NATIONAL LABOR RELATIONS BOARD v. HEALTH CARE & RETIREMENT CORPORATION OF AMERICA
Legal provision: National Labor Relations, as amended
IN THE SUPREME COURT OF THE UNITED STATES
NATIONAL LABOR RELATIONS BOARD, Petitioner v. HEALTH CARE & RETIREMENT CORPORATION OF AMERICA
February 22, 1994
The above-entitled matter came on for oral argument before the Supreme Court of the United States at 10:59 a.m.
MICHAEL R. DREEBEN, ESQ., Assistant to the Solicitor General, Department of Justice, Washington, D.C.; on behalf of the Petitioner.
MAUREEN E. MAHONEY, ESQ., Washington, D.C.; on behalf of the Respondent.
CHIEF JUSTICE REHNQUIST: We'll hear argument next in No. 92-1964, the National Labor Relations Board v. Health Care & Retirement Corporation of America.
ORAL ARGUMENT OF MICHAEL R. DREEBEN ON BEHALF OF THE PETITIONER
MR. DREEBEN: Thank you, Mr. Chief Justice, and may it please the Court:
This case involves the rule adopted by the National Labor Relations Board for determining when nurses are supervisors within the meaning of the National Labor Relations Act. Now, the Board's rule is that a nurse's direction of less-skilled employees, as a matter of professional judgment incidental to the treatment of patients, does not make the nurse into a statutory supervisor.
In this case, the Board applied that rule to the nurses employed in respondent's nursing home. The Board found that the nurses employed by respondent in that facility engaged in direct patient care, making rounds, administering medicines, talking to physicians, and maintaining records. As an incidental function of taking care of patients, the nurses give some direction to the nurse's aides who work with the nurses to bathe, dress, and feed the residents in the home. The Board concluded that the nurses' use of the aides in that fashion to carry out their nursing responsibilities did not make the nurses statutory supervisors.
QUESTION: Mr. Dreeben, does the Board's rule or decisions in this area of nurses and who is a supervisor and who isn't, are there analogous rules or principles in other areas of employment?
MR. DREEBEN: Yes, Justice O'Connor. The Board's rule in this case is really a particularized application of a general principle that has found expression in two different areas under the statute. The first is that the Board has crafted a rule to deal with the problem of minor supervisory personnel; those persons who are characterized by Congress as being below the level of foreman and not exercising the kind of supervision that aligns them with management.
And in cases of that character, the Board has found that when direction is given by leaders of groups that work together or by journeymen to apprentice, that when that direction is a function of superior skill or greater experience and not the sort of supervision that aligns the employee with management, that kind of employee is not treated as a supervisor.
QUESTION: Well, in looking at the language of the statute, it appears that the Board relies, primarily at least in this context, on the language that it is -- that the nurses are not acting in the interests of the employer, but rather in the interests of the patient.
MR. DREEBEN: That is one of the three means by which the Board reaches the route that it does under the statute.
QUESTION: But that seems to be the primary reliance.
MR. DREEBEN: I think, Justice O'Connor, it's -- it is equally important with two other provisions of the statute. The one that is most relevant here is the requirement that a supervisor exercise one of the functions listed in the statute, and the relevant one here, the most important one here, is -- are the words "responsibly to direct."
QUESTION: I read the opinions below the same way Justice O'Connor did, that the Board seemed to be principally relying on the idea that the claimed supervisors acted in the patient's interest and not in management's interest, which I frankly find quite a weak read.
MR. DREEBEN: Chief Justice Rehnquist, that is one of the ways that the Board has used to articulate the point that it's trying to get across. The point that it's trying to accomplish here is to distinguish and draw lines between the kind of supervision that Congress intended would disqualify a person from the protection of the Act from the sort of direction that goes on a day-to-day basis in a variety of workplace settings when minor supervisors, who have greater skill or familiarity with the working situation, are -- give some direction to people who work on a team with them.
QUESTION: But, yes --
QUESTION: How does that, in any way, relate to the distinction between acting in the client's interest or the patient's interest and acting in the employer's interest?
MR. DREEBEN: The Board is not taking the position that the nurses are working contrary to the employer's interest, but the words "in the interest of the employer" have to have some meaning, because all employees, as the Board has recognized, from the board of directors right down to the maintenance staff, the lowest levels, all work to further the employer's business interests.
Those words were not put into the statute to be a superfluous reiteration of that principle. They were put in, as the original draftsman of the language explained, to express the view that these are the type of employees who are really expressing managerial authority in their work. And the Board is not, in this case, attempting to say that these nurses are somehow working contrary to the employer's interest. It is simply defining and interpreting the language "in the interest of the employer" to give it the kind of meaning that Congress had originally intended.
QUESTION: Are you saying that the nurses fall into the same category as what your adversary calls the straw boss?
MR. DREEBEN: Yes, the Board has said that. And, in fact, in this very case at page 40a of the petition appendix, the ALJ explicitly drew the analogy between the kind of work direction that these nurses do and the kind that is done in this minor supervisor line of case that the Board has had under the statute for many, many years.
QUESTION: Mr. Dreeben, I always envisioned the so-called lead man or straw boss as someone who supervises a single team. I mean, you may send five men out to chop wood and you say one of them, you know, you take charge and all he does is say, well, you chop this tree, I'll chop the other tree.
But these nurses are doing much more. And if nothing more were at issue here than a nurse directing the nurse's aide with respect to the particular patient that that nurse is working with at that moment, I would say yes, the nurse -- you know, when she tells the nurse's aide, you know, bring this, bring that, bring the other, that's acting as a straw boss, that's acting as a lead man. But not when she shifts, it seems to me, nurse's aides from one patient to another, from perhaps one wing of the hospital to another; when she authorizes overtime; when she does all sorts of things that relate not to the particular team that is working on a particular patient, isn't -- I don't know any other way to distinguish the straw boss or the lead man.
MR. DREEBEN: Well, first of all, the straw boss cases do involve kinds -- the kinds of cases that you've described, Justice Scalia, but they also involve cases where you have the most skilled person, say, at a print shop supervising a variety of lesser-skilled employees and telling them what to do, telling them where to go, what -- when to do their various assignments in order to make sure that the whole puzzle fits together.
But I think it's very important to focus on what these nurses did at the nursing home in question, because the ALJ made fact findings on it and the record supports those fact findings. I don't think there's any question here of substantial evidence.
