Hull House Assn.

National Labor Relations Board - Board Decisions

Apr 7, 1978

235 N.L.R.B. 797 (N.L.R.B. 1978)

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HULL HOUSE ASSOCIATION 797
Hull House Association and Local 372, Child Care
Division, Service Employees International Union,
Petitioner, and Hull House Employees
Organization, an Independent Union, Petitioner.
Cases 13-RC-13709 and 13-RC-138 10
April 7, 1978
DECISION AND ORDER REMANDING
PROCEEDING
Upon a petition duly filed under Section of the
National Labor Relations Act, as amended, a hear-
ing was held before Hearing Officer Sheryl Sternberg
on October 2, 1975, and January 15 and 16 and
March 17, 18, and 19, 1976. Following the hearing,
and pursuant to Section 102.67 of the National
Labor Relations Board Rules and Regulations, Series
8, as amended, the Regional Director for Region 13
transferred this case to the National Labor Relations
Board for decision. Thereafter, the Employer and
both Petitioners filed briefs.
The Board has considered the entire record herein,
including the briefs of the parties, and makes the
following findings.
1. The Employer is an Illinois nonprofit corpora-
tion with 21 locations throughout Metropolitan
Chicago. These locations provide such services as
family and individual counseling, child development
services, group work and recreation services, neigh-
borhood development services, vocational counseling
and placement services, tutorial services, and senior
citizen programs.
The Employer has also contracted with Model
Cities-Chicago Committee on Urban Opportunity,
hereinafter Model Cities, an agency of the city of
Chicago, to operate two Head Start and two day care
centers. The Employer also operates six additional
Head Start and day care centers under contracts with
the Chicago Federation of Settlements and Neigh-
borhood Centers, hereinafter the Federation. The
Federation is under contract with Cities to
run these centers, but has subcontracted this work to
the Employer. The Employer has also contracted
with the Community Economic Development Asso-
ciation of Cook County to run the Des Plaines Valley
Community Head Start Center.
Local 372 seeks to represent a unit limited to the
Employer's child care employees. The Hull House
Employees Organization, hereinafter the Organiza-
tion, seeks an employerwide unit. The Employer
contends that both petitions should be dismissed
because (1) the child care centers, funded by Model
Cities, share the city of Chicago's exempt status
The funds for both the Head Start and day
with the Federal Government.
programs originate
235 NLRB No. 108
under the Act, and (2) the remaining operations do
not affect commerce within the meaning of the Act.
The Employer's first contention is essentially that
the terms and conditions of employment of the Head
Start and day care employees involved herein are set
by Model Cities and cannot be changed without
Model Cities' approval and that this fact is sufficent
to exempt from the Board's jurisdiction

under Section
of the Act.
To receive funding for the Chicago centers, the
Employer and the Federation must submit budgets
and so-called work programs to Model Cities for
The budgets list the centers' expected
expenses, and the work programs outline the centers'
goals. To receive approval, the budgets and work
programs must meet guidelines established by Model
Cities. After approval, the budgets and work pro-
grams become part of contracts with Model Cities.
Model Cities then funds the centers on a reimburse-
ment basis. Only those expenses listed in the ap-
proved budgets are reimbursable.
The guidelines indicate the labor costs which
Model Cities will reimburse the Employer for,
salaries, fringe benefits, vacations, and establish
qualifications for each job category at the centers
and discharge procedures. The issue before us is
basically whether these guidelines effectively pre-
clude the Employer from bargaining collectively,
independently of Model Cities, with a union repre-
senting these centers' employees.
Tauber, who, as director of Model Cities' Chil-
dren's Services Division, administers the agency's
Head Start and day care programs, explained the
extent to which Model Cities' personnel guidelines
have determined the working conditions of the
employees of the so-called "delegate agencies,"
contractors like the Employer, as follows.
The guidelines establish a salary range for each
category of center employee. These ranges incorpo-
rate a Federal regulation that requires that Head
Start and day care employees receive salaries compa-
rable to the area standard for the work involved.2
When the initial contracts were entered into, Model
Cities generally recognized the various salary
tures already existing at the delegate agencies.
Subsequent to the initial contracts, Model Cities has
reimbursed the delegate agencies for across-the-
board annual salary increments of 5 percent for
Head Start and day care employees. The delegate
agencies, however, are free to supplement these
salary increases with funds from sources other than
Model Cities, and certain delegate agencies have
provided annual salary increases of as high as 10
percent. Model Cities will also reimburse the delegate
The show that teachers, a job a bachelor's
degree, about and 1,000a year.
