Palmetto Prince George Operating, LLC v. National Labor Relations Board

PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

No. 15-2143

PALMETTO PRINCE GEORGE OPERATING, LLC, d/b/a Prince George

Healthcare Center,

Petitioner,

v.

NATIONAL LABOR RELATIONS BOARD,

Respondent.

No. 15-2221

NATIONAL LABOR RELATIONS BOARD,

Petitioner,

v.

PALMETTO PRINCE GEORGE OPERATING, LLC, d/b/a Prince George

Healthcare Center,

Respondent.

On Petition for Review and Cross-application for Enforcement of

an Order of the National Labor Relations Board. (10-CA-154373)

Argued: September 21, 2016 Decided: November 1, 2016

Before MOTZ, TRAXLER, and AGEE, Circuit Judges.

Petition for review denied; cross-petition for enforcement

granted by published opinion. Judge Motz wrote the opinion, in

which Judge Traxler and Judge Agee joined.

ARGUED: Jennifer Marie Fowler-Hermes, WILLIAMS, PARKER,

HARRISON, DIETZ & GETZEN, Sarasota, Florida, for

Petitioner/Cross-Respondent. Meghan Brooke Phillips, NATIONAL

LABOR RELATIONS BOARD, Washington, D.C., for Respondent/Cross-

Petitioner. ON BRIEF: John M. Hament, KUNKEL MILLER & HAMENT,

Sarasota, Florida, for Petitioner/Cross-Respondent. Richard

Griffin, Jr., General Counsel, Jennifer Abruzzo, Deputy General

Counsel, John H. Ferguson, Associate General Counsel, Linda

Dreeben, Deputy Associate General Counsel, Robert J. Englehart,

Supervisory Attorney, NATIONAL LABOR RELATIONS BOARD,

Washington, D.C., for Respondent/Cross-Petitioner.

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DIANA GRIBBON MOTZ, Circuit Judge:

In this case, nurses sought to join a union and engage in

collective bargaining with their employer. The National Labor

Relations Board found that the nurses could unionize, rejecting

the employer’s contention that they were ineligible supervisors

within the meaning of the National Labor Relations Act, 29

U.S.C. § 152(11). When the employer refused to bargain with the

nurses’ union, the Board ordered the employer to do so. The

employer then filed this petition for review, and the Board

cross-petitioned to enforce its order. Substantial evidence

supports the Board’s finding that the nurses are not supervisors

because their duties do not require the exercise of independent

judgment. Therefore, we deny the employer’s petition and grant

the Board’s cross-petition.

I.

A.

Palmetto Prince George Operating, LLC, operates a nursing

home in Georgetown, South Carolina. The nursing home provides

care twenty-four hours a day, seven days a week.

Palmetto’s management team consists of a Director of

Nursing, an Assistant Director of Nursing, and three Unit

Managers (collectively the “Managers”). The Managers monitor

and evaluate the quality of nursing care, supervise and

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discipline nursing staff, and arrange the schedules and

assignments of the nursing staff.

The Center employs twenty-three nurses to staff its units:

six registered nurses (RNs) and seventeen licensed practical

nurses (LPNs) (collectively, the “Nurses”). All assess

patients, answer call lights, administer medications, and

perform general patient care duties. 1 In addition to the Nurses,

the Center employs forty certified nursing assistants (CNAs).

The CNAs assist residents with daily tasks, such as helping them

bathe, repositioning them in bed, and aiding them in using the

restroom. Palmetto’s handbook describes the Nurses as the CNAs’

“first line of authority,” and it places the Nurses above the

CNAs on its organizational chart.

B.

In 2015, the United Steel, Paper and Forestry, Rubber,

Manufacturing, Energy, Allied Industrial and Service Workers

Union sought to represent the Nurses as their exclusive

bargaining representative. On January 12, 2015, the Union filed

an election petition with the Board. At the pre-election

hearing before the Regional Director, Palmetto argued that the

Nurses are supervisors and therefore have no collective

1

RNs and LPNs share the same duties, with the exception

that LPNs cannot sign assessments or administer small doses of

intravenous medications. These differences do not bear on the

question of whether they are supervisors.

