Goodwill Industries of Denver

National Labor Relations Board - Board Decisions

Aug 27, 1991

304 N.L.R.B. 764 (N.L.R.B. 1991)

764
304 NLRB No. 97
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
1 Member Oviatt dissented from the Board’s grant of the request for review.
2 41 U.S.C. §§ 46–48. Under that law, Government contracts are allocated
to various nonprofit organizations through noncompetitive bidding.
3 The parties stipulated that Supervisors Barbara Harms and Dan Sandoval,
as well as trainer Tracy Wise, should be excluded from the unit as statutory
supervisors. The Regional Director found it unnecessary to resolve the status
of Supervisor Cathy Corwin, which the parties disputed, in light of his deci-
sion to decline jurisdiction over the Employer.
4 We emphasize that the petitioned-for unit consisted solely of clients in
Goodwill Industries of Southern California, and that the Board’s declination
of jurisdiction was over the clients as a class and not over the employer itself.
5 The Board noted that the employer in Goodwill Industries of Southern
California furnished its clients, in addition to employment, with rehabilitation,
social service, vocational, medical, and legal counseling. Additionally, the cli-
ents’ progress and performance were reviewed at least once a year.
Goodwill Industries of Denver and United Food and
Commercial Workers International Union,
Local No. 7, AFL–CIO, CLC Petitioner. Case
27–RC–7036
August 27, 1991
DECISION ON REVIEW AND DIRECTION
OF ELECTION
BY CHAIRMAN STEPHENS AND MEMBERS
CRACRAFT AND OVIATT
On December 21, 1989, the Regional Director for
Region 27 issued a Decision and Order in the above-
entitled proceeding in which he declined to assert juris-
diction over the Employer in reliance on Goodwill In-
dustries of Southern California, 231 NLRB 536
(1977). Thereafter, in accordance with Section 102.67
of the National Labor Relations Board Rules and Reg-
ulations, the Petitioner filed a timely request for review
of the Regional Director’s decision contending, inter
alia, that the Regional Director erred in relying on
Goodwill Industries of Southern California and erred
in finding that all of the Employer’s employees are
handicapped. By order dated August 28, 1990, the
Board granted the Petitioner’s request for review.1
The National Labor Relations Board has delegated
its authority in this proceeding to a three-member
panel.
The Board has considered the record in this case and
makes the following findings.
The Employer, Goodwill Industries of Denver (Em-
ployer or Goodwill), is a nonprofit, charitable corpora-
tion with a principal office and place of business in
Denver, Colorado. Its stated purpose is to provide em-
ployment, training, and job placement services to
handicapped individuals. The Employer employs ap-
proximately 350 individuals, which includes 40 staff,
supervisory, or professional employees, 70 client/-
trainees, and 240 client/employees.
The Employer’s primary operation is its contributed-
goods program by which it collects, processes, and
sells goods that are donated by the public. Seventy-five
percent of the Employer’s operating income is derived
from the contributed-goods program. At issue in this
case, however, is the Employer’s operation at Lowry
Air Force Base. Under a contract obtained pursuant to
the Wagner-O’Day Act,2 the Employer provides jani-
torial, meat room cleaning, and merchandise stocking
services at the Lowry Air Force Base commissary
(Lowry). The record indicates that in the approxi-
mately 4 years the Employer has held the contract, it
has lost approximately $100,000, while providing over
$1 million in wages to handicapped individuals.
The Employer employs at Lowry 3 supervisors, 1
trainer, 2 meat room employees, 30 merchandise stock-
ers, and approximately 5 janitorial employees. The Re-
gional Director found that all these individuals, aside
from the supervisors and trainer,3 are handicapped and
classified as either client/trainees or client/employees.
Individuals in the former group tend to be more se-
verely handicapped than those in the latter. The Union
petitioned for an election among all stockers, clients,
janitors, and meat cleanup personnel employed by
Goodwill at Lowry.
The Regional Director found that the client/em-
ployees and client/trainees at Lowry are allowed to
work at their own pace and are paid on a piece rate
basis or at a standard rate which is certified by the De-
partment of Labor. These individuals work according
to a set schedule, but fewer than 40 hours per week.
Although the client/trainees and client/employees are
subject to discipline in extreme cases, the Employer’s
practice is to counsel them for any difficulties that
arise and, if practicable, to transfer them to another
employment position at one of Goodwill’s other loca-
tions. If an individual is placed in outside employment,
Goodwill will hold open that individual’s position at
Lowry for 30 days in the event that the outside em-
ployment proves unsuitable. According to the Regional
Director, some individuals are relatively long-term em-
ployees, while others are employed for very brief peri-
ods.