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798 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
agencies for certain fringe benefits, such as hospitali-
zation insurance and contributions to pension funds.
Additionally, Model Cities covers costs of 2 weeks'
paid vacation, but the delegate agencies are free to
add to the number of paid vacation days using funds
from sources other than Model Cities. Model Cities
also recognizes the existing holiday schedules of the
larger delegate agencies, such as the Catholic Arch-
diocese of Chicago and the Employer.
Model Cities has also established job qualifications
for each category of center employee, but the
delegate agencies retain the responsibility for select-
ing center personnel. Model Cities' role is to "verify
that the employee meets the qualifications," but not
to tell the delegate agencies which applicants to hire.
The delegate agencies have the discretion to decide
whether to discharge an employee, except that Model
Cities requires them to adhere to a procedure that is
designed to protect employees against arbitrary
discharge. The delegate agencies, however, are free to
provide additional procedural safeguards.
Thus, Tauber's testimony indicates that, contrary
to the Employer's contention, a delegate agency does
not need Model Cities' approval to improve most of
the Head Start and day care employees' terms and
conditions of employment. That the Employer can
negotiate working conditions at the centers with a
union without Model Cities' prior approval is proved
conclusively by its bargaining history with the
Organization.
Until the collective-bargaining agreement with the
Organization, described below, was signed, most of
the terms and conditions of employment of the Hull
House employees, including those employed at the
Head Start and day care centers, were governed by a
pamphlet entitled "Personnel Policies of Hull House
Association." This pamphlet was also included with
the work programs and budgets submitted to Model
Cities each year, and with Model Cities' approval
had become part of the contracts between the
See Employer's Exh.
After the close of the hearing, the Employer and the Organization
negotiated a second collective-bargaining agreement, from August
1976, until September 1978. This agreement is discussed Catholic Bishop
of Chicago, A Corporation Sole. Program. 235 NLRB
776 (1978).
The agreement incorporates the Employer's "Personnel Policies"
pamphlet. dated January 10, 1975 (Employer's 13). Adams identified a
pamphlet entitled "Personnel Policies of Hull House Association," dated
June 1971 (Local 372's I). as the pamphlet that governed the
Employer's personnel policies. The two pamphlets are basically the same.
The pamphlet dated January 10. 1975, does add. inter alia. the following:
Selection. Appointment and Promotion of Personnel
E. Beginning Salaries and for and Special Project
Employees
I. Beginning for employees whose positions are
government or special project monies are set by the of
that grant, and may be the same, higher or lower than the
Employer and Model Cities and between the Federa-
tion and Model Cities."
The initial collective-bargaining agreement4 be-
tween the Employer and the Organization, hereinaf-
ter the agreement, effective from September 3, 1975,
until July 1976, incorporated the "Personnel
Policies" pamphlet by reference. Adams, however,
testified that, if there were a conflict between the
agreement and the pamphlet, the agreement would
take precedence.5 The collective-bargaining agree-
ment changed the existing personnel policies and
significantly improved the working conditions of the
Hull House
Among the improvements was a 7-percent salary
increment for each employee, the usual 5-percent
increment, plus two 1-percent salary increments, or
bonuses, due 15, 1975, and June 15, 1976.
As noted above, Model Cities then would onlv
reimburse a delegate agency for a 5-percent incre-
ment. Adams acknowledged that the Employer had
paid the initial I-percent bonuses to employees and
had not been reimbursed for them by Model Cities."
The agreement also changed the severance pay
policy from one in which the Head Start and day
care employees were not eligible for severance pay
unless Model Cities agreed to reimburse the Employ-
er for it to one in which they were guaranteed
severance pay unless more than 10 employees from
an individual center were laid off at the same time.
Adams made clear that. with this the
agreement's severance pay provision would apply to
the Head Start and day care employees regardless of
what Model Cities' policy was with respect to
reimbursement.'
The agreement also included a grievance procedure
that provided for third-party mediation and arbitra-
tion, whereas the Employer's personnel policies had
only provided for internal appeals with no resort to
an outside party. The agreement also reduced the
cost of medical insurance to the employee. Other
step of the agency approved salary range. Effort is
made. in negotiating special projects, for inclusion of salaries no
less than the minimum of our agency salary ranges for
4. While not required to use private funds for special project salary
increases, the Executive Director currently seeks to use private
funds to support work performance for personnel if is
necessary. The asserts that this is an appropriate
private cost of obtaining and retaining the government or
special project grant.
The second I-percent bonus was not scheduled to be paid until after
the hearing herein concluded.
