Ming Quong Children's Center

MING QUONG CHILDREN'S CENTER 899 Ming Quong Children's Center and Social Services Union Local 535, Service Employees International Union, AFL-CIO, Petitioner. Case 20-RC-11493 May 24, 1974 DECISION AND ORDER BY CHAIRMAN MILLER AND MEMBERS FANNING, KENNEDY, AND PENELLO Upon a petition duly filed under Section 9(c) of the National Labor Relations Act, as amended, a hearing was held on August 7, 1973, at San Francisco, California, before Hearing Officer Robert C. Grace. After the hearing and pursuant to Section 102.67 of the National Labor Relations Board Rules and Regulations, the Acting Regional Director for Region 20 issued an order transferring the case to the Board for decision. Thereafter, the Employer filed a brief. The Board has reviewed the Hearing Officer's rulings made at the hearing and finds that they are free from prejudicial error. They are hereby affirmed. Upon the entire record in this case, the Board finds: 1. Ming Quong Children's Center is a California nonprofit corporation whose purpose is to help troubled children resolve their emotional problems. Ming Quong's facilities are located on 13 acres in Los Gatos, Santa Clara County, California. There are seven group home cottages to house the children who generally live on the premises. The facility is licensed to accept children from the ages of 5 to 11 and has 42 children presently in residence. Most of the children at the facility are referred to it from the Department of Social Services of Santa Clara County. Eighty percent of the children are residents of Santa Clara, San Mateo, and San Francisco Counties in Northern California. The facility does not accept children from outside the State of California. Ming Quong has no hospital facilities and does not have a medical doctor on the staff. It employs a part-time nurse and handles all medical emergencies and illnesses through outside hospitals and clinics. The facility receives the services of a child psychiatrist and a clinical psychologist as consultants on a contract basis. The record shows that total anticipated income at Ming Quong for fiscal year 1972-73 is projected at $532,411. CHAMPUS, an agency of the Federal Government, contributed between $12,000 and $24,000 during the past fiscal year for military dependents at the facility, Santa Clara County paid approximately $192,960 in fees for children placed at the center during the past fiscal year. According to a formula for reimbursement, the financial responsibil- ity for these children is ultimately shared by the State of California (6.5 percent), the Federal Government (22.4 percent), and the county of Santa Clara (71.1 percent). The remainder of the income received comes from private placement of a small number of children and from gifts and donations. The record shows that most of the expenditures made by Ming Quong are in the State of California and represent payments for salaries, food, and maintenance of the facilities. A small amount-less than $1,000-represents payment for staff members' expenses to attend conferences. The Board in The Children's Village, Inc., 186 NLRB 953, has asserted jurisdiction over a noncom- mercial, nonprofit agency which does work similar to Ming Quong. In that case, the Board noted annual purchases of goods from out of State of between $300,000 and $400,000 and an annual income in excess of $3.5 million and asserted jurisdiction under existing Board standards. However, the Board explicitly stated that it was establishing no specific jurisdictional standard for such operations. Similarly, in Jewish Orphans Home of Southern California a/k/a Vista Del Mar Child Care Service, 191 NLRB 32, the Board took jurisdiction over another somewhat similar institution engaged in the treatment of emotionally disturbed children where the employer's gross income exceeded $1 million, noting again that we were leaving open the question of whether or not to establish a specific standard for such cases. On the other hand, in Methodist Children's Home of Missouri, 209 NLRB No. 20, the Board declined to exercise jurisdiction over a child care facility where the revenues and expenditures of the employer were not sufficient to meet any of the Board's existing jurisdictional standards which might be applicable.' In the instant case the projected annual income of Ming Quong is substantially less than that involved in either Children's Village or Jewish Orphans Home, supra, but is sufficient to fall within certain of our jurisdictional standards-in particular the retail standard which we frequently apply to commercial entities engaged in supplying services as well as to those engaged in the sale of products. Accordingly, in this case we have examined closely the question of whether and under what circumstances or pursuant to what jurisdictional standards