The Regional Director found the circumstances of
this case to be indistinguishable from those in Good-
will Industries of Southern California, supra, in which
the Board, while asserting jurisdiction over that em-
ployer under its jurisdictional retail standard, neverthe-
less declined to assert jurisdiction over a sought-after
unit of clients of that employer in light of the primarily
rehabilitative purpose of their employment.4 Thus, al-
though the Board found that the clients in that case
might arguably be statutory employees, it concluded
that to permit collective bargaining would risk a harm-
ful intrusion on the rehabilitative process.5 Similarly,
the Regional Director noted that while the clients in
this case might arguably be statutory employees, he
concluded that it would not effectuate the purposes of
the Act to assert jurisdiction. Accordingly, the Re-
gional Director dismissed the petition.
765GOODWILL INDUSTRIES
6 Our review of the record, including the testimony of Goodwill’s president
and chief executive officer, Thomas Welker, indicates that approximately one-
third of those employed by Goodwill at Lowry are not handicapped and con-
stitute, in effect, a third group of employees in addition to the client/trainees
and client/employees.
7 To the extent that Goodwill Industries of Southern California may be read
as indication otherwise, it is overruled. See Lighthouse for the Blind of Hous-
ton, supra at 1145 fn. 9. Further, to the extent that Goodwill Industries of
Southern California has ever been construed as holding that the Board will
dismiss a petition as to an employer operating a primarily rehabilitative train-
ing program even if the employer employs individuals who are not clients in
that program, we disavow that holding.
8 A client/trainee remains at Lowry for an average of 6 weeks.
9 Compare Arkansas Lighthouse for the Blind, supra, in which the Board
found workshop clients to be statutory employees in light of, inter alia, the
maintenance of production standards and penalties for poor performance, the
Continued
The Union argues in its request for review that, con-
trary to the finding of the Regional Director, there are
nonhandicapped individuals employed by Goodwill at
Lowry.6 The Union further argues that only the
client/trainees can be described as undergoing rehabili-
tation, rather than the client/employees, many of whom
are permanent employees. The Union contends, more-
over, that the Regional Director erred in his ‘‘blanket
reliance’’ on Goodwill Industries of Southern Califor-
nia and further argues that many of the services pro-
vided by the employer in that case are not provided in
this case. For the following reasons, we agree with the
Union that the Regional Director erred in relying on
Goodwill Industries of Southern California.
It is well-established that the Board is not precluded
from asserting its jurisdiction merely because an em-
ployer is a nonprofit, charitable organization engaged
in a worthy purpose. St. Aloysius Home, 224 NLRB
1344, 1345 (1976); Hudelson Baptist Childrens Home,
276 NLRB 126 (1985). The Board will decline juris-
diction over such an employer if its activities do not
have a sufficient impact on interstate commerce to
warrant the exercise of jurisdiction, however. St. Aloys-
ius Home, supra at 1345. The Board will further con-
sider whether those employed by the nonprofit chari-
table organization are employees within the meaning
of Section 2(3) of the Act. Lighthouse for the Blind of
Houston, 244 NLRB 1144 (1979), enfd. 696 F.2d 399
(5th Cir. 1983); Cincinnati Assn. for the Blind, 235
NLRB 1448 (1978), enfd. 672 F.2d 567 (6th Cir.
1982), cert. denied 459 U.S. 835 (1982).
Based on these principles, we find that the Regional
Director erred in dismissing the petition solely because
of the Employer’s worthy rehabilitative purpose.7
Further, the Employer clearly satisfies our jurisdic-
tional standards for retail enterprises. During calendar
year 1989, the Employer’s revenue from retail oper-
ations was approximately $3-1/2 million. Additionally,
in that same time period, the Employer purchased
goods valued in excess of $50,000 from sources lo-
cated directly outside the State of Colorado. We there-
fore find that it will effectuate the policies of the Act
to assert jurisdiction over the Employer.
The remaining inquiry is whether the individuals
employed by Goodwill at Lowry are employees within
the meaning of Section 2(3) of the Act. In making this
determination, the Board examines the relationship be-
tween the nonprofit employer and its workers. When
the relationship is guided to a great extent by business
considerations and may be characterized as a typically
industrial relationship, statutory employee status has
been found. When the relationship is primarily reha-
bilitative and working conditions are not typical of pri-
vate sector working conditions, however, the Board
has indicated it will not find statutory employee status.