Severance pay was not among the fringe benefits testified was
reimbursable under Model Cities' guidelines.
no-stnke
terms
herein.9
$500,000,
$50,000.
1,000
annual
8
Buhop sypra
Sharpe,
testified
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wth
salary
increaw between
between
was Citics'
difference
apparently
note
made lhis difference.
risk
jurisdiction.10
jurisdiction.11
centers.12
commerce,l3
9(c)(l) 2(6)
i.e.. reimbursement
employes.
Naumc Counfy Ine.,
Tauber
supplrmenting
be
her. did not specify, mcant
' 0 The Rhode Islatui a /k /a Aloysiur
reapom
care
11 Compare BuffaIo, Inc.,
( 1
12 Sdt & N w t y S c M & Kincdrrgarten 2.
13 Inglewood Cemetety
HULL HOUSE ASSOCIATION 799
changes included a reduction of the probationary
period from 6 months to 3 months and the addition
of disability insurance coverage and of a paid
personal leave day for each employee. The agree-
ment also contained union-security and dues-check-
off clauses and a provision.
As indicated above, the agreement significantly
changed the and conditions of employment of
the Employer's Head Start and day care center
employees and provided for salary and fringe benefit
improvements that were not reimbursable under
Model Cities' guidelines. Despite this, the Employer,
according to Adams, signed the agreement without
Model Cities' prior approval.*
Considering Tauber's testimony regarding the ef-
fect of Model Cities' guidelines and the Employer's
bargaining history with the Organization, there can
be no doubt that the Employer is able to bargain
effectively about most of the terms and conditions of
employment of the Head Start and day care employ-
ees involved Catholic Bishop of Chicago, A
Corporation Sole, Department of Federal Programs,
supra. The City, through Model Cities, therefore,
does not control labor relations at the Head Start
and day care centers herein, and the Employer, as a
result, does not share the City's exemption from the
Act with respect to these centers.
The Employer's total revenue during the fiscal year
1975 was approximately $2.4 million. This included
fees and grants of $1.3 million from government
agencies, a community fund allocation of approxi-
mately and investment income of nearly
The parties stipulated that the value of the
Employer's purchases directly from points outside
the State of Illinois reached approximately $1
during the first 8 months of fiscal year 1975, or
$16,500 projected to an basis.
Tauber apparently reviewed the first agreement to check that it did not
conflict with Model Cities' guidelines. Catholic of Chicago,
Adams also testified that Model Cities never ratified it subsequently.
who, as the Employer's associate executive director, administered
the Employer's Head Start and day care programs, that to the best
of her knowledge the Head Start and day care employees had been treated
as required by the agreement. The agreement was signed 6 months before
she made this statement.
We note that the wntracts between the Employer and Model Cities
cannot be changed without the latter's approval. As stated earlier, these
set forth expenses that the Employer will be for
by Model Cities. Thus, the Employer cannot unilaterally increase the level
of reimbursement provided for by the contract Model Cities. As shown
above, the collective-bargaining agreement called for and fringe
benefit that were not provided for by the wntracts the
Employer and Model Cities, or those the Federation and Model
Cities. As the agreement negotiated without Model prior
approval, the in salaries and fringe benefits provided for by the
agreement and those that were reimbursable under the contracts with Model
Cities had to be made up by the Employer with its own money.
We that our findings would not change even if Model Cities
subsequently up By negotiating the agreement without
Model Cities' prior approval, the Employer assumed the of having to
The fact that the Employer is a nonprofit, noncom-
mercial, charitable organization provides no basis for
declining Although the Board has not
yet set a discretionary jurisdictional standard for
charitable organizations providing the variety of
social services that the Employer herein does, we
note that the Employer meets every discretionary
jurisdictional standard we have applied to date for
the assertion of Further, we note that
the child care centers involved herein by themselves
satisfy the jurisdictional standard for day care
As the Employer's direct inflow otherwise
shows a sufficient effect upon we
believe that asserting jurisdiction would effectuate
the policies of the Act.
2. We find, as stipulated by the parties, that the
Petitioners are labor organizations within the mean-
ing of the Act.
3. A question affecting commerce exists concern-
ing the representation of employees of the Employer
within the meaning of Sections and and
(7) of the Act.
4. Both the Employer and the Organization agree
that only an employerwide unit would be appropri-
ate. Local 372 seeks a unit limited to the Head Start
and day care employees.
