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Empress Casino Joliet Corp. v. NLRBis the most recent example of the ongoing battle between the National Labor Relations Board and the courts over who is a supervisor under the National Labor Relations Act (NLRA). This case, decided by the U.S. Court of Appeals for the Seventh Circuit in March, highlights the important distinction between “employees,” who have the right to join, support or oppose a union, and “supervisors,” who have no such right. In Empress Casino, 204 F.3d 719 (7th Cir. 2000), the court denied enforcement of an order of the NLRB, which had found that captains and mates aboard a large riverboat casino were not “supervisors” under the NLRA. The employee-supervisor distinction is important because an employer can terminate supervisors who support or join a union against the employer’s wishes. Whether an individual qualifies as a supervisor under the act therefore carries significant consequences for employers, unions and potential supervisors. THE NLRA’S DEFINITION OF �SUPERVISOR’ HAS 24 TESTS The NLRA defines a “supervisor” as any person who, in the interest of an employer, has the authority to hire, discipline, suspend, discharge, promote, transfer, lay off, recall, reward, adjust the grievances of, responsibly direct or assign work to employees — or to effectively recommend any of the above actions — as long as the exercise of such authority is the product of independent judgment. 29 U.S.C. 152(11). The test is disjunctive; an individual is a supervisor as long as he or she satisfies any one of the criteria. One might expect the NLRB, having 24 discrete tests at its disposal, to readily anoint individuals “supervisors.” However, the board desires to limit the number of supervisors and, in turn, to promote unionization among those individuals deemed “employees.” See, e.g., General Security Services Corp., 326 NLRB No. 42 (1998), slip op. at 1. The situation becomes all the more interesting because the NLRB’s decisions are not self-enforcing. Rather, the board must apply to one of the U.S. courts of appeals for an order enforcing the board’s underlying decision. Fortunately for employers, the courts have been far more willing than the board to read the NLRA’s disjunctive definition of “supervisor” literally. Indeed, courts have sharply criticized the NLRB for its “biased mishandling of cases involving supervisors” and its willingness to twist and ignore evidence in an effort to reach a “preferred result.” See Spentonbush/Red Star Cos. v. NLRB, 106 F.3d 484, 490, 492 (2d Cir. 1997). The most recent example of the board’s and the courts’ differing interpretations is Empress Casino, which denied enforcement of an NLRB order that a group of riverboat casino captains and mates were nonsupervisors. The alleged supervisors worked on one of two riverboats. Boat crews consisted of a captain, first mate, chief engineer and seven to 10 deckhands. There were an additional 150 to 200 employees, serving as cooks, bartenders, waiters and security. In response to a union election petition, the employer contended that its captains and mates, among others, were statutory supervisors and therefore ineligible for membership in the union. The NLRB disagreed. It reasoned that the captains and mates were not statutory supervisors because they reported to a shore-based executive. According to the board, it was this executive and not the captains and mates who exercised “independent judgment” with regard to all relevant decisionmaking. On appeal, the court criticized the board’s analysis. It stated that the NLRB’s holding had “the curious implication that a ship with more than 1,000 people aboard it … has no supervisor on board at any time.” 204 F.3d at 721. SOME NLRB FINDINGS ARE �FLAT WRONG,’ COURT SAYS Addressing specifics, the court concluded that some of the board’s findings were “flat wrong,” while others were “incomprehensible.” For example, in an effort to avoid a finding that captains and mates conducted job interviews, the board had claimed that captains and mates merely held “meetings” with job applicants. The court found the NLRB’s hypertechnical analysis puzzling, reasoning that the board never bothered to explain “the difference between meeting and interviewing” an applicant. The court also sharply criticized the board for emphasizing that captains and mates did not have the “final say” in hiring or firing decisions as a basis for concluding that they were nonsupervisors. The board’s rationale, the court reasoned, read the “effectively recommend” prong out of the statutory definition of supervisor. According to the court, “a decision to hire or fire is often reviewed by several layers of management. What is critical is the weight of the first-line supervisor’s recommendation in the final decision.” Id. at 722. Applying this standard, the court found the board’s rationale “completely unsatisfactory.” Although the court acknowledged that the 11th Circuit recently had reached a “contrary conclusion” in another case involving harbor pilots, Cooper/T. Smith v. NLRB, 177 F.3d 1259 (11th Cir. 1999), the 7th Circuit sharply criticized the 11th Circuit’s suggestion that, if ultimate decisionmaking rests with a higher authority, lower-level individuals who make recommendations cannot be supervisors. According to the 7th Circuit in Empress Casino, such reasoning “cannot be squared with,” and indeed “flies in the face of, the [NLRA].” Next, the court discussed the risk to business operations posed by the board’s irrational decisionmaking. Under the NLRB’s view, the only operational supervisor was the shore-based executive. The board thus completely ignored the business reality that all but the smallest of operations depend on the employer’s ability to delegate essential supervisory functions to a team, each member of which plays a specific but important role. As the court stated, if the members of this essential team were permitted to organize, “then the union rather than the company will control the … operation.” The court proceeded to highlight evidence that the employer had delegated supervisory authority to the captains and mates: Captains and mates interviewed applicants and made hiring and firing recommendations to upper management that upper management relied on; they likewise completed job evaluations that upper management used in awarding raises; and they scheduled overtime, trained new employees and assigned and directed employees’ work. All of these activities, the court concluded, were “conventional supervisory functions.” In light of this evidence, the court refused to enforce the NLRB’s order finding the captains and mates nonsupervisors. 