decided not to construe the Act “in such a way as would call for the resolution of difficult and sensitive First Amendment questions,” and so concluded the NLRB lacked jurisdiction. 

The Court’s decision also included this “definition” or characterization of a school operated by a church: "parochial schools involve substantial religious activity and purpose." Apparently based on this definition, in the years since the Court’s decision, the NLRB has decided on a case-by-case basis whether a self-identified religious school has a “substantial religious character” such that exercise of the Board’s jurisdiction would pre¬sent a significant risk of infringing on that employer’s First Amendment religious rights.

New Standard for Exercising Jurisdiction Over Religiously Affiliated Universities and Colleges 

The Board’s new standard regarding the exercise of its jurisdiction over self-identified religious colleges and universities requires a much more specific showing by the college or university claiming that it is exempt from Board jurisdiction. It “must first demonstrate, as a threshold requirement, that First Amendment concerns are implicated by showing that it holds itself out as providing a religious educational environment. Once that threshold requirement is met, the university must then show that it holds out the petitioned-for faculty members themselves as performing a specific role in creating or maintaining the college or university’s religious educational environment, as demonstrated by its representations to current or potential students and faculty members, and the community at large.”

Board’s Standard for Determining Managerial Status of Faculty Until Now

In NLRB v. Yeshiva University, the Supreme Court found that the faculty of Yeshiva University were managerial employees who, therefore, were excluded from coverage by the Act. The Court defined managerial employees in a university setting as those who “formulate and effectuate management policies by expressing and making opera¬tive the decisions of their employer.” To be found to be managerial, employees had to “exercise discretion within, or even independently of, established employer policy and must be aligned with management.” 

To determine whether an employee is “aligned with management,” the Court required that an em-ployee “represent[] management interests by taking or recommending discretionary actions that effectively control or implement employer policy.” The Court noted that “the fact that the administration holds a rarely exercised veto power does not diminish the faculty’s effective power in policymaking and implementation.”

The Court found the Yeshiva faculty were managerial employees because:

They decide what courses will be offered, when they will be scheduled, and to whom they will be taught. They debate and determine teaching methods, grading policies, and matriculation standards. They effectively decide which students will be admitted, retained, and graduated. On occasion their views have determined the size of the student body, the tuition to be charged, and the location of a school.

The Court stated that “it is difficult to imagine decisions more managerial than these.”

New Standard for Determining Managerial Status of Faculty

Like the Board’s new test for exercising jurisdiction over religiously affiliated institutions and teachers, the Board’s just-announced test for deciding whether a faculty member in a college or university is managerial requires a much more specific showing than under the prior test. Now, in order to determine whether faculty are managerial employees and, thus, are not accorded the right to organize or bargain collectively with their employer under the Act, the Board “will examine the faculty’s participation in the following areas of decisionmaking: academic programs, enrollment management, finances, academic policy, and personnel policies and decisions, giving greater weight to the first three areas than the last two areas.” The Board “will then determine, in the context of the university’s decision making structure and the nature of the faculty’s employment relationship with the university, whether the faculty actually control or make effective recommendation over those areas.” If they do, the Board will find that they are managerial employees excluded from the Act’s protections.

Applying New Standard for Exercising Jurisdiction Over Religiously Affiliated Universities and Colleges to PLU

The Board stated that its new standard provides a “better approach to protecting employees’ rights while being sensitive to First Amendment concerns.” The Board noted that evidence of a university holding itself out as providing a religious educational environment would include handbooks, mission statements, corporate documents, course catalogs, documents published on a school’s website, press releases or other public statements. It also stated that “a university’s contemporary presentation of itself is likely to be more probative than its founding documents and historical tradition.” In PLU’s case, the Board found that the university held itself out as providing a religious educational environment in statements to prospective students on PLU’s website, articles of incorporation, bylaws, faculty handbook, course catalog, and other publications.

Having found that PLU had met this “threshold” test of establishing that its holds itself out as creating a “religious educational environment,” the Board turned its attention to whether PLU holds its faculty members out as performing any religious function in creating or maintaining that environment. Evidence of this requirement might include showing “that faculty members are required to serve a religious function, such as integrating the institution’s religious teachings into coursework, serving as religious advisors to students, propagating religious tenets, or engaging in religious indoctrination or religious training,” the NLRB said. Documents used by a university in recruiting faculty and staff also could be relevant. The Board made clear, however, that general or aspirational statements without specificity as to how the requirement affects actual job functions will not suffice.

PLU failed to carry its burden to demonstrate that it holds its faculty members out as performing any religious function in creating or maintaining its religious educational environment, according to the agency. The Board found that “PLU does not take into account a contingent faculty member’s adherence to Lutheranism, membership in a Lutheran congregation, or knowledge of Lutheranism in making hiring, promotion, tenure, or evaluation decisions. PLU’s contingent faculty job postings do not list the need to serve any religious function or be or become knowledgeable about the Lutheran religion.” The Board also found that PLU’s contingent faculty contracts do not mention religion generally or Lutheranism in particular. It also noted that the general statement in those contracts that PLU requires faculty members “to be committed to the mission and objectives of the University” does not communicate the message that employees are expected to perform a specific religious function and is not specifically linked to any job duties to be performed by the faculty. For these reasons, the Board found PLU did not establish that it holds its faculty members out as performing any religious function in creating or maintaining its religious educational environment. Therefore, the Board exercised jurisdiction over PLU.

