Oklahoma Zoological Trust

171 325 NLRB No. 17 OKLAHOMA ZOOLOGICAL TRUST 1 An earlier petition filed September 26, 1996, named the Okla- homa City Zoological Society as the Employer. The Regional Direc- tor dismissed that pettion on October 9, 1996, finding that the Soci- ety was a political subdivision. No request for review was filed. 2 The Trust Agreement describes the Society as ‘‘a non profit char- itable privately held corporation.’’ 3 The original Trust Agreement was entered into on January 7, 1975. It was subsequently amended in 1985, 1987, and 1990. 4 60 OK Stat. Ann. Sec. 178(A). 5 Id. 6 60 OK Stat. Ann. Sec. 178(E). 7 Id. 8 60 OK Stat. Ann. Sec. 175.23(C). 9 60 OK Stat. Ann. Sec. 176(G). 10 60 OK Stat. Ann. Sec. 176(I). 11 60 OK Stat. Ann. Sec. 178(D). 12 Member Fox agrees with former Chairman Stephens in his dis- senting opinion in Woodbury County Community Action Agency, 299 NLRB 554, 555–561 (1990), that satisfaction of the second prong of the Hawkins’ test will not always be sufficient to establish that an entity is exempt from the Board’s jurisdiction. Under all the cir- Continued Oklahoma Zoological Trust and International Brotherhood of Teamsters, Local Union 886, AFL–CIO, Petitioner. Case 17–RC–11446 November 8, 1997 DECISION ON REVIEW AND ORDER BY CHAIRMAN GOULD AND MEMBERS FOX AND HIGGINS On January 21, 1997, the Petitioner, International Brotherhood of Teamsters, Local Union 886, AFL– CIO, filed a petition seeking to represent employees of the Oklahoma City Zoo. The Regional Director for Re- gion 17 dismissed the petition on the grounds that the Employer, the Oklahoma Zoological Trust (the Em- ployer or Trust), is a political subdivision exempt from Board jurisdiction under Section 2(2) of the Act.1 The Petitioner filed a timely request for review, and the city of Oklahoma City filed a letter in opposition to the Petitioner’s request for review. The National Labor Relations Board has considered the Petitioner’s request for review of the Regional Di- rector’s administrative dismissal and finds that it raises substantial issues with respect to whether the Employer is exempt from Board jurisdiction as a political sub- division. Based on the entire administrative record in this case, we affirm the Regional Director’s dismissal. The Employer was created in 1975 through a Trust Agreement between the Society2 and city of Oklahoma City in accordance with the Trusts for Furtherance of Public Functions Act, a statute of the State of Okla- homa.3 Under the Trust Agreement, the Society is the trustor and the city is the beneficiary in the event of the termination of the Trust. The Employer was cre- ated to develop, maintain, and operate the existing Oklahoma City Zoo, including all land and facilities located on the Zoo’s premises, and is empowered to hire and discharge employees, as well as to set em- ployees’ compensation and benefits. Oklahoma statute allows public trusts to draft their trust agreements to provide for the appointment and succession of trustees, subject to certain provisions.4 By statute, trustees are required to take the same oath of office as elected public officials.5 The Trust Agreement requires that its board of trust- ees consist of nine members. Three of these nine serve ex officio and include the city manager of Oklahoma City, the mayor, and the councilperson of the city. The remaining six trustees are selected by the mayor from a slate provided by the Society and are confirmed by the city council. Removal of trustees is regulated by statute, which provides that trustees are subject to re- moval from office by the district court having jurisdic- tion.6 Removal is ‘‘for cause, including incompetency, neglect of duty, or malfeasance in office.’’7 Removal actions may be brought by ‘‘a trustee, beneficiary, or any person affected by the administration of the trust estate.’’8 By statute, the Trust is required to file its operating budget with the mayor and city council each year.9 The Trust has been authorized by the city council to draw upon the Oklahoma City Zoo tax fund through submission of the specific expenditures for those funds to the city council for approval. In 1990, there was a ballot referendum in which the city electorate voted to levy an additional 1/8-percent sales tax to fund the zoo. The zoo is funded almost entirely from the city’s sales tax funds. Oklahoma statute also allows the Trust the power of eminent domain.10 The Trust is required to hold public meetings and make its records and min- utes available for public inspection.11 In order to determine whether entities are political subdivisions exempt from the Act, the Board uses a two-prong test. See NLRB v. Natural Gas Utility Dis- trict of Hawkins County, 402 U.S. 600 (1971). Under that test, political subdivisions are entities that are ei- ther (1) created directly by the State, so as to con- stitute departments or administrative arms of the Gov- ernment, or (2) administered by individuals who are responsible to public officials or to the general elector- ate. The Supreme Court has stated that state law is not controlling on the question of whether an entity is a political subdivision and that it is to the ‘‘actual oper- ations and characteristics’’ of the entity that the Board must look in deciding whether the entity is exempt from the Act’s coverage. Id. at 603–604. The Regional Director found that the Employer sat- isfies the second prong of Hawkins because all trustees are either public officials or selected by public officials and can be removed by a district court. For the reasons stated below, we agree with the Regional Director that the Employer is exempt under the second prong of Hawkins.12 VerDate 11-MAY-2000 15:35 May 01, 2002 Jkt 197585 PO 00004 Frm 00171 Fmt 0610 Sfmt 0610 D:\NLRB\325.016 APPS10 PsN: APPS10 172 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD cumstances in this case, however, she finds that the Employer is an exempt political subdivision. 