NLRB Drops its “Subgroup Majority Status” Test to Determine Whether Faculty are Exempt Managerial Employees

On February 19, 2021, the National Labor Relations Board (Board) modified its test for determining whether faculty at private colleges and universities should be excluded as managerial employees from the right to union representation under the National Labor Relations Act (Act). The Board did so by discarding the “subgroup majority status” rule endorsed by the Board in University of Southern California (USC)1 as consistent with its decision in Pacific Lutheran University (Pacific Lutheran).2 In place of that rule, the Board adopted the “structural inclusion” test applied by the D.C. Circuit in denying enforcement of the Board’s order in USC.3

The “Subgroup Majority Status” Test

In Pacific Lutheran, the Board set out a framework for determining whether faculty members are managerial employees under the Act. Under the framework, the Board considers petitioned-for faculty members’ participation in five areas of decision-making: academic programs, enrollment management policies, finances, academic policies, and personnel policies and decisions. The Board gives greater weight to the first three “primary” areas of consideration, which affect the institution as a whole, and less to the two “secondary” areas. The party asserting managerial status bears the burden of demonstrating that the faculty exercises control or makes effective recommendations over these areas to establish that petitioned-for faculty members are managerial employees.  The decision in Pacific Lutheran, in a footnote, explained that “[i]n those instances where a committee controls or effectively recommends action in a particular decision-making area, the party asserting that the faculty are managers must prove that a majority of the committee or assembly is faculty. If faculty members do not exert majority control, we will not attribute the committee’s conduct to the faculty.”4

In USC, the regional director applied this “majority status rule” to a subgroup of petitioned-for faculty classifications, instead of the faculty as a whole. The Board endorsed this so-called “subgroup majority status” test by denying the university’s request for review. The Board’s endorsement of the test meant, in practical terms, that a subgroup of faculty seeking to organize must hold a majority of seats on shared governance faculty committees with decision-making authority.  In practice, it expanded organizing opportunities for unions by opening to organizing a subgroup of faculty, such as non-tenured track faculty, who may not make up a majority of members in shared governance committees.

The “Structural Inclusion” Test Adopted in Elon

In Elon University, the Board abandoned the subgroup majority status test, and replaced it with the framework articulated by the D.C. Circuit in denying enforcement of the Board’s order in USC. Under that framework, managerial status of a subgroup of faculty hinges upon two distinct inquiries: “first, ‘whether a faculty body exercises effective control’ over areas of decision-making…, and second, ‘whether, based on the faculty’s structure and operations, the petitioning subgroup is included in that managerial faculty body.’”5  “If both inquiries are satisfied, then the faculty members in the subgroup at issue constitute managerial employees, regardless of whether they exert majority control within specific faculty bodies.”6

In adopting the “structural inclusion” test, the Board noted the deficiencies of the subgroup majority status test, including that a bright-line rule solely focused on committee and assembly makeup incentivizes strategic division of faculties, ignores the frequent fluctuations in committee memberships, and fails to account for instances when faculty who clearly hold managerial authority and shared interests with the university may be in the minority on committees.Moreover, the Board found that subgroup majority status test could not be reconciled with the Supreme Court’s decision in NLRB v. Yeshiva University,8 because the test ignores the possibility that subgroups may share common interests and may participate together as a body on issues relevant to managerial status.

Applying the new standard, the Board in Elon held that the employer did not meet its burden in proving that petitioned-for non-tenure-track faculty members were structurally included in its faculty bodies and, as such, failed to establish that they were managerial employees excluded from the Act.

What this Means for Private Universities

Elon comes at a time when institutions of higher education increasingly rely upon the services of adjuncts and non-tenured track faculty in delivering instruction to students. It signals a potentially growing dichotomy between the NLRB’s treatment of full-time tenured faculty, and its treatment of adjunct or other non-tenured track faculty. Arguably, Elon more easily excludes full-time tenured faculty from the right to organize based on their shared interests with their respective institutions, while simultaneously making it easier for adjunct or non-tenured track faculty to claim a right to organize based on their lack of inclusion on decision-making committees.

This is a point that was not lost on newly-appointed Democrat Board Chair Lauren McFerran, who concurred in the decision with her three Republican colleagues, Marvin Kaplan, William Emanuel, and John Ring. In her concurrence, McFerran drew a distinction between tenured and so-called “contingent” faculty members, urging her colleagues to consider carefully this test as applied to contingent faculty because, according to McFerran, contingent faculty are “poorly integrated into university structures and communities.”

Based on Elon, private institutions of higher education should assess their shared governance committees and decision-making structures, including not only the makeup of those bodies and whether non-tenured track faculty are included, but also whether faculty members exercise actual control over decision-making. Those institutions seeking to avoid unionization of adjunct or other non-tenured track faculty will need to weigh the feasibility of more fully integrating these individuals into shared governance committees.

See Footnotes

1 365 NLRB No. 11, n.1 (2016).

2 361 NLRB 1404 (2014).

3 University of Southern California v. NLRB, 918 F.3d 126 (D.C. Cir. 2019).

4 361 NLRB at 1421, n.36

5 Elon University, 370 NLRB No. 91 at *1 (quoting 918 F.3d at 139).

6 Id.

7 Id. at * 8.

8 444 U.S. 672 (1980).

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.