The ALJ found that to the extent that the nurses had any function at all to assign the aides, that was purely a matter of routine that involved no independent judgment. I believe that the assistant director of nursing described it as being "pretty well cut and dried"; that's in the transcript at 1106. The floor was simply split into sections and the aides were rotated from one section to another. And as she put it, it was just a sort of formula to be followed.
And the ALJ found, again at page 40a of the appendix, that the assignment that these nurses did during the relevant period in time was purely --
QUESTION: Whereabouts on -- whereabouts on page 40a are you referring to, Mr. Dreeben?
MR. DREEBEN: On page 40a of the petition appendix, Chief Justice, that's at the top of the page. It's a carry-over from the prior paragraph.
QUESTION: Thank you.
MR. DREEBEN: The ALJ says: "The eight assignment duties of the nurses seem to me to fall well short of requiring the use of independent judgment." And that is an independent requirement for being a supervisor under Section 2(11) of the Act. Without a showing of independent judgment in the tasks that are described, there is no supervisory status.
QUESTION: Is that a factual determination or a legal determination?
MR. DREEBEN: I think it's a factual determination which is subject to review under the substantial evidence standard.
QUESTION: He surely doesn't put it that way, does he?
MR. DREEBEN: And -- well, the ALJ referred to Board cases and to a court of appeals case that make that clear. The Board certainly has latitude under Chevron to interpret what independent judgment and what routine is within the context of reviewing the application of the act to specific circumstances.
And in this case that's what these nurses did. They did it as a matter of routine. The assignment functions were not nearly as sophisticated as Your Honor has implied. Now, there may be a change that's reflected in the record where the director of nursing decided I want things done in a different way, I want them -- I want you to use much more judgment in the way you do it. If so, nurses who do those sorts of things might be exercising independent judgment, but these nurses with respect to assignment were not doing that.
QUESTION: What about authorizing overtime? I mean you --
MR. DREEBEN: They did not authorize overtime. The ALJ again explicitly found that they did not have authority to authorize overtime.
QUESTION: Where is that, Mr. Dreeben?
MR. DREEBEN: That's in the petition appendix. I do not have the exact page at this moment. But the ALJ, again, specifically found they do not have the authority to authorize overtime. They initialed time cards.
QUESTION: Look at page 41a of the petitioner's appendix where the opinion says: "The second way the duty nurse may attempt to deal with an aide's failure to show up for work is to ask the aides who are scheduled to go off duty if one of them is willing to remain at the facility on overtime."
MR. DREEBEN: That's correct. But the nurse herself did not make any decision about whether the aide would be authorized to obtain overtime. That was a decision that was reserved by the director of nursing.
QUESTION: Oh, really? She -- you mean she can ask the nurse's aide if she's willing to serve on overtime -- and I assume this means at a time when there's no one else around. During 75 percent of the day at the time this case came up, as I understand it, if these nurses were not supervisors, there was no supervisor --
MR. DREEBEN: Well --
QUESTION: -- Present at the hospital or at the nursing home, isn't that right?
MR. DREEBEN: The director of nursing was always available on call, as was the administrator. Most of the hours --
QUESTION: Sure. Well, so are we. But I'm saying that there were --
QUESTION: -- There was nobody at the nursing home who was a supervisor during 75 percent of the working day. That's the position that the Board is taking, right?
MR. DREEBEN: Well, yes, that is the position that we're taking, and a large component of that time consists of the night shift at which there is very little staff at the hospital other than what is necessary and nurses on duty at each --
QUESTION: Where was this, in Alaska, you have a 75 percent night?
MR. DREEBEN: No, I said a large component of that. Obviously, Justice Scalia, there were times when the director of nursing or the administrator were not there. But there is testimony in the record, and the ALJ again found that the director of nursing is available on call at all times. And this is at page 47a of the appendix. Since the administrator and the DON are always on call and since the nurses do, in fact, call the administrator and the DON at their homes when nonroutine matters arise, that was an indication that, indeed, this nursing home had a mechanism of supervising its aides.
QUESTION: Well, Mr. Dreeben, looking at the language of this statute today, and in an attempt to justify the Board's rule, what do you think the strongest point is?
MR. DREEBEN: I think that --
QUESTION: Under the language of the statute?
MR. DREEBEN: Well, we do rely on the "interest of the employer" language. We also rely on the language "responsibly to direct," which the Board has interpreted --
QUESTION: But that's just an alternative. The statute also says if the nurse can assign or do other things or responsibly direct.
MR. DREEBEN: That's correct. And in this case the assignment --
QUESTION: And they did have some assignment functions.
MR. DREEBEN: And those assignment functions were found to be purely a matter of routine not requiring the exercise of independent judgment. Now, if this were a case in which the assignment functions did require some judgment, then there would a supplemental inquiry for the Board to make about whether those --
QUESTION: Well, then, is your strongest point no independent judgment? Is that what your --
MR. DREEBEN: As to the assignment, that's what the record in this case shows. There's no basis for arguing that they're supervisors, since they fail that threshold requirement, and there's never been a challenge to that requirement.
There's another very important consideration in the Board's interpretation of the statute, Justice O'Connor. You asked me earlier what categories of employees are treated analogously.
MR. DREEBEN: Another major category of employees treated analogously are professional employees. Now, the Act in Section 2(11) excludes supervisors from coverage.
QUESTION: Well, do you -- do you take the position that these nurses are professional employees within the definition of the statute?
MR. DREEBEN: No, in this case they are not. But the point of my reference to the professional inclusion is that Congress specifically did want people who exercise judgment and do so on the basis of superior skill and knowledge to be covered by the Act, and that creates some tension between Sections 2(11), which exclude supervisors, and Sections 2(12) which includes professionals, because --
QUESTION: Why are they not -- why are they not professional employees?
MR. DREEBEN: They are considered technical employees. These are licensed practical nurses. Licensed practical nurses have a lesser educational requirement and the Board is --
QUESTION: So a registered nurse would be considered professional?
MR. DREEBEN: No question, a registered nurse would be considered a professional. And the major significance of that distinction I think would simply be that the nurses who are registered nurses would have the right to a unit that did not include nonprofessionals. But for purpose of interpreting the Act and looking at the interplay between the professional exemption and the exclusion for supervisors, the important point is that the Board has to make an accommodation.
