The decision by the National Labor Relations Board (NLRB) in Pacific Lutheran University was the subject of commentary in our January 2015 E-Note. The decision will be an important topic of discussion and analysis at our annual conference in April. In preparation for the conference, we have chosen to present two additional commentaries concerning the decision.
The first commentary is by Joseph W. Ambash, Fisher & Phillips LLP who represents colleges and universities. It was originally published in the New England Journal of Higher Education NEJHE, and it is reprinted with permission. The second article is by Aaron Nisenson, Senior Counsel, American Association of University Professors, which was originally posted on the AAUP website.
Both pieces underscore the significance of the Pacific Lutheran University decision and its impact on the future of faculty collective bargaining at private sector colleges and universities.
Key NLRB Decision Opens a Wide Door for Faculty Organizing by Joseph W. Ambash
In a stunning and far-reaching decision, the NLRB has opened the door to union organizing among faculty at thousands of private-sector institutions, both secular and religious. The Board's majority decision in Pacific Lutheran University, issued in the face of powerful dissents, will inevitably spark controversy and ongoing litigation both about the legality of NLRB intrusion into the operation of religious institutions and the proper interpretation of the "managerial" status of faculty under the U.S. Supreme Court's historic Yeshiva University decision.
Pacific Lutheran University Case
The question before the NLRB in Pacific Lutheran University was whether a local of the Service Employees International Union could represent a unit of nontenure-eligible contingent faculty members employed by the university in Tacoma, Washington. The university argued that, as a church-operated institution, it was exempt from NLRB jurisdiction and that its full-time contingent faculty were managerial employees excluded from representation under the Supreme Court's 1980 decision in Yeshiva University.
In reviewing the decision of its regional director, the NLRB took the opportunity to solicit amicus briefs about the broad issues of jurisdiction over all religious institutions and the proper analysis of managerial status of all faculty at private higher education institutions. In its decision, the Board articulated new, more stringent, standards that will make it difficult for religious institutions to claim exemption from the National Labor Relations Act (NLRA) and for all private institutions to claim that their faculty are exempt from union organizing. It held that the contingent faculty in question were entitled to organize.
Difficult New Test
In Yeshiva, the Supreme Court ruled that the faculty of that institution were "managerial employees" excluded from collective bargaining because they "formulate and effectuate management policies by expressing and making operative the decisions of their employer." Controversy had existed in applying the Yeshiva standards in the 34 years since that case was decided. Reviewing courts and others had criticized the NLRB for creating confusing standards that gave poor guidance to litigants. Despite these concerns, the overwhelming majority of private-sector institutions in the country have relied on the principles of this case to maintain union-free status among their faculty.
In the Pacific Lutheran decision, the Board stated its new rule as follows:
- Where a party asserts that university faculty are managerial employees, the Board will examine the faculty's participation in the following areas of decision-making: academic programs, enrollment management, finances, academic policy, and personnel policies and decisions, giving greater weight to the first three areas than the last two areas;
- The Board interpreted the term "effective recommendations" to mean that those recommendations "must almost always be followed by the [college or university's] administration," and that they must "routinely become operative without independent review by the administration";
- The Board will then determine, in the context of the university's decision-making structure and the nature of the faculty's employment relationship with the university, whether the faculty actually control or make effective recommendations over those areas. If they do, the Board will find that they are managerial employees and, therefore, excluded from the act's protections.
In his thoughtful dissent, NLRB member Harry I. Johnson III pointed out the virtual impossibility of satisfying this new standard:
"... by increasing the burden of proof for what the Board considers to be "effective" recommendations, and by failing to consider the actual, diverse processes of university business operations and governance, the Board has raised the bar for establishing managerial status of faculty to an unattainable height, one beyond the reach even of Arete̕̕̕."
Member Johnson pointed out that the new requirement, that to be effective, recommendations "must almost always be followed by the administration," is an "overly onerous standard," which will result in fewer Board decisions conferring managerial status on faculty." In addition, member Johnson criticized the Board majority's holding that faculty recommendations are not effective if they are subject to independent review. He pointed out that discounting internal review "seems to utterly disregard the realities of decision - and policymaking in complex organizations."
The dissent's observations underscore the uphill battle nearly any college or university will have in demonstrating that its faculty are "managerial" and therefore not subject to collective bargaining.
Jurisdiction Over Religious Institutions
The Board also ruled that it will exercise jurisdiction over religious institutions-and hence allow faculty organizing-except where:
- The college or university first demonstrates that it holds itself out as providing a religious educational environment;
- Once that threshold requirement is met, the college or university must then show that it holds out the faculty members it seeks to organize as performing a religious function. This requires a showing by the college or university that it holds out those faculty as performing a specific role in creating or maintaining the university's religious educational environment.
As member Johnson pointed out in his dissent, the Board's new standard, which requires a religious university to prove that it "holds out" its faculty "as performing a specific role in creating and maintaining" its religious educational environment, necessarily involves the government in the process of evaluating religious beliefs and practices, thereby improperly intruding into the Religious Clauses of the First Amendment. This is particularly true because the majority decision requires a showing that faculty are required to serve a specific "religious function" - something that, of course, can vary widely from religion to religion. In Member Johnson's view, if the Pacific Lutheran standard is eventually appealed to the D.C. Court of Appeals, it will be overturned.
