Sinai Hospital of Baltimore, Inc. v. NLRB ( 2022 )

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 21-1642
SINAI HOSPITAL OF BALTIMORE, INC., d/b/a VSP,
Petitioner,
v.
NATIONAL LABOR RELATIONS BOARD,
Respondent,
and
1199 SEIU UNITED HEALTHCARE WORKERS EAST,
Intervenor.
No. 21-1683
NATIONAL LABOR RELATIONS BOARD,
Petitioner,
v.
SINAI HOSPITAL OF BALTIMORE, INC., d/b/a VSP,
Respondent.
and
1199 SEIU UNITED HEALTHCARE WORKERS EAST,
Intervenor.
On Petition for Review and Cross-Application for Enforcement of an Order of the National
Labor Relations Board. (05-CA-265997)
Argued: March 10, 2022 Decided: May 10, 2022
Before NIEMEYER, MOTZ, and KING, Circuit Judges.
Petition for review denied, and cross-application for enforcement granted, by published
opinion. Judge King wrote the opinion, in which Judge Niemeyer and Judge Motz joined.
Judge Niemeyer wrote a separate concurring opinion.
ARGUED: J. Eric Paltell, KOLLMAN & SAUCIER, P.A., Timonium, Maryland, for
Petitioner/Cross-Respondent. Eric C. Weitz, NATIONAL LABOR RELATIONS
BOARD, Washington, D.C., for Respondent/Cross-Petitioner. Ashley Evangeline
Macaysa, ABATO, RUBENSTEIN & ABATO, P.A., Baltimore, Maryland, for Intervenor.
ON BRIEF: Jordan F. Dunham, KOLLMAN & SAUCIER, P.A., Timonium, Maryland,
for Petitioner/Cross-Respondent. Jennifer Abruzzo, General Counsel, Peter Sung Ohr,
Deputy General Counsel, Ruth E. Burdick, Deputy Associate General Counsel, David
Habenstreit, Assistant General Counsel, Kira Dellinger Vol, Supervisory Attorney, Jared
D. Cantor, Senior Attorney, NATIONAL LABOR RELATIONS BOARD, Washington,
D.C., for Respondent/Cross-Petitioner. James R. Rosenberg, ABATO, RUBENSTEIN &
ABATO, P.A., Baltimore, Maryland, for Intervenor.
2
KING, Circuit Judge:
Sinai Hospital of Baltimore, Inc.’s Vocational Services Program (“VSP”) seeks
judicial review of a decision and order of the National Labor Relations Board (the “Board”)
finding that VSP engaged in unfair labor practices, in contravention of § 8(a)(1) and (5) of
the National Labor Relations Act (the “Act”), 29 U.S.C. § 158(a)(1), (5), by refusing to
bargain with a Board-certified bargaining representative, 1199SEIU United Healthcare
Workers East (the “Union”). See Sinai Hosp. of Balt., Inc. d/b/a VSP, 370 NLRB 129(2021) (the “Bargaining Order”). Specifically, VSP contests the Board’s underlying
determination that certain disabled janitorial workers engaged by VSP are “employees”
within the meaning of the Act. The Board cross-petitions for enforcement of the
Bargaining Order. Because substantial evidence supports the Board’s employee-status
determination, we deny VSP’s petition for judicial review and hereby grant enforcement
of the Bargaining Order.
I.
A.
VSP is a department of Sinai Hospital, an acute care facility in Baltimore, Maryland,
owned by LifeBridge Health, Inc. VSP encompasses a vocational and career-training
program as well as a separate contracts and employment program, both of which are
intended to assist individuals facing barriers to employment with preparation for
competitive employment opportunities. Disabled individuals may be referred to VSP’s
vocational program — which offers career assessments, job skills training, and internships
3
— by any of a variety of nonprofit or government organizations. Following their
graduation from the vocational program, disabled individuals become eligible for job
placements through VSP’s employment program. Such placements may be with Sinai
Hospital itself; with an outside, private employer; or at a VSP contract site. Nondisabled
individuals may also approach VSP seeking enrollment in the employment program, but
are not eligible for participation in the vocational program.
As part of its employment program, VSP has contracted with the Social Security
Administration (the “SSA”) since at least 1987 to provide janitorial staffing at SSA
facilities. VSP’s contract with the SSA is governed by the federal AbilityOne program, a
creation of the Javits-Wagner-O’Day Act (the “Javits Act”) designed to employ disabled
persons in providing commodities and services to the federal government. The terms of
the Javits Act require, inter alia, that at least 75% of the janitors that VSP employs at its
contract sites be “severely disabled.” See 41 U.S.C. § 8501(6). VSP directly employs the
disabled janitors involved in these proceedings at an SSA facility located in Maryland’s
Baltimore County. As of November 2019, VSP employed 44 janitors at that facility.
