# National Labor Relations Board v. Lewis University

> Court of Appeals for the Seventh Circuit · June 17, 1985 · 765 F.2d 616

URL: https://www.frixlaw.com/law-library/cases/9473649

## Case

- **Full name:** NATIONAL LABOR RELATIONS BOARD, Petitioner, v. LEWIS UNIVERSITY, Respondent
- **Court:** Court of Appeals for the Seventh Circuit
- **Decided:** June 17, 1985
- **Citations:** 765 F.2d 616; 119 L.R.R.M. (BNA) 2993; 1985 U.S. App. LEXIS 19995
- **Precedential status:** Published
- **Opinion:** Dissent by Swygert
- **Judges:** Swygert, Eschbach, Coffey
- **Cited by:** 8 later opinions in the Frix Law Library

## Citator (automated)

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## Opinion text

SWYGERT, Senior Circuit Judge,
dissenting.
The Board found that the “university administration’s authority dominates the decisionmaking process.” Lewis University, 265 N.L.R.B. 1239 , 1250 (1982). Because this judgment is supported by substantial evidence, I would enforce the Board’s order dismissing the University’s petition to exclude faculty from the bargaining unit. The majority’s conclusion to the contrary is based on its own independent — and questionable — review of the record and creates a conflict with the Tenth *629 Circuit, which recently enforced a similar order under virtually identical circumstances. See Loretto Heights College v. NLRB, 742 F.2d 1245 (10th Cir.1984).
Although viewed by some as the death knell for faculty unions, e.g., Note, 14 Creighton L.Rev. 657, 676-77 (1981), the Supreme Court’s decision in NLRB v. Yeshiva University, 444 U.S. 672 , 100 S.Ct. 856 , 63 L.Ed.2d 115 (1980), did not adopt a per se rule defining university faculty as “managerial” employees, who are not protected by the National Labor Relations Act, codified as amended at 29 U.S.C. §§ 151-69 (1982) (“the Act”), see NLRB v. Bell Aerospace Co., 416 U.S. 267 , 94 S.Ct. 1757 , 40 L.Ed.2d 134 (1974). Rather, the Court consigned this issue to case-by-case adjudication before the Board, see Yeshiva, 444 U.S. at 689 -90 n. 29, 690 & n. 31, 100 S.Ct. at 865 -66 n. 29, 866 & n. 31, perhaps the wisest course in view of empirical evidence that faculty power varies widely among American universities, see generally Suntrup, NLRB v. Yeshiva University and Unionization in Higher Education, 4 Ind. Rel.L.J. 287, 299-302 (1981). Unlike the proceedings in Yeshiva, the Board in this case cannot be faulted for failing to undertake an extensive review of the record or to render specific findings of fact. See Yeshiva, 444 U.S. at 678, 691 , 100 S.Ct. at 860, 867 . Nor can it be faulted for applying an incorrect legal test. See id. at 687-88 , 100 S.Ct. at 864-65 . Accordingly, we owe the Board’s judgment great deference, and our review is limited to determining whether its findings were supported by substantial evidence. See id. at 691 , 100 S.Ct. at 867 ; Local 1384, UAW v. NLRB, 756 F.2d 482 , 486 (7th Cir.1985).
In Yeshiva, 444 U.S. at 683 , 100 S.Ct. at 862 , the Court defined a managerial employee as one who “represents management interests by taking or recommending discretionary actions that effectively control or implement employer policy.” In finding the Lewis faculty to be managerial, the majority stresses the indispensability of the faculty’s professional judgment in formulating and implementing academic policy. That faculty input is vital does not necessarily render the faculty managerial; the faculty members could just as well be characterized as indispensable professional employees. The majority ignores the tension between the Act’s implicit exclusion of managerial employees and its explicit inclusion, see 29 U.S.C. § 152 (12), of professional employees whose work “involv[es] the consistent exercise of discretion and judgment.” If the managerial exclusion is defined too broadly, the Act’s mandate to protect professional employees will be undercut. Recognizing this tension, see Yeshiva, 444 U.S. at 686 , 100 S.Ct. at 864 , the Supreme Court decided that a professional employee becomes “managerial” only if his or her discretionary power is so great as to “effectively control or implement employer policy.” Id. at 683 , 100 S.Ct. at 862 .
Fairly read, the record lends substantial support to the Board’s conclusion that at Lewis University, a large administrative hierarchy controls and implements academic as well as fiscal policy. Although faculty input and expertise are indispensable in some circumstances, the faculty plays largely a passive role and is dominated by the administration.
As for fiscal policy, the faculty plays a limited role in the budget process. The department chairman, a member of the bargaining unit, commences the process by completing a budget request form. But the chairman does so only in accordance with guidelines set by the administration, and then the Dean reviews the budget and resolves any disagreements. Transcript of Proceedings at 204-05 (“T.”). After various layers of administrative review, a university budget is compiled. See Lewis University, 265 N.L.R.B. at 1246. At this point, the faculty is again called into the budget process through the Budget Review Committee. The Committee merely reviews the budget in its final form and offers suggestions. Although these suggestions are “generally” followed by the administration, T. 206, the faculty is not in a position, at this late date in the process, to rewrite the budget or to offer major policy initiatives. Rather, Dean Mascari *630 characterized the Committee as primarily an “information-sharing” and “communication” device. T. 209. The Board was therefore justified in concluding that the faculty does not “have the ability to formulate and effectuate university [budget] policy.” Lewis University, 265 N.L.R.B. at 1246.
