Sheltered Workshops of San Diego, Inc.

National Labor Relations Board - Board Decisions

Mar 4, 1960

126 N.L.R.B. 961 (N.L.R.B. 1960)

SHELTERED WORKSHOPS OF SAN DIEGO, INC. 961
of the plant oversees the entire inside laundry operation, and respon-
sibly directs, approximate 35 employees, who are engaged in both
production and distribution, we find that he is a supervisor within
the meaning of the Act, and shall accordingly exclude him from the
unit.10 .
The girl in charge of the linen room routes, sorts, and inspects the
linen for distribution. Although she is salaried, she works alongside
the other employees, and any direction she gives the employees is
routine in nature. She has neither the authority to hire, discharge, or
effectively recommend such action; nor does she have any of the other
statutory indicia of supervisory authority. We therefore find that
she is not a supervisor within the meaning of the Act and, accordingly,
include her in the unit.
Accordingly, we find that the following employees of the Employer
constitute an appropriate unit for the purposes of collective bargain-
ing within the meaning of Section 9(b) of the Act: All production
and maintenance employees at the Employers' Baltimore, Maryland,
plant, including the eight inside distribution employees, the engineer,
the mechanic, and the girl in charge of the linen room, but excluding
the truckdrivers, the route salesmen, the office clerical employees,
professional employees, guards, the foreman of the plant, and all
other supervisors within the meaning of the Act.
[Text of Direction of Election omitted from publication.]
10 See Laundry Owners A ssociation of Greater Cincinnati, supra, (Clifford Brown,
foreman).
Sheltered Workshops of San Diego, Inc. and United Association
of Handicapped, Petitioner. Case No. £1-RC-585. March 4,
1960
DECISION AND ORDER
Upon a petition duly filed under Section 9 (c) of the National Labor
Relations Act, a hearing in this case was held before Norman H.
Greer, hearing officer. The hearing officer's rulings made at the hear-
ing are free from prejudicial error and are hereby affirmed.
Upon the entire record in this case, the Board finds :
Sheltered Workshops of San Diego, Inc., herein called the Work-
shop, is a nonprofit California corporation, which is engaged in pro-
viding work experience under controlled conditions for persons
unemployable elsewhere because of their physical, mental, emotional,
or social disabilities. It does this by providing an environment which
will prepare them as soon as possible for regular employment in the
business community. The Workshop also assists those handicapped
126 NLRB No. 119.
554461--60-vol. 126-62
962 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
individuals who are accepted in its program by vocational and per-
sonal counseling and job placement. No charges are made for these
,services. During their period of rehabilitation at the Workshop, the
participants are paid on an hourly basis without regard to the quantity
,or quality of their production. Many of the participants do not
"work" full time.
The Petitioner seeks to represent a unit consisting of all the par-
ticipants, sometimes referred to as "clients," in the Workshop's pro-
gram who, as specified in the petition, are engaged in production,
maintenance, and office work, excluding the Workshop's professional
and permanent staff. The Workshop contends that it is not an "em-
ployer" within the meaning of the Act, or alternatively, that it is not
engaged in commerce, or is not engaged in such purely commercial
activities as would also warrant assertion of jurisdiction over a non-
profit organization.
The Workshop's revenues are derived from services and products
which it supplies to profit-making firms; fees for evaluation and train-
ing services performed for public rehabilitation agencies; honorary
memberships taken out by philanthropic individuals and organiza-
tions; and donations of tools, technical assistance, and funds from
service clubs and employers in the area. Since 1955, the donations
have totaled in excess of $18,000, memberships about $1,800, fees from
governmental agencies about $10,000, and receipts from the service
and manufacturing operations performed by the Workshop for in-
dustrial firms have totaled about $560,000. During the past year the
Workshop delivered work products valued in excess of $200,000 to
Rohr Aircraft and Ryan Aeronautical Corp., employers working on
defense contracts.
The Workshop is accredited as a sheltered workshop with the U.S.