Thirty-five of those VSP janitors were documented by annual employment evaluations as
suffering from “severe” physical or mental disabilities, as defined by the Javits Act. The
other nine VSP janitors working at the facility did not qualify as severely disabled. See
A.R. 26-27, 270-71. 1
1
Citations herein to “A.R. __” refer to the contents of the Administrative Record
filed in this matter.
4
The record reflects the following facts pertaining to the employment relationship
between VSP and the janitors working at the Baltimore County SSA facility. All janitors
at the facility — regardless of disability status — have substantially the same terms and
conditions of employment, and the disabled janitors work alongside nondisabled janitors
during standard eight-hour shifts. VSP maintains a progressive discipline system that, by
its terms, applies equally to all janitors, although disabled janitors may receive modified
job duties or counseling in lieu of formal discipline when they face difficulties in
completing their assigned tasks. All VSP janitors can be — and, with some frequency, are
— discharged for inadequate work performance, taking unauthorized breaks, failing to
properly store supplies, and the like, even when a janitor’s disability precipitates their
performance issues. VSP supplies certain counseling and rehabilitative services to both
disabled and nondisabled janitors, principally through a case manager named Veronica
White, but does not employ any full-time counseling personnel at the SSA facility. Janitors
tend to remain in their positions at the facility for several years, and VSP does not maintain
a formal job-placement program. Between 2014 and 2019, VSP discharged 19 disabled
janitors, while only seven left the SSA facility for outside employment during that period.
B.
On July 3, 2019, the Union filed a petition with the Board seeking to represent the
VSP janitors working at the SSA facility. The Union petitioned to represent a bargaining
unit consisting of “[a]ll full time regular and part time janitors and housekeepers employed
by [VSP] at the [SSA facility],” without regard for disability status. See A.R. 257-58. VSP
contested the Board’s jurisdiction over the proposed unit of janitors, asserting that the
5
Union’s petition should be dismissed because the disabled janitors at the SSA facility have
a “primarily rehabilitative” relationship with VSP, such that — under the standard
articulated by the Board in its decision in Brevard Achievement Center, Inc., 342 NLRB
982 (2004) — they are not “employees” as contemplated by § 2(3) of the Act. 2
The Board thereafter conducted two representation hearings in July and September
2019. The Board received testimony and exhibits from four VSP witnesses, including case
manager White, as well as from two janitors employed at the SSA facility — one disabled,
and one nondisabled. VSP and the Union also filed formal briefs with the Board following
each hearing.
On November 29, 2019, the Acting Regional Director for the Board’s Region 5
issued a Decision and Direction of Election resolving that the disabled janitors engaged by
VSP are in fact statutory “employees.” See A.R. 819-45. After assessing the factors set
forth in the Board’s Brevard decision, the Decision and Direction of Election concluded
that VSP had failed to satisfy its burden of demonstrating a “primarily rehabilitative”
employment relationship, and that VSP’s relationship with the disabled janitors was instead
more appropriately classified as “typically industrial.” Id. at 820-21 (citing Brevard, 342
NLRB at 984). The Acting Regional Director acknowledged that certain evidence at the
2
VSP also argued that, if the Board found the disabled janitors not to qualify as
statutory “employees,” the nondisabled janitors at the SSA facility should be held as an
impermissible “microunit,” thereby prohibiting the Union from representing those janitors
independently of the disabled janitors. See A.R. 820. Because it resolved that the disabled
janitors are indeed “employees,” the Board dismissed VSP’s contention as moot.
Accordingly, the Board ultimately certified the Union as the collective bargaining
representative for all janitors employed at the SSA facility. Id. at 841.
6
representation hearings suggested a “rehabilitative” relationship, but found that, on
balance, most of the evidence was illustrative of a traditional economic relationship.
Accordingly, the Acting Regional Director ruled that both the disabled and
nondisabled janitors working at the SSA facility are “employees” as contemplated by the
Act and ordered a Board-supervised secret ballot election. See A.R. 839-41. The Union
prevailed in that election by a vote of 28 to 13 and, on December 30, 2019, the Acting
Regional Director certified the Union as the exclusive collective bargaining representative
of the VSP janitors. VSP sought review of the Decision and Direction of Election’s
employee-status determination, but a three-member panel of the Board denied that request
on May 27, 2020, citing a lack of substantial issues warranting review.
C.
