University Emergency Medicine Foundation (01-CA-219266)

United States Government

National Labor Relations Board

OFFICE OF THE GENERAL COUNSEL

Advice Memorandum

DATE:

December 21, 2018

TO:

Paul J. Murphy, Acting Regional Director

Region 1

FROM:

Jayme L. Sophir, Associate General Counsel

Division of Advice

SUBJECT: University Emergency Medicine Foundation

Case 01-CA-219266

177-1617-2500

177-2401-6750

The Region submitted this case for advice as to whether the Charging Party,

who the Employer terminated for allegedly engaging in protected concerted activity,

is a managerial employee not protected by the Act. We conclude the Charging Party is

a managerial employee under NLRB v. Yeshiva University1 and related Board

decisions. Thus, the Region should dismiss the charge, absent withdrawal.

FACTS

University Emergency Medicine Foundation (“the Employer”), a non-profit

corporation located in Providence, Rhode Island, was established to benefit and assist

the Warren Alpert Medical School at Brown University, Department of Emergency

Medicine, and the corresponding medical departments at Rhode Island Hospital and

The Miriam Hospital in achieving their teaching, research, and patient care missions.

Prior to May 2017, any material change to the Employer’s operation occurred

pursuant to a vote by the Employer’s member-physicians.2 In late April 2017, the

Employer’s member-physicians voted to merge with Brown Physicians, Inc. (“BPI”),

which is a Rhode Island non-profit corporation whose governing members are the

Chiefs of each of the various departments in Brown University’s medical school and

its Dean.

After the merger, the Employer changed its name to Brown Emergency

Medicine, but it maintained independent operations as one of five divisions of BPI.

Pursuant to the Employer’s bylaws, which apparently were updated April 20, 2017

due to the then-pending merger with BPI, the Employer has only two classes of

1 444 U.S. 672 (1980)

.

After the merger, the Employer changed its name to Brown Emergency

Medicine, but it maintained independent operations as one of five divisions of BPI.

Pursuant to the Employer’s bylaws, which apparently were updated April 20, 2017

due to the then-pending merger with BPI, the Employer has only two classes of

1 444 U.S. 672 (1980).

2 The Employer has about 130 member-physicians.

Case 01-CA-219266

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members: Class A and Class B. The Class A members are physicians performing both

clinical and academic responsibilities on behalf of the Employer and who have or are

eligible to receive faculty appointments at Brown University.3 The Charging Party

was a Class A member. The sole Class B member is BPI.

All Class A member-physicians are bound by the Employer’s Articles of

Incorporation, its Bylaws, and its rules, regulations, policies, and resolutions. The

Employer’s affairs are managed by a ten-person Board of Directors that includes the

Employer’s President (who serves as the Board’s President), a representative from

Lifespan Corporation,4 the Dean of Brown University’s medical school, and seven

Class A member-physicians who are elected by the Class A membership at their

annual meeting.5 Class A member-physicians participate in the governance of the

Employer, in part, through their representatives on the elected Board of Directors.

Under Article 3 of the Bylaws, if at least two-thirds of the Class A member-physicians

approve, they have the ability to call special membership meetings to vote on a course

of action for the organization, including overriding the Board President’s veto of a

decision by the Board of Directors.6 Under Article 6, Section 1 of the Bylaws, Class A

members also may serve on ad hoc committees set up by the Board of Directors,

including serving on disciplinary committees that hear allegations and make

recommendations concerning work issues involving other Class A members

of action for the organization, including overriding the Board President’s veto of a

decision by the Board of Directors.6 Under Article 6, Section 1 of the Bylaws, Class A

members also may serve on ad hoc committees set up by the Board of Directors,

including serving on disciplinary committees that hear allegations and make

recommendations concerning work issues involving other Class A members. Class A

3 Class A member-physicians are paid a salary and do not have an equity interest in

the Employer.

4 Lifespan Corporation is a parent organization that owns and operates certain area

hospitals, including Rhode Island Hospital and The Miriam Hospital.

