Third Circuit Rejects NLRB’s Test for Supervisory Status of LPNs


Under the National Labor Relations Act, supervisors are not eligible to unionize and the issue of supervisory status in healthcare organizations is one that has been hotly debated over the years. The U.S. Court of Appeals for the Third Circuit handed a victory to employers by rejecting the NLRB’s test for such status.

Background:  In NLRB v. New Vista Nursing and Rehabilitation, the Director of Nursing supervised three levels of nursing staff: (1) the evening shift “nursing supervisor” and morning shift “unit manager”; (2) licensed practical nurses (LPNs) ; and (3) certified nurse aides or certified nursing assistants (CNAs). A union sought to represent a bargaining unit comprised of the LPNs, but the employer objected on the basis that the LPNs were statutory supervisors under the Act.

The U.S. Supreme Court has set forth a three-part test for establishing supervisory status: (1) the individuals hold the authority to engage in any 1 of the 12 listed supervisory functions [under the NLRA], (2) their “exercise of such authority is not of a merely routine or clerical nature, but requires the use of independent judgment,” and (3) their authority is held “in the interest of the employer.” One of the twelve listed functions, and the one at issue in this case, is to “discipline other employees[] . . . or effectively to recommend such action.”

The NLRB applied a four-part test to determine if the LPNs held the authority to discipline or effectively to recommend such discipline, consisting of the following: (a) whether LPNs submit actual recommendations, and not merely anecdotal reports, (b) whether their recommendations are followed on a regular basis, (c) whether the triggering disciplinary incidents are independently investigated by superiors, and (d) whether the recommendations result from the LPNs’ own independent judgment. The NLRB found the LPNs did not meet these criteria, and thus were not supervisors. An election was held, in which the LPNs voted to unionize. The employer, however, refused to bargain with the union. The NLRB then issued a bargaining order, and a petition for enforcement was filed with the Third Circuit.

The Court’s Ruling:  The Third Circuit found that the NLRB’s test was “incompatible” with its controlling caselaw. Acknowledging that different circuits had developed different rules for addressing the question of whether LPNs in a nursing home are statutory supervisors, the Third Circuit noted that it had set forth its own guidance on this issue in the case of NLRB v. Attleboro Associates, Ltd. Relying on Attleboro, the Third Circuit identified three factors that together show supervisory status: (1) the employee has the discretion to take different actions, including verbally counseling the misbehaving employee or taking more formal action; (2) the employee’s actions “initiate” the disciplinary process; and (3) the employee’s action functions like discipline because it increases severity of the consequences of a future rule violation.

The Third Circuit also specifically noted two other factors, which the NLRB had relied upon in its finding, as not disproving supervisory status: (1) whether an LPN’s supervisor undertakes an independent investigation; and (2) whether the LPNs exercise their supervisory authority only a few times (or even just one time).

The Third Circuit specifically stated that it was not necessarily finding the LPNs to be statutory supervisors. Rather, it remanded the case to the Board for further determination, using the correct legal standard.

Lessons Learned:  Although the Third Circuit did not issue a finding as to supervisory status of the LPNs in this case, it did offer some thoughts on the type of evidence that might be relevant in a supervisory status determination, such as if the LPN has authority to decide what “disciplinary” action to take, which could include a decision as to the level of disciplinary action,  a decision that verbal counseling is the appropriate response to the employee’s conduct, and even a decision to take no action in response to the employee’s conduct.