Lutheran Welfare Service of Illinois

National Labor Relations Board - Board Decisions

Feb 10, 1975

216 N.L.R.B. 518 (N.L.R.B. 1975)

518 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Lutheran Welfare Services of Illinois and Child Care
Division, Local No. 321 and Local No. 329, Service
Employees International Union , AFL-CIO, Peti-
tioner. Case 13-RC-13370
February 10, 1975
DECISION AND ORDER
By ACTING CHAIRMAN FANNING AND
MEMBERS JENKINS, KENNEDY, AND PENELLO
Upon a petition duly filed under Section 9(c) of the
National Labor Relations Act, as amended, two
hearings were held before Hearing Officer Patricia
James of the National Labor Relations Board.
Following the hearings and pursuant to Section
102.67 of the National Labor Relations Board Rules
and Regulations and Statements of Procedure, Series
8, as amended, the case was transferred to the Board
for decision. Briefs were filed by the Employer and
the Petitioner.
The Board has reviewed the Hearing Officer's
rulings made at the hearings and finds that they are
free from prejudicial error. They are hereby affirmed.
Upon the entire record in this case the Board finds:
The Employer is an Illinois nonprofit corporation
whose purpose is to serve the social welfare needs of
the people of that State. Among its services are
residential treating centers for children, services to
the mentally retarded, counseling services for fami-
lies and individuals with adjustment problems,
services for the aging, services for alcoholics and
drug addicts, and the day care centers in question in
this case. The Employer has annual revenues of
about $5.6 million and employs 600 persons.
The Employer operates the four day care centers
which are involved in this proceeding. All of the 350
children enrolled at the centers reside in Illinois. Two
of the centers operate Head Start programs and the
other two centers take care of children of working
families, but both programs are educational and
custodial in nature. The children come from low
income families and one of the purposes of the
program is to provide an early childhood educational
experience which will enable the children to compete
as they leave the day care centers and go into the
public school system. Only 9 children out of 350 pay
any fees.
The day care programs are funded by the city of
Chicago's Model Cities-Chicago Committee on
Urban Opportunity-Department of Children Serv-
ices (herein Model Cities). The essence of the
arrangement between the Employer and Model
Cities is that the Employer manages the program and
Model Cities pays the bills. The funds originally
come from the Federal Government and the budget
for the day care centers is approximately $550,000
per year. About $5,000 a year is spent on items
purchased directly from sources outside Illinois. The
Employer as a whole, however, annually makes
purchases of at least $148,000 from out-of-state
vendors.
Model Cities sets some operational standards for
the day care centers. It requires separate bank
accounts for the centers' money. The director of the
Employer prepares budgets which are submitted to
Model Cities. At the same time, the director submits
a work program detailing goals, performance, and
administrative necessities . Model Cities gives guid-
ance in a booklet entitled "Standards for Work
Projects Design." It also approves the budgets,
monitors the services, establishes detailed descrip-
tions for each staff position, and demands monthly
reports from each center.
The Petitioner introduced evidence as to the scope
of day care centers operating in the United States. In
1970, there were 16,000 licensed day care centers
with an enrollment of 625,000 children. Approxi-
mately half of the licensed centers were proprietary,
and half were nonprofit. Enrollment capacity for
these centers quadrupled between 1960 and 1970.
Some of the larger commercial centers operate
multistate. Many industrial and other types of
companies operate day care centers for their own
employees. At an estimated cost of approximately
$1,000 per child, total annual cost of operating day
care centers in 1970 exceeded $625 million.
The Employer contends that the Board does not
have jurisdiction because it is not engaged in
interstate commerce. Further, it asserts that it would
be inappropriate for the Board to exercise jurisdic-
tion because of the close operational nexus between
the Employer and the city of Chicago. We find no
merit in these contentions.
In Young Work4 Inc., 216 NLRB No. 97, issued
today, we asserted jurisdiction over an employer
operating proprietary day care centers. In Young
World we noted that the employer there put emphasis
on custodial care which included learning experi-
ences for young children. In the instant case the
programs are both custodial and educational in