Take-Away for All Private Higher Education Institutions
The NLRB's decision-unless and until it is reversed or modified-will force nearly all private-sector institutions to reevaluate their vulnerability to union organizing among their faculty. For institutions that view their faculty as truly "managerial" and not subject to organizing, the decision injects a new era of uncertainty about the fundamental relationship between faculty and administration.
Institutions should audit their administrative structure to determine the extent to which their faculty (whether regular or contingent) make "effective recommendations" which are "almost always" followed by the administration, without review. This standard may be unattainable in the era of modern higher education. Institutions who wish to maintain union-free status among their faculty should also train their administrators how to respond to organizing activities by understanding how union organizing works under the NLRA, recognizing organizing activities, and educating faculty to the pro's and con's of collective bargaining.
Religious universities likewise should audit their administrative structure to determine whether they "hold out" their faculty as serving specific religious functions.
All institutions should carefully monitor ongoing developments in this critical area.
NLRB Decision Strengthens Organizing Rights of Private-Sector Faculty by Aaron Nisenson
On December 20, 2014, the National Labor Relations Board published a significant decision involving the organizing rights of private-sector faculty members. In Pacific Lutheran University, the Board modified the standards used to determine two important issues affecting the ability of faculty members at private-sector higher education institutions to unionize under the National Labor Relations Act: first, whether certain institutions and their faculty members are exempted from coverage of the National Labor Relations Act due to their religious activities; and second, whether certain faculty members are managers, who are excluded from protection of the act. In addressing this second issue, the board specifically highlighted, as the AAUP had in an amicus brief submitted in the case, the increasing corporatization of the university.
The question of whether faculty members in religious institutions are subject to jurisdiction and coverage of the act has long been a significant issue, with the Supreme Court's 1979 decision in Catholic Bishop serving as the foundation for any analysis. In Pacific Lutheran University, the Board established a two-part test for determining jurisdiction. First, whether "as a threshold matter, [the university] holds itself out as providing a religious educational environment"; and if so, then, second, whether "it holds out the petitioned-for faculty members as performing a specific role in creating or maintaining the school's religious educational environment.
The employer and its supporters argued that only the threshold question of whether the university was a bona fide religious institution was relevant, in which case the act would not apply to any faculty members. The Board responded that this argument "overreaches because it focuses solely on the nature of the institution, without considering whether the petitioned-for faculty members act in support of the school's religious mission." Therefore, the Board established a standard that examines whether faculty members play a role in supporting the school's religious environment.
In so doing, the Board recognized concerns that inquiry into faculty members' individual duties in religious institutions may involve examining the institution's religious beliefs, which could intrude on the institution's First Amendment rights. To avoid this issue the new standard focuses on what the institution "holds out" with respect to faculty members. The Board explained, "We shall decline jurisdiction if the university 'holds out' its faculty members, in communications to current or potential students and faculty members, and the community at large, as performing a specific role in creating or maintaining the university's religious purpose or mission."
The Board also found that that faculty must be "held out as performing a specific religious function," such as integrating the institution's religious teachings into coursework or engaging in religious indoctrination (emphasis in original). This would not be satisfied by general statements that faculty are to support religious goals, or that they must adhere to an institution's commitment to diversity or academic freedom.
Applying this standard, the Board found that while Pacific Lutheran University held itself out as providing a religious educational environment, the petitioned-for faculty members were not performing a specific religious function. Therefore, the Board asserted jurisdiction and turned to the question of whether certain of the faculty members were managerial employees.
This second question arises from the Supreme Court's decision in Yeshiva, where the Court found that in certain circumstances faculty may be considered "managers" who are excluded from the protections of the act. The Board noted that the application of Yeshiva previously involved an open-ended and uncertain set of criteria for making decisions regarding whether faculty were managers. This led to significant complications in determining whether the test was met and created uncertainty for all of the parties.
Further, in explaining the need for the new standard, the Board specifically highlighted, as AAUP had in our amicus brief, the increasing corporatization of the university. The Board stated, "Indeed our experience applying Yeshiva has generally shown that colleges and universities are increasingly run by administrators, which has the effect of concentrating and centering authority away from the faculty in a way that was contemplated in Yeshiva, but found not to exist at Yeshiva University itself. Such considerations are relevant to our assessment of whether the faculty constitute managerial employees."
In Pacific Lutheran, the Board sought to create a simpler framework for determining whether faculty members served as managers. The Board explained that under the new standard, "where a party asserts that university faculty are managerial employees, we will examine the faculty's participation in the following areas of decision making: academic programs, enrollment management, finances, academic policy, and personnel policies and decisions." The Board will give greater weight to the first three areas, as these are "areas of policy making that affect the university as whole." The Board "will then determine, in the context of the university's decision making structure and the nature of the faculty's employment relationship with the university, whether the faculty actually control or make effective recommendation over those areas. If they do, we will find that they are managerial employees and, therefore, excluded from the Act's protections."
The Board emphasized that to be found managers, faculty must in fact have actual control or make effective recommendations over policy areas. This requires that "the party asserting managerial status must prove actual-rather than mere paper-authority. . . . A faculty handbook may state that the faculty has authority over or responsibility for a particular decision-making area, but it must be demonstrated that the faculty exercises such authority in fact." Proof requires "specific evidence or testimony regarding the nature and number of faculty decisions or recommendations in a particular decision making area, and the subsequent review of those decisions or recommendations, if any, by the university administration prior to implementation, rather than mere conclusory assertions that decisions or recommendations are generally followed." Further, the Board used strong language in defining "effective" as meaning that "recommendations must almost always be followed by the administration" or "routinely become operative without independent review by the administration."