13 Our dissenting colleague’s requirement that, to render trustees accountable to public officials, the power of removal must be vested exclusively in a single political official or in the general electorate and that removal must be at the will of a public official, rather than vested in the district court based on evidence of incompetency or wrongdoing, is thus, contrary to the Court’s decision in Hawkins. 14 51 OK Stat. Ann. Sec. 92 et seq. Unlike our dissenting col- league, we find no legal significance in the fact that the statutory provisions governing removal of trustees are in separate sections from those governing other public officials. What is legally signifi- cant, however, is that those provisions are similar in substance. 1 Sec. 2(2) of the Act provides that ‘‘[t]he term ‘employer’ . . . shall not include . . . any State or political subdivision thereof . . . .’’ 29 U.S.C. § 152(2). The Act does not define the term ‘‘po- litical subdivision’’ and the legislative history indicates only that Congress meant to exclude the labor relations of Federal, state, and municipal governments from the Board’s jurisdiction because gov- ernmental employees did not usually enjoy the right to strike. 402 U.S. at 604. In Hawkins, the Supreme Court approved the Board’s test that an exempt political subdivision is an entity that is either (1) created directly by the state, so as to constitute departments or ad- ministrative arms of the government or (2) administered by individ- uals who are responsible to public officials or to the general elector- ate. 402 U.S. at 604–605. In the instant case, there is no contention that the Trust is an entity created directly by the State. 2 The Society is described in the trust agreement as a privately held nonprofit charitable corporation. There is no contention in the instant case that the Society is an exempt political subdivision and, on this point, I find the trust agreement controlling. 3 60 Okl. St. Ann. Sec. 176 et seq. 4 Sec. 176.1(A). Here, the Employer was created under Oklahoma statute to take over the operation of the city zoo from the city of Oklahoma City. The trustees are appointed by an elected public official, and they are required by statute to take the same oath of office required of all elected public officials. The operations of the Em- ployer are funded almost exclusively from public funds, and the Employer is accountable to the city council for approval of expenditures of the Oklahoma City Zoo tax fund and to the general electorate for in- creased funding, such as the ballot referendum in 1990 to increase the sales tax. Further, the Employer’s meet- ings are required to be public, and its records and min- utes are available for public inspection. In addition, the Employer by statue has the power of eminent domain. Finally, the trustees are subject to removal by the dis- trict court at the instance of any beneficiary or any person affected by the administration of the Trust, which clearly includes public officials and private citi- zens. Under these circumstances, we agree with the Regional Director that the Employer is an exempt po- litical subdivision because it is administered by indi- viduals who are responsible to public officials and to the general electorate. Rosenberg Library Assn., 269 NLRB 1173 (1984); Northern Community Mental Health Center, 241 NLRB 323 (1979). Contrary to our dissenting colleague, we find that the facts in this case are quite similar to those in Haw- kins, supra. Here, in addition to the three public offi- cials who serve on the board of trustees, the mayor ap- points six trustees from a list submitted by the Society. In Hawkins, the commissioners were appointed by an elected county judge from among persons nominated in a petition filed by 38 owners of real property. Also, like the commissioners in Hawkins, the trustees are by statute subject to removal for cause by a district court judge in an action initiated by public officials or pri- vate citizens.13 Further, the statutory provisions gov- erning removal of the trustees are similar to those gov- erning other Oklahoma elected or appointed public of- ficials, who may be removed for cause by a district court in an action initiated by public officials or pri- vate citizens.14 Finally, as in Hawkins, the Employer’s records are public and open for inspection, the Em- ployer’s annual budget is placed in the public domain, and the Employer has the power of eminent domain. Accordingly, we find the Regional Director’s finding that the Employer is an exempt