N.L.R.B. v. Parents and Friends of Specialized Living Center

Citation879 F.2d 1442
Decision Date10 July 1989
Docket NumberAFL-CI,I,No. 50,CL,No. 87-3098,50,87-3098
Parties131 L.R.R.M. (BNA) 3119, 112 Lab.Cas. P 11,348 NATIONAL LABOR RELATIONS BOARD, Petitioner, Nursing and Convalescent Home Division, Service Employees International Union, Localntervening Petitioner, v. PARENTS AND FRIENDS OF THE SPECIALIZED LIVING CENTER, Respondent.
CourtU.S. Court of Appeals — Seventh Circuit

Aileen Armstrong, N.L.R.B., Washington, D.C., Jeffrey Demain, Altshuler & Berzon, San Francisco, Cal., William M. Newbury, for petitioner.

Bruce Feldacker, St. Louis, Mo., Jonathon P. Hiatt, Legal Dept. Service Employees Int'l Union, Washington, D.C., for intervening petitioner.

Bettye S. Kitch, Haynes & Boone, Fort Worth, Tex., for respondent.

Before CUDAHY and KANNE, Circuit Judges, and WILL, Senior District Judge. *

WILL, Senior District Judge.

This is a petition for review and enforcement of an NLRB order which affirmed the ALJ's decision that the employer was subject to the NLRB's jurisdiction and that it violated the Labor-Management Relations Act ("LMRA"), 29 U.S.C. Sec. 141 et seq. (1947), by refusing to negotiate with the union, unilaterally implementing employment changes and threatening employees who had lawfully picketed. The NLRB adopted the ALJ's cease and desist order and modified his affirmative action order. 1 We affirm and order enforcement.


Parents and Friends of the Specialized Living Center ("P & F"), respondent, is a P & F is managed by a nine-member board which consists of a group of concerned local citizens and parents of the facility's residents. Illinois does not select the directors and has no authority to remove them. Instead, the directors are elected by P & F's corporate members, private individuals who pay a $10.00 annual fee. The facility is managed by an executive director who is hired by the board of directors without state approval. The state only requires that the executive director be a licensed nursing home administrator.

not-for-profit Illinois corporation. It is licensed and regulated by Illinois and operates an intermediate care facility for one-hundred severely and profoundly retarded adults. The facility was built by the state in 1979 by the Illinois Capital Development Board ("ICDB") as part of a deinstitutionalization effort, pursuant to the Specialized Living Centers Act (the "SLC Act"), Ill.Rev.Stat. ch. 91 1/2, para. 601, et seq. (1975). It was first deeded to St. Clair County, which operated the facility from February 1980 through December 31, 1981, after which the facility reverted to the state. Since January 1, 1982, P & F has contracted with the ICDB and the Illinois Department of Mental Health and Developmental Disabilities ("IDMH") to operate the facility.

Under the SLC Act para. 603.06, the IDMH "shall adopt and promulgate rules and regulations for the conduct, maintenance and operation of specialized living centers." The contract between Illinois and P & F provides, in part, that P & F is deeded the property and building in exchange for its promise to abide by state laws and regulations. Should P & F fail to satisfy the laws and regulations, the facility and property will revert back to Illinois.

The facility is staffed twenty-four hours per day and, except for the administrative personnel, staffing levels are mandated by state regulations. Employees must meet certain minimum qualifications as determined by Illinois and P & F must maintain certain designated staff/resident ratios (1:4). In addition, a minimum level of direct contact staff must be maintained and the use of volunteers is limited.

State regulations also cover: (1) annual employee physical exams, (2) written personnel policies, (3) minimum qualifications and training for certain positions, (4) employment of certain types of employees by occupation and (5) discipline and discharge procedures. 2 Any labor disputes must be brought to the state's attention and the IDMH Regional Director has recommended that state employees be assigned to the facility if there is a labor strike.

Notwithstanding the above regulations with respect to personnel requirements, P & F is free to make individual hiring, firing and disciplinary decisions. Illinois is not involved in these decisions and P & F has personnel requirements and policies in addition to those promulgated by the state. These include provisions for holidays, vacations, sick pay, leaves of absence, jury duty, insurance, free meals and retirement benefits. The Illinois Department of Public Health ("IDPH") licenses P & F annually based on P & F's annual reports and personnel plans.

