The New York Institute

DECISIONS OF NATIONAL LABOR RELATIONS BOARD The New York Institute for the Education of the Blind and Local 2. United Federation of Teach- ers, AFL-CIO, Petitioner. Cases 2-RC-18532, 2-RC-18533, and 2-RC-18534 January 14, 1981 DECISION AND ORDER BY CHAIRMAN FANNING AND MEMBERS PENELLO, TRUESDALE, AND ZIMMERMAN Upon petitions duly filed under Section 9(c) of the National Labor Relations Act, as amended, a hearing was held before Hearing Officer Margaret M. Kern. Following the hearing, and pursuant to Section 102.67 of the National Labor Relations Board Rules and Regulations, Series 8, as amended, and by direction of the Regional Director for Region 2, this case was transferred to the National Labor Relations Board for decision.' The Board has reviewed the Hearing Officer's rulings made at the hearing and finds that they are free from pejudicial error. They are hereby af- firmed. Upon the entire record in this proceeding, the Board finds: The parties stipulated that "The New York Insti- tute for the Education of the Blind is a New York corporation by Special Act of the New York Leg- islature since 1831. Its principal office and place of business is at 999 Pelham Parkway North, Bronx, New York. The Institute is an educational and resi- dential care facility for blind and blind-multiply handicapped children. Annually, the Institute de- rives revenues in excess of $1 million from state and federal governmental sources, as well as pri- vate sources, and, in addition, purchases education- al materials on an annual basis valued in excess of $10,000 directly from firms located outside the state of New York." The Petitioner is a labor organization seeking to represent certain employees of the Institute (herein- after also called the Employer).2 On October 2, 1979, the Employer filed a peti- tion for an advisory opinion in conformity with i The Petitioner and the Employer filed briefs swith the Regionlal Dti- rector on December 20 and 21, 1979, respectively. ()O January 26, 19,. the Petitioner filed a supplemental memorandum 2 The three petitions were filed ion October 24. 1979, and essenltially duplicated petitions previously filed with the New York State labor Re- lations Board, as amended The Petitioner herein initially sought separate units of professional, paraprofessional, and clerical atd service and main- tenance employees, but amended its petition at the hearing to request ant overall unit of employees, providing the professional employees an tip- portunity to vote whether or not they wished to be included itl the over- all unit. The parties stipulated as to the professional or notlprofessional status and the supervisory or nonsupervisory status of certlail employee classifications The Employer contended that the professionial crplo yees should constitute a separate unit, and that an overall unit is inappropriate, but took no final position as to the unit, and the status of certain employ- ees was not resolved. Sections 102.98 and 102.99 of the National Labor Relations Board Rules and Regulations, Series 8, as amended. Thereafter, as indicated above, the Peti- tioner herein filed the petitions in the instant pro- ceeding. On December 14, 1979, the Board issued its Advisory Opinion, 246 NLRB No. 173, in which it concluded that the petition for an adviso- ry opinion should be dismissed as premature, inas- much as the petitions pending herein had advanced to a formal stage where a binding adjudication of the jurisdictional issue could be obtained from the Board. The Employer had also filed an action in the supreme court of the State of New York, county of New York, against the New York State Labor Relations Board, and against the Petitioner herein, seeking a declaration that the state board was without jurisdiction over the Employer. On December 18, 1979, Justice Tyler of the supreme court, New York County, rendered a decision3 finding, inter alia, that the Institute is a "public em- ployer" within the meaning of New York state civil service law, and that the employees of the In- stitute are public employees. As noted above, the Institute is a residential care educational facility for blind and blind multiply- handicapped children. At the time of the hearing 159 students attended the Institute. 4 The Institute receives approximately 70 percent of its funding from the State, 20 percent from the Federal gov- ernment through Title VI, and 10 percent from pri- vate contributions.5 The Institute has a staff of ap- proximately 239 employees.6 The Institute takes the position that the Board should not assert jurisdiction over it (a) because the Employer is a "political sub-division" within the meaning of Section 2(2) of the Act; (b) because the Employer is an "adjunct" to the New York school system and therefore exempt; or (c) because New York State controls its labor relations, hence it could not effectively engage in collective bargain- ing. The Petitioner on the other hand takes the po- sition that the Institute is an Employer within the meaning of Section 2(2) of the Act and exercises sufficient control over its own labor relations to engage in meaningful collective bargaining. Thus, :1 Ithc .ANt York Institutie for he ducation oi the Blind v he United liad ration of lachers' Corntliitel o the V'e York Insitute /fr the EIduca- rton o the Blind. he U'nted fideration of lia-hers. Local 2, AFL-CIO, and Ne York Stlate l.abor Raitin Board, Index number 17672/1979 (hereinafter he Inritute) 4 f these, approximately 25 to 30 were day students, and the remain- der were resideilts. " Although only about 10 percent of the Institute's income derived from private contrihuttions, it is nolted that as of June 1975 the Itstitute had a capital funld totaling almost 519 millioni, f hich almlost 12 mil- lio rpresenl ted in stinlen t inl sttcks alnd botds ()Of these. 