political subdivision is in complete accord with the Supreme Court’s decision in Hawkins, and we affirm his dismissal of the peti- tion. ORDER The Regional Director’s dismissal of the petition is affirmed and the petition is dismissed. CHAIRMAN GOULD, dissenting. I dissent from my colleagues’ decision to adopt the Regional Director’s finding that the Employer, the Oklahoma Zoological Trust (the Trust), is an exempt political subdivision under the Act. The Regional Di- rector concluded that the Trust is administered by indi- viduals who are responsible to public officials and, therefore, satisfies the second part of the test for deter- mining political subdivisions under NLRB v. Natural Gas Utility of Hawkins County, 402 U.S. 600 (1971).1 Unlike my colleagues, I find that the Trust is not ad- ministered by individuals who are clearly responsible to public officials. Accordingly, I would not find that the Trust satisfies the Hawkins’ test. In 1975, the Oklahoma Zoological Society, Inc.,2 created the Trust under a Oklahoma Statute providing for the creation of ‘‘trusts for the furtherance of public functions’’ for the benefit of the city of Oklahoma City.3 The statute specifically provides that for pur- poses of Oklahoma law a public trust is a distinct en- tity from the governmental entity that is its bene- ficiary.4 This provision further provides that the affairs of the public trust shall be separate and independent from the affairs of the beneficiary in all matters and activities authorized by the trust agreement and specifi- cally requires that the public trust’s budget, expendi- VerDate 11-MAY-2000 15:35 May 01, 2002 Jkt 197585 PO 00004 Frm 00172 Fmt 0610 Sfmt 0610 D:\NLRB\325.016 APPS10 PsN: APPS10 173 OKLAHOMA ZOOLOGICAL TRUST 5 Sec. 176.1(D) 6 Sec. 178(C) and (E). 7 Sec. 178(A). 8 Truman Medical Center, supra, 641 F.2d at 573. Cf. NLRB v. E. C. Atkins & Co., 331 U.S. 398 (1947) (civilian auxiliaries to war- time military police are employees under the Act despite the mili- tary’s reservation of the right to veto their hiring and firing). 9 I disagree with and would overrule Board precedent to the extent it holds that removal authority by public officials is not a critical factor in determining responsibility to public officials or the general electorate. See Economic Security Corp., 299 NLRB 562 (1990). tures, revenues, and general operation be separate from that of its governmental beneficiary’s.5 Under the statute creating public trusts, the trust in- strument or agreement may provide for the appoint- ment, succession, powers, duties, term, manner of re- moval, and compensation of the trustees. Trusts cre- ated for a municipal beneficiary are further required to have a minimum of three trustees and the trustees may be removed from office for cause, including incom- petency, neglect of duty, or malfeasance in office, by a district court having jurisdiction.6 The statute further provides that ‘‘in all such respects the terms of [the] instrument shall be controlling.’’7 Thus, according to the plain language of the statute creating the Trust, the trust agreement controls the composition of the board of trustees and the means and manner of the selecting additional trustees beyond the required minimum of three. A trust agreement can also impose additional re- quirements with regard to removal and succession than that required by statute. The trust agreement in this case provides for nine trustees including the mayor, the city manager, and a councilman. The six additional trustees are selected by the mayor, from a list submit- ted by the Society, and are confirmed by the city Council. They serve 4-year terms. The Regional Director concluded that the trustees meet the Hawkins’ test because they are responsible to public officials in the appointment and in their re- moval. My colleagues agree with the Regional Direc- tor, finding this case ‘‘quite similar’’ to the facts of Hawkins. I hold a different view of the law and its re- quirements. To support a claim of exempt status under Hawkins, supra, the entity must demonstrate that its policy-mak- ing officials have ‘‘direct personal accountability’’ to public officials or to the general public. Cape Girardeau Care Center, 278 NLRB 1018, 1019 (1986) (citing Truman Medical Center v. NLRB, 641 F.2d 570, 573 (8th Cir. 1981)). In Hawkins, the Court con- cluded that the commissioners of the state utility dis- tricts were either appointed by an elected public offi- cial or directly elected by the general public and sub- ject to removal under the State’s General Ouster law, which provided a procedure for citizens to remove public officials from office. The Court found that these appointment and removal procedures together with the ‘‘actual operations and characteristics’’ of the utility districts, including the district’s power of subpoena and eminent domain over public and private property, its authority to issue tax exempt bonds, and its status, de- clared by statute, as a municipality or public corpora- tion, ‘‘betoken a state rather than a private, instrumen- tality.’’ 