NLRB v. Health Care & Retirement Corp. of America

• Decision Date: 23 May 1994
• Docket Number: No. 92-1964.,92-1964.
• Citation: 511 U.S. 571
• Parties: NATIONAL LABOR RELATIONS BOARD v. HEALTH CARE & RETIREMENT CORPORATION OF AMERICA
• Court: U.S. Supreme Court

511 U.S. 571

NATIONAL LABOR RELATIONS BOARD v. HEALTH CARE & RETIREMENT CORPORATION OF AMERICA

No. 92-1964.

United States Supreme Court.

Argued February 22, 1994.

Decided May 23, 1994.

COPYRIGHT MATERIAL OMITTED

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT

Kennedy, J., delivered the opinion of the Court, in which Rehnquist, C. J., and O'Connor, Scalia, and Thomas, JJ., joined. Ginsburg, J., filed a dissenting opinion, in which Blackmun, Stevens, and Souter, JJ., joined, post, p. 584.

Michael R. Dreeben argued the cause for petitioner. With him on the briefs were Solicitor General Days, Deputy Solicitor General Wallace, Jerry M. Hunter, Nicholas E. Karatinos, Norton J. Come, Linda Sher, John Emad Arbab, and Daniel Silverman.

Maureen E. Mahoney argued the cause for respondent. With her on the brief were Cary R. Cooper, Margaret J. Lockhart, and R. Jeffrey Bixler.^*

Justice Kennedy, delivered the opinion of the Court.

The National Labor Relations Act (Act) affords employees the rights to organize and to engage in collective bargaining free from employer interference. The Act does not grant those rights to supervisory employees, however, so the statutory definition of supervisor becomes essential in determining which employees are covered by the Act. In this case, we decide the narrow question whether the National Labor Relations Board's (Board's) test for determining if a nurse is a supervisor is consistent with the statutory definition.

I

Congress enacted the National Labor Relations Act in 1935. Act of July 5, 1935, ch. 372, 49 Stat. 449. In the early years of its operation, the Act did not exempt supervisory employees from its coverage; as a result, supervisory employees could organize as part of bargaining units and negotiate with the employer. Employers complained that this produced an imbalance between labor and management, but in 1947 this Court refused to carve out a supervisory employee exception from the Act's broad coverage. The Court stated that "it is for Congress, not for us, to create exceptions or qualifications at odds with the Act's plain terms." Packard Motor Car Co. v. NLRB, 330 U. S. 485, 490 (1947). Later that year, Congress did just that, amending the statute so that the term "`employee' . . . shall not include . . . any individual employed as a supervisor." 61 Stat. 137-138, codified at 29 U. S. C. § 152(3). Congress defined a supervisor as:

"Any 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." 61 Stat. 138, codified at 29 U. S. C. § 152(11).

As the Board has stated, the statute requires the resolution of three questions; and each must be answered in the affirmative if an employee is to be deemed a supervisor. First, does the employee have authority to engage in 1 of the 12 listed activities? Second, does the exercise of that authority require "the use of independent judgment"? Third, does the employee hold the authority "in the interest of the employer"? Northcrest Nursing Home, 313 N. L. R. B. 491, 493 (1993). This case concerns only the third question, and our decision turns upon the proper interpretation of the statutory phrase "in the interest of the employer."

In cases involving nurses, the Board admits that it has interpreted the statutory phrase in a unique manner. Tr. of Oral Arg. 52 (Board: "the Board has not applied a theory that's phrased in the same terms to other categories of professionals"). The Board has held that "a nurse's direction of less-skilled employees, in the exercise of professional judgment incidental to the treatment of patients, is not authority exercised `in the interest of the employer.' " Pet. for Cert. 15. As stated in reviewing its position on this issue in its recent decision in Northcrest Nursing Home, supra, at 491— 492, the Board believes that its special interpretation of "in the interest of the employer" in cases involving nurses is necessary because professional employees (including registered nurses) are not excluded from coverage under the Act. See 29 U. S. C. § 152(12). Respondent counters that "there is simply no basis in the language of the statute to conclude that direction given to aides in the interest of nursing home residents, pursuant to professional norms, is not `in the interest of the employer.' " Brief for Respondent 30.

