Ankh Services, Inc.

DECISIONS OF NATIONAL LABOR RELATIONS BOARD Ankh Services, Inc. and Local 50, Service Employees International Union, AFL-CIO-CLC, Petitioner. Case 14-RC-8808 July 16, 1979 DECISION ON REVIEW AND ORDER REMANDING PROCEEDING TO REGIONAL DIRECTOR Upon a petition duly filed under Section 9(c) of the National Labor Relations Act, as amended, a hearing was held before Hearing Officer James 1. Singer of the National Labor Relations Board. On December 20, 1978, the Regional Director for Region 14 issued a Decision and Direction of Election in which he found appropriate a unit stipulated to by the parties consist- ing of all regular full-time and part-time in-home ser- vice workers employed by the Employer, excluding all office clerical and professional employees, guards, and supervisors and defined in the Act. Thereafter, in accordance with Section 102.67 of the National La- bor Relations Board Rules and Regulations and Statements of Procedure, Series 8, as amended, the Employer filed timely request for review of the Re- gional Director's decision, contending that the Re- gional Director erred in asserting jurisdiction over its operations. On January 16, 1979, the National Labor Relations Board, by telegraphic Order, granted the Employer's request for review. Thereafter, the Employer filed a brief on review and the Petitioner filed a brief in sup- port of the Regional Director's decision. The Board has considered the entire record in this case, including the briefs, with respect to the issues under review and makes the fo!!owing findings: The Employer contends that the Board should de- cline to assert jursidiction over it on either or both of two grounds: (I) because the Employer shares the "political subdivision" exemption of Section 2(2) of the Act; and (2) because the Employer's in-home ser- vice workers fall within the "domestic service" ex- emption of Section 2(3) of the Act. The Employer is a privately owned, for-profit Mis- souri corporation which provides, through its in- home service workers, in-home personal care and housekeeping services for aged, low-income, emotion- ally disturbed, or mentally or physically disabled in- dividuals (hereinafter collectively referred to as cli- ents) in the St. Louis, Missouri, metropolitan area. The primary purpose of the Employer's operation is to assist such clients in caring for and maintaining themselves in their own residences so as to make their institutionalization in nursing homes, mental institu- tions, and other such facilities unnecessary. Over 90 percent of the Employer's in-home service to clients is rendered pursuant to an annual contract between the Employer and the State of Missouri's Di- vision of Family Services (DFS).' The Employer also has a similar contract with the State of Missouri De- partment of Mental Health (DMH).2 In addition to the services provided pursuant to its contracts with DFS and DMH, the Employer, at the time of the hearing in December 1978, was also providing such in-home service to a relatively small number of pri- vate clients. The record indicates, however, that the Employer is gradually phasing out its business with private clients and is no longer actively soliciting new private clients. The Employer's contract with DFS provides, in pertinent part, that DFS shall determine which cli- ents are eligible to receive the Employer's services3 and which services are to be provided to clients pur- suant to an individualized service care plan prepared by DFS for each client.4 The contract also fixes the maximum number of hours of service the Employer is authorized to provide to each client per month5 and provides that the Employer will be reimbursed monthly by DFS at the flat rate of $5.75 per hour fbr ' Pnor to 1977 DFS, through its own state employees, directly provided many of the same services now provided by the Employer's in-home service workers pursuant to the Employer's contract with DFS. Although DFS is still engaged on a small scale in directly providing such services, the bulk of such services is now being provided pursuant to contracts between DFS and private companies such as the Employer. 2 The En.ployer's contract with DMH sets a $5.000 limit on the amount of the Employer's services which DMH will purchase pursuant thereto, repre- senting less than 5 percent of the Employer's total sales of service during the first 10 months of calendar year 1978. Although not called for in the contract, the Employer makes a semiannu- al recommendation to DFS as to whether clients initially designated by DFS to receive services should be continued as clients; the Employer's recommen- dations in this regard are almost always approved by DFS. U4 nder the terms of its contract with DFS the Employer's in-home service workers are expressly prohibited from providing nursing care of any kind or administering prescribed or patent medicines. Instead. the in-home service workers are required to perform such services as meal planning and/or meal preparation; making beds (with the bed occupied or unoccupied); brushing, combing, and shampooing hair; cleaning fingernails and toenails; providing walking assistance; instructing clients in meal planning, nutrition, and per- sonal care; helping clients improve methods of routine child care; cleaning and dusting homes; cleaning kitchens and bathrooms; doing laundry and ironing; sweeping and vacuuming; shopping for essential items; bagging trash; purchasing food stamps; washing walls; cleaning closets; shampooing rugs: ainng mattresses; shoveling snow; installing windows and screens; per- forming minor carpentry and electrical repairs; performing simple handy- man activities; and running essential errands. The clients themselves pay nothing for these services. Instead, as discussed more fully below, the Employer is reimbursed by DFS on the basis of the total number of hours of service rendered to clients during monthly billing periods. 