N.L.R.B. v. Highview, Inc.

• Decision Date: 26 February 1979
• Docket Number: No. 77-3279,77-3279
• Citation: 590 F.2d 174
• Parties: 100 L.R.R.M. (BNA) 2829, 85 Lab.Cas. P 11,162 NATIONAL LABOR RELATIONS BOARD, Petitioner, v. HIGHVIEW, INCORPORATED, Respondent.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 174

590 F.2d 174

100 L.R.R.M. (BNA) 2829, 85 Lab.Cas. P 11,162

NATIONAL LABOR RELATIONS BOARD, Petitioner, v. HIGHVIEW, INCORPORATED, Respondent.

No. 77-3279.

United States Court of Appeals, Fifth Circuit.

Feb. 26, 1979.

Elliott Moore, Deputy Associate Gen. Counsel, Walter Christian Schumann, Atty., Ruah D. Lahey, N.L.R.B., Washington, D. C., for the N.L.R.B.

Claud L. McIver, III, Charles Kelso, Michael C. Towers, Frederick R. Mann, Atlanta, Ga., for Highview, Inc.

Application for Enforcement of an Order of the National Labor Relations Board.

Before BROWN, Chief Judge, and TUTTLE and THORNBERRY, Circuit Judges.

THORNBERRY, Circuit Judge:

This is an application by the National Labor Relations Board (Board) for enforcement of its order entered against the respondent, Highview, Inc. The Board found that Highview violated Section 8(a)(1) of the National Labor Relations Act, 29 U.S.C. § 158(a)(1), (Act) by engaging in certain unfair labor practices and that Highview violated Section 8(a)(3) and (1) of the Act by discharging employee Mamie Fullens because she engaged in protected union activities. The Board's opinion and jurisdictional statement are found at 231 NLRB 1251, 96 LRRM 1184 (1977), and 223 NLRB 646, 92 LRRM 1088 (1976), respectively. For the reasons stated, we grant enforcement in part and deny enforcement in part.

I.

Highview advances three jurisdictional arguments. First, Highview claims that it is a political subdivision and thus exempt from the Act. Second, Highview, suggests that it shares Fulton County's exemption from the Act. Finally, Highview argues that the Board should not assert jurisdiction over it because to do so would not effectuate the purposes of the Act.

A. First, Highview argues that the Board is without jurisdiction over this matter because Highview is a political subdivision and thus exempt from the Act. 29 U.S.C. § 152(2).

Highview is a non-profit corporation originally created in 1947 under Georgia law by a group of citizens who wished to provide nursing care to old people in the greater Atlanta area. The facilities used by Highview were built from the proceeds of a county bond issue ¹ and the physical plant is located on county land. Highview pays no federal, state, or county taxes. The county pays the insurance on the Highview buildings and provides Highview with certain medical supplies, laundry, and maintenance services. In 1974, Highview had a gross revenue in excess of two million dollars. Of this amount approximately $88,000, or about five percent, of Highview's revenues took the form of direct county contributions.

Highview is managed by an independent, self-perpetuating board of directors. The county cannot influence the directors selection or affect the directors' decisions. The Board hires an administrator who makes all of the day-to-day management decisions. However, Highview does submit an annual report to the county, and all improvements on the county-owned facilities used by Highview must be approved by the county. Furthermore, patients who wish to enter Highview as indigents must be certified by the county.

Our review of these facts convinces us that the Board was correct in its determination that Highview is not a political subdivision. The Board has consistently applied a two-part test to determine whether an entity is a political subdivision within the ambit of the Act. The Board will find an employer a political subdivision if either (1) the entity was created directly by the state, so as to constitute a department or administrative arm of the government, or (2) if the entity is administered by individuals who are responsible to public officials or to the general electorate. NLRB v. Natural Gas Utility District of Hawkins County, 402 U.S. 600, 91 S.Ct. 1746, 29 L.Ed.2d 206 (1971); NLRB v. Natchez Trace Electric Power Association, 476 F.2d 1042, 1043 (5 Cir. 1973).

It is self-evident that Highview is not a political subdivision under the first test since the record is undisputed that Highview was incorporated as a non-profit corporation by private individuals under the laws of Georgia. The second test requires an examination into the actual operation and characteristics of the employer. NLRB v. Natchez Trace Electric Power Ass'n, 476 F.2d at 1044. In Hawkins County, supra, the Supreme Court noted several factors indicative of Hawkins County Utility District's public nature. In determining that the Utility District was a political subdivision the Supreme Court noted that the District had eminent domain powers, was exempt from local taxes, was statutorily declared to be a municipality, income from its bonds was exempt from federal income taxation, and that its officers were appointed by the county judge and were subject to removal for misconduct under the Tennessee General Ouster Law.