The facility receives nearly all of its funding from public sources (approximately 99%), primarily from the Illinois Department of Public Aid ("IDPA"). Funding is on a per diem (client) basis. P & F may not charge its residents for services rendered. P & F must submit annual financial reports and allow the state to audit its records.

Illinois prescribes an hourly mean wage rate which limits the total amount that P & F can pay all of its employees. In other words, P & F can pay individuals a wage higher or lower than the mean wage rate so long as the total wages paid do not exceed the mean wage rate multiplied by the total number of hours compensated. The rate is based on annual cost statements submitted by P & F and other specialized Unlike the mean wage rate which only limits the total P & F can allocate to wages for virtually all employees, Illinois sets the specific wage rate for P & F's lowest level employees, habilitation technician trainees. The rate for habilitation technician trainees is in effect for their first forty hours of classroom training and eighty hours of on-the-job training. Finally, Illinois imposes a ceiling on fringe benefits: prior to 1985, fringe benefits were limited to 15% of wages while presently P & F may not exceed the 65th percentile for benefits paid by similar employers within the geographic area. Like wages, the total amount available for fringe benefits is set by Illinois but P & F allocates the funds allotted to it.

living centers in the area. The rate is set annually by the IDPA but the state can reduce it at any time, as it did once in 1983.

On July 1, 1982, the Service Employees International Union, Local 50 (the "union"), intervening petitioner, filed an election petition with the NLRB, petitioner, seeking certification as P & F's employees' bargaining representative. At a representation hearing held on July 21 and 23, 1982, P & F presented objections, including a challenge to the NLRB's jurisdiction over P & F based on P & F's impact on interstate commerce and Illinois' control over P & F's operations. On August 12, 1982, the Regional Director held that the NLRB had jurisdiction over P & F.

P & F filed motions to reopen the hearing due to its failure at the representation hearing to articulate additional support for its objection to the NLRB's jurisdiction. The NLRB denied P & F's motions, finding that the evidence was not newly discovered and that special circumstances did not exist. An election was held on September 10, 1982 and the union received a majority of the votes. P & F filed objections to the conduct of the election but on October 19, 1982, the Regional Director overruled P & F's objections and certified the union. 3 P & F also filed exceptions which were denied on January 10, 1983 and a motion for reconsideration and rehearing en banc which was also denied by the NLRB on February 17, 1983. 4

The union sent letters to P & F on October 5, 13 and 22, 1982 requesting a meeting to negotiate a collective bargaining agreement. P & F did not respond. On November 12, 1982, the union filed an unfair labor practice charge against P & F. On November 19, 1982, P & F sent a telegram to the union's president advising him that changes had to be made in certain employees' work hours because of: (1) residents' medical needs, (2) a change in the location of a day-training workshop and (3) financial constraints imposed by the Illinois General Assembly effective February 1, 1983. P & F's telegram also stated that

the S.L.C. has refused to recognize the union as the bargaining representative of its service and maintenance employees, and the S.L.C.'s exceptions to the Regional Director's report on objections are pending before the NLRB. Accordingly, the S.L.C. maintains it has no legal duty to bargain with the union over any change in employee wages, hours or working conditions.

* * *

[W]ithout waiving its position that it is not required to recognize the union, the S.L.C. is willing to meet and confer with the union concerning required changes, in order to meet legal requirements.

Officials of the S.L.C. will be available to meet and confer with you or your representative on November 22, 23, 24, or 26. Please contact the undersigned to make an appointment. Again, the S.L.C. reiterates that its offer to meet and confer On that basis, the union notified P & F that it refused to meet.

with the union does not, in any way, constitute 'recognition' of the union or diminish the S.L.C.'s position before the NLRB.

P & F unilaterally instituted a new work schedule for its seven night-shift lab technicians on December 14, 1982. As a result, six of the employees lost between two and ten hours of work per week. Union agents picketed on December 23, 1982 in protest against P & F's award of bonuses to supervisors, denial of bonuses to union employees and refusal to bargain. In response, P & F sent a mailgram to the union which stated in relevant part:

your Union and/or individuals engaged in such picketing may be liable for all damages suffered by the Parents and Friends of the Specialized Living Center as a result of this illegal picketing as provided by federal law.

On January 17, 1983, the union amended its charge to include allegations that P & F refused to bargain with the certified union over...

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