Because virtually all professionals will supervise some lesser-skilled employees in the course of their duties. They do so as a matter of simply getting the job done, and Congress could not have been ignorant of the fact that architects have draftsmen, engineers have machine operators, and the like. Lawyers have paralegals and secretaries, and doctors have nurses.
And if Congress had not intended to accord protection to the Act to these people because they engage in such minor supervisory activities, the entire coverage of professionals would have made very little sense. And so the Board takes into account that structural aspect of the statute in arriving at its construction of when nurses should be deemed to fall on the supervisor side of the line.
QUESTION: Can you tell us an opinion in which the Board has done just that, has shown that it is playing off the tension between these two sections?
MR. DREEBEN: Well, first of all, the Board issued a decision in Northcrest Nursing Home which we cite in our reply brief, which occurred after we filed our opening brief in this case, that represents a comprehensive review of the legal principles in this area and explicitly draws the connections both to the straw boss/lead man line of cases that I referred to earlier, as well as the tension to the professional line of work.
QUESTION: Any case before this decision?
MR. DREEBEN: Well, there are also a series of cases that this Court considered and discussed in its Yeshiva University opinion at page 690 in footnote 30.
QUESTION: The footnote 30 cites Board opinions.
MR. DREEBEN: Yes, footnote 30 cites Board opinions in which the Board had considered cases where professionals were functioning as project captains or group leaders, and in the words of the Court describing the Board's cases, "they were deemed to be employees despite substantial planning responsibility and authority to direct and evaluate team members."
And if you read those cases, the Board is quite conscious of the fact that this is the way professionals operate, and it's necessary that they be given the protection of the Act, notwithstanding this minor form of direction. Otherwise it would have been pointless to cover them. The court --
QUESTION: Is that Doctors' Hospital against -- of Modesto, is that the one?
MR. DREEBEN: And Doctors' Hospital of Modesto was cited as one of the cases in that series, which is really the case in which the Board gave its most complete articulation of its current theory before 1974. That was a case in which the Board examined the role of nurses who worked at a hospital and gave some -- they were called charge nurses. They had some responsibilities over a wing of a hospital with respect to nurse's aides and other nurses there to make sure that patient care was done properly, and the Board did not consider that to disqualify them from protection under the Act. It did not view them as being made supervisors.
This Court explicitly took note of that when it described Board cases favorably, saying that the Board has not eliminated employees whose decision-making is limited to the routine discharge of professional duties in projects to which they assign them. That's -- the Court characterized those decisions as accurately capturing the intent of Congress. That is the line of decisions that really supports the Board's analysis of the nurses in this case.
And when you look at the sort of direction that the nurses gave to aides in this case, it clearly is well within the routine discharge of their professional or technical duties. Many patients at a nursing home have strict regimens of having to be turned every 2 hours. A nurse might remind an aide that that needs to be done, or ensure that it is done. Other patients need to have cushions placed in particular ways to support them. A nurse may correct an aide if the aide hasn't put the pillow in the proper place, hasn't followed the doctor's instructions with respect to the way the patient should be treated.
QUESTION: A nurse can tell an aide to go work with another nurse too, can't she?
MR. DREEBEN: Again, that relates to the assignment function.
MR. DREEBEN: It's what happened in this case when there was a shortage of aides, is that one of the aides might be rotated from one --
QUESTION: By a nurse. A nurse would say don't work with me, go and work with someone else, right?
MR. DREEBEN: Correct.
QUESTION: And a nurse could also say too few people have reported for work today; we would like someone, or two or three people, to work overtime. And the nurse could say that and authorize that overtime, isn't that right?
MR. DREEBEN: Well, I don't agree, Justice Scalia, that she could authorize the overtime. I think the findings are inconsistent with that.
QUESTION: The findings say that -- and, again, it's page 40 -- 41a and 42a. What the opinion says is, "the nurses otherwise" -- at the top of 42a, "the nurses otherwise have no authority to grant overtime." And the preceding paragraph makes clear that they do have authority to grant overtime when it's necessary because of absences.
MR. DREEBEN: Well, I think that the sentence that follows that is equally important, Justice Scalia. It says: "The nurses are not authorized to deal with an unusually heavy workload by asking aides to work on an overtime basis."
QUESTION: That's right.
MR. DREEBEN: So --
QUESTION: An unusually heavy workload is no justification, but the failure of some people to report to work does enable them to authorize overtime.
MR. DREEBEN: Well, I think the record says what it says on this subject, Justice Scalia.
QUESTION: Well, you're not arguing with that point, are you? You're not challenging the statement in the opinion?
MR. DREEBEN: No, no, no. We are not state -- challenging the statement in the opinion.
QUESTION: So they can authorize overtime then.
MR. DREEBEN: Well, to the extent reflected in the opinion, yes.
QUESTION: Well, why don't you -- why don't you admit it rather than fight it?
MR. DREEBEN: I think that whatever the finding -- those findings on overtime are not inconsistent with -- any way with the Board's ultimate conclusion that these nurses are not supervisors. The nurses did not have the kind of authority, in the Board's view, that aligned them with management, and there were ample mechanisms in place for the nursing home to conduct the supervision at issue.
Now, again, we think that the Court's opinion in Yeshiva University very strongly supports the Board's approach in this case, its general legal approach, regardless of how any particular fact situation may be applied, whether correctly or incorrectly, under that approach.
QUESTION: Mr. Dreeben, I don't read that finding as saying a nurse is authorized to -- has the authority to authorize overtime. But what I understand it to say is that hospital policy is if somebody doesn't show up for work and if you have to divide it up, the other -- the aides can decide among themselves which one shall work overtime, and the nurse can let them do that.
MR. DREEBEN: Well --
QUESTION: It's this hospital policy that says that somebody has to work overtime when somebody doesn't show up, they'll ask them to do that.
MR. DREEBEN: Certainly all of this flows from the hospital policies. And we're -- I don't think that really, one way or the other, this point is dispositive of the validity of the Board's legal role, which is the issue that we're presenting for decision to this Court. The Board's rule is a mechanism for attempting to distinguish between those employees who are high enough up on the chain of command to require them to be treated as supervisors, and employees who are lower down and who exercise some amount of direction, but not enough to align them with management for purpose of collective bargaining.
QUESTION: And in this particular facility you say there are four nurses that fit that category, the director of nursing, assistant director, patient assessment. There were four that you put in the supervisory category?