Notwithstanding the Union’s successful election and certification, VSP refused to
recognize it as the janitors’ bargaining representative or to engage in the bargaining
process. The Union thus filed an unfair labor practice charge with the Board on September
11, 2020, and the Board’s General Counsel thereafter issued a complaint alleging that VSP
had violated § 8(a)(1) and (5) of the Act by refusing to bargain in good faith with the Union.
See A.R. 933-39. 3 The General Counsel moved the Board for summary judgment and, in
response, VSP again raised its contention that the disabled janitors are not statutory
3
Section 8 of the Act defines certain unfair labor practices that may not be
committed by employers or unions, and subsections (a)(1) and (a)(5) respectively prohibit
employers from interfering, restraining, or coercing employees in the exercise of their
rights to self-organize and to bargain collectively, and from refusing to bargain with a
certified representative. See 29 U.S.C. § 158(a)(1), (5).
7
“employees.” VSP did not dispute its refusal to recognize or bargain with the Union, but
simply maintained that it had no duty in law to bargain because the Board’s underlying
certification of the Union was fatally erroneous.
On May 25, 2021, a three-member panel of the Board granted the General Counsel’s
motion for summary judgment, ruling in its Bargaining Order that VSP’s refusal to bargain
with the Union constituted an unfair labor practice under the Act. The Bargaining Order
directed VSP to recognize the Union as the certified representative of the janitors working
at the SSA facility; to engage in the bargaining process at the request of the Union; to
refrain from intrusions on the rights afforded to the janitors by § 7 of the Act; and to post
certain remedial notices at the SSA facility. See Bargaining Order 3. The Board declined
to address VSP’s renewed employee-status argument, resolving that because VSP had
failed to adduce newly discovered evidence or special circumstances calling for
reconsideration of the Board’s earlier factual determination, it had not presented a
“properly litigable” issue in the unfair labor practice proceeding. Id. at 1.
VSP timely filed a petition for review of the Bargaining Order with this Court on
June 2, 2021. Because the Bargaining Order was based in part on the Board’s
determination in the 2019 Decision and Direction of Election that the disabled VSP janitors
are statutory “employees,” that determination and the associated administrative record are
also before the Court in this matter. See 29 U.S.C. § 159(d) (permitting review of
underlying representation proceedings where court of appeals reviews an unfair labor
practice order predicated on such proceedings); see also Boire v. Greyhound Corp., 376
U.S. 473, 477 (1964). Two weeks later, on June 16, 2021, the Board filed a cross-
8
application for enforcement of the Bargaining Order, and the Union was thereafter
permitted to intervene in these proceedings in support of the Board’s cross-application.
We possess jurisdiction pursuant to 29 U.S.C. § 160(e)-(f) (authorizing petition for review
or enforcement of final order of Board in appropriate court of appeals).
II.
VSP now advances its prior position — asserted in the underlying representation
and unfair labor practice proceedings — that its relationship with the disabled janitors
working at the Baltimore County SSA facility is “primarily rehabilitative” in nature, and
that the Board’s Decision and Direction of Election incorrectly classified the disabled
janitors as statutory “employees.” VSP argues that the Board therefore lacked jurisdiction
to certify the Union as the janitors’ collective bargaining representative and that the
Bargaining Order was in error by association.
We review the Board’s findings of fact — including the status of workers as
“employees” within the meaning of the Act — only to determine if those findings are
“supported by substantial evidence in the record as a whole.” See Lee v. NLRB, 393 F.3d
491, 494 (4th Cir. 2005) (citing Universal Camera Corp. v. NLRB, 340 U.S. 474, 488
(1951)). “Substantial evidence” means “more than a scintilla of evidence, but less than a
preponderance.” See Pac Tell Grp., Inc. v. NLRB, 817 F.3d 85, 90 (4th Cir. 2015). As a
result, our review of the Board’s decision is “limited,” see Tenocap, LLC v. NLRB, 1 F.4th
304, 312 (4th Cir. 2021), and we “extend considerable deference to the NLRB’s
interpretation of [the Act’s definition of ‘employee’] and its application of [that] provision
9
to a particular worker or class of workers,” see NLRB v. Labor Ready, Inc., 253 F.3d 195,
199 (4th Cir. 2001). In these circumstances, because ample record evidence supports the
Board’s employee-status determination, we are obliged to enforce its Bargaining Order.
III.
A.
Section 7 of the Act vests the right to engage in concerted activity for purposes of
collective bargaining “or other mutual aid or protection” only in “employees.” See 29
U.S.C. § 157. Section 2(3) of the Act, meanwhile, defines an “employee” simply — if
perhaps unhelpfully — as “any employee.” Id. § 152(3). The Supreme Court has observed
that the Act “seems to reiterate the breadth of the ordinary dictionary definition” of that
term, such that it captures “any person who works for another in return for financial or
other compensation.” See NLRB v. Town & Country Elec., Inc., 516 U.S. 85, 90 (1995)
(quoting American Heritage Dictionary 604 (3d ed. 1992)).