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bargaining rights under the National Labor Relations Act. See

29 U.S.C. § 152(3) (2012).

Section 152(11) of the Act defines “supervisor” as:

[A]ny individual having authority, in the interest of

the employer, to hire, transfer, suspend, lay off,

recall, promote, discharge, assign, reward, or

discipline other employees, or responsibly to direct

them, or to adjust their grievances, or effectively to

recommend such action, if in connection with the

foregoing the exercise of such authority is not of a

merely routine or clerical nature, but requires the

use of independent judgment.

Palmetto contends that the Nurses are supervisors because they

have the authority to discipline and responsibly direct the CNAs

and must use independent judgment in exercising those two

authorities. The parties have stipulated that the Nurses lack

authority to perform any of the other ten functions listed in

§ 152(11).

The Regional Director concluded that Palmetto failed to

prove the Nurses are supervisors. Accordingly, the Regional

Director ordered an election, and the Nurses voted in favor of

having the Union represent them. After the election, the Union

requested that Palmetto recognize it as the Nurses’

representative and begin bargaining with it. Palmetto refused,

and the Union filed a refusal-to-bargain charge with the Board.

The Board’s General Counsel then filed a complaint against

Palmetto alleging that it had committed unfair labor practices

in violation of §§ 158(a)(1) and (5) of the National Labor

5

Relations Act. The Board granted the General Counsel summary

judgment, adopting the Regional Director’s findings and

concluding that Palmetto had indeed violated §§ 158(a)(1) and

(5) of the Act. Palmetto filed a petition for review with us,

and the Board filed a cross-petition to enforce its order.

II.

A.

We review the Board’s factual findings regarding

supervisory status for substantial evidence. Glenmark Assoc.,

Inc. v. NLRB, 147 F.3d 333, 338 (4th Cir. 1998). We affirm if

the record contains enough evidence that “a reasonable mind

might accept [it] as adequate to support a conclusion.” Gestamp

South Carolina, LLC v. NLRB, 769 F.3d 254, 263 (4th Cir. 2014)

(internal quotation marks omitted). We defer to the Board’s

factual findings even if we might have resolved factual disputes

differently. Id.

The Supreme Court has held that § 152(11) establishes a

three-prong test for supervisory status. See, e.g., NLRB v.

Kentucky River Cmty. Care, Inc., 532 U.S. 706, 712–13 (2001).

Employees are supervisors if they (1) have the authority to

perform any one of the twelve functions listed in § 152(11) or

effectively recommend such action, (2) exercise that authority

in a manner that is not merely clerical or routine but requires

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the use of independent judgment, and (3) hold that authority in

the interest of the employer. Id. The employer bears the

burden of proving all three prongs. Id. at 711–12. And it must

do so by a preponderance of the evidence. Pac Tell Group, Inc.

v. NLRB, 817 F.3d 86, 91 (4th Cir. 2016).

In this case, the parties dispute only the first and second

prongs of this test. We need only address the second -- whether

the Nurses exercise authority requiring independent judgment.

The Act leaves the term “independent judgment” undefined.

Moreover, the Supreme Court has recognized that the term “is

ambiguous with respect to the degree of discretion required for

supervisory status.” Kentucky River, 532 U.S. at 713 (emphasis

in original). The Court explained that it is “undoubtedly true

that the degree of judgment that might ordinarily be required to

conduct a particular task may be reduced below the statutory

threshold by detailed orders and regulations issued by the

employer.” Id. at 713-14. The Supreme Court concluded that

“[i]t falls clearly within the Board’s discretion to determine,

within reason, what scope of discretion qualifies.” Id.

