Parents And Friends Of The Specialized Living Center

SPECIALIZED LIVING CENTER Parents and Friends of the Specialized Living Center and Nursing and Convalescent Home Division, Service Employees' International Union, Local No. 50, AFL-CIO, CLC. Cases 14-CA-16309 and 14-CA-16309-2 30 September 11987 SUPPLEMENTAL DECISION AND ORDER BY CHAIRMAN DOTSON AND MEMBERS JOHANSEN AND BABSON On 17 August 1983 Administrative Law Judge Claude R. Wolfe issued the attached decision. The Respondent and the General Counsel filed excep- tions and supporting briefs. The Respondent also filed a brief in answer to the General Counsel's ex- ceptions and on the "Question of the Board's juris- diction" over it.' On 25 July 1986 the Board, in an unpublished Order, remanded the proceeding to the judge for further consideration consistent with its decisions in Res-Care, Inc., 280 NLRB 670 (1986), and Long Stretch Youth Home, 280 NLRl3 678 (11986).2 On 2 March 1987 the judge issued the attached supple- mental decision in which he recommended that the Board assert jurisdiction over the Respondent. The Respondent has filed exceptions to the supplemen- tal decision and a brief in support of its exceptions. The National Labor Relations Board has delegat- ed its authority in this proceeding to a three- member panel. The Board has considered the judge's supple- mental decision and the record in light of the ex- ceptions and brief and, in agreement with the judge and for the reasons stated by him, finds that asser- tion of jurisdiction over the Respondent in this case is proper. The Board has also considered the judge's initial decison and the record in the underlying proceed- ing in light of the exceptions and briefs previously filed by the parties and , except as noted below, has decided to affirm the judge 's rulings, findings, and conclusions and to adopt the recommended Order as modified and set forth in full below. Thus, we agree with the judge that the Respond- ent violated Section 8(a)(5) and ( 1) of the Act when, in a telegram dated 19 November 1982, it notified the Union, which was certified by the ' The Respondent also filed, and the General Counsel opposed, a motion to dismiss the complaint on the ground that it was a nonprofit charitable institution with only a de minimis impact on interstate com- merce Alternatively, it sought to have the matter remanded for the "Re- ceipt of Evidence on Impact on Interstate Commerce of Asserting Juns- diction over Respondent " 2 In Res-Care and Long Stretch, the Board set forth the guidelines it would follow in determining when it is appropriate to assert jurisdiction over an employer with close ties to an exempt entity 511 Board on 19 October 1982, that it would neither recognize nor bargain with it, and violated Section 8(a)(1) by implicitly threatening to take legal action against employees engaged in lawful picketing in an attempt to coerce them into refraining from such conduct . We do not agree, however, with the judge's finding that the Respondent did not violate Section 8(a)(5) and ( 1) when it implemented changes in the employees' work schedule on 14 December 1982. In reaching his conclusion, the judge reasoned that because the Respondent had offered in its telegram to "meet and confer" with the Union concerning the changes, and the Union had rejected this offer, the Respondent satisfied its duty to bargain. We do not agree . In light of the Respondent's statement in this same telegram that it had no legal obligation to recognize or bargain with the Union, we find that the Respondent's offer was conditional and did not constitute a good-faith offer to bargain to which the Union was entitled . See Brooks, Inc., 228 NLRB 1365, 1366 (1977), enfd. in relevant part 593 F. 2d 936 (10th Cir. 1979). Consequently, by failing to bargain in good faith with the Union concerning the imple- mented schedule changes, the Respondent violated Section 8(a)(5) and (1) of the Act. The Respondent's unilateral changes in its em- ployees' work hours, as found by the judge, result- ed in a loss of wages for certain employees. Conse- quently, the Respondent shall be required to make those employees whole for losses sustained as a result of the unilateral changes. AMENDED REMEDY We agree with and adopt the judge's recom- mended remedy . However, having found that the Respondent further violated Section 8(a)(5) and (1) of the Act by unilaterally implementing changes in its employees' work hours without first bargaining with the Union, and having found that those changes resulted in a loss of wages for certain em- ployees, we shall order the Respondent to make the affected employees whole for losses incurred as a result of its unlawful unilateral changes in their work hours.3 Such backpay will be computed in the manner set forth in Ogle Protection Service, 183 NLRB 682 (1970), with interest as prescribed in New Horizons for the Retarded.4 3 We leave it to the compliance stage of the proceeding to determine which employees are entitled to such remedial relief 4 In accordance with our decision in New Horizons for the Retarded, 283 NLRB 1173 (1987), interest