Under Board precedent, the statutory “employee” status of disabled individuals
working in rehabilitative vocational settings turns on whether the relationship between
worker and putative employer is best characterized as “typically industrial” or instead
“primarily rehabilitative.” See Brevard Achievement Ctr., Inc., 342 NLRB 982, 983-84
(2004); Goodwill Indus. of Denver, 304 NLRB 764, 765 (1991). The Board declines to
assert jurisdiction over “primarily rehabilitative” employment relationships as a prudential
matter, in recognition of the fact that the Act “contemplates a primarily economic
relationship between employer and employee,” wherein “employees who do not possess
10
full freedom of association or actual liberty of contract” will experience an inequity of
bargaining power as compared to their better-organized employers. See Brevard, 342
NLRB at 984-85 (quoting 29 U.S.C. § 151). But “[i]t is well-established that the Board is
not precluded from asserting its jurisdiction merely because an employer is . . . engaged in
a worthy purpose,” and the Board classifies individuals working in rehabilitative settings
as “employees” if there is a classically economic working relationship with the employer
that is “typically industrial” and reflects “private sector working conditions.” See Goodwill
Indus. of Denver, 304 NLRB at 765-66; see also Balt. Goodwill Indus., Inc. v. NLRB, 134
F.3d 227, 229 (4th Cir. 1998).
The “typically industrial” versus “primarily rehabilitative” determination calls for a
case-by-case factual assessment, and “the party seeking . . . to exclude otherwise eligible
employees from the coverage of the Act” bears the burden of proving a “primarily
rehabilitative” employment relationship to the Board. See Goodwill Indus. of N. Ga., Inc.,
350 NLRB 32, 35 (2007). In conducting that analysis, the Board weighs the following,
non-exhaustive list of factors identified in its Brevard decision:
(1) The existence of employer-provided counseling, training, or
rehabilitative services;
(2) The existence of any production standards;
(3) The existence and nature of disciplinary procedures;
(4) The applicable terms and conditions of employment (particularly in
comparison to those of nondisabled individuals employed at the same
facility); and
(5) The average tenure of employment, including the existence/absence
of a job-placement program.
11
See Brevard, 342 NLRB at 984.
B.
In concluding that VSP had failed to meet its burden of demonstrating a “primarily
rehabilitative” employment relationship, the Board resolved that the disabled janitors’
affiliation with VSP is more akin to that found in traditional private sector employment
settings, such that the Act’s leading purpose of restoring balance to bargaining power
disparities is served by classifying the janitors as statutory “employees.” See A.R. 839. To
be sure, the Board acknowledged that certain testimony received during its representation
hearings pointed toward a “primarily rehabilitative” relationship. But it ultimately ruled
that “[those] facts are insufficient to overcome the other facts supporting a traditionally
industrial relationship” and that each Brevard factor weighed against finding a principally
“rehabilitative” connection between VSP and its disabled janitors. Id. Our review of the
record fully supports the Board’s determination.
1.
The Board first found that the terms and conditions of employment for VSP’s
disabled and nondisabled janitors are “virtually indistinguishable,” thereby suggesting a
“typically industrial” relationship under Brevard. See A.R. 828. The Board relied on
evidence indicating that all janitors at the SSA facility — regardless of disability status —
are assigned to shifts of the same length; receive equivalent wages and benefits; have the
same job description; and are afforded equal amounts of break time. The Board also
observed that a 90-day probationary period applies to all newly hired janitors and that VSP
12
has demonstrated a “ready willingness” to discharge any janitor rendering unsatisfactory
performance during that probationary period. Id. at 839. Testimony further indicated that
all janitors are expected to complete their assigned tasks during their shift, and the Board
took that policy to indicate the implementation of production standards, following its
conclusion in Goodwill Industries of North Georgia that an identical requirement
evidenced the employer’s maintenance of productivity standards and weighed against a
finding of a “primarily rehabilitative” relationship with disabled janitorial workers. See
