Goodwill Industries of Southern California

National Labor Relations Board - Board Decisions

Aug 23, 1977

231 N.L.R.B. 536 (N.L.R.B. 1977)

DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Goodwill Industries of Southern California and Local
Freight Drivers Local 208, International Brother-
hood of Teamsters, Chauffeurs, Warehousemen
and Helpers of America, Petitioner. Case 31-RC-
3769
August 23, 1977
DECISION AND ORDER
BY MEMBERS JENKINS, MURPHY, AND
WALTHER
Upon a petition duly filed under Section 9(c) of the
National Labor Relations Act, as amended, by Local
Freight Drivers Local 208, International Brother-
hood of Teamsters, Chauffeurs, Warehousemen and
Helpers of America, a hearing was held before
Hearing Officer Trudi C. Ferguson. Following the
hearing, and pursuant to Section 102.67 of the
National Labor Relations Board Rules and Regula-
tions, Series 8, as amended, the Regional Director for
Region 31 transferred this proceeding to the Board
for decision. Thereafter, the Employer filed a brief in
support of its position, and Goodwill Industries of
America filed an amicus curiae brief.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the
National Labor Relations Board has delegated its
authority in this proceeding to a three-member panel.
The Board has reviewed the Hearing Officer's
rulings made at the hearing and finds that they are
free from prejudicial error. They are hereby ap-
proved.
Upon the entire record in this case, the Board finds
as follows:
1. Goodwill Industries of Southern California is
one of a nationwide network of approximately 160
nonprofit and charitable organizations, each of
which is locally autonomous. Its purpose is to
provide rehabilitative work experience to persons
whose physical, emotional, and social handicaps
render them ineligible for work in private competi-
tive industry. By providing counseling and work
experience, Goodwill attempts to help these people
overcome their disabilities and then to place them
back in the competitive job market.
To support this charitable enterprise and as an
integral part of its rehabilitative program, Goodwill
maintains a number of stores in which it sells
discarded clothing, furniture, appliances, etc., which
it collects from the community and repairs and
refurbishes at its plant. In this manner, 95 percent of
' None of Goodwill's income is supplied by the Federal or state
governments.
2 The Rhode Island Catholic Orphan Asylum, a/k/a Str. Aloysius Home,
224 NLRB 1344 (1976).
231 NLRB No. 49
Goodwill's income is generated; the other 5 percent
consists of monetary contributions from individuals,
corporations, and foundations in the community.'
Goodwill's annual revenue from its retail operations
exceeds $4 million. In addition, Goodwill purchases
goods from outside the State of California valued in
excess of $2,000.
The Employer contends that the Board should
decline to assert jurisdiction over its operations on
the grounds that it is a nonprofit charitable organiza-
tion whose commercial activities are ancillary to its
rehabilitative objectives. However, as has by now
been firmly established, the Board no longer distin-
guishes between profit and nonprofit organizations
for jurisdictional purposes. No longer will the Board
decline jurisdiction over a nonprofit organization
solely on the basis of its charitable function or
worthy purpose. 2 Consequently, since the Employer
clearly satisfies our jurisdictional standards for retail
enterprises, we find that it would effectuate the
policies of the Act to assert jurisdiction herein.3
2. The parties stipulated, and we find, that the
Petitioner is a labor organization within the meaning
of the Act which claims to represent certain
employees of the Employer.
3. The Petitioner seeks to represent a unit
consisting of all drivers, helpers, and mechanics
employed by the Employer at its San Fernando
Road, Los Angeles, California, facility, excluding all
other employees, office clerical employees, profes-
sional employees, and guards and supervisors as
defined in the Act. The Employer argues that the
Board should not assert jurisdiction over these
persons, on the ground that they are not employees
within the meaning of Section 2(3) of the Act.
The Employer employs approximately 850 indivi-
duals. Of that number, 100 are staff and supervisory
employees who manage the Employer's operation
and assist in the rehabilitative effort. These persons
have no employment disabilities and are admittedly
employees within the meaning of the Act. Another 80
to 100 individuals are client trainees who are referred
on a fee-paying basis by various state agencies for
work experience and vocational training. The re-
maining individuals, 650 to 670 in number (whom
the Employer calls "clients") are handicapped
persons who constitute the chief beneficiaries of the
Employer's charitable endeavor. These individuals
(hereafter called clients) are employed primarily in
the Employer's transportation and production de-
partments. Petitioner's requested unit consists solely
of clients who work for the Employer's transporta-
3 See Abilities and Goodwill, Inc., 226 NLRB 1224 (1976); The Salvation
Army, Inc., 225 NLRB 291 (1976); The Chicago Lighthousefor the Blindu 225
NLRB 249 (1976); Carolina Supplies and Cement Co., 122 NLRB 88 (1958).
536
GOODWILL INDUSTRIES OF SO. CALIF.
tion department. (The transportation department
collects discarded items donated by members of the
community. The production department sorts these
discards, disposes of the nonrepairable ones, and
repairs and refurbishes the others for sale in the
Employer's retail store outlets.)
The record shows that clients are referred to'
Goodwill from a variety of sources, including friends,
churches, and government agencies. These clients
have in common the fact that they suffer from some
sort of employment disability, whether it be a mental
or emotional disturbance, a physical defect, an
educational limitation, or a penal record. After
referral, the prospective client is interviewed about
his background to determine the full extent of his