Department of Labor and with the California Bureau of Vocational
Rehabilitation. It has been exempted from the minimum wage re-
quirements of the Fair Labor Standards Act and the Walsh-Healey
Public Contracts Act, and is not subject to unemployment compensa-
tion laws.
The Workshop is supervised by an executive director who reports
to a board of directors composed of local businessmen, welfare agency
members, and community leaders, who all serve without pay. The
permanent staff consists of a number of professional employees and
about eight leadmen, of instructors, who supervise the activities of
the handicapped participants in the Workshop's program. As of the
hearing date there was a waiting list in California of about 560 persons
seeking acceptance by the Workshop, which then had a capacity: of
66 clients. Since June 1959, approximately 14 persons have been
temporarily laid off because-of lack of work.
SHELTERED WORKSHOPS OF SAN DIEGO, INC. 963
The clients perform such work as grinding of machine tools, manu-
facturing a plastic protective envelope, assembling and inspecting
parts and tools, refurbishing steel cabinets and workbenches, and
mimeographing, stuffing, and mailing printed matter. The Work-
shop also provides training in such trades and skills as fabric and
patterncutting, welding, machine tool operation, tool crib attendant,
tool processing and treating, power and hand sewing, office services,
packaging, and janitorial work.
The Workshop presented testimony in support of its contention that
it is not an "employer" in relation to its clients. Among other things,
it pointed to its objectives of placement and training, the criterion of
unemployability which is used in selecting participants in its pro-
gram, the amount of time spent in counseling for which the partici-
pants lose no pay, and the absence of compulsion or direction over the
participants by creating an atmosphere in which they will voluntarily
agree to perform whatever work is assigned to them as part of their
rehabilitation program.
Many aspects of the Workshop's program are similar to programs
sponsored by nonprofit welfare institutions for the treatment of indi-
vidua18 with special needs. A combined work and training program,
as here involved, necessarily contains some elements ordinarily existing
in an employment relationship, such as control over entrance and ter-
mination, discipline, fixing rates of compensation, and supervision.
However, the emphasis which is placed on training, counseling, re-
habilitation, and placement tend to establish that the Workshop's
essential purpose is to provide therapeutic assistance rather than
employment. In view of our determination, infra, not to assert juris-
diction, it is unnecessary that we decide whether the Workshop is an
.employer under the Act in relation to its clients.
Although the Act specifically excludes from the term "employer"
.only one type of nonprofit organization, that of hospitals, the Board
has used as a guide, in deciding whether to assert jurisdiction over
other nonprofit organizations , the test of whether they were engaged
in activities which were "commercial in the generally accepted sense."I
'This is not a recent innovation in Board policy. The report of the
House Conference Committee on the 1947 amendments to the Act
accurately summarized the Board's then existing policy, and indicated
.a guide, if not a mandate,' to govern future policy, viz :
1 Trustees of Columbia University in the City of New York , 97 NLRB 424 ; Philadelphia
,Orchestra Association, 97 NLRB 548; Armour Research Foundation of Illinois Institute
of Technology, 107 NLRB 1052; Lutheran Church, Missouri Synod, 109 NLRB 859.
Cf. Henry Ford Trade School , 58 NLRB 1535; Sunday School Board of the Southern
Baptist Convention, 92 NLRB 801; Port Arthur College, 92 NLRB 152; Massachusetts
Institute of Technology , 110 NLRB 1611 ; Disabled American Veterans , Inc. (Idento Tag
-Operation ), 112 NLRB 664
0Trustees of Columbia University in the City of New York, 97 NLRB at 427. -- - -
964 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
The Conference agreement . . . follows the Senate amendment
in the matter of exclusion of non-profit corporations and asso-
ciations operating hospitals. The other non-profit organizations
excluded under the House Bill are not specifically excluded in the
conference agreement, for only in exceptional circumstances and
in connection with purely commercial activities of such organiza-
tions or of their employees have any of the activities been
considered as affecting commerce so as to bring them within the
scope of the National Labor Relations Act.'