6TH CIRCUIT ALSO CRITICIZES NLRB IN � CAREMORE‘ CASE In Caremore Inc. v. NLRB, 129 F.3d 365 (6th Cir. 1997), cited by the 7th Circuit in Empress Casino, the board came under criticism in a case involving the status of nurses. The court refused to enforce a board order finding a group of nurses nonsupervisors. The nurses there assigned and directed work, evaluated employees, and recommended discipline and discharge. Additionally, these nurses were the highest-ranking officials on two of three shifts. After reviewing this evidence, the court admonished the NLRB, stating that “[b]ecause the NLRB continues to misapprehend both the law and its own place in the legal system, today we state for the fifth time that individuals who possess authority in any area listed in Section 2(11) of the NLRA (including authority effectively to recommend …), who exercise that authority in the interest of their employer … and who use independent judgment in the exercise of that authority, are supervisors.” Stating that “this is not a close case” and criticizing the board’s use of “razor-thin factual distinctions as a basis for requiring employers in the health-field to bear the expense of proving, in each individual case, that their nurses are supervisors,” the court invited the employer to petition for recovery of its costs and fees. Cases like Empress Casinoand Caremorehighlight a growing area in the dispute over alleged supervisory status for professional and quasi-professional employees. In a recent decision that will only add to this debate, the NLRB reversed long-standing precedent and held that a group of dispatchers were not statutory supervisors even though they prepared complex service plans and directed employees performing duties under the plans. Mississippi Power & Light, 328 NLRB No. 146 (1999). The board majority reasoned that, although the dispatchers exercised independent judgment, such judgment was limited to developing the plans. According to the majority, the dispatchers’ requiring employees to follow these plans involved no exercise of independent judgment and therefore did not make them supervisors. Perhaps foreshadowing its intent to apply this reasoning to a broad class of industries, the NLRB majority emphasized that accelerating technological change required the board to “keep abreast of changing conditions in the workplace and to determine how such changes affect traditional analysis.” It remains to be seen how the courts will react to the board’s reasoning. TIPS FOR DEALING WITH THE NLRB’S CLOSE SCRUTINY The current split between the courts and NLRB regarding findings of supervisory status shows no signs of mending. Employers must recognize that the board closely scrutinizes supervisory-status claims involving frontline personnel, particularly “working foremen,” technical employees and professionals, such as nurses. Concerned employers should conduct supervisory audits, examining not only what authority alleged supervisors possess but also how they exercise the authority and, importantly, what objective evidence exists that supports the possession and exercise of such authority. Furthermore, employers should be aware that an individual must exercise “independent judgment” when wielding supervisory authority to qualify as a statutory supervisor. Evidence that an alleged supervisor possesses authority to discipline employees for flagrant violations of common working rules, such as fighting or intoxication, may be insufficient on the ground that such orders are “common sense.” Thus, employers should identify and preserve evidence of alleged supervisors disciplining, suspending or discharging employees in nonflagrant circumstances involving uncleanliness, attitude problems or perhaps, best of all, insubordination. Likewise, evidence that an alleged supervisor “made recommendations” will be insufficient absent corresponding evidence that upper management followed such recommendations, ideally with no further investigation. Thus, employers should preserve evaluation, transfer, layoff, recall and promotion records that show a “linkage” between recommendations of alleged supervisors and ultimate personnel actions. This “linkage” can then be demonstrated by testimony from the alleged supervisor and his superior, supporting documentation from personnel files containing notations showing that the alleged supervisor recommended or acted, and management “personnel action” forms showing that the acts or recommendations were effectuated. Finally, employers should show that the alleged supervisor’s recommendations are “effective.” This can be done by presenting evidence that the alleged supervisor acted and made recommendations that management effectuated without independent investigation. The employer should highlight specific examples of upper management’s acting on the alleged supervisor’s recommendations without conducting any independent investigation. Especially useful are examples in which upper management disagreed with, but nevertheless failed to reverse, the recommendations of lower-level “supervisors.” If the status of a particular individual or group of individuals is at issue, employers must be prepared to conduct a thorough hearing before the NLRB. The record generated during the hearing must be sufficient to convince a court of appeals that any disputed individuals are supervisors, even if the board initially disagrees. Showing independent judgment, showing a linkage between the alleged supervisor’s recommendations and the ultimate personnel action, and showing that the alleged supervisor’s recommendations are “effective” will maximize the likelihood of proving supervisory status. Mr. Dolin is a partner and chairman of the labor and employment practice at Chicago’s Jenner & Block. Mr. Rozmus, an associate, also is a member of the labor and employment practice.

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