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SEPARATING SUPERVISORS FROM THE RANK AND FILE: COURT ISSUES GUIDANCE ON WHEN SUPERVISORS SHOULD BE EXCLUDED FROM BARGAINING UNITS




September 1, 2015


Under the New Hampshire Public Employee Labor Relations Act, RSA 273-A, et seq., groups of public employees, i.e. bargaining units, are entitled to elect an exclusive representative, i.e. union, to collectively bargain with their public employer on their behalf. Pursuant to the statute, however, "[p]ersons exercising supervisory authority involving the significant exercise of discretion may not belong to the same bargaining unit as the employees they supervise."

On May 22, 2015, the New Hampshire Supreme Court issued its decision in the Appeal of New Hampshire Retirement System[1] matter and weighed in on the debate over what evidence an employer needs to provide to the New Hampshire Public Employee Labor Relations Board ("PELRB") to demonstrate that supervisory-in-name positions are truly supervisory-in-fact and therefore should be excluded from bargaining units including non-supervisory positions

I. Factual and Procedural Background

The New Hampshire Retirement System ("NHRS") is a public employer within the meaning of the Act. In 2011, the State Employees' Association ("SEA") was the exclusive representative for NHRS' employees, including NHRS' Team Lead positions, its Public Information Officer ("PIO"), and its Controller. Although the job description for all of these positions included explicit supervisory responsibilities over other members of the bargaining unit, the employees in these positions were not in fact carrying out those responsibilities.

In 2012, NHRS' hired new a management team and charged them with reinvigorating NHRS' supervisors. Accordingly, the new management team implemented management trainings, amended job descriptions, and performed training sessions related to performance appraisals and supervisor accountability. As a result of these efforts, by the Spring of 2013, the NHRS' Team Leads, PIO, and Controller were in fact exercising the supervisory responsibilities as stated in their job descriptions by "assigning work, imposing discipline, and conducting performance evaluations of other employees who are members of the bargaining unit." Therefore, NHRS filed a petition with the PELRB seeking to exclude the positions on the basis of the statutory exemption for supervisors. The SEA objected and the PELRB agreed holding that the "‘hiring of new management and the implementation of new managerial strategic plan are not material changes in circumstances warranting modification of existing bargaining unit.'" NHRS appealed the PELRB's decision to the New Hampshire Supreme Court.

II. New Hampshire Supreme Court's Decision

On appeal, NHRS argued that the change in the contested positions from "supervisory-in-name-only" to "supervisory-in-fact" constituted a material change in circumstances sufficient to warrant a modification of the bargaining unit. Furthermore, NHRS argued that the change was, by necessity, "material" because to deny the modification would result in a statutory violation by permitting supervisory employees to remain in a bargaining unit with the employees they supervise. The Court agreed.

First, the Court agreed with NHRS and held that a "change that would result in a bargaining unit violating RSA 273-A:8 constitutes a material change in circumstances warranting modification." Therefore, the Court turned to whether the PELRB erred as a matter of law when it held that the evidence was insufficient to show that the Team Leads, PIO, and Controller positions did not exercise supervisory responsibility involving the significant exercise of discretion. In order to make that determination, the Court considered the following factors: "their authority to evaluate other employees; the nature of their supervisory role; and their disciplinary authority."

A. Authority to Evaluate Other Employees

Regarding the contested positions authority to evaluate other employees within the bargaining unit, the hearing officer had found that:

Under the job descriptions, these positions are responsible for ‘appraising performance,' and, under the new management team, now actually do evaluate other employees in the bargaining unit. These evaluations are placed in the employee's personnel file, and can affect the employee's opportunities for promotion, can lead to placement on an improvement plan, or can lead to termination

Based on these facts, the Court held that the Team Lead, PIO, and Controller positions had authority to evaluate other employees, which indicated that the positions exercised supervisory authority involving the significant exercise of discretion.

Additionally, of note, the Court held that NHRS had sufficiently demonstrated that the Team Lead, PIO, and Controller positions had authority to evaluate other employees in the bargaining unit despite the fact that NHRS had not submitted any completed performance evaluations to the PELRB. In so holding, the Court reiterated its position that "the fact that an employee ‘has such [supervisory] authority, regardless of whether he presently exercises it, is sufficient to vest him with supervisory authority under the statute,'" and, furthermore, that it was not obligated to "allow events to unfold" prior to taking remedial action.

B. Nature of Supervisory Role

Regarding the nature of the supervisory role of the contested positions, the hearing officer had found that:

Based on the job description language, each position is responsible for: ‘interviewing, hiring and training employees'; planning, assigning and directing work'; ‘rewarding' employees; and ‘addressing complaints and resolving problems.'

Accordingly, based on the facts as found by the hearing officer,the Court held that the nature of the supervisory role for the Team Lead, PIO, and Controller "positions was substantial vis-à-vis other bargaining unit members, and, thus, shows that these positions exercise supervisory authority involving the significant exercise of discretion."

C. Disciplinary Authority

Regarding the contested positions' disciplinary authority, the hearing officer had found that:

[E]ach position has the authority to issue disciplinary letters and written warnings, which are placed in the employee's personnel file.

This finding was supported by NHRS' submission of three written warnings and two letters summarizing attire and behavioral concerns. Accordingly, based on the facts found by the hearing officer, the Court held that the Team Lead, PIO, and Controller positions had sufficient disciplinary authority over other bargaining unit members, which indicated that the positions exercised supervisory authority involving the significant exercise of discretion.

In summary, therefore, "in light of all the facts found by the PELRB, [the Court] held that the Team Leads, [PIO], and Controller are supervisors under RSA 273-A:8, II," and, furthermore, held that "the hiring of new management and the implementation of a new managerial plan, in which the contested positions became supervisors-in-fact, constituted a material change in circumstances that mandated the modification of the bargaining unit in order to prevent a violation of the statute." Accordingly, the Court reversed the PELRB's decision denying NHRS' petition for modification of the bargaining unit and remanded the matter for further proceedings before the PELRB consistent with its opinion.

III. Employer Take-Aways

As indicated by the PELRB's initial ruling in the New Hampshire Retirement System matter, the PELRB is generally reluctant to exclude positions from bargaining units and even more reluctant to modify bargaining units where the parties have a demonstrated history of successful bargaining. With the New Hampshire Retirement System decision, however, the Court reinvigorates the Act's "supervisory" exclusion and signals to the PELRB that, where an employer can demonstrate that a position wields actual supervisory authority over other members of the unit, the PELRB must exclude those positions from the unit or face reversal.

From a practical stand-point, the decision also provides a roadmap for employers who want to demonstrate that their supervisors should be excluded from an existing bargaining unit or should be removed from an existing unit due to bona fide workplace restructuring. In essence, the Court and the PELRB need evidence, whether through documentation or testimony, showing that (a) the supervisory positions in question have been delegated substantial supervisory authority – i.e. the authority to evaluate and discipline co-workers in a way that could impact that co-worker's employment or conditions of employment – by the employer and (b) the supervisory positions in question in fact exercise that supervisory authority over other members of the bargaining unit.

[1] Appeal of N.H. Retirement Sys., No. 2014-312, slip op. at 1 (N.H. May 22, 2015), available at http://www.courts.state.nh.us/supreme/opinions/2015/2015041nhrs.pdf.




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  • Anna B. Cole

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  • Employment & Labor



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