Palmetto Prince George Operating v. NLRB , 841 F.3d 211 ( 2016 )

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 15-2143
PALMETTO PRINCE GEORGE OPERATING, LLC, d/b/a Prince George
Healthcare Center,
Petitioner,
v.
NATIONAL LABOR RELATIONS BOARD,
Respondent.
No. 15-2221
NATIONAL LABOR RELATIONS BOARD,
Petitioner,
v.
PALMETTO PRINCE GEORGE OPERATING, LLC, d/b/a Prince George
Healthcare Center,
Respondent.
On Petition for Review and Cross-application for Enforcement of
an Order of the National Labor Relations Board. (10-CA-154373)
Argued: September 21, 2016 Decided: November 1, 2016
Before MOTZ, TRAXLER, and AGEE, Circuit Judges.
Petition for review denied; cross-petition for enforcement
granted by published opinion. Judge Motz wrote the opinion, in
which Judge Traxler and Judge Agee joined.
ARGUED: Jennifer Marie Fowler-Hermes, WILLIAMS, PARKER,
HARRISON, DIETZ & GETZEN, Sarasota, Florida, for
Petitioner/Cross-Respondent. Meghan Brooke Phillips, NATIONAL
LABOR RELATIONS BOARD, Washington, D.C., for Respondent/Cross-
Petitioner. ON BRIEF: John M. Hament, KUNKEL MILLER & HAMENT,
Sarasota, Florida, for Petitioner/Cross-Respondent. Richard
Griffin, Jr., General Counsel, Jennifer Abruzzo, Deputy General
Counsel, John H. Ferguson, Associate General Counsel, Linda
Dreeben, Deputy Associate General Counsel, Robert J. Englehart,
Supervisory Attorney, NATIONAL LABOR RELATIONS BOARD,
Washington, D.C., for Respondent/Cross-Petitioner.
2
DIANA GRIBBON MOTZ, Circuit Judge:
In this case, nurses sought to join a union and engage in
collective bargaining with their employer. The National Labor
Relations Board found that the nurses could unionize, rejecting
the employer’s contention that they were ineligible supervisors
within the meaning of the National Labor Relations Act, 29
U.S.C. § 152(11). When the employer refused to bargain with the
nurses’ union, the Board ordered the employer to do so. The
employer then filed this petition for review, and the Board
cross-petitioned to enforce its order. Substantial evidence
supports the Board’s finding that the nurses are not supervisors
because their duties do not require the exercise of independent
judgment. Therefore, we deny the employer’s petition and grant
the Board’s cross-petition.
I.
A.
Palmetto Prince George Operating, LLC, operates a nursing
home in Georgetown, South Carolina. The nursing home provides
care twenty-four hours a day, seven days a week.
Palmetto’s management team consists of a Director of
Nursing, an Assistant Director of Nursing, and three Unit
Managers (collectively the “Managers”). The Managers monitor
and evaluate the quality of nursing care, supervise and
3
discipline nursing staff, and arrange the schedules and
assignments of the nursing staff.
The Center employs twenty-three nurses to staff its units:
six registered nurses (RNs) and seventeen licensed practical
nurses (LPNs) (collectively, the “Nurses”). All assess
patients, answer call lights, administer medications, and
perform general patient care duties. 1 In addition to the Nurses,
the Center employs forty certified nursing assistants (CNAs).
The CNAs assist residents with daily tasks, such as helping them
bathe, repositioning them in bed, and aiding them in using the
restroom. Palmetto’s handbook describes the Nurses as the CNAs’
“first line of authority,” and it places the Nurses above the
CNAs on its organizational chart.
B.
In 2015, the United Steel, Paper and Forestry, Rubber,
Manufacturing, Energy, Allied Industrial and Service Workers
Union sought to represent the Nurses as their exclusive
bargaining representative. On January 12, 2015, the Union filed
an election petition with the Board. At the pre-election
hearing before the Regional Director, Palmetto argued that the
Nurses are supervisors and therefore have no collective
1
RNs and LPNs share the same duties, with the exception
that LPNs cannot sign assessments or administer small doses of
intravenous medications. These differences do not bear on the
question of whether they are supervisors.
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bargaining rights under the National Labor Relations Act. See
29 U.S.C. § 152(3) (2012).
Section 152(11) of the Act defines “supervisor” as:
[A]ny individual having authority, in the interest of
the employer, 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, or effectively to
recommend such action, if in connection with the
foregoing the exercise of such authority is not of a
merely routine or clerical nature, but requires the
use of independent judgment.
Palmetto contends that the Nurses are supervisors because they
have the authority to discipline and responsibly direct the CNAs
and must use independent judgment in exercising those two
authorities. The parties have stipulated that the Nurses lack
authority to perform any of the other ten functions listed in
§ 152(11).