195 were funded by the Stale, 4() through Title VI, and 4 stc hired pursulant t ctract with the City f New York, through Cl' 'A 254 NLRB No. 85 664 NEW YORK INSTITUTE FOR EDUCATION OF THE BLIND the Petitioner contends that, while the Institute was admittedly incorporated by act of the New York state legislature, "it was not done in such a fashion so as to constitute an arm of government; "that the Board announced in National Transportation Ser- vice, Inc., 240 NLRB 565 (1979), that it would no longer utilize the "intimate connection" test relied on by the Employer;7 and, while conceding that the facts in certain cases cited by the Employer 8 are similar to the facts in the instant case, the Peti- tioner contends that "the jurisdictional test estab- lished in those cases is no longer controlling." In National Transportation Service, supra, the Board concluded that it would no longer utilize the so-called "intimate connection" test, but would in- stead "determine whether the employer itself meets the definition of 'employer' in Section 2(2) of the Act and, if so, determine whether the employer has sufficient control over the employment conditions of its employees to enable it to bargain with a labor organization as their representative. In the subsequent Watson Home case, 9 involving assertion of jurisdiction over an employer as a health care institution, the employer there contend- ed that the Board should decline to assert jurisdic- tion on the basis of Overbrook School for the Blind, supra, and Pennsylvania School for the Deaf, 213 NLRB 513 (1974), where the Board refused to assert jurisdiction over private nonprofit schools for blind and deaf children. In rejecting the conten- tion in Watson Home the Board stated that "when ascertaining whether jurisdiction should be asserted over an employer which appears to maintain close ties to an exempt governmental entity," it would no longer decline jurisdiction "solely because of the relationship between the 'purposes' of the exempt entity and the nature of the services pro- vided to it" by an employer; but, for the reasons expressed in National Transportation Service, would henceforth resolve such jurisdictional questions as set forth above. The Board further concluded that, "to the extent that they are inconsistent," the cases cited by the Employer were no longer controlling. While, as noted by the Institute, that conclusion did not necessarily mean that the Board would no longer consider the "adjunct" test-at least insofar as schools are concerned- 0 -"the fact that the 7 In addition to National Transportation, supra. the Petitioner cites for example D. T Watson Home for Crippled Children, 242 NLRB 1368 (1979); The Krebs School Foundation. Inc., 243 NLRB 514 (1979) Resident Home for the Mentally Retarded of Hamilton County. Inc., 239 NLRB 3 (1978). s Overbrook School for the Blind. 213 NLRB 511 (1974); Perkins School for the Blind. 225 NLRB 1293 (1976). I D. T Watson Homefor Crippled Children. supra. 'O The Krebs School Foundation. Inc.. supra There, the employer con- tended that the Board should not assert jurisdiction both because it as an adjunct of the exempt public school system, and was intimately con- nected with the function o the state and local government. Assessing the record under the first of those tests. the Board concluded that the evi- school performs an educational function for the [State] which, by law, is required to guarantee an education," does not of itself make the school an adjunct of the public school system. i' According- ly, we turn first to consideration of the Employer's contention that it is exempt as a political subdivi- sion within the meaning of Section 2(2) of the Act. As stated by the Supreme Court in Hawkinst 2 the Board has "limited the exemption for political subdivisions to entities that are either (1) created directly by the state, so as to constitute department or administrative arms of the government, or (2) administered by individuals who are responsible to public officials or to the general electorate."' 3 Federal rather than state law governs the determi- nation of whether an entity created under state law qualifies for the exemtpion, although state law dec- larations and interpretations are given careful con- sideration. Here, an act of the legislature established the In- stitute in 1831.' 4 When the legislature (Laws of 1867; Chapt. 744) subsequently established the state-owned New York State School for the Blind in upstate Batavia, it provided for the Institute to continue to educate the state pupils appointed to it until Batavia was completed. It further provided that upon completion of Batavia, the Institute would be the school to which state pupils from New York and Kings Counties would be appoint- ed. ' ," It appears that the initial name (New York Institute for the Blind) was changed to include the words "Education of" in 1912. 16 The Institute operates under the supervision of the New York state board of regents. New York state residents are appointed and attend free of charge. Blind children from other States also are dence did not show that the school was an adjunct of the exempt public school system The Board went on to note that as stated in National Transporatioln Service. supra, it would "no longer consider the so-called intimate connection test in ascertaining whether to assert jurisdiction." and asserted jurisdiction over the employer as a "specialized child care institution " " Kreh. upra. 12 N L.R.B. v The Natural Gas Utility District of Hawkins County, Ten- nessee, 402 U.S 600 (1971) la Id at 604-605 As the Court concluded in Hawkins that the Board had erred in its reading of the Tennessee statute, it found it unnecessary for the Court to decide "whether 'the actual operations and characteris- tics' of an entity must necessarily feature one or the other of the Board's limitations to qualify an entity for the exemption . ." (Id. at 605.) 