nature. In Young World we stated that we were not
prepared to establish a jurisdictional standard for
day care centers as a class, but that we were satisfied
that the employer there was engaged in commerce
and that it met every discretionary jurisdictional
standard the Board has applied to date. Similarly, in
this case we have no doubt that the Employer is
engaged in commerce, since its total annual revenues
are about $5.6 million and annual purchases from
out of State are at least $148,000. It is also clear that
in this case the Employer meets every discretionary
216 NLRB No. 96
LUTHERAN WELFARE SERVICES OF ILLINOIS 519
jurisdictional standard we have applied to date. The
fact that the Employer is a nonprofit organization is
irrelevant as far as our exercise of jurisdiction is
concerned.'
In support of its argument against the Board
asserting jurisdiction, the Employer refers to Pennsyl-
vania Labor Relations Board 209 NLRB 152 (1974),2
an Advisory Opinion, in which the Board advised the
parties that it would not assert jurisdiction over
nonprofit day care centers engaged- in providing
preschool minority children with educational train-
ing which would enable them to compete with their
peers when they entered public school. The Board
stated that in the exercise of its discretion it would
refuse to assert jurisdiction because the day care
centers in that case were an adjunct of the local
public school system and therefore essentially local
in character. Pennsylvania Labor Relations Board is
therefore distinguishable from the present case
inasmuch as the day care centers here involved are
not operated as an adjunct of the Chicago public
school system and their purpose is to provide
custodial care for children of working mothers, as
well as educational training for the children.
Accordingly, we find that the Employer is engaged
in commerce within the meaning of the Act and that
it will effectuate the policies of the Act to assert
jurisdiction herein.
The present case was transferred to the Board
solely to resolve the jurisdiction issue . The record is
inadequate to enable the Board to define the
appropriate unit. Accordingly, we shall remand the
case to the Regional Director for further processing
in accordance with this Decision.
ORDER
It is hereby ordered that the case be, and it hereby
is, remanded to the Regional Director for Region 13
for further processing.
MEMBER KENNEDY, dissenting:
I disagree with the decision of my colleagues to
assert jurisdiction over this Employer. In Pennsylva-
nia Labor Relations Board, 209 NLRB No. 33 (herein
PLRB), Members Jenkins and Penello joined Chair-
man Miller in declining to assert jurisdiction over
nonprofit day care centers for minority children
intended to prepare them for competing with their
peers in the local public school system. The Board
decided that the operation of such centers was
essentially local and that in the exercise of its
discretion it should decline to assert jurisdiction over
them. I believe that PLRB is indistinguishable from
the present case and that, although I did not
participate in PLRB, it furnishes sound precedent for
dismissing the present petition.
The facts in the two cases are virtually identical.
Thus, in both cases the employer is a nonprofit
corporation. Although in PLRB, the program was
not a custodial program but an educational one; and,
in this case, the centers are custodial as well as
educational, I find the distinction between custodial
and educational to be artificial. So-called "custodial"
programs inherently have some educational aspects
(the children are kept busy 'with drawings, playing
with educational toys, etc.). So-called "educational"
programs are also necessarily custodial since they
involve care of the children.
In PLRB, the children came from minority groups.
In Lutheran the children come from low income
families , but two-thirds of the children also come
from minority groups. In both cases the objective of
the program is for children to be able to compete
when they reach the public schools, and also in both
cases the programs offer some health and social
services to the children and their families. Finally, in
both cases all funds come from either Federal or
state governments.
In my view, the Board correctly determined in
PLRB that day care centers are essentially local in
character and that the Board should exercise its
sound discretion in not extending its jurisdiction to
cover such local operations. Accordingly, I would
dismiss the petition herein.
i Drexel Home, Inc., 182 NLRB 1045 (1970). case is not to be taken as agreement with the Advisory Opinion rendered
2 Acting Chairman Fanning did not participate in Pennsylvania Labor therein.
Relations Board and his participation in this Decision distinguishing that