problem so that he can be properly matched with a
job. If accepted, the client is given a physical
examination, his handicaps are recorded on a card
for the benefit of supervisory personnel, and he is
placed in a suitable job.
Commensurate with its rehabilitative objective,
Goodwill allows its clients to work at their own pace.
They are paid the same hourly wage, are provided
with a life insurance policy, and get vacations based
on the length of their employment. Discipline is not
handled in the same manner as in private industry.
When infractions occur, supervisory personnel sit
down with the client, talk to him, and try to
understand what made him violate the regulations.
Consequently, disciplinary discharges are rare. If a
client does not work out in one department, he is
usually transferred to another in an attempt to find
him a proper employment niche.
As part of its effort to foster dignity and self-
confidence among its clients, Goodwill furnishes
clients (in addition to employment) with rehabilita-
tion, social service, vocational, medical, and legal
counseling. In addition, a client's progress and
performance are reviewed at least once a year.
Goodwill's ultimate hope is that its clients will find
employment in private competitive industry. To
accomplish this purpose, Goodwill employs a job
placement specialist whose sole purpose is to find
jobs for clients in the private market. Once a client
gets a job, he is sent out on a I-month trial basis. The
client's old job is kept open for this period so that if
the client is unable to adjust to outside employment
he or she can return to this job. This feature of
Goodwill's program relieves pressure on the client
and encourages private employers to extend job
offers to clients which they might not otherwise be
willing to make.
Despite this stated objective, however, Goodwill
does not try to force its clients to leave. Many of the
Employer's clients suffer from disabilities which are
not readily curable. In recognition of this fact, 50
percent of Goodwill's client jobs are reserved for
extended employment of 2 years or more. The other
50 percent of its employment openings are designat-
ed for transitional relatively short-term employment.
From the foregoing, it is clear that the Employer's
clients whom Petitioner seeks to represent are
employees in the generic sense of the term. Clients
work for a set number of hours a day, perform
functions which are of recognized economic value,
and are paid for the performance of those functions.
Nevertheless, it is equally clear that this employment
relationship is different in many, if not most,
significant respects from the normal employment
relationship.
The focus of Goodwill's employment concern is
upon rehabilitating its clients and preparing them for
work in private competitive industry, not on produc-
ing a product for profit. Prospective clients are
"hired" not on the basis of their competence, but on
the basis of the severity of their impairments-
presumably the more severe their impairment, the
more likely they are to be hired. Wages are the same
regardless of the client's performance or tenure, and
are as much an instrument of the rehabilitative
process as they are recompense for productive
activity. In addition, clients are counseled rather
than disciplined, are rarely, if ever, discharged, and
are allowed to continue their employment as long as
they desire. The picture presented is thus that of an
employer whose primary objectives are the converse
of a normal employer's objectives-so much so that
Goodwill might better be classified as a vocational
clinic than as a viable entrepreneurial concern.
This unusual employer-client relationship presents
us with that rare, possibly nonrecurring, instance
where an employer's concern for the welfare of his
employees competes with, and in some sense displac-
es, the union's ordinary concern for employee well-
being. The Union's normal objective-that of secur-
ing improved working conditions for the employees it
represents-is here avowedly and convincingly em-
braced by the Employer itself-with, however, a
difference in emphasis as to how that goal should be
accomplished. To permit collective bargaining in this
context is to risk a harmful intrusion on the
rehabilitative process by the Union's bargaining
demands. For example, if the Union demanded
higher wages, this could well force the Employer to
either reduce its client work force or hire more
productive workers-thus compromising the Em-
ployer's rehabilitative efforts. Union demands for
higher benefits for senior employees might tempt the
Employer to reconsider its policy of keeping clients
on as long as necessary. Conversely, union demands
for unlimited employment tenure could prejudice the
Employer's efforts to provide charitable employment
537
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
to as many disabled people as possible. The
collective-bargaining process, in short, is likely to
distort the unique relationship between Employer
and client and impair the Employer's ability to
accomplish its salutary objectives.
On the basis of the above considerations, we are
convinced that, although clients may arguably be
said to be employees within the meaning of the Act,
it will not effectuate the purposes of the Act to assert
jurisdiction over them. Accordingly, we shall dismiss
the petition. 4
ORDER
It is hereby ordered that the petition before us be,
and it hereby is, dismissed.
MEMBER MURPHY, dissenting:
I would not assert jurisdiction of this Employer for
the reasons stated in my and Member Penello's
dissenting opinion in Abilities and Goodwill, Inc., 226
NLRB 1224 (1976). Accordingly, I also find it
unnecessary to decide whether the Employer's clients
are employees within the meaning of Section 2(3) of
the Act or whether it would effectuate the policies of
the Act to direct an election in a unit comprised of
such clients.
Because of our decision herein we do not address the Employer's
alternative contention that the petitioned-for unit is too narrow in scope.
538