on and after 1 January 1987 shall be computed at the "short-term Federal rate" for the underpayment of taxes as set out in the 1986 amendment to 26 US C § 6621 Interest on amounts accrued prior to 1 January 1987 (the effective date of the 1986 amendment to 26 US C § 6621) shall be computed in accordance with Florida Steel Corp , 231 NLRB 651 (1977) 286 NLRB No. 46 512 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD ORDER The National Labor Relations Board orders that the Respondent, Parents and Friends of the Spe- cialized Living Center, Swansea, Illinois, its offi- cers, agents, successors, and assigns, shall 1. Cease and desist from (a) Refusing to recognize and bargain collective- ly concerning rates of pay, wages, hours, and other terms and conditions of employment with Nursing and Convalescent Home Division, Service Employ- ees' International Union, Local No. 50, AFL-CIO, CLC as the exclusive bargaining representative of its employees in the following appropriate unit: All full-time and regular part-time employees employed by Respondent at its 1450 Caseyville Avenue, Swansea, Illinois facility, excluding li- censed practical nurses, managerial employees, business office clericals, professional employ- ees, guards, and supervisors as defined in the Act. (b) Unilaterally implementing changes in its em- ployees' work hours without first bargaining with the Union. (c) Threatening to institute legal proceedings against employees because they engage in lawful picketing. (d) In any like or related manner interfering with, restraining, or coercing employees in the ex- ercise of the rights guaranteed them by Section 7 of the Act. 2. Take the following affirmative action neces- sary to effectuate the policies of the Act. (a) Recognize and, on request, bargain with the Union as the exclusive representative of all em- ployees in the above-described appropriate unit with respect to rates of pay, wages, hours, and other terms and conditions of employment and, if an understanding is reached, embody such under- standing in a signed agreement. (b) Make employees whole for losses sustained as a result of its unilateral change in their working hours in accordance with the amended remedy sec- tion of this decision. (c) Preserve and, on request, make available to the Board or its agents for examination and copy- ing, all payroll records, social security payment records, timecards, personnel records and reports, and all other records necessary to analyze the amount of backpay due under the terms of this Order. (d) Post at its 1450 Caseyville Avenue, Swansea, Illinois facility copies of the attached notice marked "Appendix."b Copies of the notice, on forms provided by the Regional Director for Region 14, after being signed by the Respondent's authorized representative, shall be posted by the Respondent immediately upon receipt and main- tained for 60 consecutive days in conspicuous places including all places where notices to em- ployees are customarily posted. Reasonable steps shall be taken by the Respondent to ensure that the notices are not altered, defaced, or covered by any other material. (e) Notify the Regional Director in writing within 20 days from the date of this Order what steps the Respondent has taken to comply. CHAIRMAN DOTSON, dissenting. Contrary to my colleagues and the judge, I would not assert jurisdiction over the Respondent, a nonprofitable charitable institution engaged in the residential care and training of developmentally disabled adults. The Board, in my view, should not assert jurisdiction over any labor dispute involving this type of employer unless there is evidence to show that this particular class of institutions has a substantial impact on interstate commerce.' As no such showing has been made in this case, I would decline to assert jurisdiction and would dismiss the complaint in its entirety. 5 If this Order is enforced by a judgment of a United States court of appeals, the words in the notice reading "Posted by Order of the Nation- al Labor Relations Board" shall read "Posted Pursuant to a Judgment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board." i See my dissenting opinions in Alan Short Center, 267 NLRB 886, 889 (1983); Volunteers of America, 272 NLRB 173, 175 (1984), and Hudelson Baptist Childrens Home, 276 NLRB 126, 128 (1985) APPENDIX NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government The National Labor Relations Board has found that we violated the National Labor Relations Act and has ordered us to post and abide by this notice. WE WILL NOT refuse to recognize and bargain collectively concerning rates of pay, wages, hours, and other terms and conditions of employment with Nursing and Convalescent Home Division, Service Employees' International Union, Local No. 50, AFL-CIO, CLC as the exclusive representative of our employees in the following appropriate unit: All full-time and regular part-time employees employed at our 1450 Caseyville Avenue, SPECIALIZED LIVING CENTER Swansea, Illinois facility, excluding licensed practical nurses, managerial employees, busi- ness office clericals, professional