we ought to exercise jurisdiction over institutions of this general nature. In the course of this examination, we have once again reviewed the Board precedents and the legislative history of the Act relating to our exercise 1 Member Kennedy concurred only in the result 210 NLRB No. 125 900 DECISIONS OF NATIONAL LABOR RELATIONS BOARD of jurisdiction over various types of nonprofit corporations. In The Trustees of Columbia University in the City of New York, 97 NLRB 424, where we declined to exercise jurisdiction over an educational institution, the Board reviewed that legislative history, noting that the House of Representatives had proposed a specific exemption from the Act for nonprofit corporations and other like entities "organized and operated exclusively for religious, charitable, scientif- ic, literary, or educational purposes." 2 We observed that while the Congress had not adopted this specific exemption, the Conference Report on the Labor Management Relations Act of 1947 3 had stated: The . . . nonprofit 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 organizations have any of the activities of such organizations or of their employees been considered as affecting commerce so as to bring them within the scope of the National Labor Relations Act. In Cornell University, 183 NLRB 329, we once again reviewed this legislative history and concluded that the impact of that history indicated general approval of the Board's practices in this regard, but did not mean that the Board "must continue to refuse to assert such jurisdiction indefinitely in the future despite change of circumstances." We further stated that the history "seems to indicate that Congress was content to leave to the Board's informed discretion in the future as it has in the past, whether and when to assert jurisdiction over nonpro- fit organizations whose operations had a substantial impact upon interstate commerce." We also observed in that case that the Supreme Court had described the Board's actions in this regard 4 as being that "the Board has never recognized . . . a blanket rule of exclusion over all nonprofit employers. It has declined jurisdiction on an ad hoc basis over religious, educational, and eleemosynary employers "5 Then, in Cornell, after a full review of all of the commerce facts relating to higher educational institu- tions as a class the Board concluded that those facts strongly supported the claim of the petitioner in that case "that educational institutions as a class have not 2 Sec 2, H.R 3020, 80th Cong, 1st sess 3 H.R 510, 80th Cong, 1st sess , p 32, 1 Legislative History of the Labor Management Relations Act, 1947, 505, 536 4 Office Employees International Union, Local No II v N L.R B, 353 U.S 313 (1957) 5 Id at 318 6 The Board in Cornell took jurisdiction over Cornell University without only a substantial, but massive impact on interstate commerce." Accordingly, the Board there deter- mined that it would no longer decline jurisdiction over all nonprofit educational institutions.6 It is apparent from the above review that we did not intend, in Cornell, to change our policy of declining jurisdiction over what the Supreme Court referred to as "religious, educational, and eleemosy- nary employers." Instead, we found on the basis of a thorough review of extensive commerce information and data that the facts as to the impact on commerce of private colleges and universities had changed over the years to a point where the impact of the operation of such institutions on commerce had become so substantial that it, was no longer appropri- ate for us to continue to decline jurisdiction over that particular class of institution. We have also concurred in the rationale expressed by a United States district court7 to the effect that if we assert jurisdiction over a given class of employers (there nursing homes) we may not distinguish within the class on the basis of whether the institution is a private profit-making enterprise or a nonprofit institution. Drexel Home, Inc., 182 NLRB 1045. But as we said in both Children's Village and Jewish Orphans Home the kind of child care facility with which we are dealing here does not fall within the classification of nursing home-a class over which we have asserted jurisdiction-nor do these institu- tions fall within the classification of nonprofit "hospital," over which we are statutorily prohibited from asserting jurisdiction. It is equally clear that these institutions are eleemosynary in character and that we are not faced with the kind of purely commercial activity engaged in by nonprofit corporatlons,8 over which, as the legislative history correctly asserts, we have tradition- ally asserted jurisdiction. Nor have we been presented in this case, in Children's Village, or in Jewish Orphans Home with the kind of evidence submitted