As indicated above, the Head Start and day care
employees were, with certain exceptions, subject to
the same personnel policies as the Employer's other
employees, even before the collective-bargaining
agreement with the Organization was negotiated. The
parties also stipulated that an independent employee
organization had represented all the Employer's
employees for many years before formal recognition
was extended to the Organization. Further, at certain
locations, Head Start and day care employees share
common supervision with the Employer's other
employees. These facts lead us to conclude that an
pay for the added costs of employing the Head Start and day care
employees out of its own pocket; without from Model
Cities. This fact alone is enough to show that the Employer was able to
bargain effectively about the working conditions of these See.
generally, Health Facilities Association, etal.. 227 NLRB
1680 (1977). We also note that testified that a delegate agency's
policy of salaries with its own money to a level "really out of
proportion"with Model Cities' guidelines would a matter of concern to
She however, what she by "out of proportion."
We do not believe this testimony is specific enough to provide us with a
basis for concluding Model Cities has set an upper limit to the level a
delegate agency can supplement salaries.
Catholic Orphan Asylum. St. Home,
224 NLRB 1344 (1976) (Member Fanning concurring).
For the stated in Catholic Bishop of Chicago, we also reject the
Employer's argument that the Head Start and day centers herein a n an
integral pan of, or "intimately connected" with, the Chicago public school
system.
Catholic Charities of New York, 220 NLRB 9
975).
Pepper No. 222 NLRB 1295
(1976) (Member Fanning dissenting).
Compare Park Association, 147 NLRB 803 (1964).
approp:iate.
there
8(a)(2)
time.14
PENELLO,
Employer.15
Cities.1"~
position.17
day
(1978),
sufficient
MEMBER
Gnvern-
e.g.,
-
I*
Orga~zatiofi.
15
'8 Citres admmsters
operation uwt
whch
ROO DECISIONS OF NATIONAL LABOR RELATIONS BOARD
employerwide unit would be At the
same time, the record does not reveal a sufficient
basis for concluding that the Head Start and day care
employees share a separate community of interest
apart from the Employer's other employees. We
therefore find that a unit limited to the Employer's
Head Start and day care employees would not
constitute an appropriate unit.
The present case was transferred to the Board to
resolve the jurisdictional and unit issues. As is
presently before the Regional Director an
charge alleging that the Employer unlawfully
recognized the Organization, we shall not direct an
election at this We shall, however, remand
this proceeding to the Regional Director for further
processing, if appropriate.
ORDER
It is hereby ordered that this proceeding be, and it
hereby is, remanded to the Regional Director for
Region 13 for further processing, if appropriate.
MEMBER dissenting:
I would not assert jurisdiction over the day care
and Head Start center operations of the
I am persuaded that Model Cities-Chicago Com-
mittee on Urban Opportunity (Model Cities), an
agency of the city of Chicago, exercises sufficient
control over the centers' labor relations policies as to
disable the Employer from bargaining with a union
over the wages, hours, and other working conditions
of the employees at the centers.
The centers, which provide day care and educa-
tional services for underprivileged children, are
funded on an annual basis through contracts let by
Model these contracts, each of which
contains a budget and a "work program" outlining in
detail the expenses and operations of each center for
the year, Model Cities governs virtually all facets of
the centers' labor relations. Thus, Model Cities has
established salary ranges for every employee job
classification, and each contract specifies the exact
amount to be paid each employee out of Model
Cities' funds, the educational and other qualifica-
tions required for each the hours to be
worked by the employees, and the vacations, holi-
days, and fringe benefits to which the employees are
entitled. Further, Model Cities conducts regular and
We note that our unit findings are not to any extent based upon the
Employer's collective-bargaining history with the
The Employer operates four day care and seven Head Start centers.
Model the day care and Head Start programs, but
contracts out the actual of the centers to designated "delegate
agencres,"generally private employers engaged in providing social services.
The Employer contracts directly with Model Cities to operate two day care
and two Head Start centers: it also operates two day care and four Head
Start centers under subcontract with the Chicago Federation of Settlements
and Neighborhood Centers. In addition, the Employer operates one Head
detailed audits to insure compliance with its stan-
dards, and may terminate contract with the
Employer for noncompliance.
Model Cities exercises the same degree of control
over the labor relations policies of each of the
employers operating its care and Head Start
center programs. In my dissent in Catholic Bishop of
Chicago, A Corporation Sole, Department of Federal
Programs, 235 NLRB 776 which involved
another Model Cities delegate agency, I explained in
detail my reasons for concluding that such employers
are not granted freedom to engage in
genuine collective bargaining. I would therefore
dismiss the petition in this case for the same reasons I
refused to assert jurisdiction over the employer in
Catholic Bishop.