Accordingly, a court defers to the Board’s interpretation of

“independent judgment” so long as it is “reasonable and

consistent with the Act.” Id. at 711–12.

After the Supreme Court decided Kentucky River, the Board

explained that to exercise independent judgment, “an individual

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must at a minimum act, or effectively recommend action, free of

the control of others and form an opinion or evaluation by

discerning and comparing data.” In re Oakwood Healthcare, Inc.,

348 NLRB 686, 693 (2006). Crucially, the Board concluded in

Oakwood that “a judgment is not independent if it is dictated or

controlled by detailed instructions, whether set forth in

company policies or rules, the verbal instructions of a higher

authority, or in the provisions of a collective bargaining

agreement.” Id.

B.

Palmetto does not challenge the reasonableness of the

Board’s current, post-Kentucky River interpretation of

“independent judgment.” Nor does Palmetto contend that this

interpretation is inconsistent with the Act. Indeed, Palmetto

conceded at oral argument that the Board’s interpretation of

“independent judgment” in Oakwood controls. Palmetto maintains,

however, that our analysis of “independent judgment” in cases

involving nurses issued prior to Kentucky River and Oakwood is

in all respects “consistent” with those cases, and so governs

the case at hand. Reply Br. 2.

Our pre-Oakwood cases responded to the Board’s perplexing

application of § 152(11) to nurses. Before Kentucky River, the

Board took the position that nurses do not exercise “independent

judgment” any time they exercise “ordinary professional or

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technical judgment in directing less-skilled employees to

deliver services.” Kentucky River, 532 U.S. at 713 (quoting the

Board’s brief).

In a series of cases, we rejected that interpretation of

“independent judgment” as unreasonable and held that the nurses

at issue in those cases were supervisors. See, e.g., Beverly

Enterprises, Virginia, Inc. v. NLRB, 165 F.3d 290, 298 (4th Cir.

1999) (en banc) (holding that nurses were supervisors because

they exercised § 152(11) authorities “by and large without any

guidelines or established criteria”); Glenmark, 147 F.3d at 341-

45 (holding that nurses were supervisors given their authority

to schedule and discipline nursing assistants without management

approval).

After we decided these nurse/supervisor cases, the Supreme

Court in Kentucky River similarly rejected the Board’s sharp

distinction between professional and independent judgment,

holding that it was unreasonable to conclude that professional

judgment can never be “independent” for the purposes of the Act.

532 U.S. at 714, 721 (citation omitted). In Oakwood, the Board

adopted its current interpretation of “independent judgment” to

comport with Kentucky River.

This is the first case requiring us to address the

precedential value of our pre-Oakwood nurse/supervisor cases.

It is settled law that an agency construction entitled to

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deference supersedes a prior judicial construction of an

ambiguous statute. Nat’l Cable & Telecomm. Ass’n v. Brand X

Internet Servs., 545 U.S. 967, 982 (2005). The phrase

“independent judgment” is ambiguous, and we have always

understood that the Board’s reasonable and consistent

interpretations of it are entitled to deference. See, e.g.,

Beverly, 165 F.3d at 296; Glenmark, 147 F.3d at 338.

In Oakwood, the Board adopted a reasonable interpretation

of “independent judgment.” As we recently noted, there is no

conflict between the Board’s interpretation and the text of

§ 152(11) or Congress’s intent to distinguish “true supervisors”

from employees whom the Act protects “even though they perform

‘minor supervisory duties.’” Pac Tell, 817 F.3d at 91 (quoting

Oakwood, 348 NLRB at 686); see also NLRB v. Health Care &

Retirement Corp. of America, 511 U.S. 571, 586–88 (1994)

(recounting the legislative history of § 152(11)). Indeed, in

Oakwood the Board did nothing more than implement guidance

offered directly by the Supreme Court. See Kentucky River, 532

U.S. at 713–14 (noting the significance when determining

“independent judgment” of an employer’s “detailed orders and

regulations”).

