Goodwill Industries of Tidewater

National Labor Relations Board - Board Decisions

Aug 27, 1991

304 N.L.R.B. 767 (N.L.R.B. 1991)

767
304 NLRB No. 98
GOODWILL INDUSTRIES
1 All cleaners, waxers, buffers, trainees and strippers employed by the Em-
ployer at its Little Creek Amphibious Base, Norfolk, Virginia location, but ex-
cluding office clerical employees, guards and supervisors as defined in the
Act.
2 The Employer’s request for stay of the election was denied. An election
was held and the ballots were impounded pending this Decision on Review.
By letter dated May 2, 1991, the Laborers’ International Union of North
America urged the Board to affirm the Regional Director’s decision to assert
jurisdiction over the Employer, with additional supporting rationale. We have
not considered this letter in reaching our decision as it represents an untimely
filing by a nonparty.
3 41 U.S.C. §§ 46–48 (also known as the Javits Wagner-O’Day Act). Under
that Act, Federal Government contracts are awarded to nonprofit organizations
through noncompetitive bidding.
4 Since the inception of this contract, the Employer has employed approxi-
mately 300 individuals. Of the current work force, approximately 64 percent
are handicapped individuals. The Employer is required to have a minimum of
75 percent handicapped individuals, under the Wagner-O’Day program.
5 This is really the issue that differentiates our decision in this case and
Goodwill Industries of Denver, supra, from Goodwill Industries of Southern
California, supra. In the latter case, the Board did not decide whether the cli-
ents were employees under the Act but simply refused to assert jurisdiction
over the clients, for fear of the collective-bargaining process intruding on the
clients’ unique relationship with the employer. Here, and in Goodwill Indus-
tries of Denver, we rest our determination to include or exclude clients in any
unit found appropriate solely on whether they qualify as employees under the
Act.
Goodwill Industries of Tidewater, Inc. and Public
Service Employees Local Union 572, Laborers’
International Union of North America, AFL–
CIO, Petitioner. Case 5–RC–13462
August 27, 1991
DECISION ON REVIEW AND DIRECTION OF
ELECTION
BY CHAIRMAN STEPHENS AND MEMBERS
CRACRAFT AND OVIATT
On September 6, 1990, the Regional Director for
Region 5 issued a Decision and Direction of Election
in the above-entitled proceeding in which he asserted
jurisdiction over the Employer and directed an election
be held in the petitioned-for unit.1 Thereafter, in ac-
cordance with Section 102.67 of the National Labor
Relations Board Rules and Regulations, the Employer
filed a timely request for review of the Regional Direc-
tor’s decision contending, inter alia, that the Regional
Director erred by asserting jurisdiction over it and by
finding that the Employer’s handicapped ‘‘clients’’
were employees within the meaning of the Act. By
order dated October 4, 1990, the Board granted the
Employer’s request for review.2
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 is a nonprofit, charitable corporation
with a principal office and place of business in Nor-
folk, Virginia. Its purpose is to provide rehabilitation
training, work experience, and placement to handi-
capped individuals. The Employer’s primary operation
is a sheltered workshop program in which donated
clothing and goods are reconditioned or reassembled
for sale in its retail store. Its operating income is de-
rived primarily from the sheltered workshop program.
Another part of the Employer’s rehabilitation pro-
gram—and the only part involved in this proceeding
involves a contract with the United States Navy to pro-
vide janitorial services at the Little Creek Amphibious
Base in Norfolk, Virginia. Under this contract, award-
ed to the Employer in 1988 pursuant to the Wagner-
O’Day Act,3 the Employer operates a janitorial skills
training program and provides janitorial services to the
entire base. Although the Employer states that it has
lost money on this contract, the record shows that it
has derived gross revenues in excess of $250,000 dur-
ing the past 12 months and has paid wages to both
handicapped and nonhandicapped individuals at Little
Creek. In its janitorial skills training program, the Em-
ployer employs 7 supervisors, 2 supervisor/trainers and
approximately 44 janitorial employees, including 27
handicapped and 17 nonhandicapped individuals.4
The Employer contends that the Board should de-
cline to assert jurisdiction because its function is pure-
ly one of rehabilitating its clients and preparing them
for work in private industry. It further contends that
this case is factually similar to Goodwill Industries of
Southern California, 231 NLRB 536 (1977), and that
the impact of an adverse ruling here would be no less
severe than in that case on the relationship between its
handicapped clients and itself.