MR. DREEBEN: I don't think findings were made about whether the patient assessment and treatment nurse qualified as supervisors, and that really isn't an issue here. The director of nursing, the assistant director of nursing, and the administrator were all found to -- I think there is no dispute that they are supervisors in this case.
And the director of nursing was actively involved in supervising on the floor. She testified that she was out of the floor an average of 50 percent of the time. That's at page 913 of the transcript. That's an average. There were ample mechanisms in place for the supervisors to accomplish their goal. And, in fact, an administrator at one point said to a nurse, don't ever make a decision on this floor without my consent first. I think the record amply bears up what the ALJ ultimately found in this case, which is that respondent --
QUESTION: Well, what happens in that instance if the supervisor isn't there, which is a substantial part of the time.
MR. DREEBEN: That's when the telephone comes in handily, Justice Kennedy. The director of nursing, the assistant director of nursing, and the administrator are available by phone --
QUESTION: Are these the kind of decisions that the statute characterizes as decisions made which require the use of independent judgment?
MR. DREEBEN: Well as to the assignment functions, the ALJ found that they are not. As to the question of whether to consult a supervisor, there was no finding made about whether that required independent judgment. I'd suggest that --
QUESTION: Well, let me put it this way; is your understanding of the record that whenever independent judgment is required, that the nurse must talk with the supervisor?
MR. DREEBEN: We -- I don't think we would disagree that independent judgment might have been required in seeking the authority of a true supervisor in this case, whether it is or not --
QUESTION: Can independent judgment ever be exercised under the policy of this hospital without consulting the supervisor?
MR. DREEBEN: Yes, I think that there are some instances in which the nurse is exercising independent judgment.
QUESTION: So that it's more than just arranging a pillow and so forth.
MR. DREEBEN: Well, no, I think that itself is a matter of independent judgment. The nurses there are providing their medical judgment. They are -- they are the ones who hear from the doctors what is required for the patient's care. They read the materials that describe it, and they are ultimately responsible for making sure that the care is done in a professional manner.
QUESTION: Well, I take it they have to monitor the condition of the patient.
MR. DREEBEN: That's correct. And, again, they have to use judgment in whether to require that some aide look in on a patient more often than not to make sure that the patient doesn't suddenly spike a temperature. And those are the kinds of independent judgment that the nurses used in this case, but that's totally coextensive with the sort of independent judgment that a professional routinely uses in the kinds of projects that a professional carries out. And Congress did not view that sort of expression of professional judgment as inconsistent with the treatment of the employee as a protected employee under the statute.
Now, I wanted to mention again the case of Yeshiva University, because we do think that the Court's general approach in that case is precisely the same that is at issue today. The Court said that if the faculty had been simply exercising routine professional judgments in the matter of their teaching work, that would not have been a problem for coverage under the Act. The problem in that case is the faculty were really managers and they were really determining what the school would do, what teach -- what courses it would teach, what students would be admitted, and making all the decisions which would be characterized as managerial in any other setting.
In this case the nurses are not doing what would be characterized as managerial or supervisory in any other setting. They are much more analogous to the type of project captains that supervise other professionals and other less-skilled employees, and they also fit within the line of cases that dealt with lead men and straw bosses, and for that reason the Board properly placed them on the side of the line where they are protected rather than the side where they are not protected.
I'd like to reserve the balance of my time.
QUESTION: Thank you, Mr. Dreeben.
Ms. Mahoney, we'll hear from you.
ORAL ARGUMENT OF MAUREEN E. MAHONEY ON BEHALF OF THE RESPONDENT
MS. MAHONEY: Mr. Chief Justice and may it please the Court:
I'd like to start out by saying that I really did think that the issue in this case was not whether the court of appeals had erred in its application of the substantial evidence test under the traditional statutory criteria for finding supervisory status, but rather that the question that was presented in the petition was whether the court of appeals had erred by rejecting the Board's interpretation of the statute, not the application of the evidence.
And, in fact, there is -- under Universal Camera this Court has said, and repeatedly held, that the application of substantial evidence to a settled statutory meaning is something that's placed in the charge of the court of appeals and it would rarely be disturbed by this Court absent some indication that it was grossly misapplied or misapprehended. So for the Government to now come in today and suddenly start citing all these transcript cites about how these people really didn't -- these nurses really didn't have any independent judgment or meet the traditional statutory criteria seems not to be, to me, the issue in this case.
And in fact, as the court of appeals found, if you evaluate the activity that these nurses performed on behalf of the nursing home under the traditional criteria, look at the structure of the operations, look at what the higher levels of management were expecting them to do, you would find that they were, in fact, charged with the overall direction, assignment, with the use of independent judgment for the operation of the facility.
In fact, the findings of the ALJ specifically say that these nurses were in charge of a wing of the nursing home for much of the time. I think it's important to emphasize here that there's only one floor nurse on the floor on the wing of a hospital overseeing the care that's being given to 50 residents at any time, and that the director of nursing and the assistant director of nursing are absent from the facility 75 percent of the time.
Similarly, to say that the ALJ found that they didn't exercise independent judgment in connection with the exercise of their responsibilities is not supported by the -- either the findings of the judge or what he said at page 40a. He finds -- he does not say they do not exercise independent judgment in connection with the direction of the work of the aides. He says he finds that what they do doesn't equate to responsibly directing the aides in the interests of the employer.
He never goes on to make some separate finding that they didn't use independent judgment, and the question, the way it's posed, seems to presume that they did, by saying whether the Board reasonably determined that employees, in the exercise of professional judgment, were properly denied supervisory status. So --
QUESTION: Ms. Mahoney, may I just ask you a question about the assumption you're making about the statute, and I think I'll understand your argument better. Do you agree that in each of the three categories covered by the statute, the sort of assignment responsibility, the direction responsibility when they're working, and the grievance responsibility, that the statute seems to make a distinction between levels of responsibility?
It seems to assume that a given professional, for example, could do any of these three things conceivably, but there are different levels of responsibility. For example -- and just as an example, it doesn't speak merely of directing other employee, it speaks of responsibly directing them. Now, those may be sort of opaque adjectives, but they seem to be -- at least to be getting to the -- to make the point that there are two different levels, and only if you meet the sort of whatever the standards are for the highest level do you fall into the supervisory category.
Do you accept that basic view of the statute?
MS. MAHONEY: That there is a?
QUESTION: That there's kind of a two -- there's an assumption that there's a two-tier possibility for each of these three categories?
