Carroll College, Inc. v. National Labor Relations Board

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued December 4, 2008 Decided March 13, 2009

No. 07-1315

CARROLL COLLEGE, INC.,

PETITIONER

v.

NATIONAL LABOR RELATIONS BOARD,

RESPONDENT

INTERNATIONAL UNION, UNITED AUTOMOBILE, AEROSPACE &

AGRICULTURAL IMPLEMENT WORKERS OF AMERICA,

INTERVENOR

Consolidated with 07-1383

On Petition for Review and Cross-Application for

Enforcement of an Order of the National Labor Relations

Board

Edward A. Brill argued the cause and filed the briefs for

petitioner. Lawrence Z. Lorber entered an appearance.

Arnold E. Perl and Ada Meloy were on the brief of amici

curiae American Council on Education et al. in support of

petitioner.

2

Steven B. Goldstein, Attorney, National Labor Relations

Board, argued the cause for respondent. With him on the brief

were Ronald E. Meisburg, General Counsel, John H.

Ferguson, Associate General Counsel, Linda Dreeben,

Deputy Associate General Counsel, and Robert J. Englehart,

Supervisory Attorney.

Catherine Trafton argued the cause for intervenor. With

her on the brief was James B. Coppess.

Before: HENDERSON, ROGERS, and GRIFFITH, Circuit

Judges.

Opinion for the Court filed by Circuit Judge GRIFFITH.

GRIFFITH, Circuit Judge: The National Labor Relations

Board ordered Carroll College to bargain with the recognized

collective bargaining agent of its faculty. In this petition for

review, the college argues that its religious educational

environment and affiliation with the United Presbyterian

Church place it beyond the Board’s jurisdiction under NLRB

v. Catholic Bishop of Chicago, 440 U.S. 490 (1979), and

University of Great Falls v. NLRB, 278 F.3d 1335 (D.C. Cir.

2002). We agree.

I.

Established in 1846, Carroll College is a private college

located in Waukesha, Wisconsin, and affiliated with the

Synod of Lakes and Prairies of the United Presbyterian

Church of the U.S.A. The college has a school of liberal arts

and sciences for undergraduates and a school of graduate and

professional studies. Its governance structure is composed of

a board of trustees, an administration, and a faculty.

3

In November 2004, the International Union, United

Automobile, Aerospace & Agricultural Implement Workers

of America-UAW, filed a petition with the NLRB seeking

certification as the collective bargaining representative for

Carroll’s faculty. Carroll challenged the Board’s jurisdiction,

arguing that requiring it to bargain with the union would

substantially burden its free exercise rights in violation of the

Religious Freedom Restoration Act (RFRA), 42 U.S.C.

§ 2000bb-1 (2000). In the alternative, Carroll argued that its

faculty members are managerial employees not covered by

the National Labor Relations Act (NLRA), 29 U.S.C.

§§ 152(3), 157 (2000), under NLRB v. Yeshiva University,

444 U.S. 672 (1980).

After a hearing to consider the union’s petition, the

Regional Director for the NLRB rejected both of the college’s

arguments. On the question of jurisdiction, the Regional

Director saw no need to address the college’s RFRA

argument, interpreting Board precedent to foreclose such a

challenge unless a school can show under Catholic Bishop

that it is “church operated.” See J.A. at 21–22 (citing Catholic

Bishop, 440 U.S. at 507 (holding that church-operated schools

are not subject to NLRB jurisdiction)). Carroll’s affiliation

with the Synod, the Regional Director concluded, was

insufficient to meet this requirement. Reaching the merits, the

Regional Director concluded that Carroll’s faculty members

are not managerial employees. J.A. at 38–45. Carroll filed a

timely request to review the Regional Director’s decision on

jurisdiction and the merits, but stressed that its argument

against NLRB jurisdiction was based solely on RFRA and not

Catholic Bishop. See Resp’t Br. add. 8.

The NLRB granted Carroll’s request for review on the

jurisdictional issue alone and concluded that it was no

violation of RFRA to apply the NLRA’s duty to bargain to the

4

college. Carroll Coll., Inc., 345 N.L.R.B. 254, 254, 257–60

(2005). In the wake of the NLRB’s decision, the Regional

Director certified the union as the exclusive representative of

Carroll’s faculty. Carroll refused to bargain with the union,

which drew an unfair labor practice charge from the General

Counsel alleging a violation of sections 8(a)(5) and (1) of the

NLRA. In its defense before the Board, Carroll presented

once again the RFRA and managerial employee arguments it

had first made to the Regional Director.