402 U.S. at 608. I disagree with my col- leagues’ assertion that the trustees in the instant case have any powers approaching those of the commis- sioners at issue in Hawkins, and as noted above, the Regional Director dismissed the petition solely on the basis of the appointment and removal procedures. In my view, the appointment and removal procedures do not establish the required accountability under Haw- kins. The composition of the board of trustees and the ap- pointment procedure is established by the trust agree- ment not by statute. As to six of the nine trustees, the Society selects the list of candidates. The mayor of Oklahoma City must appoint from the list submitted by the Society. There is no evidence as to how many names are submitted by the Society for each vacancy or even that there is more than one name submitted for each vacancy. At best, the mayor may exercise a lim- ited veto power by choosing one name at the exclusion of the other names on the list.8 Thus, those persons whose names are on the list appear to be more ac- countable to the Society for placing them on the list than to the mayor for appointing them from the list. Further, to the extent that appointment by the mayor from those names submitted by the Society represents accountability to a public official, the trustees are ac- countable by choice not by law and such an arrange- ment does not establish a political subdivision under the second part of the Hawkins’ test. Jefferson Com- munity Center v. NLRB, 732 F.2d 122, 125 fn. 3 (10th Cir. 1984), cert. denied 469 U.S. 1086 (1984). The trustees take all actions by a majority vote. There is no evidence that the votes of those trustees who are mayor, city councilman or city manager have more significance or weight than those of the other trustees. Nothing in the record suggests that these six, a major- ity of the trustees, have any official connection to any governmental body. Nor are their decisions subject to approval by any such entity. Further, in my view, a critical factor in establishing accountability under the Hawkins’ analysis is whether public officials or the general electorate have an unfet- tered right of removal during an individual’s term.9 In determining whether the commissioners were respon- sible to public officials or the general electorate, the Hawkins’ Court relied on its finding, which it noted was contrary to the Board’s finding, that the commis- sioners were subject to the same removal statute as VerDate 11-MAY-2000 15:35 May 01, 2002 Jkt 197585 PO 00004 Frm 00173 Fmt 0610 Sfmt 0610 D:\NLRB\325.016 APPS10 PsN: APPS10 174 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 10 402 U.S. at 607–608. 11 See St. Jude Industrial Park Board v. NLRB, 760 F.2d 223 (8th Cir. 1985); NLRB v. Natchez Trace Electric Power Assn., 476 F.2d 1041 (5th Cir. 1973). 12 402 U.S. at 608. 13 The mere fact that the trust agreement can impose additional re- moval procedures establishes that it is not the same statutory proce- dure for removing public officials from office. See 60 Okl. Stat. Ann. Sec. 178(A), (C), and (E). 14 Sec. 176(I) provides that [a]ny public trust created pursuant to the provisions of this sec- tion shall have the power to acquire lands by use of eminent do- main in the same manner and according to the procedures pro- vided for in Sections 51 through 65 of Title 66 of the Oklahoma Statutes. The Oklahoma statute referred to confers power upon railroads to take, hold, and appropriate real estate necessary for the location, construction, and convenient use of their road. Guthrie & Western Ry. Co. v. Rhoades, 73 P. 1134 (1903). Sec. 176(I) further provides that [a]ny exercise of the power of eminent domain by a public trust pursuant to the provisions of this section shall be limited to the furtherance of public purpose projects involving revenue-produc- ing utility projects of which the public trust retains ownership . . . Revenue-producing utility projects shall be limited to projects for the transportation, delivery, treatment, or furnishing of water for domestic purposes or for power, including but not limited to the construction of lakes, pipelines, and water treat- ment plants. 15 In an opinion addressing the issue of whether, under Oklahoma law, a public trust created under 60 Okla. Stat. Ann. Sec. 176 et seq. has the power of eminent domain for the purpose of acquiring lands for the construction of a water reservoir for municipal use, the Okla- homa Attorney General stated that a preliminary consideration is ‘‘whether the or not the public trust at issue herein is authorized by the instruments or articles prescribing its creation to engage in the contemplated activity.’’ Okl. A.G. Opin. No. 78-260 (Nov. 21, 1978). In order to make this determination, ‘‘it would be necessary to review the Declaration of Trust creating a particular public trust, and proceed to make a factual determination as to whether or not the Declaration authorizes engagement in the contemplated activity.’’ Id. 16 As noted above, whatever limited power of eminent domain the Trust may have is pursuant to a statutory provision according emi- nent domain to railroads. 17 ‘‘To carry out its functions, the District is granted not only all the powers of a private corporation, but also ‘all the powers nec- essary and requisite for the accomplishment of the purpose for which such district is created, capable of being delegated by the legisla- ture.’ This delegation includes the power of eminent domain, which the District may exercise even against other governmental entities.’’ [Statutory citations omitted] 402 U.S. at 606. other public officials.10 The courts of appeals have also relied on removal authority as an important factor in the Hawkins’ analysis.11 As the courts have recog- nized, the power of removal is as important as the power of appointment to the determination of account- ability to public officials or the general electorate. Once appointed, an individual remains accountable to the political official or the public only because of the authority to remove that individual during his or her term. In the case of a true political appointee, the basis for removal can lie totally within the discretion of the appointing official or entity. Thus, if an entity is to be found to be an exempt political subdivision, then those individuals who manage it must continue during their term to be responsible to those who put them in office. In the instant case, trustees serve a 4-year term and cannot be removed except for cause. Further, the power of removal is vested in the district court, not in the discretion of a single political official or in the general electorate. Thus, removal is not at will of the mayor or other city officials, but must be based on some incompetency or wrongdoing established in a ju- dicial proceeding. The trustees cannot be removed sim- ply because a political official or the general public disagrees with the actions they have taken or the deci- sions they have made. During their terms, as long as they act competently and do not act ultra vires, the trustees are not controlled in the exercise of their dis- cretion. My colleagues argue that the removal procedure in the instant case is similar to the procedure in Hawkins. In Hawkins, however, the commissioners were subject to the state’s general ouster law, the removal procedure applicable to all public officials.12 In the instant case, the removal procedure is merely specified in the gen- eral Oklahoma statute that provides for the creation of any trust ‘‘for the furtherance of public functions,’’ and, unlike Hawkins, there is no evidence nor does anyone contend that the removal procedure set forth in the trust agreement is the same procedure applicable to public officials.13 My colleagues note that a removal action may be brought by ‘‘a trustee, beneficiary, or any person affected by the administration of the trust estate,’’ citing 60 Okl. Stat. Ann. Sec. 175.23(C). This provision, however, applies to ‘‘any trust instrument.’’ Since this removal mechanism is common to trusts generally under Oklahoma law, including indisputably private entities, it provides no support for a finding of exempt political subdivision. My colleagues rely on the fact that the Oklahoma statute under which the Trust is created provides for a limited power of eminent domain.14 It is unclear from the trust agreement whether the Trust possesses the ability to exercise even this limited power of eminent domain.15 Even assuming that the Trust had this lim- ited power of eminent domain, the Trust could only exercise such a power over private property and pursu- ant to a statutory provision separate from the provision according eminent domain powers to state govern- mental bodies.16 In contrast, the commissioners in Hawkins had the power of eminent domain over both public and private agencies.17 Finally, in my view, the remaining factors cited by my colleagues do not support a finding of exempt po- litical subdivision in the absence of accountability to political officials through appointment and removal procedures. To be sure, the trustees take the same oath VerDate 11-MAY-2000 15:35 May 01, 2002 Jkt 197585 PO 00004 Frm 00174 Fmt 0610 Sfmt 0610 D:\NLRB\325.016 APPS10 PsN: APPS10 175 OKLAHOMA ZOOLOGICAL TRUST of office as elected officials, the Trust’s operations are funded by public funds, the Trust’s meetings are open to the public, and the Trust’s records and minutes are available for public inspection. I do not dispute that the Trust has some characteristics of a public entity. If it did not, our inquiry would be at an end. I do not, however, find that the possession of a minimum of public attributes establishes the degree of accountabil- ity to elected public officials or the general electorate so as to remove the Trust from the jurisdiction of the Act. Indeed, as is appropriate in a modern economy where the private sector is subject to regulation at both the federal and state level, considerable public disclo- sure is mandated for and practiced by private corpora- tions as well as the public sector. The existence of ac- cess that is available to the public is hardly dispositive of the question of whether an entity is a public sub- division within the meaning of the Act. As discussed above, I find that the trustees here do not have the type of responsibility to either public offi- cials or the general electorate that qualifies the Trust as an exempt political subdivision under Section 2(2) of the Act. Accordingly, I would process the petition. VerDate 11-MAY-2000 15:35 May 01, 2002 Jkt 197585 PO 00004 Frm 00175 Fmt 0610 Sfmt 0610 D:\NLRB\325.016 APPS10 PsN: APPS10