MS. MAHONEY: I think so. Let me see if I understand your question correctly. We would acknowledge and agree that in order to be found to have engaged in activity that could be called responsibly to direct the activities of other employees on the site that, yes, you'd need to do something more than just exercise independent judgment. And that they are talking --
QUESTION: In other words, there can be some direction which is not responsible direction?
MS. MAHONEY: There could be --
QUESTION: So the mere fact that a nurse says, you know, go to bed one rather than bed two, that may not get you to the point where you want to get.
MS. MAHONEY: Absolutely, Your Honor. In fact, what the courts and the Board has traditionally done outside of the health care area and some other professional contexts, is they have looked at the structure of the employer's operation and tried to locate where that -- the person who's alleged to be a supervisor falls on the hierarchy, and whether that person has overall day-to-day responsibility for overseeing the activities of other subordinate employees.
That's precisely the analysis that the court of appeals said should apply in this case. In the Beverly decision it said we're going to look at the structure of the operations. We're not going to just exclude nurses wholesale, because they might give some direction to an aide in the course of performing their duties, but rather we'll see what role they were play.
QUESTION: Do you see a disagreement between the court of appeals and the Board on that general proposition?
MS. MAHONEY: No, I do not.
MS. MAHONEY: No, I think if you go back to the Beverly opinion, which was the predicate for the court of appeals analysis in this case, it very specifically said our disagreement with the Board is that they are wholesale denying protection -- or granting protection to persons who under the traditional criteria would be engaged in supervisory activity, and that's not just a nurse who is giving some direction to a patient. In this case, for instance --
QUESTION: And supervisory activity of the higher rather than the lower degree.
MS. MAHONEY: Well, not a straw boss, not a straw boss.
QUESTION: That's right, yeah.
MS. MAHONEY: Right. And not someone who just directs someone on a team with independent judgment, you know, in an occasional kind of way for a particular patient.
QUESTION: How does it differ from a lawyer giving instructions to a paralegal --
MS. MAHONEY: Well --
QUESTION: -- That would involve independent judgment? Are there situations where a lawyer giving instructions to a paralegal, the lawyer could still not be a supervisor?
MS. MAHONEY: Yes, I think there could be, Your Honor. I think you have to look at what the courts have done and what the Board has done, is look to see what the responsibility of the lawyer is for the overall management of that paralegal's activities. If, in fact, the lawyer's --
QUESTION: Suppose the paralegal is assigned to an associate, first-year associate got this paralegal who will do whatever the lawyer tells the paralegal to do. Does that mean that the lawyer is a supervisor so you could not have -- suppose we had a legal aid unit that was operating that way; the lawyers would not be protected under the Act?
MS. MAHONEY: Well, Your Honor, if the lawyer in that assignment process also had the authority to effectively recommend, for instance, whether that paralegal would get a raise, then I think even under the Board's rule they acknowledge that that person, in fact, would be a supervisor.
QUESTION: Let's take out controlling pay.
MS. MAHONEY: Okay. And does the lawyer also determine precisely what activities that paralegal is going to perform on a day-to-day basis and assign that paralegal to other lawyers when the workload is different and essentially tell that paralegal when they can come, when they can go, and that they really are the only supervisor for that paralegal?
QUESTION: If this -- this description in this record seems not unusual for a setup where you have practical nurses, a relatively small staff, and a large staff of nurse's aides. So is there anything in this record that makes this an atypical setup? In other words, you seem to be saying we have to look and see what these nurses are doing, but I get the picture that anytime you have a staff of practical nurses and a large staff of nurse's aides, it's going to be roughly the same as this setup.
MS. MAHONEY: No, Your Honor, I don't think so. First of all, one of the important points here is that this is structured in a very different way from a hospital. You wouldn't see, ordinarily, the same kind of ratios of lesser-skilled employees to higher-skilled employees. And what you have here is --
QUESTION: Is typical of nursing homes.
MS. MAHONEY: It may be more typical of nursing homes, but nursing homes also, for instance, may have another level of supervision inbetween the licensed practical nurses and may have some other RN's, for instance, who are in fact the person in charge on the floor at any given time.
QUESTION: The Board has had a number of nurses' cases now. Is there something that shows whether this is typical, not typical, or, as you say, are most of the Board's decisions coming out the same way and the record's more or less the same?
MS. MAHONEY: Well, Your Honor, the -- in the Avon Convalescent Center case, which was decided after the Doctors' Hospital case, they looked at a fact situation that's almost identical to this, where the licensed practical nurses were found to be supervisors because they were exercising --
QUESTION: What year was that?
MS. MAHONEY: It was in 1972, I believe.
QUESTION: Since 1974, has there been any deviation in the Board's rulings in this area?
MS. MAHONEY: I think that -- you mean have they found some nurses to be supervisors?
QUESTION: In the -- since 1974 -- you pointed out, quite correctly, that the Board seemed to be shifting here and there before 1974, but for the last 20 years I haven't noticed that they have, and correct me if I'm wrong.
MS. MAHONEY: Well, the shift, Your Honor, that's occurred is they've been finding more and more and more nurses to be supervise -- not to be supervisors even if they disciplined -- for instance, in the Riverchase case -- even if they disciplined a nurse's aide in connection with patient care. Because the Board took its rationale to sort of its logical conclusion, which is that anything done incidental to patient care is going to disqualify them from supervisory status.
And, again, if we just look at the structure of this nursing home and compare it to the structure of many of the industries and facilities that the Board has traditionally looked at, the Dale Operating case; Ohio Power; Maine, Vermont and Yankee; what they do is they say if the person who's in charge of the floor or the facility -- even if they don't have the power to decide whether to give someone a raise or whether to fire them or hire them, if they really are responsible for the safety of the operations and for ensuring that those people do their work and keep to it and do it in a safe manner, that an employer has got to be able to demand the undivided loyalty of its representative on the floor of the plant or on -- in this case, on the floor of the nursing home.
That's really what these cases are designed to find, is whether the employer has a legitimate need in order to rely upon the undivided loyalty. Because if we back up and look at what Taft-Hartley was all about to begin with, it was a reaction to the fact that the Board has interpreted its authority to permit foreman to unionize.
QUESTION: Are you saying --
QUESTION: So it's the need to ensure the loyalty of the employee that is the touchstone for determining whether they're acting in the interest of the employer.