We find no merit in the Employer’s contention inso-
far as it relies on Goodwill Industries of Southern Cali-
fornia. In Goodwill Industries of Denver, 304 NLRB
764, issued today, the Board has overruled Goodwill
Industries of Southern California to the extent that it
might be read as indicating that an employer’s worthy
rehabilitative purpose is a basis for declining jurisdic-
tion, and disavowed any construction of that decision
as holding that dismissal of a petition on that ground
would be applicable even if the unit sought included
nonhandicapped employees. Further, the record shows
that the Employer’s contract with the Navy grosses
over $250,000 in annual revenues. That fact alone suf-
fices to establish the Board’s statutory and discre-
tionary jurisdiction over the Employer on the basis that
the Employer’s operations at the Little Creek Amphib-
ious Base in Norfolk, Virginia, exert a substantial im-
pact on the national defense. Ready Mixed Concrete
Materials, 122 NLRB 318 (1958). See also Castle In-
stant Maintenance/Mail, 256 NLRB 130, 131 (1981).
The remaining question is whether the individuals
employed by the Employer at Little Creek are employ-
ees within the meaning of Section 2(3) of the Act.5 In
768 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
6 Other referrals have been by private insurance companies who have re-
ferred persons involved in accidents to prepare them for a return to the work
force. Also, other individuals with documented disabilities have been admitted
for training.
7 The record indicates that a training program for janitorial services for the
clients was selected because janitorial work is readily available in the resort
areas of Norfolk and Virginia Beach.
8 This lack of emphasis on production is in marked contrast to Arkansas
Lighthouse for the Blind, supra. There, the clients received 30 days of on-the-
job training but were retained after that period only if their production was
sufficient. To ensure such production by the clients in that case, the respondent
used a variety of techniques including what witnesses described as ‘‘pressure
to produce.’’ Similarly, there was an emphasis on productivity in Cincinnati
Assn. for the Blind, supra, and in Lighthouse for the Blind of Houston, 244
NLRB 1144 (1979).
9 Consistent with this objective, the DRS pays one-half of the clients’ wages
during the training period; the rest is paid by the Employer. The latter, how-
ever, becomes fully responsible for the clients’ wages if they stay on after the
training is completed.
making this determination, the Board looks at the em-
ployer’s relationship with these individuals. 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, the Board has indicated
that it will not find statutory employee status. Compare
Arkansas Lighthouse for the Blind, 284 NLRB 1214,
1216–1218 (1987), enf. denied 851 F.2d 180 (8th Cir.
1988); and Cincinnati Assn. for the Blind, 235 NLRB
1448–1449 (1978), with Goodwill Industries of Den-
ver, supra.
In concluding that all the persons employed in the
unit are statutory employees, the Regional Director re-
lied on evidence that they all were assigned to the var-
ious tasks which the Employer is required to perform
at Little Creek and on his finding that no significant
differences exist in supervision, hours, and discipline.
Thus, he found that all the employees work closely to-
gether, share substantially common wages, have the
same benefits, have similar working hours, share com-
mon supervision, and are subject to the same work
rules. Our reversal of the Regional Director rests on
our findings, described below, that significant dif-
ferences do exist in supervision, discipline, production
expectations, support, and other areas to an extent that
the relationship between the Employer and the clients
is primarily rehabilitative and that working conditions
for the clients are not typical of the private sector.
The Employer’s clients primarily come from refer-
rals by the Virginia Department of Rehabilitation Serv-
ices (DRS).6 A representative of DRS testified that
DRS makes referrals of disabled persons ‘‘who need
assistance and support’’ to find a job, and that DRS
contracts with the Employer to ‘‘provide training for
our clients’’ for eventual placement in competitive em-
ployment. The DRS and the Employer negotiate indi-
vidualized contracts providing for client training in a
wide range of janitorial skills. The training period var-
ies depending on the individual client’s needs and
abilities.
