February 5, 2015
NLRB Decision Opens Door to Unionization of Private University and College Faculty
At the end of last year the National Labor Relations Board (“NLRB”) issued a decision in Pacific Lutheran University and Service Employees International Union, Local 925, 361 NLRB No. 157 (December 2014), in which it revisited and revised the standard for deciding the managerial status of private university and college faculty members. As a result, private schools are likely to see an increase in efforts to unionize faculty.
As a general matter, any group of employees may self-organize, form or join with a labor union for the purpose of collective bargaining or to engage in activities for the mutual aid or protection of the group. Certain supervisors and persons in managerial positions do not fall within the definition of “employee” under the National Labor Relations Act (“NLRA”). As managerial employees are tasked with policy and decision-making authorities, a supervisor’s membership in an employee bargaining group would be inappropriate. Accordingly, in many instances where employees seek to unionize, a threshold issue is which individuals are part of the proposed group and which, if any, supervisory employees may be excluded.
For thirty years, the NLRB and federal courts have primarily followed a standard set forth in the 1980 case NLRB v. Yeshiva University, 444 U.S. 672 (1980). The Yeshiva Court held that managerial employees in a university setting are those who “formulate and effectuate management policies by expressing and making operating the decisions of their employer." Yeshiva, 444 U.S. at 682. The Yeshiva decision, however, was analyzed with the understanding that a private university, unlike standard industry, operated pursuant to a system of “collegial decision-making,” where the professional expertise of the faculty was necessary to the formulation and implementation of academic policy. Id. at 680. Therefore, the Yeshiva standard recognized heightened managerial and operational duties of university faculty than is present in the modern-day model.
The NLRB in Pacific Lutheran explained that since 1980, the trend has shown that colleges and universities are being run more like corporations. Schools have moved away from the model where faculty are involved in management, and have increasingly centered management control within the administration. Several factors, including the increase in part-time, contingent and non-tenured faculty support this change in school governance. According to the NLRB, this movement has made the Yeshiva standard ripe for revision.
In revamping the standard, the NLRB formulated a two-prong test and set forth several factors to be considered under each prong. The goal of the test is to determine whether the faculty actually exercise control or make effective recommendations over areas of policy that effect the university as a whole, not just their department or classes; the analogy being akin to a determination of whether corporate employees exercise control over the product produced by the company, the terms by which the product is offered, or the customers served.
The first step of the test is to review the faculty’s decision-making in five identified areas: academic programs, enrollment management, finances, academic policy and personnel policy and decisions. NLRB weighs the first three factors as “primary” factors which is consistent with the acknowledgment of and analogy of what is important to determining managerial status in a private industrial or corporate setting. The last two factors, the “secondary” areas of decision making, hold less weight.
The second step in the test is to determine whether the decision-making that the faculty engages in is (1) pursuant to actual, rather than paper, authority, and (2) results in effective recommendations to the administration that are “almost always followed.” NLRB will also consider where in the university structure the faculty at issue stands, e.g. are they tenure eligible, contingent, etc., as temporary, part-time, or non-tenure eligible faculty are naturally limited in their ability to effect university policy.
Under the Pacific Lutheran test, not only does a faculty member have to actually engage in decision making over the university’s programming, the student enrollment, and the tuition, but the faculty’s role in those decisions must be authorized and their recommendations must be “almost always” accepted by the administration. In addition, even if a faculty member does engage in such administrative, university-wide policy making, it may still be difficult for any non-tenured or contingent faculty members to satisfy the test, as their status alone is likely to tip the scales to the non-managerial side. As this standard has been set out by the NLRB, it appears that, only a small number of faculty members who are engaged in management-level functions in the university would be likely to satisfy the Pacific Lutheran test.
Notably, the facts in Pacific Lutheran concerned contingent faculty members who were not tenure eligible, were not permitted to sit on faculty standing committees, had a limited voice in faculty or university governance or university-wide academic programing. Therefore it was easy for the NLRB to find that the faculty at issue were not managerial, under the new or the Yeshiva standard, and thus could be included in the proposed employee bargaining unit.
Because the facts were as they were, the Pacific Lutheran decision is likely to be just the first in numerous labor board and court decisions reviewing and seeking to apply this new standard. Through those decisions, the standard may be defeated or redefined. Nevertheless, as it now stands, the Pacific Lutheran standard is more comprehensive and sets a higher bar for finding a managerial employee than the Yeshiva test did. It will make it more difficult for universities and colleges to have faculty members excluded from unionization efforts, and in turn increase the appeal of union organizing in those schools.
We recommend that all affected entities take note of this new standard and seek legal guidance and advice in reviewing the duties and authorities of faculty members that may no longer be considered managerial. Hill Wallack LLP’s Labor and Employment and School Law attorneys have vast experience in counseling school entities in all areas of labor relations, including defending school clients before national and state labor boards.
 The decision also reviewed the standard used by the NLRB to determine whether a religious university is subject to the National Labor Relations Act, which will not be addressed in this client alert.
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