350 NLRB at 38.
VSP’s case manager, Veronica White, maintained that although all janitors have the
same job description, disabled janitors may have their assigned tasks modified if their
disabilities interfere with successful completion of those tasks. But the two janitors who
appeared at the Board’s representation hearings — Gregory Parker and Wilzona Tyler —
refuted White’s testimony, relating that they had not previously witnessed any task
modifications because of a colleague’s disability-related difficulties. The Board observed
that White does not work full-time at the SSA facility and is there only “one or two times
a week,” and also that VSP neglected to call any supervisors or other personnel working at
the SSA facility daily. See A.R. 829. Accordingly, the Board accorded “greater weight”
to Parker and Tyler’s testimony and found that, in any event, no testimony indicated that
VSP’s disabled janitors could “work at their own pace” as in the Board’s Brevard decision,
where disabled workers and their employer were held to possess a “primarily
rehabilitative” relationship. Id. at 827-28; Brevard, 342 NLRB at 983. Despite some
inconsistency regarding the lenience afforded to VSP’s disabled janitors, substantial
13
evidence supports the Board’s judgment that universally applied terms and conditions of
employment, as well as the general maintenance of productivity standards, disfavor finding
a “primarily rehabilitative” workplace relationship in this case.
2.
The evidence presented to the Board made clear that VSP does provide certain
counseling and rehabilitative services to its disabled (and nondisabled) janitors, primarily
through White. As previously noted, White works at the SSA facility only one to two days
per week; she is otherwise “on call” while working at other VSP facilities. See A.R. 138-
39. White provides a range of services to all janitors at the SSA facility — including
assistance with budgeting, locating housing, scheduling medical appointments, and
drafting resumés — although janitors are not required to meet with White on any fixed
schedule. No evidence indicates that VSP employs any full-time job trainers, mental health
counselors, or other comparable personnel at the SSA facility. VSP thus stands apart from
the employer in the Board’s 1991 Goodwill Industries of Tidewater decision, where the
employer’s retention of a full-time job-placement counselor and assignment of a dedicated
skills trainer to each of its disabled janitorial employees informed the Board’s finding of a
“primarily rehabilitative” employment relationship. See 304 NLRB 767, 768-69 (1991).
The record shows that VSP’s disabled janitors do have access to “job coaches” that
visit the SSA facility and assist janitors in completing their work, but White testified that
those coaches “work in conjunction with [VSP]” and “are generally employed through
other agencies,” such as Baltimore nonprofit organizations. See A.R. 427-29.
Accordingly, the Board discounted the job coaches as not qualifying as an “employer-
14
provided” counseling service. Id. at 832. Other VSP managers testified as to VSP’s
employment of nine “job-retention” counselors of its own, but those counselors do not
work at the SSA facility, are part of VSP’s distinct vocational program (not its employment
program), and, as the Board observed, the two testifying janitors stated that “they had never
heard of these nine counselors prior to the hearing.” Id. at 37-39, 832.
The Board acknowledged that, especially in view of White’s services, “there are
some rehabilitative elements” to VSP’s relationship with its disabled janitors. See A.R.
831. The Board also observed, however, that White spends relatively little time at the SSA
facility, that she is “essentially [VSP’s] sole source of counseling, training, and
rehabilitation services,” and that her services “would be more significant” if they were
offered only to disabled janitors. Id. at 829, 831. Given that VSP appears to employ no
full-time counseling personnel at the SSA facility and that its maintenance of a
probationary period “is inherently contradictory to a rehabilitative relationship,” the Board
resolved that Brevard’s “counseling services” factor weighed against finding a “primarily
rehabilitative” relationship. Id. at 833. Although we recognize that the record confirms
VSP’s provision of at least some rehabilitative and counseling services to its disabled
janitors, we are satisfied that far more than “a scintilla of evidence” supports the Board’s
finding that VSP’s services are not sufficient to establish a rehabilitative relationship
standing alone. See Pac Tell Grp., Inc. v. NLRB, 817 F.3d 85, 90 (4th Cir. 2015).
3.
Among the Brevard factors, the Board appeared to find the one designated as “the
existence and nature of disciplinary procedures” as the most problematic for VSP in
15
demonstrating a “primarily rehabilitative” relationship. Indeed, the record reveals that VSP
applies a progressive discipline system to all of its janitors — once more irrespective of
their disability status — and an exhibit setting forth the terms of that system indicates that
supervisors are not directed to discipline disabled janitors less severely or otherwise
differently than nondisabled janitors. See A.R. 306-17. Testifying at the September 2019
representation hearing, a VSP project manager confirmed that she considered the same
criteria when applying corrective actions to disabled and nondisabled janitors. Id. at 516-
18. The Board reiterated its concern with VSP’s maintenance of a probationary period
applicable to the disabled janitors, and recognized that disabled janitors who exhaust their
available corrective discipline options will be discharged, ordinarily without eligibility for
rehiring. And the record confirms that disabled janitors have been fired for a variety of
infractions, including punctuality and attendance issues, inappropriate behavior, taking
unauthorized breaks, and failing to properly store supplies. In that sense, this matter stands
in stark contrast to the D.C. Circuit’s decision in Davis Memorial Goodwill Industries, Inc.
v. NLRB, where disabled workers in a “primarily rehabilitative” employment setting “could
not be discharged” at all, but were instead referred to a rehabilitation program when they
violated workplace rules. See 108 F.3d 406, 411 (D.C. Cir. 1997).