Since, as we find, the Workshop's purposes are directed entirely
toward rehabilitation of unemployable persons, its commercial activi-
ties should be viewed only as a means to that end. Based on these con-
siderations, as well as the limited effect on commerce of labor disputes
involving such rehabilitation centers, and the Workshop's close affilia-
tion with State agencies and philanthropic organizationcs, we believe
that it would not effectuate the policies of the Act to assert jurisdic-
tion here. Accordingly, we shall dismiss the petition.
[The Board dismissed the petition.]
CHAIRMAN LEEDOM and MEMBER BEAN, dissenting :
We do not consider the arguments advanced by our colleagues for
declining to assert jurisdiction here as persuasive, for reasons which
we give below. Certain points made in the decision should, however,
be first clarified. The majority finds it unnecessary to decide whether
the Workshop is an "employer" within Section 2(2) of the Act, or
whether it is an "employer" in the generic sense of that term, as
meaning that the legal relationship of master and servant exists
between the Workshop and the participants. We believe that the
Workshop is an employer in both senses. Although it provides a
form of treatment for individuals with special needs, it certainly does
not meet any reasonable definition of a hospital nor does it conform
to any of the other specific exclusions which are set out in Section
2(2). We are also satisfied that the Relationship between the Work-
shop and the participants is one of employment. The Workshop
requires regular and sustained work from the participants in its reha-
bilitation program. That program is largely dependent on the
income derived from the services performed by the participants. The
Workshop provides the facilities for such work, utilizes the clients'
labors in producing a work product or service which is salable in
regular commercial channels, regulates their hours of work, and
pays them at rates which take into account to some extent differences
in proficiency and productivity. It pays them for vacations, it docks
them for time lost from work, and it lays them off when work is slack.
8 H. Conf . Rept . No. 510 on H.R . 3020, p. 32.
SHELTERED WORKSHOPS OF SAN DIEGO, INC. 965
In general, it expects them to work, and pays them in accordance
with their capacities. Although the clients are not expected to meet
standards usually encountered in businesses operated for profit, and
although the Workshop's ultimate objective is in training and rehabili-
tating its clients, we are satisfied that the compensation which the
clients receive is earned by them for the services they perform.4
Secondly, we assume that the majority agrees that the Workshop is
engaged in commercial activities. Indeed, these activities are the
heart of its program. Rehabilitation through work must supply the
participants with a feeling that their activities are useful. The Work-
shop does not ask them to expend energy on products which are to be
destroyed; it utilizes their labor in normal commercial channels. The
participants also regard their work as useful because they are paid for
doing it. In fact, they can be paid only because their labor produces
goods and services which are required by commercial users. One
need only compare the $560,000 which the Workshop has received
from industrial firms since 1955, with the donations and fees which
have amounted to less than $30,000 in the same period, to recognize
the extent to which the Workshop is engaged in commercial activities.
Why then does the majority find that it would not effectuate the pur-
poses of the Act to assert jurisdiction here? It does so because the
Workshop's rehabilitation work benefits the entire community. We do
not, of course, deny that this is so, but we reject the implicit corollary
that a nonprofit organization engaging in socially beneficial activities
therefore owes its employees less than other employers do. The right
of employees to select a representative and to bargain with their
employer concerning their grievances and work conditions should not
be so lightly disregarded. The majority has balanced the Workshop's
commercial activities against its rehabilitation program and has
decided that the latter outweighs the former. We would balance the
Workshop's total program, commercial and rehabilitative, against the
rights of these unfortunate and disabled employees, and would find
that the latter is equally important. The factors which impel Gov-
ernment to grant tax exemptions or other benefits to nonprofit insti-
tutions engaged in community services are not applicable here.
Another standard of values is needed in deciding whether the policy
of the Act is effectuated by allowing the Workshop to avoid bargain-
ing with its employees.
We 'would find that the Workshop is an employer substantially
engaged in commercial activities, and since a basic policy of the Act
is to encourage collective bargaining, we would hold that it is better
effectuated by asserting jurisdiction than by not asserting it.
6 We note that the exemption from the minimum wage requirements of the Fair Labor
Standards At which the Workshop enjoys is granted by the Wage and Hour Division on
the premise that an employer -employee relationship exists.