The Board will apply this new standard for determining whether to exercise jurisdiction over religiously affiliated colleges and universities retroactively in all pending cases, except those in which an election was held and the ballots have been opened and counted.

Applying New Standard for Determining Managerial Status of Faculty to PLU

The Board states that its new standard for determining the managerial status of faculty “is designed to answer the question whether faculty in a university setting actually or effectively exercise control over decision making pertaining to central policies of the university such that they are aligned with management.” The Board’s new standard requires it to examine “both the breadth and depth of the faculty’s authority” at the institution. “In examining the breadth of the faculty’s authority, [the Board] will give more weight to those areas of policy making that affect the university as a whole, such as the product produced, the terms on which it is offered, and the customers served. In examining the depth of their authority, [the Board will] seek to determine whether the faculty actually exercise control or make effective recommendations over those areas of policy; this inquiry will necessarily be informed by the administrative structure of the particular university, as well as the nature of the faculty’s employment with the university.” 

The Board will consider faculty authority in these primary areas:

• Academic programs (covers topics such as the university’s curricular, research, major, minor, and certificate offerings);

• Enrollment management (dictates the size, scope, and make-up of the university’s student body); and

• Finances (the power to control or make effective recommendations regarding financial decisions).

Areas of secondary importance are:

• Academic policy (covers topics such as teaching/research methods and policies on grading, academic integrity, syllabus, research, and course content); and

• Personnel policy and decisions (faculty control over hiring, promotion, tenure, leave, and dismissal).

In order to establish managerial status, the party seeking the exclusion must show that faculty actually exercise control or that they make effective recommendations. This means “actual — rather than mere paper — authority.” In order for the recommendations to be effective, they “must almost always be followed by the administration.” Finally, in order to determine whether faculty have actual control or make effective recommendations, the Board will look to “the structure of university decision-making and where the faculty at issue fit within that structure, including the nature of the employment relationship held by such faculty (e.g., tenured vs. tenure eligible vs. nontenure eligible; regular vs. contingent).”

The Board found that PLU failed to establish that full-time contingent faculty actually control or make effective recommendations in any of the primary or secondary areas of decisionmaking and thus are not managerial employees. The Board found that full-time contingent faculty have limited participation in decisions affecting academic programs and noted that they are not permitted to serve on faculty standing committees. The Board found no evidence that they could vote on enrollment management policies. Similarly, the Board found no evidence that contingent faculty are involved in decisions affecting PLU’s finances. Decisions affecting academic policy proceeded through PLU’s decisionmaking process in much the same way as decisions affecting academic policy, affording limited participation by contingent faculty. The record showed that contingent faculty play a limited role in deciding personnel matters and are excluded from voting on specific personnel decisions. 

In light of these findings, the Board concluded PLU failed to prove that the full-time contingent faculty are substantially involved in decision making affecting the key areas of academic programs, enrollment management and finances. It also found that in the secondary areas of academic policy and personnel policy and decisions, their decision-making authority is essentially limited to matters concerning their own classrooms or departments. Noting that PLU typically employed contingent faculty on one-year contracts, the Board found that their ability to control or make effective recommendations regarding university policy is inherently limited. Accordingly, the Board found PLU failed to establish that the full-time contingent faculty exercise managerial authority on behalf of PLU. 

The Board did not indicate whether it will apply this new standard retroactively or prospectively. However, it noted the existence of a “presumption in favor of applying new rules retroactively.” 

Recommendations

It is almost certain this case will be appealed to the courts, if the union prevails in the election that was held in October 2013, but the Board’s processes for doing so are complicated and time-consuming. (The ballots were impounded and thus have not been counted.) In order to appeal (to the U.S. Court of Appeals), PLU will have to refuse to bargain when the SEIU requests PLU to do so. The SEIU then will file an unfair labor practice charge against PLU alleging PLU unlawfully refused to bargain. A series of procedural steps will result in an NLRB finding that PLU indeed unlawfully refused to bargain. It is that finding which PLU will be able to appeal. PLU presumably will argue the NLRB was mistaken in asserting jurisdiction and that, even if the Board could assert jurisdiction, its contingent faculty members are managerial employees who are not covered by the Act. In other words, PLU has no obligation to bargain with respect to its contingent faculty members.

In the meantime, all private colleges and universities should review the nature of the participation of their contingent faculty in the decision-making process. The Pacific Lutheran University decision offers a road map for the kind of participation that schools will need to be able to show to establish that their contingent faculty are managerial employees who are not entitled to a representation election under the Act.

In addition, religiously affiliated colleges and universities should review their faculty handbooks, employment agreements, recruiting materials, and websites to determine whether they are holding themselves out as providing a religious educational environment, and if so, whether they are holding their faculty members out as performing a specific role in creating or maintaining the religious educational environment.