The Board credited testimony that disabled janitors who have committed infractions
are often counseled by White instead of facing formal disciplinary measures, and the record
confirms that disabled janitors are disciplined less frequently than their nondisabled
colleagues. White testified, however, that nondisabled janitors are also given an
opportunity to meet with her when disciplinary actions are under consideration, and the
16
Board opined that, despite the evidence of leniency, “[VSP] will issue discipline to janitors
at the [SSA facility] for misconduct related to their disabilities.” See A.R. 835. As the
Board observed, that practice departs from the standards of the “primarily rehabilitative”
employer in the Brevard decision, where disabled janitors were fully “exempt from
discipline for any conduct related to their disabilities.” See 342 NLRB at 983, 986. That
practice also renders this case distinct from the Board’s decision in Goodwill Industries of
Denver, where the employer disciplined its disabled workers “only in extreme cases” and
the Board found the workers not to be statutory “employees.” See 304 NLRB at 765-66.
Put simply, the evidence demonstrates that VSP disciplines and discharges its disabled
janitors with some regularity, thereby supporting the Board’s determination that VSP’s
relationship with the janitors is less “rehabilitative” and more typical of ordinary private
sector employment.
4.
The Board lastly compared VSP’s employment program to instances where
“rehabilitative” employers maintain robust job-placement programs and where their
disabled employees “routinely make the transition to competitive employment.” See A.R.
837. Although case manager White does provide some job-placement services to VSP’s
disabled janitors — including assistance with resumé drafting and conducting mock
interviews — VSP does not employ a full-time job-placement coordinator and lacks a
formal program designed to aid janitors in securing competitive employment outside the
SSA facility. Nor are any time limits placed on janitors’ tenure at the facility. The record
suggests that, on average, janitors stay with VSP for about 13 years. Id. at 54. And in the
17
five years preceding the Board’s 2019 representation hearings, only seven disabled janitors
left VSP for outside employment — two of whom reported receiving assistance from White
— while VSP discharged 19 disabled janitors during that same period.
Accordingly, the Board resolved that “it is significantly more likely that [VSP] will
discharge one of its disabled workers at the [SSA facility] than help transition that worker
to private competitive employment.” See A.R. 838. Once again, the record evidence
pertaining to employee tenure and the lack of a noteworthy job-placement program lends
strong support to the Board’s ultimate employee-status determination.
C.
Based on the record as a whole, and in consideration of the deference that we must
afford the Board’s factual findings, substantial evidence supports the Board’s
determination in its Decision and Direction of Election that VSP failed to demonstrate a
“primarily rehabilitative” employment relationship and that its disabled janitors are
“employees” within the meaning of the Act. The Board therefore possessed jurisdiction to
certify the Union as the bargaining representative of the VSP janitors. Because VSP
admitted its refusal to bargain with the Union in contravention of § 8(a)(1) and (5) of the
Act, there is no error in the Bargaining Order, and we grant its enforcement.
IV.
Pursuant to the foregoing, we deny VSP’s petition for review and grant the Board’s
cross-application for enforcement of the Bargaining Order.
18
PETITION FOR REVIEW DENIED;
CROSS-APPLICATION FOR ENFORCEMENT GRANTED
19
NIEMEYER, Circuit Judge, concurring:
I have substantial doubt that categorically the disabled janitors employed by
Vocational Services Program (VSP) at the Social Security Administration (SSA) site in
Baltimore are entitled to collective bargaining rights under the National Labor Relations
Act (NLRA). The NLRA’s collective bargaining guarantees are intended to balance
bargaining power disparities between employers and employees engaged in a traditional
economic employment relationship. In recognition of this statutory intent, the National
Labor Relations Board (NLRB) has held that workers engaged in rehabilitative — rather
than economic or “typically industrial” — relationships with their employer are not
“employees” entitled to collective bargaining rights under the NLRA. See, e.g., Brevard
Achievement Ctr., Inc., 342 N.L.R.B. 982, 983–86 (2004). VSP, however, hired disabled
janitors to provide services to the SSA pursuant to the AbilityOne Program authorized by
the Javits-Wagner-O’Day Act, 41 U.S.C. §§ 8501–8506. This Act creates a statutory and
regulatory framework aimed at “increas[ing] employment and training opportunities for
[disabled] persons” by promoting the federal government’s procurement of goods and
services from nonprofit agencies that employ disabled individuals. 41 C.F.R. § 51–1.1.