Arkansas Lighthouse for the Blind, 284 NLRB 1214,
1216–1218 (1987), enf. denied 851 F.2d 180 (8th Cir.
1988); Cincinnati Assn. for the Blind, supra at 1448–
1449.
We find, initially, that the Employer’s client/trainees
are not statutory employees. As found by the Regional
Director, the client trainees are allowed to work at
their own pace and are not subject to production
quotas or discipline for insufficient production. Fur-
ther, discipline is imposed only in extreme cases.
Goodwill’s practice is to counsel the client trainees if
difficulties arise with their employment at Lowry, and
to transfer them to a position at another Goodwill loca-
tion if Lowry is deemed unsuitable. Further, President
and Chief Executive Officer Welker testified that
client/trainees will be discharged only for failure to
come to work or for eating commissary food, which
violates Air Force regulations; those regulations are
strictly enforced by the Air Force.
Moreover, the client/trainees, virtually all of whom
are referred to Goodwill by various government and
nongovernmental agencies, participate in Goodwill’s
rehabilitation program. This includes an initial evalua-
tion of the client/trainee and continuing evaluation
thereafter in conjunction with the referring agency.
Training includes instruction of the client/trainees to
remain at their assigned work area, to interact appro-
priately with staff, and to follow instructions. Many of
the client/trainees are transported to and from Lowry
by trainer Tracy Wise, who is present during the work-
ing hours of the client/trainees. Additionally, Goodwill
employs two full-time job-placement specialists who
are responsible for placing the client/trainees in com-
petitive outside employment.8
We accordingly find the focus of Goodwill’s rela-
tionship with its client/trainees to be clearly rehabilita-
tive. Further, Goodwill’s lack of emphasis on produc-
tion by the client/trainees, and its reliance on counsel-
ing, with use of discipline and discharge only in ex-
treme cases, indicate that the working conditions of the
client/trainees are not primarily guided by economic or
business considerations and are not typical of those in
the private sector.9
766 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
absence of any counseling services, and the lack of a job-placement counselor
or program.
10 As the unit found appropriate is not that petitioned for by the Union, the
Union may notify the Regional Director if it does not wish to proceed to an
election in this basis. In the event of an election, we direct that Cathy Corwin,
whose status as a supervisor was disputed by the parties, shall vote subject
to challenge.
In contrast, the record indicates that only an unspec-
ified number of the Employer’s client/employees re-
ceive the services detailed above, and many apparently
work with little or no counseling at all. Further, ap-
proximately one-half of the client/employees are rel-
atively long-term employees of the Employer. Never-
theless, Goodwill’s disciplinary policy toward its
client/employees is no different from that vis-a-vis its
client/trainees: a focus on counseling regarding work
difficulties, discipline or termination only in extreme
circumstances, and an effort to transfer an individual
to a position at another Goodwill location if serious
difficulties arise at Lowry. Additionally, client/em-
ployees, like client/trainees, are permitted to work at
their own pace. Thus, despite Goodwill’s diminished
provision of rehabilitative services to client/employees,
its disciplinary and production policy is clearly not
typically industrial, and is guided not by business con-
siderations but rather by a desire to continue to provide
employment opportunities for its client/employees. Ac-
cordingly, we cannot conclude that the client/em-
ployees are employees within the meaning of the Act.
Finally, the record indicates that Goodwill’s remain-
ing nonhandicapped employees neither receive reha-
bilitative services nor are subject to the flexible dis-
ciplinary and production policies described above. In-
deed, Welker testified that these employees, unlike the
client/trainees and client/employees, are subject to dis-
charge for failure to meet Goodwill’s production stand-
ards. Therefore, the working conditions of these indi-
viduals are typical of private sector working conditions
and, in the absence of the provision of any rehabilita-
tive services whatsoever, we find these individuals to
be employees within the meaning of Section 2(3) of
the Act.
Accordingly, we shall direct an election in the fol-
lowing appropriate unit composed of those individuals
we have found to be employees under the Act:
All stockers, janitors, and meat clean-up person-
nel, including part-time workers who work regu-
larly one day or more a week, employed by the
Employer at its Lowry Air Force base location;
but excluding client/trainees, client/employees, the
store managers, 1st assistant manager, office and
clerical workers, and supervisors as defined in the
National Labor Relations Act.10
[Direction of Election omitted from publication.]