In the present case, it is clear that Highview shares in these factors only to the extent that it pays no local taxes. Highview has no power of eminent domain. It is extremely doubtful that Georgia considers Highview a political subdivision. Cf. Bradfield v. Hospital Authority, 226 Ga. 575, 176 S.E.2d 92 (1970); Richmond County Hospital Authority v. McClain,112 Ga.App. 209, 144 S.E.2d 565 (1965). ² There is no evidence in the record that Highview has the authority to issue bonds. Finally, the structure of the organization of Highview convinces us that Highview is not administered by individuals who are responsible to public officials or to the electorate generally. As mentioned earlier, the corporate directors of Highview are self-perpetuating and are not directly responsible to the public officials of the county.

B. Although we believe that Highview itself is not a political subdivision, it is possible for a non-exempt institution to share a political subdivision's exemption if the non-exempt employer does not have control over labor relations so that it cannot bargain effectively with a union. NLRB v. Pope Maintenance Corp., 573 F.2d 898 (5 Cir. 1978). In the instant case, we believe that the record sufficiently supports the Board's conclusion that Highview has the ability to bargain meaningfully with its employees. This is especially true in view of the rather small share of the operating cost contributed by the county. ³

C. Even if jurisdiction is proper under the Act, the Board has traditionally followed the policy of declining to assert jurisdiction if it finds that to do so would not effectuate the purposes of the Act. Compton v. National Maritime Union of America, AFL-CIO, 533 F.2d 1270, 1275 (1 Cir. 1976). Given this policy, Highview next argues that the Board has not properly applied its own standards in asserting jurisdiction in this case.

In Herbert Harvey, Inc., 171 NLRB 238, 68 LRRM 1053, 1055 (1968), the Board stated,

"The Board has . . . uniformly held that the assertion of jurisdiction over a contractor providing services for an institution exempted from the process of the Act is dependent upon the relationship of the services performed to the exempted functions of the institution. Where the services are intimately connected with the exempted operations of the institution, the Board has found that the contractor shares the exemption; on the other hand, where the services are not essential to such operations the Board has found that the contractor is not exempt and asserts jurisdiction over the contractor's activities."

Using this rule the Board has declined to assert jurisdiction over a private company that provided: (1) fire protection to a political subdivision, Rural Fire Protection Co., 216 NLRB 584, 88 LRRM 1305 (1975); (2) police protection to a political subdivision, The Wackenhut Corp., 203 NLRB 86, 83 LRRM 1001 (1973); (3) park maintenance service to a political subdivision, Current Construction Corp., 209 NLRB 584, 85 LRRM 1417 (1974). According to the Board each of these services fire, police, and park maintenance is essential to the purposes of the political subdivision.

On the other hand, the Board has asserted jurisdiction over an employer who provided janitorial service to the World Bank, Herbert Harvey, Inc., 171 NLRB 238, 68 LRRM 1053 (1968), Enforced, 137 U.S.App.D.C. 282, 424 F.2d 770 (1969), and an employer who provided maintenance service to a (then exempt) hospital, Richmond of New Jersey, Inc., 168 NLRB 117, 67 LRRM 1113 (1967). The distinction, according to the Board is that maintenance at the World Bank and at an exempt hospital is not "so integrated and interwoven with the purposes and operation of the (exempt institution)." Id. 67 LRRM at 1113, Quoted in Herbert Harvey, Inc., 137 U.S.App.D.C. 282, 424 F.2d at 782 n.90. Therefore, the Board will decline to assert jurisdiction over an employer if it supplies an exempt institution with services that are an essential attribute of the purpose of the exempt institution. However, the Board will assert jurisdiction over an employer who merely provides services to the exempt institution that do not directly relate to the purposes of the exempt institution.

In the instant case, the Board has determined that it will assert jurisdiction over Highview because the providing of nursing home care "is not a traditional municipal function" and the care provided at Highview is "not essential to the function of government." ⁴ The Board can point to at least two other cases in which it has made the same distinction. Bishop Randall Hospital, 217 NLRB 1129, 89 LRRM 1249, Enjoined by a district court, 89 LRRM 2822 (D.C.Wyo.1974), Dis't ct. reversed for lack of jurisdiction, 523 F.2d 845 (10 Cir. 1975); Grey Nuns of the Sacred Heart, 221 NLRB 1215, 91 LRRM 1099 (1975).

Highview, as can be expected, objects to this determination. It argues that the care of the old, the sick, and the indigent has long been a traditional function of government. Highview then asserts that we should disagree with the Board determination of the traditional nature of this service and then correctly apply...