We therefore defer to the Board’s interpretation of

“independent judgment” and apply its standards here. To the

extent our pre-Oakwood cases accord with those standards, they

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remain instructive. 2 However, the Board’s current standards

supersede our prior cases to the extent the two conflict. Thus,

for example, before Oakwood, we considered it highly probative

of independent judgment if nurses served as the most senior

staff on site for significant portions of the work week. See

Beverly, 165 F.3d at 297–98; Glenmark, 147 F.3d at 341–42; NLRB

v. St. Mary’s Home, Inc., 690 F.2d 1062, 1066 (4th Cir. 1982).

In accordance with Kentucky River, when detailed employer rules

severely constrain the nurses’ discretion, Oakwood indicates

that this fact is not as probative as we had held. Moreover, in

Golden Crest Healthcare Center, a case decided the same day as

Oakwood, the Board expressly applied Oakwood to hold that the

nurses at issue there, although serving for significant periods

of time as the most senior staff on site, were not supervisors,

particularly given that managers remained on-call after hours.

348 NLRB 727, 727, 730 n.10 (2006).

With these legal principles in mind, we turn to the case at

hand.

2

In Oakwood, the Board also adopted a new interpretation of

the term “responsibly to direct.” Oakwood, 348 NLRB at 690–92.

Here, we need not address the extent to which this new

interpretation displaces our prior cases.

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III.

Palmetto argues that the Nurses here are supervisors

because they have the authority to discipline and responsibly

direct the work of CNAs in a manner requiring the use of

independent judgment. Both arguments fail for the same reason:

Palmetto simply has not shown that the Nurses must use any

independent judgment when performing these functions.

A.

We first consider the evidence Palmetto offered in support

of its contention that the Nurses must exercise independent

judgment when disciplining CNAs.

Palmetto uses a progressive discipline policy that

classifies violations into three categories. Category I

includes minor infractions, such as failing to comply with the

dress code or departmental procedures. Category II includes

violations such as threatening other employees and ignoring

protocols for lifting and moving residents. Category III

includes the most serious violations, such as sleeping on the

job, insubordination, and neglecting or abusing residents.

Palmetto’s current handbook lists the following disciplinary

steps: documented oral counseling, reprimands, written

warnings, suspension, and discharge.

Any employee can report a disciplinary violation, and in

some cases, employees must report them. In particular, failure

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to report a Category II or Category III violation is itself a

Category II violation. The Managers conduct separate

investigations of misconduct and make all final disciplinary

decisions.

Nevertheless, Palmetto insists that the Nurses must use

independent judgment in disciplining CNAs. The record before us

contains very scant evidence of oral counseling and only three

instances in more than three years -- 2011 through 2014 -- of

Nurses filing written reports of CNA misconduct. In one, it is

unclear under which category the violation fell. The other two

involved Category II and Category III violations, which the

Nurses had no choice but to report. In the Category III case, a

Nurse sent a CNA home for sleeping on the job. Palmetto relies

heavily on this incident. However, one instance of a Nurse

reacting to such an egregious violation, by itself, does not

demonstrate independent judgment. See Phelps Cmty. Med. Ctr.,

295 NLRB 486, 492 (1989). Moreover, Palmetto’s argument ignores

its written rule that sleeping on the job is punishable only by

discharge. The Nurse involved in this incident did not

discharge or even suspend the CNA. She made no final

disciplinary decision. Rather, she called Director of Nursing

Jennifer Lambert to report the incident, who then investigated

the matter and ultimately fired the CNA. The record before us

indicates that Palmetto has given its Nurses only the

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disciplinary power provided to every other employee (including

CNAs themselves): the power to report rule violations to the

Managers.

On this record, a reasonable mind could certainly conclude

that Palmetto did not offer evidence sufficient to establish

that the Nurses use independent judgment when disciplining CNAs.

B.