MS. MAHONEY: No, Your Honor, absolutely not. I don't think that the phrase "the interest of the employer" has anything to do with assessing the loyalty of the employee, but that rather simply the fact that that's how Congress sought to identify the categories of activity that would require or -- or an employer to want to have undivided loyalty. In other words, the people who do the assignment, who do the responsible direction, the employer's got to be able to count on them to report infractions of rules to make sure that the operations are run in a safe manner, because --
QUESTION: Well, you began your argument by telling us that we were focusing too much on the facts in the transcript, that this was a legal argument.
MS. MAHONEY: Yes, Your Honor, it is.
QUESTION: And I take it your principal legal argument is that the Board is incorrect in the way it's interpreted the phrase "interest of the employer."
MS. MAHONEY: Absolutely. And the reason is that that phrase, looking at the statute, is used for -- as this Court found in Packard, for common law notions of respondeat superior. Without it, the statute doesn't make any sense. The Board suggests that our interpretation of it is superfluous, and it's not. It --
QUESTION: But all -- almost all employees or supervisors are both covered by respondeat superior. I don't see how that helps us.
MS. MAHONEY: But, Your Honor, it doesn't. That's not the way that this particular statutory provision is written. And if I could just turn to the language, the reason I think it's necessary is because it doesn't define supervisor in terms of any employee that works for a particular employer. If it said that, then there -- they might have an argument that the additional phrase "in the interest of the employer" was superfluous. Instead it says the term "supervisor" means, "any individual having authority."
And, of course, the term "employee" extends to employees throughout industries, regardless of what particular employer they work for. So unless you put in this phrase, "in the interest of the employer," you don't have any attribution to the particular employer who is alleged to be denying the Section 7 rights.
And that's important in several circumstances. First of all, it's important because if you take it out, quite literally a union steward who is employed by an employer and engages in, for instance -- effectively recommends discipline of other employees, also adjusts grievances, they would be found to be a supervisor under the literal definition.
QUESTION: So you're saying that "interest of the employer" is inserted to make sure that we're covering employees?
MS. MAHONEY: Excuse me? I'm sorry.
QUESTION: You're saying that the function of including the phrase "interest of the employer" in the statute is to ensure that what we are dealing with are employees, as opposed to independent contractors?
MS. MAHONEY: No. I'm saying that it draws a number of lines. It makes sure that the supervisory activities are being performed on behalf of the employer, as opposed to on behalf of the employee in his personal interests or in the collective interests of the union. Second, it also makes sure that, for instance, with respect to third parties who may be supervising the employees of the employer, that they -- because it says "any individual," that they also could be a supervisor as long as their activity was done in the interest of the employer.
QUESTION: Well, that is a very sweeping interpretation of that phrase, and it seems to me to contradict the rather common sense observation that all employees to some extent are working for the interest of the employer.
MS. MAHONEY: Well, Your Honor, in the -- if I could just mention also the third place where it's significant, is that if an employer -- I mean if an employee works for two different employers and is a supervisor for one and not a supervisor for the other, if you don't have that phrase in there they actually would be deemed a supervisor for all employers. Because this is what -- the language that brings it back to the particular employer who is alleged to have engaged in the wrongful activity or denying the Section 7 right.
QUESTION: So, are you saying that the phrase, then, has rather little to do with this case, or that it has everything to do with this case?
MS. MAHONEY: It has all -- it has little to do with this case in that it is -- it's -- in the situation where you're dealing with employees, this phrase, prior to the 1970's in the health care context, was never a dispositive factor in the cases. We can go all the way back to 1947, and the Board never used this phrase as an additional prerequisite for an employee to be found to be a supervisor, because it really is just a common law agency kind of test. It serves a purpose, but it's not -- it's not important to most of the cases that are adjudicated under this section. It's certainly not superfluous, though.
QUESTION: Ms. Mahoney, if we find that this language is not entirely clear, is there a role for deference to the Board and in taking -- and answering that question, what credit, if any, should we give to the Board's consistent rulings for the last 20 years in cases of this nature?
MS. MAHONEY: Your Honor, first of all it is unambiguous because Packard said it was unambiguous. It interpreted precisely the same phrase prior to the adoption of Taft-Hartley, said it was unambiguous, and there's absolutely nothing in the legislate --
QUESTION: So that would mean for the last 20 years the Board has been essentially wrong, which I think is --
MS. MAHONEY: Absolutely, Your Honor.
QUESTION: -- Your position, yes.
MS. MAHONEY: Absolutely.
QUESTION: But if we don't agree with that, then we would owe some deference to the Board, is that not so?
MS. MAHONEY: Well, no, Your Honor, I -- well, I mean if you found that it was a long term, long standing, consistent interpretation that had a basis in the language --
MS. MAHONEY: -- Then I would have to say some deference. But I'd like to emphasize that what the Board is really trying to do here is to regain, reclaim authority that Congress took away from it in 1947. That what the whole purpose of Taft-Hartley was to do was to say to the Board we don't want you out there just deciding who's got conflicting interests and who doesn't, because we don't like the way you've balanced those policies.
Instead what we're going to do, unlike Section 7 and Section 8 where we've given you sort of broad delegations to come up with rules that make sense for industry, here what we're going to do is we're going to spell out the criteria, we're going to tell you what categories of activity entitle an employer to demand undivided loyalty. Because we find that the balance of power has totally shifted under your interpretation of the Act, and that it's of critical importance that employers be allowed to have representatives with undivided loyalty who will not fail to report disciplinary problems because they're siding with the organized -- organizational interests of the employees that they supervise.
That's what Taft-Hartley was about. They took away the Board's authority to engage in some sort of broad rulemaking as they have done in the health care area. And I think --
QUESTION: Ms. Mahoney, isn't it arguable that in 1947 Congress adopted the position of the dissenting justice in the Packard case?
MS. MAHONEY: No, Your Honor, I don't think so. First of all, as this Court recently said in Betts, that unless Congress -- when this Court has interpreted a phrase in a statute and said that it's unambiguous, the fact that Congress changes the result in the case doesn't mean that it disavowed the interpretation of the plain language. This is identical to that situation.
Moreover, if you look at --
QUESTION: Of course, it did reject the holding in the case.
MS. MAHONEY: It -- well it, what it -- no, it actually didn't even reject the holding. It didn't -- what it said was the Court has found that the -- are you talking in Packard?