5 Under Article 5 of the Bylaws, the Employer also has a set of officers apart from its

Board of Directors. The President of the Board of Directors, who is the Chair of the

Department of Emergency Medicine at Brown University’s medical school, also

serves as the chief officer of the Employer’s organization. If Lifespan Corporation

does not appoint that same individual as Chief of Emergency Medicine at Rhode

Island Hospital, then the RIH Chief is to serve as the Employer’s President and the

Board President.

6 Under Article 4, Section 4 of the Bylaws, the Board’s President has the authority to

veto certain Board decisions, including those the Board President believes would

jeopardize the University’s or an affiliated hospital’s academic program, institute

major structural change in the emergency medicine organization, or amend the

Employer’s bylaws. If a majority of Class A members vote to override the Board

President’s veto, that override vote is then subject to the approval of Class B

member-BPI.

decisions, including those the Board President believes would

jeopardize the University’s or an affiliated hospital’s academic program, institute

major structural change in the emergency medicine organization, or amend the

Employer’s bylaws. If a majority of Class A members vote to override the Board

President’s veto, that override vote is then subject to the approval of Class B

member-BPI.

Case 01-CA-219266

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members serving on one of these committees exercise all the authority delegated to

the committee by the Board. Under Article 4, Section 5 of the Bylaws, the Class B

member-BPI is granted final approval authority over many matters of corporate

governance and operations including budgeting, financial matters, significant changes

to Class A member compensation, vetoes of Board actions by the Class A member-

physicians, and future mergers. Class B member-BPI cannot exercise this power over

any policy or directive that has not been voted on by the Board of the Directors or the

Class A member-physicians (depending on the circumstances).

Class A members have both academic and clinical responsibilities, with some

physicians primarily serving in one capacity or the other. Within their academic

responsibilities, Class A members are part of the Brown University medical school

faculty where they teach medical students, residents, and interns in the Emergency

Medicine Physician Extender Development Program, conduct research, and engage in

other academic activities. On the clinical side, Class A members spend a certain

number of hours per week at one of the affiliated hospital emergency departments.

The Charging Party was a Class A member-physician with the Employer for about

ten years, providing primarily clinical services at Rhode Island Hospital.

The Employer’s Board of Directors meets quarterly each year. In the months

when the Board meets, it holds two meetings

ide, Class A members spend a certain

number of hours per week at one of the affiliated hospital emergency departments.

The Charging Party was a Class A member-physician with the Employer for about

ten years, providing primarily clinical services at Rhode Island Hospital.

The Employer’s Board of Directors meets quarterly each year. In the months

when the Board meets, it holds two meetings. The first is an informational meeting

for the Class A member-physicians so that the Board can solicit their input before

voting on an issue. The second meeting, which is held two weeks later, is when the

Board votes. The Employer also has an annual Class A membership meeting each

December where the Class A members elect their representatives to the Board of

Directors.

On December 21, 2017, the Board of Directors voted to increase the required

number of clinical hours to be performed by all Class A member-physicians, based on

a formula of clinical hours and academic rank at the University. On January 9, 2018,

the Board of Director’s decision was reported to the Class A members at a faculty

meeting. On January 10, the President of the Board announced that based on

feedback from the Class A member-physicians about the new policy, the Board of

Directors would convene for a special meeting regarding the issue on January 22, but

that a forum open to all Class A members to discuss the concerns they had raised

would first be held on January 18.

On January 18, the Employer held the forum with about 70 Class A member-

physicians in attendance. After the President of the Board gave a brief presentation

related to the Employer’s finances, the Board of Directors then conducted an open

forum allowing Class A members to raise questions from the floor. Shortly after the

meeting began, many Class A members received an anonymous email from someone

using the alias

criticizing the Board of Directors’ recent vote to

physicians in attendance. After the President of the Board gave a brief presentation

related to the Employer’s finances, the Board of Directors then conducted an open

forum allowing Class A members to raise questions from the floor. Shortly after the

meeting began, many Class A members received an anonymous email from someone

using the alias

criticizing the Board of Directors’ recent vote to

(b) (6), (b) (7)(C)

Case 01-CA-219266

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increase clinical hours as having an uneven effect on primarily clinical physicians

versus primarily academic physicians. Attached to the

email was the

work schedule of a Class A member-physician who primarily performed academic

responsibilities; the email implied that the attached schedule was evidence that

academics were not shouldering their fair share of clinical hours, and that the

Employer’s proposed new formula would exascerbate the problem. About 15 minutes

after the email was sent, the Charging Party arrived at the Class A member forum.