The NLRB granted the General Counsel’s motion for

summary judgment and ordered Carroll to recognize and

bargain with the union. Carroll Coll., Inc., 350 N.L.R.B. No.

30, at 1 (2007). With respect to Carroll’s RFRA challenge, the

NLRB repeated its earlier analysis and concluded again that

the duty to bargain did not substantially burden the college’s

free exercise rights. Id. at 2–3. With respect to Carroll’s

argument that its faculty members are managerial employees,

the Board used the Regional Director’s earlier analysis and

likewise concluded that they are not. Id. at 1–2. Carroll now

petitions for review, and the NLRB cross-petitions for

enforcement of its order. The union has intervened in support

of the Board.1 We have jurisdiction under 29 U.S.C.

§ 160(e), (f).

II.

Before us, Carroll abandons the argument that the NLRB

cannot, consistent with RFRA, order it to bargain with the

union. Instead, Carroll asserts for the first time that the NLRB

1

The American Council on Education, the National Association of

Independent Colleges and Universities, the Council of Independent

Colleges, and the Wisconsin Association of Independent Colleges

and Universities filed an amici brief in support of Carroll’s petition.

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has no jurisdiction under Catholic Bishop. We begin with an

explanation of Catholic Bishop and its progeny.

In Catholic Bishop, the Supreme Court read the NLRA in

light of the Religion Clauses of the First Amendment to hold

that the NLRB lacks jurisdiction over church-operated

schools. 440 U.S. at 507. Central to the Court’s reasoning was

a concern that despite the best of intentions, a Board

authorized to order collective bargaining at church-operated

schools would, in many cases, find itself inquiring “into the

good faith of the position asserted by the clergy-

administrators and its relationship to the school’s religious

mission.” Id. at 502. The First Amendment does not permit

such inquiry. “It is not only the conclusions that may be

reached by the Board which may impinge on rights

guaranteed by the Religion Clauses, but also the very process

of inquiry leading to findings and conclusions.” Id. (emphasis

added). The Court saw “no escape” from these “serious First

Amendment questions” if the Board was permitted to exercise

jurisdiction over church-operated schools. Id. at 504.

But the Court offered no test for determining whether a

school is beyond Board jurisdiction. In a series of decisions

following Catholic Bishop, the NLRB created a framework

for analysis that looked to whether a school has a “substantial

religious character” to determine if it is exempt from

jurisdiction. See, e.g., Livingstone Coll., 286 N.L.R.B. 1308,

1309–10 (1987); Jewish Day Sch. of Greater Wash., Inc., 283

N.L.R.B. 757, 760–61 (1987); Trustee of St. Joseph’s Coll.,

282 N.L.R.B. 65, 68 & n.10 (1986). The Board weighed, inter

alia, the involvement of the affiliated religious group in the

school’s day-to-day affairs, the degree to which the school has

a religious mission, and whether religious criteria play a role

in faculty appointment and evaluation. See Livingstone Coll.,

286 N.L.R.B. at 1309–10. The “substantial religious

6

character” test allowed the Board to consider “all aspects of a

religious school’s organization and function that [it deemed]

relevant.” St. Joseph’s Coll., 282 N.L.R.B. at 68 n.10.

In Great Falls, we held that the Board’s approach

involved just “the sort of intrusive inquiry that Catholic

Bishop sought to avoid,” with “the NLRB trolling through the

beliefs of [schools], making determinations about [their]

religious mission, and that mission’s centrality to the ‘primary

purpose’ of the [school].” 278 F.3d at 1341–42. Accordingly,

we read Catholic Bishop to require a much different and less

intrusive inquiry. Drawing in large part on then-Judge

Breyer’s opinion in Universidad Central de Bayamon v.

NLRB, 793 F.2d 383 (1st Cir. 1986) (en banc), we fashioned a

three-part inquiry. A school is exempt from NLRB

jurisdiction if it (1) “‘holds itself out to students, faculty and

the community’ as providing a religious educational

environment,” Great Falls, 278 F.3d at 1343 (quoting

Bayamon, 793 F.2d at 400); (2) “is organized as a

‘nonprofit,’” id.; and (3) “is affiliated with, or owned,

operated, or controlled, directly or indirectly, by a recognized

religious organization, or with an entity, membership of

which is determined, at least in part, with reference to

religion,” id. We intended this test to create a “bright-line”

rule for determining jurisdiction “without delving into matters

of religious doctrine or motive.” Id. at 1345. It would ensure

that schools claiming a Catholic Bishop exemption “are bona

fide religious institutions,” id. at 1344, while avoiding Board

inquiry into the substance and contours of their religious

beliefs and missions, see id. at 1344–45.