MURPHY, dissenting:
Contrary to my colleagues, I would not assert
jurisdiction over the Employer's four day care and
seven Head Start centers. I find that the city of
Chicago, acting in furtherance of fundamental gov-
ernmental objectives, exercises substantial and per-
vasive control over the labor relations policies of the
centers herein which precludes the Employer from
effectively bargaining concerning those centers'
working conditions.
Employer's day care and Head Start centers are
funded through the Social Security Act of 1935 and
the Economic Opportunity Act of 1964. The primary
purpose of both programs is the Federal
ment's objective to provide social and educational
services for children of poverty.
The centers are operated pursuant to service
contracts let annually by Model Cities-Chicago
Committee on Urban Opportunity (hereinafter Mod-
el Cities), an agency of the city of Chicago. The
contracts with the city include a budget and wage
program covering, the type of curriculum,
dietary plan, and social and medical services, all of
which must be approved by the city before the city
will agree to allocate funds for the centers' operation.
In addition, Model Cities set all operational stan-
dards for the Employer's programs. Thus, the "Stan-
dards for Project Design" specify all employee
classifications for the centers' personnel, educational
and experience qualifications for each classification,
detailed uniform job descriptions for each staff
Start center through contract with the Community Economic Development
Association of Cook County. The Federal Government provides 75 percent
of the funds for the day care centers, while the city of Chicago contributes
25 percent in matching funds. Head Start centers are supported to the extent
of 80 percent of the of the program by the Federal Government, leaving
20 percent is supplied in the form of in-kind services by the delegate
agencies.
Although the Employer does the initial screening and selection of
hires, candidates for promotions, etc., such actions must be reported lo
Model Cities within 5 days for its approval.
(1978).
antipoverty program hesigned specialized
- -
vrivate nonvrofit
ihe every
fre-
18 C. Atkinr & Company, 398,406
ID
centen
services fkrtherance
terminate
find
Act."18
jurisdiction.19 Znc., A M
1 conclude
event, assert
Herberr Harvey, Inc., I71 238,240 (1968).
801 HULL HOUSE ASSOCIATION
position, and corresponding salary levels. Model
Cities further specifies hours of operation, vacations,
holidays, fringe benefits, ratio of staff to children,
and total employee complement. To enforce its
standards, Model Cities closely monitors all aspects
of the Employer's programs and may terminate a
contract for noncompliance.
The facts of the instant case do not differ material-
ly from those presented in Catholic Bishop of Chicago,
A Corporation Sole, Department of Federal Programs,
235 NLRB 776 For the reasons more fullv set ,
forth in my dissenting opinion in that case, I find
that the Employer's day care and Head Start pro-
grams are funded as part of a Federal comprehensive
to meet the
social and educational needs occasioned by the
poverty environment and to open economic opportu-
nities for a deprived class of citizens by freeing them
from child care to enter the work force. In -imple-
menting the Federal policy, the city of Chicago (in
lieu of undertaking to provide such services directly)
has chosen to contract with a
agency to provide these fundamental services subject
to substantial and pervasive controls which enable
the city to insure the accomplishment of its objec-
tives. Thus, as shown supra, city regulates
aspect of the centers labor relations policies,
N.L.R.B. v. E. 331 U.S. (1947).
In the alternative, since the Employer's day care and Head Start
are operated as part of a governmentally funded antipoverty
program and offer which are essential and basic to the
quently monitors each centers operations to deter-
mine compliance with Model Cities' guidelines, and
retains authority to a contract for failure to
comply with Model Cities' guidelines.
In sum, I that Model Cities' labor relations
policies applicable to the Employer's day care and
Head Start centers have significantly limited any
discretion on the part of the Employer to determine
these working conditions "that would form the basis
for collective bargaining as contemplated by the
Under these circumstances, I see no choice
under the Board's established policies but to find
that such extensive control precludes our assertion of
Herbert Harvey, supra;
Services, Znc., 221 NLRB 64 (1975); Teledyne Eco-
nomic Development Company, 223 NLRB 1040 (1976).
I so find even though I am mindful of the fact that
certain employees at these day care and Head Start
centers may desire union representation. But, the
facts, the law, the Federal policies, and this Board's
own long-established policies impel me-however
reluctantly-to conclude that the Board should not
assert jurisdiction over these centers. Accordingly, I
dissent from the finding that a unit which includes
the Employer's Head Start and day care employees is
appropriate.
of that interest. that the services provided by the Employer are
intimately related to fundamental governmental objectives. I find that, in
any it would not effectuate the policies of the Act to
jurisdiction.Cf. NLRB