in Cornell University, indicating that we have here a particular type or class of institution which has, unlike most charitable institutions, "not only a substantial, but massive impact on interstate commerce." Upon further reflection, therefore, we have con- cluded that we erroneously departed, in Children's Village and Jewish Orphans Home, from our congres- sionally approved general practice of declining jurisdiction over nonprofit charitable organizations establishing a definitive jurisdictional standard, but later established such a standard in a rule-making proceeding r Council 19, American Federation of State, County and Municipal Employees, AFL-CIO v N L R B., 296 F.Supp. 1100 (D C Illinois, 1968). s E g, The Sunday School Board of the Southern Baptist Convention, 92 NLRB 801 MING QUONG CHILDREN'S CENTER 901 without having had the special kind of justification relied upon in Cornell. Applying the Frankfurterian philosophy to which we have had previous occasion to refer9 that "Wisdom too often never comes, and so one ought not to reject it merely because it comes late," we recognize the error in this departure from previous practices and shall act to correct it herein. Accordingly, we conclude that it would not effectuate the policies of the Act for the Board to assert its jurisdiction over this type of nonprofit institution whose activities are noncommercial in nature and are intimately connected with the charitable purposes of the institution. We shall, therefore, dismiss the instant petition. ORDER It is hereby ordered that the petition filed herein be, and hereby is, dismissed. MEMBER KENNEDY, concurring: I concur in the result. MEMBER FANNING, dissenting: I dissent from my colleagues' refusal to assert jurisdiction over this Employer and from their overruling of The Children's Village and Jewish Orphans Home decisions.10 The majority's conclusion that the Employer's operations are eleemosynary in character and have little impact on commerce has little to recommend it either as a reflection of the record made in this proceeding or as a judicious application of the policies governing the Board's jurisdictional determinations. The Employer is engaged in the business of furnishing professional treatment to emotionally disturbed children. It does so almost entirely on a fee basis. Thus, of its more than $500,000 annual gross revenues, $469,000 were received as the payment of fees charged for services rendered. These fees were set through negotiations with the Welfare Division of Santa Clara County and of other county government in the immediate vicinity of San Francisco. Eighty percent of the children treated by Ming Quong are referred to it by such public welfare agencies. The director of the Welfare Division of Santa Clara County testified that the division refers more children to Ming Quong than to any other similar agency, and that it paid Ming Quong $192,960 for services rendered to the county in the treatment of 9 New York University, 205 NLRB No 16, fn 9 (1973) 10 The Children's Village, Inc, 186 NLRB 953, Jewish Orphans Home of Southern California a/k/a Vista Del Mar Child Care Service, 191 NLRB 32 11 CHAMPUS paid Ming Quong between $12,000 and $24,000 during the year in question The Employer receives more than $50,000 from the county of Santa Clara, and its operations meet the standard for enterprises furnishing services to other enterprises engaged in commerce See Siemons Mailing Service, 122 NLRB 81, generally and, more particularly, In 12 children referred by the county. Of this amount, he noted, the county was reimbursed from state and Federal programs in the amounts of approximately $12,500 and $42,100, respectively. Of Ming Quong's annual revenues for fiscal year 1972-73, only about $62,000 derived from gifts and contributions. All the rest was received from fees charged by Ming Quong and paid by either Santa Clara County, other counties, or CHAMPUS, an agency of the Federal Government.ii At the time of the hearing, the Employer was caring for 42 children, ages 5 to 11, most of whom were referred to it by the aforemen- tioned public welfare agencies. To care for these children, and to maintain and operate the facilities, the Employer employs approximately 55 full-time and 10 part-time employees. These include a child psychiatrist, a clinical psychologist, a registered nurse, professional social workers, professional ther- apists, and professionally trained group home man- agers or "house parents." The 42 children are housed in 7 cottages or homes, each with a group home manager living in with the children. Ming Quong treats emotionally and psychologically disturbed children in an attempt to cure their psychological and emotional difficulties to the end that they may return to their families and enjoy normal family and social relationships. "Normally, the