To determine whether the University of Great Falls held

itself out as “providing a religious educational environment,”

we looked to its course catalogue, mission statement, student

bulletin, and other public documents. Id. at 1345. There was

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no inquiry into the content of the school’s religious beliefs nor

skepticism whether those beliefs were followed. Probing into

the school’s religious views would “needlessly engage in the

‘trolling’ that . . . Catholic Bishop itself sought to avoid.” Id.

The second and third questions were easily answered. The

school operated as a nonprofit and it was undisputed that it

was affiliated with a recognized religious institution. See id. at

1343–45. There was no need to dig deeper. Doing so would

only risk infringing upon the guarantees of the First

Amendment’s Religion Clauses.

III.

Carroll easily satisfies the Great Falls test. The college’s

charter documents make clear that it holds itself out to

students, faculty, and the broader community as providing a

religious educational environment. Carroll’s Articles of

Incorporation describe its relationship with the Synod and

provide that the college was incorporated “for the purpose of

maintaining and conducting [itself] as a Christian liberal arts

college dedicated to God.” J.A. at 1102–03. Carroll’s mission

statement provides that the school will “demonstrate Christian

values by . . . example.” J.A. at 1093. The board of trustees

has adopted a “Statement of Christian Purpose,” which

declares it the college’s mission to provide “a learning

environment devoted to academic excellence and congenial to

Christian witness.” J.A. at 1091. And Carroll and the Synod

are parties to an agreement that commits the board of trustees

of the college to “recognize and affirm [Carroll’s] origin and

heritage in the concern of the Church for the intellectual and

spiritual growth of its students, faculty, administration, and

staff.” J.A. at 1129. These objective indicia easily satisfy the

first element of our test. See Great Falls, 278 F.3d at 1345.

8

The Regional Director assumed the college could not

challenge the Board’s jurisdiction under RFRA unless it was

exempt from Board jurisdiction under Catholic Bishop. As the

NLRB had yet to adopt our Great Falls test, the Regional

Director applied the NLRB’s “substantial religious character”

approach to conclude that Carroll is not exempt from the

Board’s jurisdiction under Catholic Bishop, but added a

footnote explaining that he would reach the same conclusion

under the three-part Great Falls inquiry. See J.A. at 23–25 &

n.3. He found Carroll’s “aspirational statements of principle

and purpose” insufficient to establish that it holds itself out as

a college providing a religious educational environment

because there was little accompanying evidence of actual

religious influence or control over the college or the education

it provides. J.A. at 25 n.3. Not only does this heightened

standard require a showing of religious influence far beyond

what we found necessary in Great Falls, but it involves the

type of inquiry Catholic Bishop forbids. In determining

whether a school is exempt from the NLRA under Catholic

Bishop, the NLRB may not “ask[] how effective the

institution is at inculcating its beliefs.” Great Falls, 278 F.3d

at 1344. To do otherwise and require proof of “actual

religious influence or control” as the Regional Director did

here, J.A. at 25 n.3, is tantamount to questioning the sincerity

of the school’s public representations about the significance

of its religious affiliation. This neither the Board nor we may

do. See Great Falls, 278 F.3d at 1344 (stating that to avoid

“constitutional infirmities,” courts cannot “ask about the

centrality of beliefs or how important the religious mission is

to the institution”).

As we determined in Great Falls, focusing solely on a

school’s public representations as to its religious educational

environment—as opposed to conducting a skeptical inquiry

into the actual influence exerted over the school by its

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affiliated religious institution—is also a more useful way for

determining the school’s religious bona fides. See id. at 1344.

The Regional Director’s worry that Carroll’s public

statements of religious affiliation are “aspirational” and

without practical effect is addressed by the incentives Carroll

has to adhere to how it describes itself to the consuming

public. “[S]uch public representations serve as a market

check.” Id. Not all students and faculty are attracted to overtly

religious environments, so public representations of religious

ties come at a cost to the school claiming a Catholic Bishop

exemption. See id.