As the forum went on, several Class A members who received the email spoke up

during the forum and said that whoever sent the

email needed to

stop sending mass anonymous emails.7

After the meeting ended, the President of the Board sent an email response to

(copying the other Class A members who had received the

anonymous email) stating that the initial email was harmful and divisive because it

seemed to question the contributions of the Class A member whose schedule had been

attached. Over the next 24 hours, several other Class A members responded to the

email thread with similar denouncements of

while some Class A

members agreed with the substance of the sender’s primary concern about the

increase in clinical hours.

Several days after the January 18 forum, the Employer began an IT

investigation to determine the identity of

based on where both the

April 27, 2017, and the January 18, 2018 emails had originated

members responded to the

email thread with similar denouncements of

while some Class A

members agreed with the substance of the sender’s primary concern about the

increase in clinical hours.

Several days after the January 18 forum, the Employer began an IT

investigation to determine the identity of

based on where both the

April 27, 2017, and the January 18, 2018 emails had originated. Based on this

investigation, the Employer determined that the Charging Party had been the only

Class A member in both locations at the times the emails had been sent. On January

31, after reviewing the findings of the IT investigation, the President of the Board

convened a special committee of several Vice Chairs, Medical Directors, and

Administrative officers from the hospitals and the University, as well as about ten

Class A member-physicians. At this meeting, the committee discussed the findings

from the IT investigation and concluded, as a group, that the Charging Party should

be terminated based on the belief both that

was

and that

attachment of the academic physician’s work schedule inappropriately denigrated

clinical contributions. The Employer discharged the Charging Party later that day.

7 On April 27, 2017, before UEMF member-physicians had voted to merge with BPI,

had sent a similar anonymous email to the member-physicians

encouraging them to vote against the merger.

(b) (6), (b) (7)(C)

(b) (6), (b) (7)(C)

(b) (6), (b) (7)(C)

(b) (6), (b) (7)(C)

(b) (6), (b) (7)(C)

(b)

(b) (6), (b) (7)(C)

(b)

(b)

7 On April 27, 2017, before UEMF member-physicians had voted to merge with BPI,

had sent a similar anonymous email to the member-physicians

encouraging them to vote against the merger.

(b) (6), (b) (7)(C)

(b) (6), (b) (7)(C)

(b) (6), (b) (7)(C)

(b) (6), (b) (7)(C)

(b) (6), (b) (7)(C)

(b)

(b) (6), (b) (7)(C)

(b)

(b)

(b) (6), (b) (7)(C)

Case 01-CA-219266

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In late April, the Charging Party filed a charge alleging that the Employer

violated Section 8(a)(1) by terminating

for engaging in protected concerted

activity. The Employer’s primary defense is that the Charging Party is a managerial

employee not protected by the Act.

ACTION

We conclude that the Charging Party is a managerial employee under NLRB v.

Yeshiva University and related Board decisions and, thus, is not protected by the Act.

Because an employer is entitled to the undivided loyalty of its representatives,

the Act’s coverage does not extend to managerial employees.8 Managerial employees

are those who “formulate and effectuate management policies by expressing and

making operative the decisions of their employer,” or who have discretion in the

performance of their jobs independent of their employer’s established policy.9

Moreover, “final authority is not required to show managerial status, [but] ‘the

relevant consideration is effective recommendation or control.’”10 Regarding

professional employees specifically, the Board has held that medical employees may

be managerial “if their activities on behalf of their employer fall outside the scope of

decision-making routinely performed by similarly situated health care professionals

and that is primarily incident to their treatment of patients.”11

8 See NLRB v. Yeshiva University, 444 U.S. at 682. Cf

he Board has held that medical employees may

be managerial “if their activities on behalf of their employer fall outside the scope of

decision-making routinely performed by similarly situated health care professionals

and that is primarily incident to their treatment of patients.”11

8 See NLRB v. Yeshiva University, 444 U.S. at 682. Cf. Citywide Corporate

Transportation, Inc., 338 NLRB 444, 450 (2002) (“Where a group of individuals

already has the power to collectively influence the policies of an organization . . .,

they do not need the Act’s protection.”)