As for academic policy, the majority stresses the collegial authority the faculty wields through the Educational Policies Committee and the “Faculty Convened,” a committee composed of all members of the faculty. It is true that these deliberative bodies recommend a variety of academic policies that are generally adopted by the administration. Yet, substantial evidence supports the Board’s conclusion that while the faculty plays a vital role in defining academic policy, it is the administration that effectively controls and implements policy. The record reveals that the most important academic policy decisions are made at the initiative of the administration and often in spite of faculty resistance. And the administration maintains control over more routine matters by subjecting faculty decisions to various layers of administrative review and by virtue of its control over finances.
With respect to the curriculum at Lewis University, it is true that the faculty has approved all the graduation and admissions requirements listed in the catalogue. But the graduation requirements were formulated by an ad hoc curriculum study group dominated by the administration, see infra at 630; see also T. 274. As for admissions criteria, the requirements have not been changed for some time, and the record does not indicate whether the faculty initiated the most recent changes or simply acquiesced to them. T. 363-64. Moreover, the committee that actually decides who to admit is composed of administrators, not faculty. T. 364.
The record also shows that the more important the curriculum change, the less influence exerted by the faculty. In response to a fiscal emergency, the administration unilaterally eliminated the modern languages major, despite a resolution by the Educational Policies Committee that “no further cuts in faculty membership or programs be made.” 1 Employer’s Exhibit 27 at 22; T. 282-84. Similarly, the Dean unilaterally cancelled one course and one section of a course in the music department. T. 493-96. When the faculty was consulted and did approve major policies, such as the addition of a science degree and a writing requirement, the faculty’s recommendation was subjected to four layers of administrative review: the Dean, the Vice-President for Academic Affairs, the President, and the Board of Trustees. T. 249, 274, 374.
The only instance apparent from the record where the faculty initiated a major academic policy decision, as opposed to passively reacting to events, was the institution of a writing requirement. T. 274. The history of the most recent curriculum reform is demonstrative of faculty passivity. The impetus for reform came from the administration, not the faculty. T. 446. Instead of referring the matter to the Educational Policies Committee, the President, with the authorization of the Board of Trustees, appointed an ad hoc commission to study the matter. T. 447, 483-84. Only three or four of the eleven members of the commission were part of the bargaining unit. T. 483-84. The Academic Vice-President could not recall whether the Educational Policies Committee was ever consulted by the commission. The faculty did offer several suggestions, some of which were rejected by the administration. T. 451, 455-56. Eventually, the Faculty Convened approved the curriculum reform. T. 451.
It is true that faculty members exercise substantial discretion and authority in conducting their classes and research. Yet, “professors may not be excluded [as managerial] merely because they determine the content of their own courses, evaluate their *631 own students, and supervise their own research.” Yeshiva, 444 U.S. at 690 -91 n. 31, 100 S.Ct. at 866 -67 n. 31. Such authority is considered to be the “routine discharge of professional duties,” not managerial. Id. at 690 , 100 S.Ct. at 866 . Moreover, at Lewis University, even this academic freedom is circumscribed by the administration. Although faculty members, in cooperation with the department chairmen, are responsible for the content of courses, the Dean may review all courses and recommend modifications. Disagreements between the Dean and the faculty members are resolved by the Academic Vice-President, subject to appeal to the Executive Vice-President. Lewis University, 265 N.L.R.B. at 1242. Although faculty members are free to conduct research as they please, the time and money necessary for successful research is controlled by the administration: sabbaticals, research grants, and reduced teaching loads are available solely at the discretion of the Deans, the Academic Vice-President, and the President. Id. at 1243.