In this case, the Board's General Counsel issued a complaint alleging that respondent, the owner and operator of the Heartland Nursing Home in Urbana, Ohio, had committed unfair labor practices in disciplining four licensed practical nurses. At Heartland, the Director of Nursing has overall responsibility for the nursing department. There is also an Assistant Director of Nursing, 9 to 11 staff nurses (including both registered nurses and the four licensed practical nurses involved in this case), and 50 to 55 nurses' aides. The staff nurses are the senior ranking employees on duty after 5 p.m. during the week and at all times on weekends— approximately 75% of the time. The staff nurses have responsibility to ensure adequate staffing; to make daily work assignments; to monitor the aides' work to ensure proper performance; to counsel and discipline aides; to resolve aides' problems and grievances; to evaluate aides' performances; and to report to management. In light of these varied activities, respondent contended, among other things, that the four nurses involved in this case were supervisors, and so not protected under the Act. The Administrative Law Judge (ALJ) disagreed, concluding that the nurses were not supervisors. The ALJ stated that the nurses' supervisory work did not "equate to responsibly . . . directing the aides in the interest of the employer, " noting that "the nurses' focus is on the well-being of the residents rather than of the employer." 306 N. L. R. B. 68, 70 (1992) (internal quotation marks omitted) (emphasis added). The Board stated only that "the judge found, and we agree, that the Respondent's staff nurses are employees within the meaning of the Act." 306 N. L. R. B. 63, 63, n. 1 (1992).

The United States Court of Appeals for the Sixth Circuit reversed. 987 F. 2d 1256 (1993). The Court of Appeals had decided in earlier cases that the Board's test for determining the supervisory status of nurses was inconsistent with the statute. See Beverly California Corp. v. NLRB, 970 F. 2d 1548 (1992); NLRB v. Beacon Light Christian Nursing Home, 825 F. 2d 1076 (1987). In Beverly, for example, the court had stated that "the notion that direction given to subordinate personnel to ensure that the employer's nursing home customers receive `quality care' somehow fails to qualify as direction given `in the interest of the employer' makes very little sense to us." 970 F. 2d, at 1552. Addressing the instant case, the court followed Beverly and again held the Board's interpretation inconsistent with the statute. 987 F. 2d, at 1260. The court further stated that "it is up to Congress to carve out an exception for the health care field, including nurses, should Congress not wish for such nurses to be considered supervisors." Id., at 1261. The court "reminded the Board that it is the courts, and not the Board, who bear the final responsibility for interpreting the law." Id., at 1260. After concluding that the Board's test was inconsistent with the statute, the court found that the four licensed practical nurses involved in this case were supervisors. Id., at 1260-1261.

We granted certiorari, 510 U. S. 810 (1993), to resolve the conflict in the Courts of Appeals over the validity of the Board's rule. See, e. g., Waverly-Cedar Falls Health Care Center, Inc. v. NLRB, 933 F. 2d 626 (CA8 1991); NLRB v. Res-Care, Inc., 705 F. 2d 1461 (CA7 1983); Misericordia Hospital Medical Center v. NLRB, 623 F. 2d 808 (CA2 1980).

II

We must decide whether the Board's test for determining if nurses are supervisors is rational and consistent with the Act. See Fall River Dyeing & Finishing Corp. v. NLRB, 482 U. S. 27, 42 (1987). We agree with the Court of Appeals that it is not.

A

The Board's interpretation, that a nurse's supervisory activity is not exercised in the interest of the employer if it is incidental to the treatment of patients, is similar to an approach the Board took, and we rejected, in NLRB v. Yeshiva Univ., 444 U. S. 672 (1980). There, we had to determine whether faculty members at Yeshiva were "managerial employees." Managerial employees are those who "formulate and effectuate management policies by expressing and making operative the decisions of their employer." NLRB v. Bell Aerospace Co., 416 U. S. 267, 288 (1974) (internal quotation marks omitted). Like supervisory employees, managerial employees are excluded from the Act's coverage. Id., at 283 ("so clearly outside the Act that no specific exclusionary provision was thought necessary"). The Board in Yeshiva argued that the faculty members were not managerial, contending that faculty authority was "exercised in the faculty's own interest rather than in the interest of the university." 444 U. S., at 685. To support its position, the Board placed much reliance on the faculty members' independent professional role in designing the curriculum and in discharging their professional obligations to the students. We found the Board's reasoning unpersuasive:

"In arguing that a faculty member exercising independent judgment acts primarily in his own interest and therefore does not represent the interest of his employer, the Board assumes that the professional interests of the faculty and the interests of the institution are distinct, separable

...