'The Employer is not required to provide the full amount of authorized hours of service per month to each client. In this regard the Employer's contract with DFS has been orally modified to require the Employer to provide a minimum of 65 percent of the roial number of hours of service authorized for all clients in a given month. Thus, the Employer could pro- vide less than 65 percent of the hours of service authorized for any individual client or clients, as long as it provided at least 65 percent of the total hours of service authorized for all clients dunng that same month. 243 NLRB No. 68 478 ANKH SERVICES. IN('. each hour of service rendered during that monthly billing period.6 To support these billings the Em- ployer is required to maintain detailed operational records. Finally. the contract provides that it may be terminated on 30 days' notice by either party at any time, with or without cause. As noted, the Employer contends that it shares the Act's statutory exemption of state agencies DFS and DMH whether the "intimate connection" or "right of control" test is applied, and thus the Board should decline to assert jurisdiction over it. In its decision in National Transportation Senice, Inc., 240 NLRB 565 (1979) (Members Penello and Murphy dissenting),7 the Board abandoned the so- called intimate connection test as a standard for as- certaining whether the Board's assertion of jurisdic- tion over an employer with close ties to an exempt entity is warranted, and decided that from thence- forth it would look only at whether the employer ex- ercises sufficient control over the employment condi- tions of its employees to enable it to engage in meaningful collective bargaining with a labor organi- zation representing those employees and, if it does, assertion of jurisdiction is warranted. In the instant case, the Employer is required by its contract with DFS to deliver its in-home services in accordance with a set of"Standards for In-Home Ser- vice" set out in the contract itself. The first of these standards is a requirement that the Employer "de- velop and implement personnel policies and practices compatible with the expectations" of DFS and Fed- eral regulations. The Employer is also required to em- ploy the work force necessary to mplement the con- tractually specified program of care and to provide direction and management to insure that services are delivered according to the individualized service care plan drawn up for each client by DFS. The standards also require the Employer to establish and conduct initial and continuing formal and on-the-job training programs for its in-home service workers whereby they will become sufficiently knowledgeable about and proficient in personal and housekeeping care tasks to enable them properly to render the services set out in footnote 4, supra.8 Finally, under the terms of the contract the Employer's in-home service super- * The Employer's contract with DMH also provides for reimbursement at the flat rate of $5.75 per hour of service rendered. In addition, the DMH contract provides that the fees for services charged by the Employer shall not be greater than those fees charged to the general public for the same services; the Employer's contract with DFS contains no similar provision, With this exception, the Employer's contract with DMH is sufficiently similar in all material respects to its contract with DFS to make further discussion of the DMH contract unnecessary 7 That decision issued subsequent to the Regional Director's Decision and Direction of Electon herein. I Indeed. the services listed in fn. 4. supra, are themselves set out in the aforementioned section of the DFS contract entitled "Standards." as manda- tory or optional personal care and housekeeping activities visors are required to screen, interview, and make rec- ommendations to the Employer as to the employabil- ity of applicants for in-home service positions: schedule and assign in-home service workers for spe- cific duties and responsibilities with individual cli- ents: supervise their work and counsel them in regard to improvement of their performance: and monitor and evaluate their performance and make recommen- dations to the Employer regarding their promotion or termination. Thus, by the very terms of its contract with DFS, the establishment and management of per- sonnel policies and programs and the supervision of the in-home service work force are placed squarely in the control of the Employer. The record establishes that the Employer's employ- ees are not covered by Missouri Civil Service regula- tions. Further, the testimony of the Employer's cor- porate secretary, John B. Roman, shows that the Employer has sole and final discretion and authority over, inter alia, (I) the hiring of individual in-home service workers from among the applicants who meet certain contractually mandated minimum criteria:9 (2) their promotion, discipline, and discharge: (3) their hourly wage rates,'° working hours, and schedul- ing;" (4) whether to pay them holiday, vacation, or sick pay; (5) whether to establish health, welfare, pen- sion, and retirement programs for them; (6) the size and composition (i.e., full time and part time) of the in-home service work force; and (7) the establishment and implementation of work rules and seniority, lay- off and grievance procedures, and rules regarding the purchase and wear of uniforms. According to Roman, neither DFS nor DMH has any authority or control over the Employer in the above matters. Thus, on the basis of the overwhelming record evi- dence in this regard, we conclude that the Employer has substantial, if not total, control over the wages, hours, and other terms and conditions of employment of its in-home service workers, and that the Employer is thus able effectively to engage in meaningful bar- gaining over these matters with a labor organization representing them. We shall therefore assert jurisdic- tion over the Employer. 