4 IL.ass of New York, 54th sess., chapt. 214. The act was to continue until 1852. By act passed April 16. 1852, the original act was continued permanently Laws of New York. 75th sess, chapt 333. L" Subsequently, the jurisdiction of the Institute as expanded by the legislature to include Queens, Suffolk Richmond, Westchester Putnam. and Rockland Counties. Chapt 5661 of the LaAs of 1894. See The Insrti- tlufe. iiprda " Audit Report NY-ST 15-77. office of the state comptroller. report filed May 5. 1978 665 DECISIONS OF NATIONAL LABOR RELATIONS BOARD accepted, but charged tuition.17 The Institute has five major programs identified as Lower School, Upper School, Cerebral Palsy, Multi-Handicapped, and Deaf-Blind. The Lower School serves children between the ages of 4 and 13, providing an aca- demic program, and training in traveling and the activities of daily living. The Upper School con- sists of a high school, junior high school, and learn- ing center, with programs designed to prepare a blind student for college or for a training program. This Upper School, chartered by the University of the State of New York, offers a regents' diploma. The Cerebral-Palsy program includes academic and daily living skills, with speech and physical therapy as an integral part of the program. The Multi- Handicapped program is designed to develop so- cialization, sensory-motor skills, and daily living activities. Facilities especially designed for blind children include a library, three gymnasiums, a bowling alley, two swimming pools, science and physics laboratories, a music conservatory, and a vocational training program for those blind stu- dents who wish to prepare for employment as tran- scriptionists. The Institute developed and main- tained the first formal training program in New York State for the multi-handicapped-that is, deaf-blind, cerebral palsy-blind, mentally retarded- blind, and neurologically impaired-blind. In 1968, the Institute was designated as a regional center for the deaf-blind by the United States Office of Edu- cation, Department of Health, Education and Wel- fare. 1 Under article 85, of section 4201 of the State's education law, certain institutions for the instruc- tion of the deaf and of the blind are subject to visi- tation of the commissioner of education. There are 12 such institutions, known as the "4201" schools.'9 Two of the 12 are state-owned and op- 17 The handicaps of most of the students at the Institute require resl- dential care in the judgment of the commissioner of education of the State. Of the 159 students at the Institute at the time of the hearing herein, 156 were New York "State pupils." The remaining three were ap- pointed by their respective states of residence. Nonresidents of New York are accepted only when there is no waiting list for residents at the educational level of the out-of-state child. L New York State Audit Report, supra at pp. 1-2. The center has re- sponsibility in New York, New Jersey, Delaware, and the Caribbean for identification of, and development of, programs for deaf-blind children and providing funding or awarding subcontracts to various subcontract- ing schools of agencies, e.g., The Department of Health in Puerto Rico. 19 Sec. 4201 provides that it shall be the duty of the commissioner: a. To inquire into the organization of the several schools and the methods of instruction employed therein. b. To prescribed courses of study and methods of instruction that will meet the requirements of the State for the education of State pupils. c. To make appointments of pupils to the several schools, to trans- fer such pupils from one school to another as circumstances may re- quire; to cancel appointments for a sufficient reason. d. To ascertain by a comparison with other similar institutions whether any improvements in instruction and discipline can be made: erated; the remainder, including the Institute, re- ceive state support. Section 4201 does not distin- guish among these schools insofar as the duties of the commissioner of education are concerned. The record indicates that there are other privately oper- ated schools providing special education for handi- capped children that are not included by the State among the 4201 schools. Regulations under the statute provide that the Institute must annually submit budgets containing justifications for all pro- posed expenditures for which state aid is required, and all new positions requested, and all expendi- tures must be justified to the Commissioner. The appointment of pupils is regulated both by article 85 and the commissioner's regulations thereun- der.2 0 The same appointment process applies to the Institute as well as the state-operated school at Ba- tavia: the parent or guardian of a blind child ap- plies to the commissioner, supplying documentation of the child's legal blindness. The commissioner then refers the child to the Institute or Batavia for evaluation and for recommendation as to whether the child would be suitable for the program. It ap- pears that, except for the possible availability of specific programs, the commissioner of education relies solely upon geographical accessibility in as- signing a child to one school or the other.21 The operations of the Institute are under the overall direction of its board of managers, a body of private citizens elected on an annual basis. 