The Act and its implementing regulations mandate a rehabilitative — not economic —
relationship between the employer nonprofit agencies and their disabled employees,
requiring that the agencies, for example, deliver the majority of their services through
disabled persons unable to participate in “normal competitive employment”; that they
maintain job placement programs to transition those workers to competitive employment;
and that they adhere to other parameters foreign to traditional economic employment
20
relationships. See id. §§ 51–1.3, 51–4.3. The parties do not dispute that VSP is in
compliance with the requirements of the Javits-Wagner-O’Day Act and its regulations.
Because of this, I would approach this case — and any case involving disabled workers
employed pursuant to the Javits-Wagner-O’Day Act — with a strong presumption that the
employees are engaged in a rehabilitative employment relationship with their employer
and are therefore not entitled to the NLRA’s collective bargaining guarantees.
Collective bargaining is afforded by the NLRA to “restor[e] equality of bargaining
power between employers and employees.” 29 U.S.C. § 151. The Act contemplates an
“arms-length economic relationship[]” between employers and employees, under which
the two sides jockey for advantage “through a contest of economic strength.” Brevard,
342 N.L.R.B. at 985; see also NLRB v. Burns Int'l Sec. Servs., Inc., 406 U.S. 272, 288
(1972) (stating that “[t]he congressional policy manifest in the [NLRA] is to enable the
parties to negotiate for any protection either deems appropriate, but to allow the balance of
bargaining advantage to be set by economic power realities”). In this traditional economic
relationship, employers are generally incentivized to minimize the wages and benefits that
they provide to their employees in order to increase profits, whereas employees are
incentivized to maximize those wage-and-benefit outlays. While the ability of any
individual employee to negotiate successfully for higher wages or benefits is negligible,
collective bargaining allows employees to “pool[] their economic strength” and thereby
enhance their bargaining power. NLRB v. Allis-Chalmers Mfg. Co., 388 U.S. 175, 180
(1967). And with that enhanced bargaining power, employees can negotiate with their
employers on a more-level playing field. See Phelps Dodge Corp. v. NLRB, 313 U.S. 177,
21
183 (1941) (asserting that the NLRA “leaves the adjustment of industrial relations to the
free play of economic forces but seeks to assure that the play of those forces be truly free”).
At bottom, then, the employees contemplated by the NLRA are best understood as
individuals who can benefit economically from collective bargaining with their employers.
The employees in this case, however, do not fit that profile. Here, the relevant
workers are disabled janitors working for a government-determined wage under a program
designed to rehabilitate their vocational skills and transition them to competitive economic
employment. Thus, their relationship with their employer was not created for profit but
rather for rehabilitative purposes, in accordance with the design of the Javits-Wagner-
O’Day Act.
The fundamental purpose of the Javits-Wagner-O’Day Act is directed specifically
at the rehabilitation of severely disabled persons in respect to employment. See 41 C.F.R.
§ 51–1.1. The House Committee on Government Operations, for example, in a report
issued shortly before the Act’s passage, framed the Act as “an important rung in the ladder
toward expanding a successful self-help rehabilitation program through work.” H.R. Rep.
No. 92-228, at 6 (1971). And the Senate Committee on Labor and Public Welfare similarly
highlighted how the Act would transition disabled workers from “dependency” to “self-
sufficiency.” S. Rep. No. 92-41, at 2 (1971). For implementation, the Act tasked the
Committee for Purchase From People Who Are Blind or Severely Disabled (now known
as the “AbilityOne Commission”) with maintaining a federal procurement list of products
and services offered by “qualified nonprofit agenc[ies]” that employ the blind and severely
disabled. See 41 U.S.C. § 8503(a). To obtain federal contracts through this procurement
22
list, qualified nonprofits — like VSP — must ensure that at least 75% of the “work-hours
of direct labor required to furnish [their] . . . services” are provided by “persons with severe
disabilities,” defined as those who have “a severe physical or mental impairment . . . which
so limits [their] functional capabilities . . . that [they are] unable to engage in normal
competitive employment over an extended period of time.” 41 C.F.R. § 51–1.3; see also
41 U.S.C. § 8501(6), (8). Nor is it sufficient for these qualified nonprofits simply to employ
disabled individuals. Rather, regulations impose a range of requirements on qualified
nonprofits to ensure that they are complying with the Act’s rehabilitative aims. For
example, these regulations require, inter alia, that qualified nonprofits maintain job
placement programs to assist their workers in transitioning to “normal competitive
employment”; that they maintain written documentation detailing each disabled worker’s
disability and ability to participate in competitive employment; and that they complete
annual compliance certifications and comply with ad hoc records requests from AbilityOne
Program authorities. See 41 C.F.R. § 51–4.3. Thus, the employment relationship
mandated by the Act’s requirements is inherently rehabilitative, rather than economic. The
parties in this case do not dispute that VSP was properly functioning in accordance with
those requirements. Indeed, the record in this case shows how VSP’s relationship with its
disabled employees at the SSA site aligns with the rehabilitative aims of the Javits-Wagner-
O’Day Act.