MS. MAHONEY: What it said is that the Court has found that the definition of employee, which essentially has no limitations, allows the Board to decide that foreman can unionize, even though we, the Supreme Court, question that policy.
Congress didn't say the Court got it wrong. Congress said we understand that we need to come forward and we need to establish a definition that will take that authority away from the Board. We don't want them to decide who's an employee and who's not in accordance with their own assessment of the policies of the Act. That's what they did.
There's nothing in the legislative history of that amendment, after Packard was decided, that suggests that they were interpreting the "interest of the employer" to be the dividing line between those who were super -- those who were minor supervisory employees and those who were not. The only reference to the phrase "the interest of the employer" is contained in a different section where Congress was changing the definition of employer to -- from those who act in the interest of the employer to those who act as an agent of the employer, saying that they thought it was too loose a test.
And that is essentially what this Court found that phrase meant in Carbon Fuel. It's hard to believe that Congress would have known about the Packard interpretation, changed it in one section because it was a little loose, and then intended a totally different meaning in this section of the Act without saying so somewhere. That just does not conform with statutory principles.
Even if it means something more than common law agency, what does it mean? Maybe it means in the interests of management. Well, we win under that test too, because the whole point here is that what these individuals were doing had to be in our interests. I mean when they attended a disciplinary conference or when they wrote up warning notices, whose interests were they acting in? They were acting in the interests of management, they weren't acting in the interests of -- the collective interests of the employees.
QUESTION: Ms. Mahoney, suppose we were to agree that maybe the Board's heavy reliance on the language "in the interest of the employer" is not justified, what do we do in this case? Are there other findings below that would justify the result reached by the Board?
MS. MAHONEY: No, absolutely not, Your Honor. If we look at what the court of appeals said, it said "the interest of the employer" cannot be interpreted in the way the Board has said because -- and I need to emphasize this -- the Board has said that the only way that a nurse is going to act in the interest -- that we're going to find that they're acting in the interest of the employer is if they take action or have the authority to affect job status or pay.
And, of course, that's the key point here because that's not the test for supervisors in any other industry. Congress, in fact, made it clear that you didn't have to have that authority. So the Court rejected that definition of "the interest of the employer" because it was inconsistent with the other provisions of the Act.
They then, under the Beverly analysis, looked at how would these people be supervisors in other industries? Do they meet the statutory criteria? Is the employer vesting them with the type of authority to responsibly direct its operations, oversee its work force, that they would be found to be a supervisor in any other industry? And they found that it was clear that they would be.
And, in fact, if you go through the Board's cases from 1947 forward outside the health care area, on analogous facts there are many cases without any reference to "the interest of the employer," of course, where they have found that precisely this kind of activity is supervisory in character and that an employer is entitled to demand the undivided loyalty of those people.
And one of the things, too, that the Board referred now to say that its test is not whether they have the authority to affect pay or job status. They claim that now, although if we look back, for instance, at the petition reply at page 4, it says: "The Board will find nurses to be supervisors where in addition to performing professional duties, they also possess the authority to affect the job status or pay of employees." They have never suggested what authority these nurses could have had that would have made them eligible for supervisory status under Section 2(11) that was not covered by one of the other statutory criteria. They've rendered it superfluous.
I should add in the reply there is one thing they said, was well perhaps if the nurses had responsibility to establish the job description of these nurse's aides, that that might mean that they were engaged in responsible direction. But no Board case has ever said that that was a prerequisite for a finding of "responsibly to direct," and, in fact, that's the kind of managerial authority that ordinarily is exercised by a much higher management level and not by the lower level that is the supervisory level.
QUESTION: Ms. Mahoney, am I correct in thinking that the Board's opinion in this particular case dealt with the supervisor-employee issue only in a footnote, and then simply discussed who had the burden of proof?
MS. MAHONEY: That's correct, Your Honor. There's no indication of precisely what the Board was doing. But I think that essentially if this Court rejects the Board's rule, as the court of appeals does. If you find that there's adequate room here to accommodate the -- you know, not excluding all professionals under the statutory criteria the way that the court of appeals found, that the court of appeals decision has got to be affirmed because it really is just a question of whether there was substantial evidence to support the judgment under the statutory criteria.
And there the Board's decision -- the Board's decision in the Avon Convalescent Center case and the University Health Care case fully support, because the facts are essentially indistinguishable with the court of appeals' application of the law to the facts. The problem here is that the Board stopped applying that test after 1974, and then went off on this -- this different kind of analysis where everything that a nurse did that furthered the interest of the patient was no longer supervisory.
I mean, the bottom line here is that the Board's rule gives greater organizational rights to nurses than it does to employees in any other industry. The lead person -- not the lead man, but the senior personnel, for instance, in the power plant example is entitled to supervisory -- is not entitled to organizational rights when they perform exactly the same job functions as the licensed practical nurses in this case. And that's the real irony in the way that the Board has interpreted the statute to give --
QUESTION: Who was that, Ms. Mahoney? Give me -- what is the example you're giving?
MS. MAHONEY: In the power plant cases, for instance, what they will have is a lead control operator who is the senior person that's responsible for overseeing the work of others in the operation or in the control room of the power plant. And they also perform work themselves, but they have the responsibility -- they're the one who's in charge. They have the responsibility to decide, you know, what's going to be done in the event of an emergency, whether they need to get additional staffing, or whatever.
And even in the absence of the authority to effectively recommend pay raises or, you know, personnel authority under the other sections, they are found to be the people who are in charge, they are found to be those who are engaged in responsible direction. It doesn't make any sense to say that those exact same activities are now somehow not supervisory because they occur in the context of a nursing home and the employer chooses to use a nurse to perform those functions. That's really what is going on here.
There's also no problem here with --
QUESTION: So you're saying there should be no industry-by-industry distinction in when people are working or not working for the interest of the employer --
MS. MAHONEY: No, Your Honor.
QUESTION: -- Despite the fact that in the power company the people are not engaged in helping other people, whereas in the nursing company they are?
MS. MAHONEY: Well, they're engaged in helping the customers. They're acting pursuant to regulatory standards, a lot of skill and training, and they're acting in the interest of the power plant's customers. The patients in this case are no different than the customers of any other industry.
There's simply no rational distinction, I don't believe, for that analysis. That instead you really have to look at what are the functions they are performing; where are they in the hierarchical structure; what is the employer relying upon them to do? And here the ALJ acknowledged they were the senior personnel, they were in charge of the facility, but because of the Board's patient care rule they could not go ahead and find that they were supervisors.