2 2 The board of managers hires a director, who hires, disciplines, and fires employees, which the State does not review. The salary of employees is based on the state salary paid to employees at the two state-owned schools (called the state salary "grid"). The Institute uses its private moneys to supplement the salaries of Title VI employees to bring them to the state level, and to supplement the salaries of and for that purpose to appoint from time to time, suitable persons to visit the schools. e. To suggest to the directors of such institutions and to the legis- lature such improvements as he shall judge expedient. f. To make an Annual Report to the legislature on all of the mat- ters enumerated in this subdivision and particularly as to the condi- tion of the schools, the improvement of the pupils, and their treat- ment with respect to board and lodging 20 The relevant regulation, sec. 206, is entitled "State Aid to Blind in certain state-operated and state-supported schools provided by Article 85, 87 and 88 of the Education Law and Chapter 1060 of the Laws of 1974." 21 The regulations specify that a blind child "will be appointed to the school for the . . . blind nearest [hisl place of residence. ." In ap- pointing students, terminating students, or in exercising the power to transfer students, the record discloses that the commissioner may and in fact has taken such action contrary to the Institute's recommendations. The Institute must continue the student until the commissioner either ter- minates the appointment or transfers the student. e2 The State currently has no input in the election of the board of managers. The original board of managers, and the officers, were ap- pointed by the legislature. Secs 2 and 3 of the Act of 1831 established the method of selecting the board of managers and officers. 666 NEW YORK INSTITUTE FOR EDUCATION OF THE BLIND four employees above the state level. The state- funded employees must participate in the state em- ployee retirement system, and all employees are permitted to participate in the state health care plan. The Institute must submit an annual budget to the commissioner prior to the commencement of its fiscal year, as the state education department will not advance funds until the budget is submitted. On two occasions, the Institute used moneys from pri- vate contributions to remain in operation during a delay in receipt of state funds. In addition, the state comptroller conducts regular audits of the Institute. As noted above, in determining whether to assert jurisdiction herein, Federal rather than state law controls. We find persuasive, however, some of the facts enumerated in the collateral state court deci- sion. 23 The state legislature, during a period of almost 150 years, has consciously and specifically denominated the Institute, inter alia, as its agent in satisfying the State's perceived obligation or consti- tutionally mandated requirement of providing the State's residents with a suitable education. The State, through the commissioner of education, exer- cises full power of appointment of students. 2 4 Moreover, although the Institute receives private funds, the record establishes that the State as a practical matter exercises significant control over the Institute's expenditures by reason of the re- quired submission of budgets in advance of the fiscal year and the applicabilty of state audit proce- 23 We need not reach, however, and do not indicate any view as to the state court's holding, or whether the Institute would be subject to ju- risdiction of the New York State Labor Relations Board under New York State's "Taylor" Law. We note in passing, however, that, in the instances cited by the Petitioner as analogous in support of its position that bargaining herein would be appropriate, two involve state-owned and operated schools, and a third entailed intervention by the State at an- other 4201 school. 2z Cf. The Krebs School Foundortion. Inc., supra. dures. Considering this degree of budgetary and audit control in light of the long history of the state-created 2 5 Institute as a state-authorized and state-utilized facility, we conclude that the Institute is an agent of the State and, in the words of the Supreme Court in Hawkins, an "administrative arm" of the State, in providing educational services for the handicapped. 2 6 Accordingly, we shall dismiss the petitions herein. ORDER It is hereby ordered that the petitions filed herein shall be, and they hereby are, dismissed. MEMBER PENELLO, concurring: I agree with my colleagues, for the reasons they have cited, that the Employer is a political subdivi- sion within the meaning of Section 2(2) of the Act and thus exempt from our jurisdiction. Contrary to the majority, I continue to adhere to the "intimate connection" test for determining whether to assert jurisdiction.2 7 I also continue to adhere to the "ad- junct" test for deciding whether to take jurisdic- tion.2 8 2' For further detailed history of legislative involvement and appropri- ations, including support of students, purchase of land, and construction of buildings, see People v. Fitch. 154 N.Y 14, 47 N.E. 93 (1897); notes of decisions, New York Education Law, art. 85, Title 6 sec. 4201 "2 Member Truesdale agrees with his colleagues that in the unique cir- cumstances of this case the Institute is an exempt employer under Sec 2(2) of the Act. Among the special factors which Member Truesdale be- lieves support this finding are the State of New York's long involvement with the Institute, the required participation of state-funded employees in the State's employee retirement plan, and the appointment power of the commissioner of education in referring children to the Institute. 27 See my dissent in ational Transportation Service, Inc., 240 NLRB 565, 566. 2 Overbrook School for the Blind, 213 NLRB 511: Pennsylvania School for the Deaf, 213 NLRB 513 667