The record in this case shows that VSP is a distinct department of Sinai Hospital of
Baltimore that exists to provide employment opportunities to individuals with disabilities
with the goal of helping those individuals to “lift themselves up to find [job] placement”
23
elsewhere. Many of the individuals coming to VSP are referred to it by the Maryland
Division of Rehabilitation Services, the Department of Veterans Affairs, and other
community rehabilitation providers such as The ARC Baltimore or Chimes. Of the 44
janitors VSP employed to work at the SSA site, 35 were severely disabled. VSP does not
make any profit from the employees’ work at the SSA and the wages that it pays are “solely
funded” by its contract with SSA at rates “controlled by” Department of Labor wage
determinations. In short, VSP functions to benefit disabled workers by rehabilitation, not
to make a profit, and the relationship it has with its employees is thus fundamentally unlike
the traditional economic employment relationships the NLRA is designed to regulate.
Importantly, the NLRB has recognized the distinction between economic and
rehabilitative employment relationships, concluding that rehabilitative employees are not
statutory employees under the NLRA. See Brevard, 342 N.L.R.B. at 984–85; see also Balt.
Goodwill Indus., Inc. v. NLRB, 134 F.3d 227, 229–31 (4th Cir. 1998) (per curiam). As the
Board has explained, a rehabilitative employer’s objective in hiring an individual is not to
maximize its own profits or otherwise secure its own economic advantage, but rather to
“rehabilitat[e] [the individual] and prepar[e] them for work in private competitive
industry.” Goodwill Indus. of S. Cal., 231 N.L.R.B. 536, 537 (1977), overruled on other
grounds by Goodwill Indus. of Denver, 304 N.L.R.B. 764 (1991). Thus, “[t]he conflicting
interests present in traditional, primarily economic employment relationships are absent”
in the rehabilitative context. Brevard, 342 N.L.R.B. at 985–86; see also Goodwill Indus.
of S. Cal., 231 N.L.R.B. at 537 (describing how a rehabilitative employer’s “primary
objectives are the converse of a normal employer's objectives”). And because of this, the
24
Board has recognized that the injection of collective bargaining into rehabilitative
employment contexts might actually undermine the rehabilitative purpose of such
arrangements. See Brevard, 342 N.L.R.B. at 988 (reasoning that “[t]he imposition of
collective bargaining at the rehabilitative stage could interfere with the rehabilitation
process itself”). As the Board in Brevard summarized:
The imposition of collective bargaining on relationships that are not
primarily economic does not further the policies of the [NLRA]. The Act is
premised on the view that in arms-length economic relationships, there can
be areas of conflict between employers and employees that, if the parties
cannot reach agreement, can be resolved through a contest of economic
strength in the collective-bargaining process if the employees choose to
bargain collectively. This premise is not well suited to a setting that is not
primarily economic but primarily rehabilitative.
Id. at 985; see also Balt. Goodwill Indus., 134 F.3d at 229; Davis Mem’l Goodwill Indus.,
Inc. v. NLRB, 108 F.3d 406, 410 (D.C. Cir. 1997).
In sum, while the NLRA protects employees in an economic relationship with their
employers, disabled workers employed in compliance with the Javits-Wagner-O’Day Act
are necessarily in a rehabilitative relationship with their employers. Accordingly, I would
approach this case with a strong presumption that disabled employees hired under a Javits-
Wagner-O’Day Act program, such as the one conducted by VSP, are not, as a class,
“employees” within the ambit of the NLRA and therefore are not entitled to the collective
bargaining rights afforded by the Act. See 29 U.S.C. § 157.
Had VSP argued for such a categorical presumption before us, I would have
welcomed the discussion and engaged both parties on that point. Instead, however, VSP
focused its briefing on whether substantial evidence supported specific factual findings
25
made by the Board. Because the record includes substantial evidence to support those
findings, albeit narrow in scope, I concur in the opinion of Judge King, which ably
demonstrates this.
26