9 NLRB v. Bell Aerospace Co., 416 U.S. 267, 288 (1974). See also NLRB v. Yeshiva

University, 444 U.S. at 687 (“normally an employee may be excluded [from the Act’s

protection] as managerial only if he represents management interests by taking or

recommending discretionary actions that effectively control or implement employer

policy”); Republican Co., 361 NLRB 93, 95–96 (2014) (finding newspaper’s editorial

page editor, who was responsible for the content of the entire editorial page, to be a

managerial employee despite his publisher having a rarely exercised veto power).

10 Republican Co., 361 NLRB at 96 (quoting Yeshiva University, 444 U.S. at 683,

n.17 (“the fact that the administration holds a rarely exercised veto power does not

diminish the faculty’s effective power in policymaking and implementation”)).

11 FHP, Inc., 274 NLRB 1141, 1142–43 (1985) (citing Montefiore Hospital & Medical

Center, 261 NLRB 569, 570 (1982)). See also Joint Diseases, North General Hospital,

288 NLRB 291, 297 (1988) (same).

a University, 444 U.S. at 683,

n.17 (“the fact that the administration holds a rarely exercised veto power does not

diminish the faculty’s effective power in policymaking and implementation”)).

11 FHP, Inc., 274 NLRB 1141, 1142–43 (1985) (citing Montefiore Hospital & Medical

Center, 261 NLRB 569, 570 (1982)). See also Joint Diseases, North General Hospital,

288 NLRB 291, 297 (1988) (same).

(b)

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Applying those general principles, the Board in FHP, Inc. concluded that

physicians with a health maintenance organization were managerial employees not

covered by the Act.12 The physicians’ roles on six standing committees and various ad

hoc committees, including effectively recommending the discipline of other physicians,

indicated that they served as more than advisors and that department heads

regularly followed committee recommendations concerning core aspects of the

organization’s operations, such as protocol changes and employee compensation.13

Similarly, in Citywide Corporation Transportation, Inc., the Board accepted the

employer’s defense that it was not liable for an alleged unfair labor practice because

its driver-shareholders were managerial employees not covered by the Act.14 The facts

showed that the driver-shareholders possessed, as a group, an effective voice in

formulating and determining corporate policy.15 Specifically, the ALJ, who the Board

affirmed, emphasized that they cumulatively owned “at least 200 of the 277 voting

shares, [which represented] a sufficient majority to elect or impeach officers, board

members, and elected committee persons, to rescind working rules and even to amend

or change the [employer’s] constitution.”16 The ALJ concluded that “[i]n essence, the

drivers are working for themselves, not for an employer with conflicting interests.”17

In this case, the evidence provided by the parties demonstrates that the

Charging Party, like the physicians in FHP and driver-shareholders in Citywide, is a

escind working rules and even to amend

or change the [employer’s] constitution.”16 The ALJ concluded that “[i]n essence, the

drivers are working for themselves, not for an employer with conflicting interests.”17

In this case, the evidence provided by the parties demonstrates that the

Charging Party, like the physicians in FHP and driver-shareholders in Citywide, is a

12 274 NLRB at 1143.

13 Id.

14 338 NLRB at 444 n.1, 447, 450.

15 Id. at 450.

16 Id.

17 Id. Cf. Montefiore Hospital & Medical Center, 261 NLRB at 570 (finding

physicians were not managerial employees because the department chairmen “make

every major administrative decision that is not dictated” by central administration;

although the physicians had some input, it was only in the form of recommendations

that the chairmen or their designees considered); Joint Diseases, North General

Hospital, 288 NLRB at 298–99 (finding physicians were not managerial employees

because the employer’s major administrative and policy decisions were made by its

president-CEO and the “administrative side of the hospital,” and any committees

that the physicians served on did not engage in the same type of “detailed,

nonpatient-related decisionmaking” as the physician committees in FHP).

