Staff Builders Services, Inc. v. N.L.R.B., AFL-CI

• Decision Date: 13 July 1989
• Docket Number: CL,AFL-CI,Nos. 88-2308 and 88-2514,I,s. 88-2308 and 88-2514
• Citation: 879 F.2d 1484
• Parties: 131 L.R.R.M. (BNA) 3067, 112 Lab.Cas. P 11,334 STAFF BUILDERS SERVICES, INC., Petitioner/Cross-Respondent, v. NATIONAL LABOR RELATIONS BOARD, Respondent/Cross-Petitioner, and Local 880, Service Employees International Union,ntervening Respondent.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1484

879 F.2d 1484

131 L.R.R.M. (BNA) 3067, 112 Lab.Cas. P 11,334

STAFF BUILDERS SERVICES, INC., Petitioner/Cross-Respondent, v. NATIONAL LABOR RELATIONS BOARD, Respondent/Cross-Petitioner and Local 880, Service Employees International Union, AFL-CIO CLC, Intervening Respondent.

Nos. 88-2308 and 88-2514.

United States Court of Appeals Seventh Circuit.

Argued June 9, 1989.

Decided July 13, 1989.

Aileen A. Armstrong, Frederick Havard, Collis Suzanne Stocking, Washington, D.C., Donald J. Crawford, N.L.R.B., Chicago, Ill., for N.L.R.B.

R. Clay Bennett, Keck, Mahin & Cate, Joel A. D'Alba, Lester Asher, Asher, Pavalon, Gittler & Greenfield, Chicago, Ill., for Staff Builders Services, Inc.

Before FLAUM and EASTERBROOK, Circuit Judges, and FAIRCHILD, Senior Circuit Judge.

EASTERBROOK, Circuit Judge.

Staff Builders Services, Inc., provides "homemaker" and "chore housekeeper" services to elderly and disabled residents of Illinois under contract with three governmental agencies. The homemakers and chore housekeepers, who are paid little more than the minimum wage, asked the National Labor Relations Board to hold an election so that they could decide whether to be represented by a union. The union prevailed at the election in June 1984. Five years later, Staff Builders has yet to bargain with the union. Its sole excuse is that the NLRB does not have jurisdiction, given the influence governmental agencies exercised over its employment policies. In 1986 the Board certified the union as the representative of the homemakers and chore housekeepers. When Staff Builders refused to bargain, the Board tarried another two years before holding that Staff Builders had committed an unfair labor practice--a mechanical conclusion with no function other than to clear the way for judicial review of the decision taken in 1986.

If Staff Builders were a public agency, the NLRB could not order it to bargain with a union. 29 U.S.C. Sec. 152(2). Staff Builders is not "any State or political subdivision thereof", however. It is a for-profit corporation selling services to governmental bodies under contracts designating it as a "contractor", and to private persons as well (some 8% of its sales are in the private sector). Staff Builders hires, trains, assigns, directs, supervises, disciplines, and fires its workers, maintaining at least as much control over them as the Court held in NLRB v. E.C. Atkins & Co., 331 U.S. 398, 412-13, 67 S.Ct. 1265, 1272-73, 91 L.Ed. 1563 (1947), made for private employment. See also, e.g., Jefferson County Community Center for Developmental Disabilities, Inc. v. NLRB, 732 F.2d 122 (10th Cir.1984); Golden Day Schools, Inc. v. NLRB, 644 F.2d 834 (9th Cir.1981). The agencies decided what kind of services they were willing to provide to their clients and to that end specified rules (including maximum hours per person per client per day) governing the work. Many employers of independent contractors do the same. Just as extensive state regulation of a private activity does not create "state action", Blum v. Yaretsky, 457 U.S. 991, 102 S.Ct. 2777, 73 L.Ed.2d 534 (1982); Rendell-Baker v. Kohn, 457 U.S. 830, 102 S.Ct. 2764, 73 L.Ed.2d 418 (1982), so too extensive control by a governmental purchaser does not make the seller a part of the government. If governmental control "extends to the minutest details of job performance and other terms and conditions of employment", NLRB v. Chicago Youth Centers, 616 F.2d 1028, 1029 (7th Cir.1980), see also Lutheran Welfare Services of Illinois v. NLRB, 607 F.2d 777 (7th Cir.1979), then the state will be treated as a joint employer with the nominally "private" entity, but the state's control of Staff Builders stops well short of that mark. Staff Builders is covered by the statute.

The Board does not exercise jurisdiction over the labor relations of every covered private employer. If governmental control of labor relations is so intrusive that the employer lacks control over a "core group" of "basic bargaining subjects", the Board will leave employer and employees to their own devices. Res-Care, Inc., 280 N.L.R.B. No. 78 (1986), sets out the Board's current position on the subject. Staff Builders maintains that the Board should have declined jurisdiction under the principles of Res-Care.

Once the Board has statutory jurisdiction, however, its exercise in a particular employer's case is a matter of resource allocation. Not having a staff large enough to investigate every claim, the Board must decide where to devote its energies. The four years the Board took to resolve this simple case testify to its overcrowded docket. If the terms and conditions of employment at a given firm are so dominated by state law that as a practical matter the existence of a union will make no difference, then it would be a waste of time for the Board to superintend its labor relations. So if Illinois law provided that Staff Builders' homemakers and housekeepers must be paid the same wages as the state pays to its own employees in these categories, and enjoy fringe benefits and conditions of like quality, it would be pointless to direct Staff Builders to bargain with the union. What could come of such a sterile encounter? In Res-Care itself the state required the employer to propose wage and fringe benefit packages, which the state then approved or rejected. See also Correctional Medical Systems, 289 N.L.R.B. No. 103 (1988). Unions do not waste their resources organizing the workers of firms that cannot accommodate their demands, however, so it is not surprising that the Board rarely declines jurisdiction on the ground that the state sets the key terms and conditions of employment.

More frequently employers contend that the state has some but not total control and ask the Board to stand aside. Whether the Board honors such a request may depend on the state of its backlog. If it is current with its docket and flush with staff, the Board might take jurisdiction over every employer meeting the...