The on-the-job training for clients includes general
office cleaning, cleaning of restrooms, supplying soap
and bathroom tissue, cleaning windows, and stripping,
waxing, and buffing floors. Although this part of the
clients’ training emphasizes skills used on the particu-
lar job being performed under the Employer’s contract
with the Navy, these skills are readily transferrable to
private competitive employment in the area.7
The clients work at their own pace and are not sub-
ject to production quotas or discipline for insufficient
production.8 Although they are subject to the same
work rules as the nonhandicapped employees, the
standard for discipline is fundamentally different.
Thus, the emphasis is on counseling the clients about
work problems and discipline is imposed only in ex-
treme cases. The emphasis on counseling also is re-
flected in the clients’ supervision: in addition to a su-
pervisor, the clients have a trainer who works with
them on their training program and monitors their
progress. Furthermore, accommodations are made in
the clients’ working hours for their medication and
therapy.
The clients’ on-the-job training is supplemented by
a work adjustment support program that emphasizes
appropriate behavior in the workplace and socialization
skills. This program is not provided for nonhandi-
capped employees and is often administered outside
work hours. It includes teaching clients how to catch
the bus to get to work on time and how to punch the
timeclock, ‘‘lots of one-on-one support on the job,’’
and ‘‘staffing’’ sessions at which problems experi-
enced by the clients in the course of their job training
are gone over with them, their referring agencies, and
their supervisors and trainers, among others, and at
which modifications in their training are made. Al-
though this supplemental training is responsive to par-
ticular problems arising out of the clients’ participation
in the Employer’s janitorial services program, many
aspects of such training have general application be-
yond the program to the time when the clients become
employees of other employers. Thus, it is clear that the
training was designed to prepare the clients for entry
into the private work sector, rather than for further em-
ployment with the Employer.
The record also shows that long-term employment is
not contemplated for the clients; rather, the objective
is to prepare each client for private competitive jobs.9
To achieve this objective the Employer employs a full-
time job placement counselor to obtain information on,
769GOODWILL INDUSTRIES
10 The Regional Director found no merit in the Employer’s contention that
the nonhandicapped workers are ‘‘casual employees’’ who are ineligible to
vote in the election. The Employer did not renew this contention in its request
for review. We note that the record shows that the nonhandicapped employees,
like the handicapped persons, work an average of 18–26 hours per week.
11 At the hearing, the Petitioner indicated that, if the Regional Director
found appropriate a unit different from the petitioned-for unit, it desired to
proceed to an election in the unit found to be appropriate.
and make arrangements for, the placement of clients in
private employment. Although there is no showing, on
the record here, that clients are forced to leave at the
end of the training period, there also is no showing
that clients are retained to the exclusion of creating
new openings for other clients. The absence of any
such clear pattern may be explained by the relative
newness of the program at the time of the hearing and
the need to attain a work force of 75 percent handi-
capped employees to meet the requirements and pur-
pose of the Wagner-O’Day program. In any event, the
high turnover rate (see fn. 4 supra) is at odds with any
suggestion of long-term retention of individual clients.
Compare Arkansas Lighthouse for the Blind at 1217.
In sum, we find the clients’ relationship with the
Employer is primarily rehabilitative and that the cli-
ents’ working conditions are not typical of private sec-
tor working conditions. We predicate this finding on
the record as a whole, but particularly, on the evidence
of the significant differences in the nature of super-
vision, the emphasis on counseling over discipline, the
absence of any typical industrial means of ensuring
productivity, and the substantial supplemental support
for the clients both during and outside of work hours.
Accordingly, we find that the clients are not employees
within the meaning of Section 2(3) of the Act.
With respect, however, to Goodwill’s nonhandi-
capped naval base employees, the record establishes
that they neither receive rehabilitative services nor are
subject to the flexible disciplinary and production poli-
cies described above.10 Therefore, the working condi-
tions of these individuals are typical of private sector
working conditions and, absent the provision of any re-
habilitative services, 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:11
All cleaners, waxers, buffers, and strippers em-
ployed by the Employer at its Little Creek Am-
phibious Base, Norfolk, Virginia location, but ex-
cluding office clerical employees, guards and su-
pervisors as defined in the Act.
[Direction of Election omitted from publication.]