There is no dispute that Carroll meets the second element

of Great Falls. It is a nonprofit institution. See J.A. at 1102

(Articles of Incorporation). The third element is also satisfied

because Carroll is “affiliated with . . . a recognized religious

organization,” Great Falls, 278 F.3d at 1343. The college’s

Articles of Incorporation provide that it is “related” to the

Synod of Lakes and Prairies of the United Presbyterian

Church, J.A. at 1103, and Carroll, pursuant to an agreement

with the Synod, is bound to “recognize and affirm its origin

and heritage in the concern of the Church,” J.A. at 1129. See

also J.A. at 1814 (Course Catalogue) (“The college is

affiliated with the Presbyterian Church.”). Both the Regional

Director and the NLRB acknowledged that Carroll and the

Synod are affiliated. See, e.g., Carroll Coll., 345 N.L.R.B. at

254 (“Soon after the College was established . . . it ‘affiliated’

with the Presbyterian Church” and “[t]oday, that affiliation is

recognized in the Articles of Incorporation.”); J.A. at 25 n.3.

The Regional Director determined, however, that because

“the Church does not sponsor the College, does not own its

campus, and does not have any right of ultimate control over

it,” the third element was not satisfied. J.A. at 25 n.3. Again,

after Great Falls, this type of analysis requires too much.

Although elements of religious ownership, operation, and

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control were present in the facts before us in Great Falls, our

test is met with affiliation alone. See 278 F.3d at 1343 (stating

a school is exempt if it is “affiliated with, or owned, operated,

or controlled . . . by a recognized religious organization”

(emphasis added)). As the Board found, Carroll is plainly

affiliated with a recognized religious organization.

There remains a complication in this otherwise

straightforward application of Great Falls. Carroll did not

raise the Catholic Bishop argument before the Board. See

Pet’r Br. 26; see also 29 U.S.C. § 160(e) (“No objection that

has not been urged before the Board . . . shall be considered

by the court, unless the failure or neglect to urge such

objection shall be excused because of extraordinary

circumstances.”).2 Certain jurisdictional challenges, however,

need not be raised before the Board to be considered on

review. “A court can always invalidate Board action that is

patently beyond the Board’s jurisdiction, even if the

jurisdictional challenge was never presented to the Board.”

Local 900, Int’l Union of Elec., Radio & Mach. Workers,

AFL-CIO v. NLRB, 727 F.2d 1184, 1191 n.5 (D.C. Cir. 1984);

see also NLRB v. Cheney Cal. Lumber Co., 327 U.S. 385, 388

(1946); Noel Foods v. NLRB, 82 F.3d 1113, 1121 (D.C. Cir.

2

In both the proceedings below and its brief to this court, the

NLRB stated that Carroll “explicitly conceded that the Board had

jurisdiction over it.” Resp’t Br. 35. Not so. It is true that Carroll’s

post-representation hearing brief made clear that it was not claiming

an exemption under Catholic Bishop. Resp’t Br. add. 2; see also id.

add. 8 (Request for Review) (arguing that the Board decided an

issue that Carroll “did not raise”—namely, that “[t]he Board has

‘jurisdiction’ (whatever that means) over Carroll”). But this merely

disclaimed reliance on Catholic Bishop, and there is a difference

between Carroll’s decision not to contest jurisdiction under

Catholic Bishop and an express concession that jurisdiction exists.

11

1996). After our decision in Great Falls, Carroll is patently

beyond the NLRB’s jurisdiction.3 Great Falls created a

bright-line test of the Board’s jurisdiction according to which

we ask three questions easily answered with objective criteria.

From Carroll’s public representations, it is readily apparent

that the college holds itself out to all as providing a religious

educational environment. That it is a nonprofit affiliated with

a Presbyterian synod is beyond dispute. From the Board’s

own review of Carroll’s publicly available documents, see

Carroll Coll., 345 N.L.R.B. at 254–55, it should have known

immediately that the college was entitled to a Catholic Bishop

exemption from the NLRA’s collective bargaining

requirements. The Board thus had no jurisdiction to order the

school to bargain with the union, and we have authority to

invalidate the Board’s order even though the college did not

raise its jurisdictional challenge below.

IV.

Under Great Falls, Carroll is exempt from the NLRB’s

jurisdiction. We thus need not address Carroll’s argument that

its faculty members are managerial employees who fall

outside the protection of the NLRA. We grant Carroll’s

petition for review, vacate the decision and order of the

NLRB, and deny the Board’s cross-petition for enforcement.

So ordered.

3

At oral argument, the Board pressed for a narrow reading of what

constitutes action that is “patently beyond” its jurisdiction, arguing

that so “long as [it] is purporting to decide a labor dispute, the

Board has not . . . patently traveled outside the orbit of its

authority.” See Oral Arg. Recording at 29:39–30:05. But that

cannot be right. For example, the NLRA does not reach labor

disputes involving railroads. See 29 U.S.C. § 152(2). As we explain,

Great Falls works a similar exemption from Board jurisdiction.