Goodwill Industries of Southern California

DECISIONS OF NATIONAL LABOR RELATIONS BOARD Goodwill Industries of Southern California and Local Freight Drivers Local 208, International Brother- hood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, Petitioner. Case 31-RC- 3769 August 23, 1977 DECISION AND ORDER BY MEMBERS JENKINS, MURPHY, AND WALTHER Upon a petition duly filed under Section 9(c) of the National Labor Relations Act, as amended, by Local Freight Drivers Local 208, International Brother- hood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, a hearing was held before Hearing Officer Trudi C. Ferguson. Following the hearing, and pursuant to Section 102.67 of the National Labor Relations Board Rules and Regula- tions, Series 8, as amended, the Regional Director for Region 31 transferred this proceeding to the Board for decision. Thereafter, the Employer filed a brief in support of its position, and Goodwill Industries of America filed an amicus curiae brief. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the National Labor Relations Board has delegated its authority in this proceeding to a three-member panel. 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 ap- proved. Upon the entire record in this case, the Board finds as follows: 1. Goodwill Industries of Southern California is one of a nationwide network of approximately 160 nonprofit and charitable organizations, each of which is locally autonomous. Its purpose is to provide rehabilitative work experience to persons whose physical, emotional, and social handicaps render them ineligible for work in private competi- tive industry. By providing counseling and work experience, Goodwill attempts to help these people overcome their disabilities and then to place them back in the competitive job market. To support this charitable enterprise and as an integral part of its rehabilitative program, Goodwill maintains a number of stores in which it sells discarded clothing, furniture, appliances, etc., which it collects from the community and repairs and refurbishes at its plant. In this manner, 95 percent of ' None of Goodwill's income is supplied by the Federal or state governments. 2 The Rhode Island Catholic Orphan Asylum, a/k/a Str. Aloysius Home, 224 NLRB 1344 (1976). 231 NLRB No. 49 Goodwill's income is generated; the other 5 percent consists of monetary contributions from individuals, corporations, and foundations in the community.' Goodwill's annual revenue from its retail operations exceeds $4 million. In addition, Goodwill purchases goods from outside the State of California valued in excess of $2,000. The Employer contends that the Board should decline to assert jurisdiction over its operations on the grounds that it is a nonprofit charitable organiza- tion whose commercial activities are ancillary to its rehabilitative objectives. However, as has by now been firmly established, the Board no longer distin- guishes between profit and nonprofit organizations for jurisdictional purposes. No longer will the Board decline jurisdiction over a nonprofit organization solely on the basis of its charitable function or worthy purpose. 2 Consequently, since the Employer clearly satisfies our jurisdictional standards for retail enterprises, we find that it would effectuate the policies of the Act to assert jurisdiction herein.3 2. The parties stipulated, and we find, that the Petitioner is a labor organization within the meaning of the Act which claims to represent certain employees of the Employer. 3. The Petitioner seeks to represent a unit consisting of all drivers, helpers, and mechanics employed by the Employer at its San Fernando Road, Los Angeles, California, facility, excluding all other employees, office clerical employees, profes- sional employees, and guards and supervisors as defined in the Act. The Employer argues that the Board should not assert jurisdiction over these persons, on the ground that they are not employees within the meaning of Section 2(3) of the Act. The Employer employs approximately 850 indivi- duals. Of that number, 100 are staff and supervisory employees who manage the Employer's operation and assist in the rehabilitative effort. These persons have no employment disabilities and are admittedly employees within the meaning of the Act. Another 80 to 100 individuals are client trainees who are referred on a fee-paying basis by various state agencies for work experience and vocational training. The re- maining individuals, 650 to 670 in number (whom the Employer calls "clients") are handicapped persons who constitute the chief beneficiaries of the Employer's charitable endeavor. These individuals (hereafter called clients) are employed primarily in the Employer's transportation and production de- partments. Petitioner's requested unit consists solely of clients who work for the Employer's transporta- 3 See Abilities and Goodwill, Inc., 226 NLRB 1224 (1976); The Salvation Army, Inc., 225 NLRB 291 (1976); The Chicago Lighthousefor the Blindu 225 NLRB 249 (1976); Carolina Supplies and Cement Co., 122 NLRB 88 (1958). 