Yeshiva is really exactly analysis -- exactly analogous because what the Board did in Yeshiva, and, in fact, what it did in Bell Aerospace, was it came to this Court saying we want to find that managerial employees, employees who meet the traditional criteria for managerial status, are not managers. And they're entitled to the protections of the Act because we don't think there's a potential for conflicting loyalties, because in Yeshiva they exercise professional judgment so it's our informed discretion, looking at this industry, that really there's no need to deny them the protection of the Act. They said the same about buyers --
QUESTION: What do you make of footnote 30 in Yeshiva which seems to say that nurses fall in this group that are deemed employees despite substantial planning responsibility and authority to direct and evaluate others?
MS. MAHONEY: I think what Yeshiva is talking about is they were asking the question that the court -- is consistent with the court of appeals, and that is to say do these -- do the university professors only do those things that all university professors do, or do they do something beyond that.
And I think that what the Court was really saying is that when they exercise decisionmaking authority that goes beyond that which sort of every nurse or every university professor inherently must have, that you go ahead and you apply the criteria. Because if you didn't do that, if you said, for instance, that the mere direction, any direction of an aide or -- was automatically supervisory activity, then you'd have a wholesale exclusion. And Yeshiva --
QUESTION: What would you have to take away from these nurses to make them nonsupervisors?
MS. MAHONEY: I'm sorry, Your Honor.
QUESTION: What would you have to take away?
MS. MAHONEY: What would you have to take away from them?
QUESTION: In other words, you said --
MS. MAHONEY: You'd have to take away the responsibility to be the senior personnel who's got the oversight of all of the performance of their functions. If you've got another hierarchical structure, I think that that's the main distinction among the cases.
QUESTION: Thank you.
MS. MAHONEY: I'm sorry, my time is up.
QUESTION: Thank you, Ms. Mahoney.
Mr. Dreeben, you have 4 minutes remaining.
REBUTTAL ARGUMENT OF MICHAEL R. DREEBEN ON BEHALF OF THE PETITIONER
MR. DREEBEN: The burden of respondent is to show that the Board's construction violates the statute, that it is inconsistent with the statute. The terms that appear in Section 2(11) of the Act are terms that are open to more than one interpretation.
This is a Chevron case. The Board has examined the facts of various industries in light of its power to apply the Act to particular situations, and it has arrived at an interpretation designed to draw the very distinction that Congress intended between those with supervisory authority that aligns them with management and those with minor supervisory duties.
QUESTION: Has the Board found that any other character of individual, in attending to the needs of the customer of the employer, is not acting in the interest of the employer but rather in the interest of the customer? It is uniquely nurses that when they take care of nursing-home customers, are not acting in the interest of the employer?
MR. DREEBEN: No, it is not uniquely nurses.
QUESTION: What other fields has the Board applied that theory to?
MR. DREEBEN: The Board has not applied a theory that's phrased in the same terms to other categories of professionals, but --
QUESTION: Why would that be if it's the central feature of this section of --
MR. DREEBEN: What the Board has done is draw an analogy between the -- what nurses do and what other minor supervisory employees do. Our reply brief at page 5, note 7, collects cases that do, in fact, show that the Board's rule in this case is fully consistent with the traditional rule that it has applied. There are many factual distinctions that get drawn between the various cases. The Board tries to draw consistent distinctions. Occasional cases are going to wander on one side of the line or another, but the Board has done what it can to generate a general category.
It does not mean that all nurses are supervisors or are not supervisors. That depends on what they, in fact, do. But the Board's principal rule here is designed to test out what a nurse does as a professional doing what professionals typically do, from what persons do who do exercise genuine supervisory authority.
I thank the Court.
CHIEF JUSTICE REHNQUIST: Thank you, Mr. Dreeben.
The case is submitted.
(Whereupon, at 11:58 a.m., the case in the above-entitled matter was submitted.)
Argument of Speaker
Mr. Speaker: Justice Kennedy has an opinion to announce.
Argument of Justice Kennedy
Mr. Kennedy: I have the opinion to announce for the Court in National Relations Board versus the Healthcare and Retirement Corporation of America, No. 92-1964.
The National Labor Relations Act affords employees the right to organize and the right to engage in collective bargaining free from any employer and insurance.
The Act does not grant those rights to supervisory employees however, and that means that the statutory definition of supervisor becomes essential in determining which employees are covered by the Act.
This case presents the narrow question whether the Board's rulings were consistent with the statutory definition when it adapted a test for determining if a nurse is a supervisor.
The Act states that any individual who uses independent judgment in performing one of twelve supervisory functions in the interest of the employer is a supervisor.
This case turns on the statutory phrase, in the interest of the employer.
In cases involving nurses, the Board has stated that a nurse's direction of less skilled employees incidental to the treatment of the patients is not authority exercised in the interest of the employer.
This case involves four nurses employed at the Heartland Nursing Home in Urbana, Ohio.
Heartland, which is the respondent here, had contended that the nurses were supervisors and so were not covered by the Act.
The Board disagreed stating that the focus of the nurse's activity was on the well-being of the nursing home residents.
The Court of Appeals held that Board's test inconsistent with the statutory phrase, in the interest of the employer, and ruled in favor of respondents.
We granted certiorari and we now affirm.
The Board has created a full septotomy between acts taken in connection with patient care and acts taken in the interest of the employer.
Patient care is the business of the nursing home.
It follows that attending to the needs of the nursing home patients, who are the employer's customers, is in the interest of the employer.
That conclusion is supported by our 1980 decision in NLRB versus Yeshiva University and in our 1947 decision in Packard Motor Car Company versus NLRB.
Because the Board's test is inconsistent with both the statutory language and this Court's precedents the Board put forth a series of non-statutory arguments but none is persuasive.
The Board argues, for example, that granting organizational rights to nurses, whose supervisory authority concerns patient care, does not threaten the conflicting loyalties that the supervisory exception were designed to avoid.
The Act must be enforced according to its own terms, however, and by creating legal categories inconsistent with its meaning, as the Board has done here, is impermissible.
We hold that the Board's test for determining if a nurse is a supervisor is inconsistent with the National Labor Relations Act.
Justice Ginsburg has filed a dissenting opinion and she has joined therein by Justice Blackmun, Justice Stevens, and Justice Souter.