The Regional Director concluded that Palmetto failed to
prove the Nurses are supervisors. Accordingly, the Regional
Director ordered an election, and the Nurses voted in favor of
having the Union represent them. After the election, the Union
requested that Palmetto recognize it as the Nurses’
representative and begin bargaining with it. Palmetto refused,
and the Union filed a refusal-to-bargain charge with the Board.
The Board’s General Counsel then filed a complaint against
Palmetto alleging that it had committed unfair labor practices
in violation of §§ 158(a)(1) and (5) of the National Labor
5
Relations Act. The Board granted the General Counsel summary
judgment, adopting the Regional Director’s findings and
concluding that Palmetto had indeed violated §§ 158(a)(1) and
(5) of the Act. Palmetto filed a petition for review with us,
and the Board filed a cross-petition to enforce its order.
II.
A.
We review the Board’s factual findings regarding
supervisory status for substantial evidence. Glenmark Assoc.,
Inc. v. NLRB, 147 F.3d 333, 338 (4th Cir. 1998). We affirm if
the record contains enough evidence that “a reasonable mind
might accept [it] as adequate to support a conclusion.” Gestamp
South Carolina, LLC v. NLRB, 769 F.3d 254, 263 (4th Cir. 2014)
(internal quotation marks omitted). We defer to the Board’s
factual findings even if we might have resolved factual disputes
differently. Id.
The Supreme Court has held that § 152(11) establishes a
three-prong test for supervisory status. See, e.g., NLRB v.
Kentucky River Cmty. Care, Inc., 532 U.S. 706, 712–13 (2001).
Employees are supervisors if they (1) have the authority to
perform any one of the twelve functions listed in § 152(11) or
effectively recommend such action, (2) exercise that authority
in a manner that is not merely clerical or routine but requires
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the use of independent judgment, and (3) hold that authority in
the interest of the employer. Id. The employer bears the
burden of proving all three prongs. Id. at 711–12. And it must
do so by a preponderance of the evidence. Pac Tell Group, Inc.
v. NLRB, 817 F.3d 86, 91 (4th Cir. 2016).
In this case, the parties dispute only the first and second
prongs of this test. We need only address the second -- whether
the Nurses exercise authority requiring independent judgment.
The Act leaves the term “independent judgment” undefined.
Moreover, the Supreme Court has recognized that the term “is
ambiguous with respect to the degree of discretion required for
supervisory status.” Kentucky River, 532 U.S. at 713 (emphasis
in original). The Court explained that it is “undoubtedly true
that the degree of judgment that might ordinarily be required to
conduct a particular task may be reduced below the statutory
threshold by detailed orders and regulations issued by the
employer.” Id. at 713-14. The Supreme Court concluded that
“[i]t falls clearly within the Board’s discretion to determine,
within reason, what scope of discretion qualifies.” Id.
Accordingly, a court defers to the Board’s interpretation of
“independent judgment” so long as it is “reasonable and
consistent with the Act.” Id. at 711–12.
After the Supreme Court decided Kentucky River, the Board
explained that to exercise independent judgment, “an individual
7
must at a minimum act, or effectively recommend action, free of
the control of others and form an opinion or evaluation by
discerning and comparing data.” In re Oakwood Healthcare, Inc.,
348 N.L.R.B. 686, 693 (2006). Crucially, the Board concluded in
Oakwood that “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 a higher
authority, or in the provisions of a collective bargaining
agreement.” Id.
B.
Palmetto does not challenge the reasonableness of the
Board’s current, post-Kentucky River interpretation of
“independent judgment.” Nor does Palmetto contend that this
interpretation is inconsistent with the Act. Indeed, Palmetto
conceded at oral argument that the Board’s interpretation of
“independent judgment” in Oakwood controls. Palmetto maintains,
however, that our analysis of “independent judgment” in cases
involving nurses issued prior to Kentucky River and Oakwood is
in all respects “consistent” with those cases, and so governs
the case at hand. Reply Br. 2.
Our pre-Oakwood cases responded to the Board’s perplexing
application of § 152(11) to nurses. Before Kentucky River, the
Board took the position that nurses do not exercise “independent
judgment” any time they exercise “ordinary professional or
8
technical judgment in directing less-skilled employees to
deliver services.” Kentucky River, 532 U.S. at 713 (quoting the
Board’s brief).
In a series of cases, we rejected that interpretation of
“independent judgment” as unreasonable and held that the nurses
at issue in those cases were supervisors. See, e.g., Beverly
Enterprises, Virginia, Inc. v. NLRB, 165 F.3d 290, 298 (4th Cir.
1999) (en banc) (holding that nurses were supervisors because
they exercised § 152(11) authorities “by and large without any
guidelines or established criteria”); Glenmark, 147 F.3d at 341-
45 (holding that nurses were supervisors given their authority
to schedule and discipline nursing assistants without management
approval).