536 GOODWILL INDUSTRIES OF SO. CALIF. tion department. (The transportation department collects discarded items donated by members of the community. The production department sorts these discards, disposes of the nonrepairable ones, and repairs and refurbishes the others for sale in the Employer's retail store outlets.) The record shows that clients are referred to' Goodwill from a variety of sources, including friends, churches, and government agencies. These clients have in common the fact that they suffer from some sort of employment disability, whether it be a mental or emotional disturbance, a physical defect, an educational limitation, or a penal record. After referral, the prospective client is interviewed about his background to determine the full extent of his problem so that he can be properly matched with a job. If accepted, the client is given a physical examination, his handicaps are recorded on a card for the benefit of supervisory personnel, and he is placed in a suitable job. Commensurate with its rehabilitative objective, Goodwill allows its clients to work at their own pace. They are paid the same hourly wage, are provided with a life insurance policy, and get vacations based on the length of their employment. Discipline is not handled in the same manner as in private industry. When infractions occur, supervisory personnel sit down with the client, talk to him, and try to understand what made him violate the regulations. Consequently, disciplinary discharges are rare. If a client does not work out in one department, he is usually transferred to another in an attempt to find him a proper employment niche. As part of its effort to foster dignity and self- confidence among its clients, Goodwill furnishes clients (in addition to employment) with rehabilita- tion, social service, vocational, medical, and legal counseling. In addition, a client's progress and performance are reviewed at least once a year. Goodwill's ultimate hope is that its clients will find employment in private competitive industry. To accomplish this purpose, Goodwill employs a job placement specialist whose sole purpose is to find jobs for clients in the private market. Once a client gets a job, he is sent out on a I-month trial basis. The client's old job is kept open for this period so that if the client is unable to adjust to outside employment he or she can return to this job. This feature of Goodwill's program relieves pressure on the client and encourages private employers to extend job offers to clients which they might not otherwise be willing to make. Despite this stated objective, however, Goodwill does not try to force its clients to leave. Many of the Employer's clients suffer from disabilities which are not readily curable. In recognition of this fact, 50 percent of Goodwill's client jobs are reserved for extended employment of 2 years or more. The other 50 percent of its employment openings are designat- ed for transitional relatively short-term employment. From the foregoing, it is clear that the Employer's clients whom Petitioner seeks to represent are employees in the generic sense of the term. Clients work for a set number of hours a day, perform functions which are of recognized economic value, and are paid for the performance of those functions. Nevertheless, it is equally clear that this employment relationship is different in many, if not most, significant respects from the normal employment relationship. The focus of Goodwill's employment concern is upon rehabilitating its clients and preparing them for work in private competitive industry, not on produc- ing a product for profit. Prospective clients are "hired" not on the basis of their competence, but on the basis of the severity of their impairments- presumably the more severe their impairment, the more likely they are to be hired. Wages are the same regardless of the client's performance or tenure, and are as much an instrument of the rehabilitative process as they are recompense for productive activity. In addition, clients are counseled rather than disciplined, are rarely, if ever, discharged, and are allowed to continue their employment as long as they desire. The picture presented is thus that of an employer whose primary objectives are the converse of a normal employer's objectives-so much so that Goodwill might better be classified as a vocational clinic than as a viable entrepreneurial concern. This unusual employer-client relationship presents us with that rare, possibly nonrecurring, instance where an employer's concern for the welfare of his employees competes with, and in some sense displac- es, the union's ordinary concern for employee well- being. The Union's normal objective-that of secur- ing improved working conditions for the employees it represents-is here avowedly and convincingly em- braced by the Employer itself-with, however, a difference in emphasis as to how that goal should be accomplished. To permit collective bargaining in this context is to risk a harmful intrusion on the rehabilitative process by the Union's bargaining demands. For example, if the Union demanded higher wages, this could well force the Employer to either reduce its client work force or hire more productive workers-thus compromising the Em- ployer's rehabilitative efforts. Union demands for higher benefits for senior employees might tempt the Employer to reconsider its policy of keeping clients on as long as necessary. Conversely, union demands for unlimited employment tenure could prejudice the Employer's efforts to provide charitable employment 537 DECISIONS OF NATIONAL LABOR RELATIONS BOARD to as many disabled people as possible. The collective-bargaining process, in short, is likely to distort the unique relationship between Employer and client and impair the Employer's ability to accomplish its salutary objectives. On the basis of the above considerations, we are convinced that, although clients may arguably be said to be employees within the meaning of the Act, it will not effectuate the purposes of the Act to assert jurisdiction over them. Accordingly, we shall dismiss the petition. 4 ORDER It is hereby ordered that the petition before us be, and it hereby is, dismissed. MEMBER MURPHY, dissenting: I would not assert jurisdiction of this Employer for the reasons stated in my and Member Penello's dissenting opinion in Abilities and Goodwill, Inc., 226 NLRB 1224 (1976). Accordingly, I also find it unnecessary to decide whether the Employer's clients are employees within the meaning of Section 2(3) of the Act or whether it would effectuate the policies of the Act to direct an election in a unit comprised of such clients. Because of our decision herein we do not address the Employer's alternative contention that the petitioned-for unit is too narrow in scope. 538