We next consider the evidence Palmetto offered in support

of its contention that the Nurses must use independent judgment

when they responsibly direct the work of CNAs.

Palmetto argues that Director Lambert’s testimony

establishes as much. But at most, that testimony establishes

that the Nurses exercise not independent, but heavily

constrained, judgment. Director Lambert testified that the

Nurses are responsible for making sure CNAs:

(1) follow various laws, rules, and regulations,

including the OSH [sic], (2) comply with infection

control procedures, (3) stay within the scope of their

certification, (4) adhere to proper protocols for

resident hygiene, (5) treat residents in a non-abusive

or neglectful [sic] manner, (6) follow the proper

feeding and hydration rules and regulations, (7)

document treatment, and (8) comply with fire alarm,

disaster evacuation, and resident elopement

procedures.

Pet. Br. 31.

Palmetto has extensive policies on all these matters and on

virtually all CNA duties. It has training, instructions, and

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policies on everything from handwashing and bathing residents to

dealing with patient abuse. During mandatory in-service

meetings, the Managers regularly give specific instructions to

Nurses and CNAs on such topics as repositioning residents,

properly clothing residents, taking breaks, clocking in and out,

attending to residents’ hygiene, and providing meal service.

Palmetto also conducts fire, evacuation, and resident elopement

drills. State law and OSHA regulations provide additional

protocols for infection control, patient hygiene, and emergency

preparedness. In every case, the Nurses’ responsibility seems

to amount to the same thing: making sure the CNAs follow the

written instructions. This suggests that the Nurses serve

merely as conduits for these instructions.

It is true, of course, that “the mere existence of company

policies does not eliminate independent judgment from decision-

making if the policies allow for discretionary choices.”

Oakwood, 348 NLRB at 693 (citing Glenmark, 147 F.3d at 341).

However, Palmetto has not offered even one instance in which the

Nurses could (let alone did) direct CNAs largely without

guidance from Palmetto’s instructions.

Palmetto leans heavily on the Managers’ absence at night

and on weekends, leaving the Nurses as the most senior staff on

site during those times. But, under the Oakwood standard, which

Palmetto agrees controls, these facts do not themselves

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establish independent judgment. See Golden Crest, 348 NLRB at

730 n.10 (applying Oakwood and holding that charge nurses were

not statutory supervisors despite this arrangement). Here,

substantial record evidence establishes that Palmetto’s

instructions continue to control nurses’ discretion even after

hours and on weekends. When the Managers go home at night or

for the weekend, they do not take their instructions with them.

Moreover, the record evidence establishes that both the

Director and Assistant Director of Nursing rotate “on-call”

duties on nights and weekends, and the three Unit Managers have

other limited on-call duties. The Unit Managers have instructed

the Nurses to call them after hours for assistance, and Director

Lambert testified that the Nurses may call her for assistance as

well. As the Board explained in Golden Crest, the fact that

nurses are the most senior staff on site after hours “is even

less probative where management is available after hours.” Id. 3

Given these facts, the Board reasonably concluded that the

Nurses do not exercise independent judgment when directing CNAs.

3 Palmetto’s reliance on our decision in Beverly is

misplaced. In addition to predating Kentucky River and Oakwood,

in Beverly the Board conceded that the employer “provides no

list of criteria by which assignments, direction of nursing

assistants, or emergency dismissals are to be made.” 165 F.3d

at 298. Here, Palmetto has utterly failed to rebut evidence

that its instructions provided detailed “criteria” on these

issues.

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IV.

The record offers abundant evidence supporting the Board’s

finding that Palmetto failed to establish that the Nurses use

independent judgment in disciplining and directing the work of

CNAs. Accordingly, we must deny Palmetto’s petition for review

and grant the Board’s cross-petition for enforcement of its

order.

PETITION FOR REVIEW DENIED;

CROSS-PETITION FOR ENFORCEMENT GRANTED

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