After we decided these nurse/supervisor cases, the Supreme
Court in Kentucky River similarly rejected the Board’s sharp
distinction between professional and independent judgment,
holding that it was unreasonable to conclude that professional
judgment can never be “independent” for the purposes of the Act.
532 U.S. at 714, 721 (citation omitted). In Oakwood, the Board
adopted its current interpretation of “independent judgment” to
comport with Kentucky River.
This is the first case requiring us to address the
precedential value of our pre-Oakwood nurse/supervisor cases.
It is settled law that an agency construction entitled to
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deference supersedes a prior judicial construction of an
ambiguous statute. Nat’l Cable & Telecomm. Ass’n v. Brand X
Internet Servs., 545 U.S. 967, 982 (2005). The phrase
“independent judgment” is ambiguous, and we have always
understood that the Board’s reasonable and consistent
interpretations of it are entitled to deference. See, e.g.,
Beverly, 165 F.3d at 296; Glenmark, 147 F.3d at 338.
In Oakwood, the Board adopted a reasonable interpretation
of “independent judgment.” As we recently noted, there is no
conflict between the Board’s interpretation and the text of
§ 152(11) or Congress’s intent to distinguish “true supervisors”
from employees whom the Act protects “even though they perform
‘minor supervisory duties.’” Pac Tell, 817 F.3d at 91 (quoting
Oakwood, 348 N.L.R.B. at 686); see also NLRB v. Health Care &
Retirement Corp. of America, 511 U.S. 571, 586–88 (1994)
(recounting the legislative history of § 152(11)). Indeed, in
Oakwood the Board did nothing more than implement guidance
offered directly by the Supreme Court. See Kentucky River, 532
U.S. at 713–14 (noting the significance when determining
“independent judgment” of an employer’s “detailed orders and
regulations”).
We therefore defer to the Board’s interpretation of
“independent judgment” and apply its standards here. To the
extent our pre-Oakwood cases accord with those standards, they
10
remain instructive. 2 However, the Board’s current standards
supersede our prior cases to the extent the two conflict. Thus,
for example, before Oakwood, we considered it highly probative
of independent judgment if nurses served as the most senior
staff on site for significant portions of the work week. See
Beverly, 165 F.3d at 297–98; Glenmark, 147 F.3d at 341–42; NLRB
v. St. Mary’s Home, Inc., 690 F.2d 1062, 1066 (4th Cir. 1982).
In accordance with Kentucky River, when detailed employer rules
severely constrain the nurses’ discretion, Oakwood indicates
that this fact is not as probative as we had held. Moreover, in
Golden Crest Healthcare Center, a case decided the same day as
Oakwood, the Board expressly applied Oakwood to hold that the
nurses at issue there, although serving for significant periods
of time as the most senior staff on site, were not supervisors,
particularly given that managers remained on-call after hours.
348 N.L.R.B. 727, 727, 730 n.10 (2006).
With these legal principles in mind, we turn to the case at
hand.
2
In Oakwood, the Board also adopted a new interpretation of
the term “responsibly to direct.” Oakwood, 348 N.L.R.B. at 690–92.
Here, we need not address the extent to which this new
interpretation displaces our prior cases.
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III.
Palmetto argues that the Nurses here are supervisors
because they have the authority to discipline and responsibly
direct the work of CNAs in a manner requiring the use of
independent judgment. Both arguments fail for the same reason:
Palmetto simply has not shown that the Nurses must use any
independent judgment when performing these functions.
A.
We first consider the evidence Palmetto offered in support
of its contention that the Nurses must exercise independent
judgment when disciplining CNAs.
Palmetto uses a progressive discipline policy that
classifies violations into three categories. Category I
includes minor infractions, such as failing to comply with the
dress code or departmental procedures. Category II includes
violations such as threatening other employees and ignoring
protocols for lifting and moving residents. Category III
includes the most serious violations, such as sleeping on the
job, insubordination, and neglecting or abusing residents.
Palmetto’s current handbook lists the following disciplinary
steps: documented oral counseling, reprimands, written
warnings, suspension, and discharge.
Any employee can report a disciplinary violation, and in
some cases, employees must report them. In particular, failure
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to report a Category II or Category III violation is itself a
Category II violation. The Managers conduct separate
investigations of misconduct and make all final disciplinary
decisions.