'The DFS contract requires that in-home service workers he "mature" individuals, age 18 or over, with at least an eighth grade education. ma The Employer is required to abide by Federal and state minimum wage standards. At the time of the hearing the Employer's in-home service work- ers were paid between $2.65 and $3.00 per hour. As indicated above. the Employer is reimbursed by DFS and DMH at the flat rate of $5.75 per hour for each hour of service rendered to a client 11 Indeed, the Employer's current written personnel policies provide. inter aria, that "lthe Employer] has no policy for giving [in-home service workers] vacation or sick pay or for paying for holidays; their fnnge benefit is that they are able to ork fior the hours that are convenient to them" (emphasis supplied) The Employer's current written work rules also provide. inter ala. that these workers must be available fir at least 4 hours olf work between the hours of 8 a m and 5 p.m on the days they wish to work. and that overtime must he approved in advance by the Fmplyer. 479 DECISIONS OF NATIONAL LABOR RELATIONS BOARD As indicated above, however, the Employer also contends that we should decline to assert jurisdiction herein on the grounds that the in-home service work- ers are individuals employed in the domestic service of families or person in their homes and are thus ex- cluded from the definition of "employees" under Sec- tion 2(3) of the Act. We find no merit in this conten- tion. While this issue presents a novel question,'2 we find that the individuals petitioned for herein do not qual- ify as being "in the domestic service of any family or person at his home." Here we are not presented with a few individuals who are employed by the homeowner or resident of the home in which they perform their domestic ser- vices. Rather, we are presented with a stipulated unit of approximately 40 persons, each of' whom works from time to time in the homes or residences of nu- merous clients and all of whom are employed by the Employer and not by the clients.' Thus, our focus is on the principals to whom the employer-employee re- lationship in fact runs and not merely on the undis- putably "domestic" nature of some of the services rendered."4 In this regard, we note that the wages of the in-home service workers are paid by the Em- ployer, not the clients, who themselves pay nothing for the receipt of services rendered.' Thus, the in- home services workers are not employed by the homeowners or residents in whose homes the in-home service workers provide their services; although the in-home service workers do render their services to the clients, they nevertheless perform their services on behalf of and are clearly employed by the Employer. 6 12 There appears to be no reported Board precedent interpreting this part of Sec. 2(3). However, in Child and Family Service of Springfield, Inc., 220 NLRB 37 (1975) (then Chairman Murphy dissenting on other grounds), without commenting on the potential 2(3) issue. we asserted jurisdiction and found appropriate a union comprsed in part of employees classified as "homemakers" who, like the in-home service workers in the instant case, performed light housekeeping, shopping. meal preparation, and laundry ser- vices for elderly and ill individuals in order to maintain them in their own community and to prevent their institutionalization. 1" See our recent decision in 30 Sutton Place Corporation, 240 NLRB 752, fn. 6 (1979), where, albeit in a somewhat different factual setting, we dis- cussed this fundamental distinction in employment relationship in the con- test of a theoretical exclusion of employees from the Board's jurisdiction under the "domestic service" exclusion of Sec. 2(3) of the Act. (The inadver- tent reference in the cited portion of 30 Sutton Place to Sec. 2(2) of the Act was due to a typographical error.) '"See Social Security Board v. Nierotko, 327 U.S. 358, 365-366 (1946), construing the term "service" in the context of Sec. 209(b) of the Social Security Act of 1935, as amended, to mean not only work actually done, but the entire employer-employee relationship for which compensation is paid to the employee by the employer. '5 In fact, the in-home service workers are expressly prohibited by the Employer's written work rules from accepting any tips or gifts from clients under any circumstances. is Even beyond this fundamental and ultimately dispositive consideration. we note also that while a client may request that a particular in-home service worker be assigned to or reassigned from the client. the Employer is under no obligation to accede to the client's request. Furthermore, if a client re- quest that an in-home service worker perform a service which the Employer Moreover, as shown by the legislative history of the National Labor Relations Act, Congress has explic- itly stated what type of individual it intended to exempt from the coverage of the Act by the "domes- tic service" exclusion. Quite clearly it meant to ex- clude "domestic servants. "'7 The Congress did not, however, elaborate on the term "domestic servant," nor did it define the scope of any particular employ- ment relationship it may have intended to exempt from the operation of the Act in this regard. Nor, apparently, have the Supreme Court or lower Federal courts been called upon to construe the parameters of the "domestic service" exclusion of the Act. Thus, neither the Congress nor the courts have given us any reason to believe that the former intended to exclude from the coverage of the Act any other than those individuals whose employment falls within the com- monly accepted meaning of the term "domestic ser- vant."'8 In view of the foregoing, we find that the Employ- er's in-home service workers are employees within the meaning of the Act rather than "individuals em- ployed in the domestic service of any family or person at his home," and that, therefore, there is no statutory impediment to processing the petition in this case pursuant to the terms of the Regional Director's De- is not contractually required to provide, the in-home service worker must refuse the client's request. Similarly, a client's request that an in-home ser- vice worker work beyond the number of hours specified bor that client will not be granted. Thus, it is abundantly clear from the record that the client has no control over the wages, hours, or other terms and conditions of the in- home service worker's employment, but that that control is vested solely in the Employer. I Thus: As now drafted, the bill does not relate to employment as a domestic servant . .. [The word "employee" is] so defined as to exclude from the operation of the Act domestic servants. S. Rept. No. 1184, 73d Cong., 2d sess. I, 3 (1934), reprinted in I Leg. Hist. of the National Labor Relations Act, 1935 at 1099, 1102 (1949) (emphasis sup- plied). '8 In an early case interpreting Sec. 2(3), the U.S. Court of Appeals for the Ninth Circuit considered the consequences of extending the meaning of the "domestic service" exclusion beyond its common usage. In North Whittier Heights Citrus Association v. N.LR.B., 109 F.2d 76 (9th Cir. 1940), cert. denied 310 U.S. 632, enfg. 10 NLRB 1269 1939), the court ruled that the employees in question there were not within the "agricultural laborer" exclu- sion of sec. 2(3) of the Act. The court commented that: The purpose of the Act is clear and we find the Act specifically ex- cepting [any individual employed as an agricultural laborer. or in the domestic service of any family or person at his home, or any individual employed by his parent or spouse] from the Act's] provisions... . Why is "any individual employed by his parent or spouse" exempted? Be- cause (not excluding other reasons) in this classification there never would be a great number suffering under the difficulty of negotiating with the actual employer and there would be no need for collective bargaining and conditions leading to strikes would not obtain. The same holds good as to "domestic service", and the same holds good as to "agricultural laborer" if the term be not enlarged beyond the usual idea that the term suggests. Enlarge he meaning of an of these terms beyond their common usage and confusion results. Id at 80 (emphasis supplied). See also. in this same vein, N.L. R B. v. E. C Atkins & Company, 331 U.S. 398. 403 (1947), and N.L.R.B. v Hearst Publi- cations, Inc., 322 U.S. II1I, 129 (1944) (construction of terms in accordance with the purposes and policies of the Act). 480 ANKH SERVICES, INC. cision and Direction of Election which, with the ex- ception of his application of the "intimate connec- tion" test, we hereby affirm. Accordingly we shall remand this case to the Regional Director to take whatever further steps are appropriate under that De- cision and Direction. ORDER It is hereby ordered that this case be, and it hereby is, remanded to the Regional Director for Region 14 for further appropriate action. MEMBER PENELLO and MEMBER MURPHY, dissenting: We would not assert jurisdiction over this Em- ployer, as we find that it shares the "State or political subdivision" exemption of state agencies DFS and DMH under Section 2(2) of the Act, and that the Board is therefore precluded from asserting jurisdic- tion over it. In reaching this conclusion we would apply the "intimate connection" test which, for the reasons set out in our dissenting opinion in National Transporta- tion Service, Inc., supra, we still find to be an appro- priate and viable standard for determining whether to assert jurisdiction over an employer whose operation is closely connected to a governmental entity. Apply- ing that test to the instant situation, we conclude that the Employer's in-home services are so closely related to the exempt functions and purposes of the Missouri Division of Family Services and Missouri Depart- ment of Mental Health that the national policy con- siderations underlying the exemptions accorded to these state agencies apply with equal force to the Em- ployer itself so as to preclude the exercise of our juris- diction in this case. The provision of free public welfare services, such as are provided by the State of Missouri in this case, to aged or mentally or physically infirm individuals who would otherwise not be able to afford such care with a view towards maintaining such individuals in their own homes and thereby preventing their institu- tionalization is clearly a legitimate and recognized governmental function.' Indeed, until 1977 the State of Missouri provided the bulk of such services directly through its own state employees. Now it performs this function primarily through private concerns such as the Employer. Truly, there could be no closer connec- tion between the exempt functions of DFS and DMH and the services provided by this Employer than that which exists in this case. The relationship between the Employer and these two state agencies is much more than merely contractual; it is. quite literally, essential, going as it does to the very essence of the exempt functions performed by these two agencies. For these reasons we would decline to assert juris- diction over this Employer in this proceeding. 0 i* The statutory mandate for the Missouri Division of Family Services, for example. empowers that agency. inter aia. to: Plirovide appropriate public welfare services . and to provide such public welfare services to aid needy persons who can be so helped to become sell-supporting or capable of self-care. M. Rev. Stat. Se. 207.020115} 1977). 10 In light of this we find it unnecessary to pass on the issue of whether in- home service worker- fall within the "domestic service" exclusion of Sec. 2(3) of the Acl. 481