Case 01-CA-219266

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managerial employee not protected by the Act. Pursuant the Employer’s Bylaws,

Class A member-physicians, which the Charging Party had been, participate in the

formulation and effectuation of management policies at every level of the Employer’s

decision-making.18 Initially, Class A member-physicians, as a group, effectively

control the Employer’s Board of Directors, which is the body that manages the

Employer’s affairs. Under the Employer’s Bylaws, although the Board of Directors

includes three non-Class A members, the remaining seven members are selected

exclusively from and by the Class A member-physicians

level of the Employer’s

decision-making.18 Initially, Class A member-physicians, as a group, effectively

control the Employer’s Board of Directors, which is the body that manages the

Employer’s affairs. Under the Employer’s Bylaws, although the Board of Directors

includes three non-Class A members, the remaining seven members are selected

exclusively from and by the Class A member-physicians. Although Class B member-

BPI and the President of the Board retain the power to veto Board decisions to pursue

or reject policies, neither possesses an ultimate veto power that would completely

negate the ability of Class A members to direct the Employer’s affairs. Indeed, while

BPI retains ultimate approval authority over several key managerial aspects of the

Employer, such as budget issues, Class A member compensation, and future mergers,

the Employer’s organizational structure ensures that BPI reviews only those

proposals that are supported by a majority of the Class A members on the Board of

Directors or a majority of the Class A membership. In short, Class A members have

authority similar to the driver-shareholders in Citywide,19 who because of their

majority stake and role in corporate governance, were constantly in a position to

formulate and determine corporate policy.

Apart from how the Bylaws establish their role in corporate governance, the

managerial status of Class A member-physicians is also apparent based on the

Employer obtaining their approval for workplace policies. After Class A members

raised concerns about the new policy on clinical hours, the President of the Board

announced the Board would reconvene on the issue only after holding a forum during

which it would obtain feedback from the Class A members. Similarly, the President of

the Board convened a committee that included ten Class A members to determine the

proper discipline for the Charging Party based on the results of the IT investigation

and the content of the email

rs, the President of the Board

announced the Board would reconvene on the issue only after holding a forum during

which it would obtain feedback from the Class A members. Similarly, the President of

the Board convened a committee that included ten Class A members to determine the

proper discipline for the Charging Party based on the results of the IT investigation

and the content of the email. The Employer terminated the Charging Party only after

the disciplinary committee met and determined, as a group, that

discharge was

the appropriate course of action. Both above-mentioned actions demonstrate that the

Employer relies on the input and approval of Class A members for significant

personnel decisions. This process is similar to that in FHP,20 where the Board held

that physicians were managerial employees because they effectively recommended

18 Although Class A member-physicians do not have an equity interest in the

Employer, their various voting rights in the Employer’s system of corporate

governance makes them very similar to traditional stockholders.

19 338 NLRB at 450.

20 274 NLRB at 1143.

(b) (6), (b

Case 01-CA-219266

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their employer’s policies, including discipline for other physicians, in their capacity as

committee members.21 In short, these examples of actual authority displayed by the

Class A member-physicians strongly support concluding that they are managerial

employees under the Act.

Accordingly, the Region should dismiss the charge, absent withdrawal, because

the Charging Party is managerial employee not protected by the Act.22

J.L.S.

ADV.01-CA-219266.Response.UEM

21 Cf. Montefiore Hospital & Medical Center, 261 NLRB at 570 (concluding that

doctors were statutory employees and not managerial because, among other things,

they did not participate or have input in the discipline of other doctors)

g Party is managerial employee not protected by the Act.22

J.L.S.

ADV.01-CA-219266.Response.UEM

21 Cf. Montefiore Hospital & Medical Center, 261 NLRB at 570 (concluding that

doctors were statutory employees and not managerial because, among other things,

they did not participate or have input in the discipline of other doctors).

22 Because we conclude that the Charging Party is a managerial employee excluded

from the Act’s protection, we do not reach whether

was a supervisor under

Section 2(11) or whether sending the

emails constituted protected

concerted activity.

(b)

(6),

(b)

(b) (6), (b) (7)(C)