Nevertheless, Palmetto insists that the Nurses must use
independent judgment in disciplining CNAs. The record before us
contains very scant evidence of oral counseling and only three
instances in more than three years -- 2011 through 2014 -- of
Nurses filing written reports of CNA misconduct. In one, it is
unclear under which category the violation fell. The other two
involved Category II and Category III violations, which the
Nurses had no choice but to report. In the Category III case, a
Nurse sent a CNA home for sleeping on the job. Palmetto relies
heavily on this incident. However, one instance of a Nurse
reacting to such an egregious violation, by itself, does not
demonstrate independent judgment. See Phelps Cmty. Med. Ctr.,
295 N.L.R.B. 486, 492 (1989). Moreover, Palmetto’s argument ignores
its written rule that sleeping on the job is punishable only by
discharge. The Nurse involved in this incident did not
discharge or even suspend the CNA. She made no final
disciplinary decision. Rather, she called Director of Nursing
Jennifer Lambert to report the incident, who then investigated
the matter and ultimately fired the CNA. The record before us
indicates that Palmetto has given its Nurses only the
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disciplinary power provided to every other employee (including
CNAs themselves): the power to report rule violations to the
Managers.
On this record, a reasonable mind could certainly conclude
that Palmetto did not offer evidence sufficient to establish
that the Nurses use independent judgment when disciplining CNAs.
B.
We next consider the evidence Palmetto offered in support
of its contention that the Nurses must use independent judgment
when they responsibly direct the work of CNAs.
Palmetto argues that Director Lambert’s testimony
establishes as much. But at most, that testimony establishes
that the Nurses exercise not independent, but heavily
constrained, judgment. Director Lambert testified that the
Nurses are responsible for making sure CNAs:
(1) follow various laws, rules, and regulations,
including the OSH [sic], (2) comply with infection
control procedures, (3) stay within the scope of their
certification, (4) adhere to proper protocols for
resident hygiene, (5) treat residents in a non-abusive
or neglectful [sic] manner, (6) follow the proper
feeding and hydration rules and regulations, (7)
document treatment, and (8) comply with fire alarm,
disaster evacuation, and resident elopement
procedures.
Pet. Br. 31.
Palmetto has extensive policies on all these matters and on
virtually all CNA duties. It has training, instructions, and
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policies on everything from handwashing and bathing residents to
dealing with patient abuse. During mandatory in-service
meetings, the Managers regularly give specific instructions to
Nurses and CNAs on such topics as repositioning residents,
properly clothing residents, taking breaks, clocking in and out,
attending to residents’ hygiene, and providing meal service.
Palmetto also conducts fire, evacuation, and resident elopement
drills. State law and OSHA regulations provide additional
protocols for infection control, patient hygiene, and emergency
preparedness. In every case, the Nurses’ responsibility seems
to amount to the same thing: making sure the CNAs follow the
written instructions. This suggests that the Nurses serve
merely as conduits for these instructions.
It is true, of course, that “the mere existence of company
policies does not eliminate independent judgment from decision-
making if the policies allow for discretionary choices.”
Oakwood, 348 N.L.R.B. at 693 (citing Glenmark, 147 F.3d at 341).
However, Palmetto has not offered even one instance in which the
Nurses could (let alone did) direct CNAs largely without
guidance from Palmetto’s instructions.
Palmetto leans heavily on the Managers’ absence at night
and on weekends, leaving the Nurses as the most senior staff on
site during those times. But, under the Oakwood standard, which
Palmetto agrees controls, these facts do not themselves
15
establish independent judgment. See Golden Crest, 348 N.L.R.B. at
730 n.10 (applying Oakwood and holding that charge nurses were
not statutory supervisors despite this arrangement). Here,
substantial record evidence establishes that Palmetto’s
instructions continue to control nurses’ discretion even after
hours and on weekends. When the Managers go home at night or
for the weekend, they do not take their instructions with them.
Moreover, the record evidence establishes that both the
Director and Assistant Director of Nursing rotate “on-call”
duties on nights and weekends, and the three Unit Managers have
other limited on-call duties. The Unit Managers have instructed
the Nurses to call them after hours for assistance, and Director
Lambert testified that the Nurses may call her for assistance as
well. As the Board explained in Golden Crest, the fact that
nurses are the most senior staff on site after hours “is even
less probative where management is available after hours.” Id. 3
Given these facts, the Board reasonably concluded that the
Nurses do not exercise independent judgment when directing CNAs.
3 Palmetto’s reliance on our decision in Beverly is
misplaced. In addition to predating Kentucky River and Oakwood,
in Beverly the Board conceded that the employer “provides no
list of criteria by which assignments, direction of nursing
assistants, or emergency dismissals are to be made.” 165 F.3d
at 298. Here, Palmetto has utterly failed to rebut evidence
that its instructions provided detailed “criteria” on these
issues.
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IV.
The record offers abundant evidence supporting the Board’s
finding that Palmetto failed to establish that the Nurses use
independent judgment in disciplining and directing the work of
CNAs. Accordingly, we must deny Palmetto’s petition for review
and grant the Board’s cross-petition for enforcement of its
order.
PETITION FOR REVIEW DENIED;
CROSS-PETITION FOR ENFORCEMENT GRANTED
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