I concede that the majority is on strong ground in concluding that the faculty effectively controls important personnel decisions. With very few exceptions, it is the faculty who determines who is hired and who is tenured. See ante at 623. This power is subject to some limitations, however. The faculty does not control appointments to nonfaculty positions. Although on two occasions the faculty offered advisory opinions as to who to select for high administrative positions, its advice was not followed in either instance. Lewis University, 265 N.L.R.B. at 1244. Nor does the faculty have absolute control over the status of nontenured faculty, as shown by the Dean's unilateral decision in 1974 to terminate two nontenured faculty in the education department. T. 270-71. Even with respect to tenured members, the faculty's power to control personnel decisions is constrained by the administration’s control of finances. Thus, during the 1978 fiscal crisis, the administration unilaterally terminated four tenured professors in the modern languages department. Employer’s Exhibit 27 at 26. And, even in the best of times, a faculty member cannot be hired without a decision by the administration to appropriate the necessary funds. In addition, the administration does exercise some control over more systemic concerns, such as affirmative action and hiring strategies. Lewis University, 265 N.L.R.B. at 1244.
Nevertheless, the specific personnel who are hired and then tenured are effectively chosen by the faculty. In this respect, the case at bar is indistinguishable from Yeshiva. Yet the majority fails to explain why this particular similarity should control the result, especially given the contrast between the across-the-board power wielded by the Yeshiva faculty and the relative weakness of the Lewis faculty in nonper-sonnel matters. 2 In order to decide this question, it is necessary to determine what result would be most consistent with the policies behind the Act’s simultaneous exclusion of managerial employees and inclusion of professional employees.
*632 As the majority notes, the policy behind the managerial exclusion is to prevent a conflict of interests. Ante at 621. Yet it is important to define precisely what this conflict is. If managerial employees are powerful enough to “effectively control” policy, then they are the employer. Consequently, they can no more divide loyalties between the employer and the union than they could between themselves and the union. Division of loyalties is a problem, then, only because management owes a fiduciary duty to a third party: ownership. Management’s duty is to bring together the ownership’s capital and the employees’ labor in order to produce goods and services for the benefit of ownership. This duty cannot be discharged if management allies itself with labor.
Yet, if the Act was in this sense intended to preserve ownership’s control over the means of production, cf. Klare, Labor Law as Ideology: Toward a New Historiography of Collective Bargaining Law, 4 Ind. Rel.L.J. 450 (1981), it was also intended to cure the excesses of the unregulated market by encouraging labor to organize to protect its interests and by democratizing the workplace. Thus, Professor Meltzer has concluded that a “commitment to democracy [was] central to the rationale for unionization and collective bargaining ... [0]f all the considerations that [were] invoked in favor of legal protection of unions in the 1930’s, their contribution to industrial democracy remained the most widely accepted justification.” B. Meltzer, Labor Law: Cases, Materials & Problems, 1117-18 (2d ed. 1977). By expressly extending the protection of the Act to professional employees,, Congress recognized that white collar professionals as well as manual laborers could be sufficiently divorced from the management of production and sufficiently victimized by the power of management to merit protection.
The only potential conflict of interest in the case at bar is that the faculty will use its power to hire and grant tenure to reward union sympathizers. There are two reasons to believe that this potential conflict does not in fact deprive ownership, i.e., the Board of Trustees, of its control over the enterprise. First, despite several years of union representation, the University can cite no specific manifestation of such a conflict. Second, the very reason why the University chooses to grant the faculty power over personnel decisions indicates that the power will not be abused. Dean Mascari testified that deference to the faculty, particularly the faculty of the relevant department, is necessary because the faculty is in the' best position to assess professional competence, the primary consideration in any hiring decision. T. 332-33. It can reasonably be concluded from this that the faculty’s sense of professionalism as well as its desire to preserve its prestige would prevent it from allowing union loyalties to cloud its judgment of academic competence. Thus, the faculty’s discretionary power in personnel matters can best be characterized as the “routine discharge of professional duties,” Yeshiva, 444 U.S. at 690 , 100 S.Ct. at 866 , rather than as a species of managerial power that creates a conflict of interests.
