When Professionals Also Supervise: The Kentucky River Cases

Within moments of the publication of the National Labor Relations Board's decisions in the cases popularly known as the ' Kentucky River Cases,' ( Oakwood Healthcare, Inc. , 348 NLRB No. 37 (2006); Golden Crest Healthcare Center, 348 NLRB No. 39 (2006); Croft Metals, Inc., 348 NLRB No. 38 (2006)), leaders of organized labor declared that the Board's 'clarified' guidelines concerning the definition of 'supervisor' under the National Labor Relations Act (the 'Act') would deny as many as 34 million American workers by 2012 the right to the protections of the Act and representation by a labor organization. Some management-side pundits also claimed victory for employers, who, they said, could now safely remove an entire layer of employees from the ranks of those able to engage in union activity and become union members. These pre-programmed extremes were overblown. While the cases provide some framework and assistance for the analysis of who is and who is not a supervisor, it is not at all certain what the effect will be in specific factual circumstances.

The primary issue involved in these cases is the overlap in the statutory definitions of 'professional' and 'supervisor.' Under the Act, professionals may be represented by a union (though they may choose to be in a unit separate from non-professionals), while supervisors do not have a similar protected right. A professional is defined in Section 2(12) of the Act, inter alia, as an employee who is involved in 'the consistent exercise of discretion and judgment.' A supervisor, in Section 2(11), is defined as an individual, inter alia, who exercises authority that 'requires the use of independent judgment.' Stated as a question, 'When a professional gives instructions to a subordinate that are technical in nature and arise out of the professional's technical expertise, is the professional acting as a supervisor and excluded from the protections of the Act or simply a professional and entitled to the protections of the Act?' In Kentucky River , the Board had held, essentially, that where the instruction is only technical in nature (that is, an application of the professional's technical expertise), the individual is a professional and not a supervisor. On appeal from the Sixth Circuit, the United States Supreme Court disagreed and chastised the Labor Board for improperly excluding judgments based on professional expertise from the kinds of independent judgments that also can indicate the exercise of supervisory authority.

In the three cases decided on September 29, the Board responded to the direction of the Supreme Court with respect to the 'independent judgment' element of Section 2(11) of the Act. In addition, the Board discussed and clarified the meanings of two of the statute's twelve indicia of supervisory authority which it felt were most implicated in the professional/supervisor debate, i.e., the authority to assign and the authority to responsibly direct subordinates. As anticipated, the Board split along party lines, and the 3-2 decision will remain questionable authority for action, until not only the appeals are completed but also the approximately seventy cases that involve the same issue are decided using the new guidelines. The decisions in the backlogged cases will add many nuances to the new guidelines. As a consequence, the issue in what is now likely to be called the Oakwood cases will remain unsettled and undulating well into the next political administration. If the next administration is from the Democratic Party and the majority of the members of the Board shifts, as is tradition, to reflect the party in the White House, the current tilt may reverse entirely. Moreover, even with the attempt at clarity by the majority in the Oakwood cases, the key concepts of 'assign,' 'responsibly direct' and 'independent judgment' remain only somewhat less ambiguous because they have been 'clarified' with other similarly vague concepts, such as 'overall,' 'accountable,' 'corrective action' and 'control.'

The watchword for employers, therefore, should be 'caution,' as they proceed to apply the new guidelines to their specific situations. Further, employers considering wholesale lift-outs of workers from the ranks of statutory employees into that of statutory supervisors should take special notice that the Board's own application of the criteria in the Oakwood cases themselves does not predict that all close cases will be called in favor of employers - three of the four employee groups in those cases were held not to be supervisors under the new guidelines. Most importantly, every individual the employer designates a supervisor will be one more person with the power to bind the employer by what he or she says or does, creating strict liability for sexual harassment and other illegal acts.

As with most issues in labor and employment law, the decision as to whom an employer wishes to be a supervisor will involve the balancing of risks and benefits. And if the risks are to be minimized, the decision must be at the front-end of a complex process of validation, monitoring and training.

Published November 1, 2006.