more disturbed children [with] fairly severe behavior problems .. . who are judged to need a fairly intensive type of treatment" are referred to Ming Quong. "Treatment is by no means merely maintenance of the children as is true in some institutions," rather Ming Quong "is a place for children to be treated psychologically. The treatment given may be described as `milieu therapy' in which the child experience in a cottage or house-like setting is of paramount importance in the treatment process, in which everyone is important, the house parent, the social worker responsible for the treatment, whatever contacts the supervisors might have. It is a staff effort to help the child deal with his emotional problem and social functioning." Family counseling is also an important part of the process. Children stay at the center for an average of 30 months. From the foregoing there emerges the picture of a highly professional, intensive, extended care, mental health treatment center, operated on a fee basis. Although a small amount of its revenues derives from contributions and gifts, Ming Quong can by no Moreover, over $50,000 of such revenues are received from the Federal Government , and its operations therefore affect commerce within the meaning of the Act and are imbued with an importance to the national welfare See Browne & Buford Engineers and Surveyors, 145 NLRB 765, Canal Marais Improvement Corporation, 129 NLRB 1332, Woods Hole Oceanographic Institution, 143 NLRB 568 See also Butte Medical Properties, d/b/a Medical Center Hospital, 168 NLRB 266, 267, University Nursing Home, Inc, 168 NLRB 263,264 902 DECISIONS OF NATIONAL LABOR RELATIONS BOARD stretch of the imagination be described as an eleemosynary operation, as it charges and receives fees for the full value of its services.12 Nor does its nonprofit character warrant the conclusion that it is not engaged in commercial operations.13 Not only has the Board consistently held that the furnishing of professional services constitutes activities in com- merce or affecting commerce, the Board has so held with respect to medical services in numerous cases.14 In any event, the Employer's operations correspond in broad purpose to those of hospitals and nursing homes. The business aspects of its operations are akin to those of nursing homes and other related facilities as to which the Board has asserted jurisdic- tion. That the differences that exist between its opera- tions and those of "nursing homes and related facilities" preclude application of the same nursing home jurisdictional standard to these operations is an exceedingly dubious proposition.15 To refuse either to apply that standard or to devise any other standard for this aspect of the industry is wholly unwarranted.16 Having long since made the determi- nation that operations of the health care industry have a substantial impact on commerce and, having established minimum jurisdictional requirements for assertion of jurisdiction over individual operations in the industry, the Board should not now arbitrarily decline to assert jurisdiction over operations meeting those minimal requirements solely on the ground that the operations in question are incorporated on a nonprofit basis.17 Much less can it do so on the clearly erroneous basis that the operations in question are eleemosynary in character. I believe that the Board should decide in this case either to apply the nursing home standard to employers such as Ming Quong or establish another standard for this class of employers . I favor the former course of action , for I believe the prolifera- tion of jurisdictional standards is approaching the point of introducing pointless complications and uncertainties into our jurisdictional determinations. However that may be, I find the majority opinion a wholly unsatisfactory basis for decision in this case, and I therefore dissent. 12 Compare Visiting Nurses Association, Inc, 188 NLRB 155, Visiting Nurses Association of Sacramento, 187 NLRB 731, Trustees of the Corcoran Gallery of Art, 186 NLRB 565 13 Council 19, American Federation of State, County and Municipal Employees, AFL-CIO v. N L R B, 296 F Supp 1100 (D C Illinois, 1968); Drexel Home, Inc, 182 NLRB 1045 14 See, for example, Visiting Nurses Association, supra, Visiting Nurses Association of Sacramento, supra, The Swanholm, an operation of the Martin Luther Foundation, Inc, 186 NLRB 45. Quain and Ramstad Clinic, 173 NLRB 1185, Dr J C Campbell, and Dr Walter F Boucher, Partners, d/b/a Dr J C Campbell, Dentist, 157 NLRB 1004 15 Compare Visiting Nurses Association, supra, Visiting Nurses Association of Sacramento, supra 16 Office Employees International Union, Local No 11 v N.LR.B., 353 U.S. 313 (1957) 17 Council 19, American Federation of State , County and Municipal Employees, AFL-CIO v N LR.B, supra