On the other hand, industrial peace, and consequently the well-being of the employer, would be threatened if the protections of the Act were withdrawn. The majority contents itself with the observation that in these trying times for universities, we should take care to encourage the “collegial decisionmaking process.” Ante at 626. I was not aware that Congress viewed unionization as a threat to the health or morale of any enterprise. On the contrary, the Act assumes that unionization and the protections of the Act are in the long-term interests of industry as well as labor because only in this way can industrial peace be maintained. See 29 U.S.C. § 151 (1982). Here, considerable tensions have caused the faculty at Lewis University to organize. Instead of inhibiting the University in coping with trying times, the Act has ensured that disputes between the faculty and the administration have been resolved amicably, rather than on the streets. Thus, the administration’s elimination of the modern languages department *633 and the resulting termination of four tenured professors did not lead to a strike or other labor disturbance that would have disrupted the University. Rather, because of the collective bargaining relationship fostered by the Act, the dispute was resolved by peaceful arbitration.
The decisive question in cases such as the one at bar is whether the union threatens ownership’s control of the enterprise by depriving it of a loyal managerial hierarchy. Substantial evidence supports the Board’s conclusion that this is not a problem at Lewis University. Ownership’s interests are more than adequately protected by a loyal administrative bureaucracy that dominates decisionmaking, yet which, as sound management theory would seem to dictate, solicits and relies on faculty expertise. 3
The Board’s decision is also supported by recent precedent. In Loretto Heights, 742 F.2d 1245 , the Tenth Circuit enforced the Board’s recognition and protection of a faculty union at a Denver College with a similar size, governance structure, and religious orientation as Lewis University. The majority distinguishes this case on the ground that the Loretto Heights faculty lacked a plenary faculty body similar to the Faculty Convened at Lewis University. Ante at 627-628. Yet the Tenth Circuit noted in that case that a committee of all the faculty, entitled the “Academic Forum,” regularly met to discuss “academic policy and other matters of interest” and made “recommendations to appropriate committees or administrators on a variety of subjects.” Loretto Heights, 742 F.2d at 1249 . Although we are not bound by the Tenth Circuit’s decision, intercireuit conflicts should not be created lightly, and at the very least we should frankly acknowledge when we depart from the law of other circuits.
Because the Board’s decision is supported by the record evidence, as well as by precedent and policy, I would enforce its order.
. I therefore disagree with the majority’s suggestion that the University has never rejected a proposal approved by the Educational Policies Committee. Ante at 622-623.
. A strong argument can be made that authority over personnel matters is enough to require exclusion from the bargaining unit because such authority renders the employee a "supervisor” within the meaning of 29 U.S.C. § 152 (11). To be sure, the Act defines "supervisor” to include employees with "authority" to “hire ... promote, ... reward, or discipline.” Id. Yet, as this court noted in NLRB v. Res-Care, Inc., 705 F.2d 1461, 1465 (7th Cir.1983), this seemingly broad definition of supervisory status is limited by the last clause of 29 U.S.C. § 152 (11): “... 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." Thus, professional employees who exercise the supervisory powers listed in section 152(11) are not supervisors if they do so pursuant to the "routine discharge of professional duties.” See Yeshiva, 444 U.S. at 690 , 100 S.Ct. at 866 (emphasis added).
The distinction, and tension, between the exclusion of supervisors and inclusion of professional employees is governed by the same policies that distinguish managerial from professional employees. See id. at 682 , 100 S.Ct. at 862 . The same reasons that lead me to conclude that the Lewis faculty is composed of professional rather than managerial employees also lead me to conclude that faculty members are professional employees rather than supervisors. See infra.
. This conclusion is consistent with empirical evidence that strong faculty influence is not associated with small, teaching-oriented institutions like Lewis University. Rather, the administration’s control is most likely threatened in large, prestigious, research-oriented institutions. The locus of power in such institutions tends to be largely autonomous departments, and faculty members are able to wield enormous power by virtue of their prestige, high morale, and tradition. See generally Suntrup, supra, 4 Ind.Rel. L.J. at 298-302.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/9473649. Public record. Not legal advice.