employees, guards and supervisors as defined in the Act. WE WILL NOT unilaterally implement changes in our employees' work hours without first notifying and bargaining with the Union. WE WILL NOT threaten to institute, nor will we institute, legal proceedings against our employees because they engage in lawful picketing. WE WILL NOT in any like or related manner interfere with, restrain, or coerce you in the exer- cise your rights guaranteed you by Section 7 of the Act. WE WILL recognize and, on request, bargain with the above-named Union as the exclusive rep- resentative of all employees in the above-named bargaining unit with respect to rates of pay, wages, hours, and other terms and conditions of employ- ment and, if an understanding is reached, embody such understanding in a signed agreement. WE WILL make employees whole for losses sus- tained as a result of our unilateral change in their work hours. PARENTS AND FRIENDS OF THE SPE- CIALIZED LIVING CENTER Mary J. Holmes and Mark W. Weisman, Esgs., for the General Counsel. Bettye S. Kitch and Ronald J. Hein Jr., Esqs., for the Re- spondent. Wallace McMullen, business representative, for the Union. DECISION STATEMENT OF THE CASE CLAUDE R. WOLFE, Administrative Law Judge. This consolidated proceeding was tried before me at St. Louis, Missouri, on June 8 and 9, 1983, pursuant to charges timely filed and served and consolidated com- plaint issued February 25, 1983. The complaint alleges violations of Section 8(a)(5) and (1) of the National Labor Relations Act (the Act) by Parents and Friends of the Specialized Living Center (Respondent) consisting of a threat to file a lawsuit against employees engaged in lawful picketing, failure and refusal to recognize and bar- gain with the Union' as collective-bargaining representa- tive of certain of Respondent's employees, and the unilat- eral institution of new work schedules for the night- and evening-shift employees represented by the Union. Re- spondent denies it has committed any unfair labor prac- tices. ' The Union is alleged, admitted to be, and I find is a labor organiza- tion within the meaning of Sec 2(5) of the Act 513 On the entire record, 2 my observations of the demean- or of the witnesses testifying before me, and careful con- sideration of the posttrial briefs filed by the parties I make the following FINDINGS AND CONCLUSIONS 1. HISTORY OF THE PREVIOUS REPRESENTATION CASE The Union filed a petition with the Board's Region 14 on July 1, 1982,3 in Case 14-RC-9612 seeking certifica- tion as the exclusive collective-bargaining agent of a unit of Respondent's employees. Thereafter a hearing was held in Case 14-RC-9612 before Hearing Officer Cotter wherein Respondent and the Union were given opportu- nity to and did call, examine, and cross-examine wit- nesses and submit documentary evidence bearing, inter alia, on the issue of jurisdiction. The Regional Director for Region 14 issued a decision and direction of election on August 12 wherein he found Respondent is an em- ployer within the meaning of the Act, and directed a representation election among the employees in the fol- lowing unit: All full-time and regular part-time employees em- ployed by the Employer at its 1450 Caseyville Avenue, Swansea, Illinois, facility EXCLUDING licensed practical nurses, managerial employees, business office clericals, professional employees, guards, and supervisors as defined in the Act. On August 31, Respondent filed a motion to reopen hearing for receipt of additional evidence and for recon- sideration in light of additional evidence with the Re- gional Director. The motion was denied on September 1. Respondent then, on September 3, filed a request for review and a motion to remand to Region and reopen hearing with the Board. The motion to remand recited, in pertinent part, as had the motion previously denied by the Regional Director, that present counsel was retained after the representation hearing, original counsel was ap- parently not familiar witht he Act's political subdivision exemption or the Board's "right-to-control" test, and the record contained no evidence or inadequate evidence on the following issues: (a) Stringent controls exercised by the State of Il- linois on wages and fringe benefits; (b) State regulations limiting state fund reim- bursements for wages and fringe benefits; (c) State regulations requiring specific ratio of number of employees to number of clients; (d) State regulations regarding hiring, qualifica- tions, and training of employees; (e) State regulations imposing limitation of assign- ment of personnel; (f) Various other state regulations significantly limiting the Employer's ability to uniterally control day-to-day labor relations, policies, and functions; z Certain errors in the transcript have been noted and corrected All dates are 1982 unless otherwise indicated 514 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD (g) State-imposed penalties and fines when state standards are not met, thereby eliminating right to strike and/or lock out. Respondent's request for review, accompanied by a 41-page supporting brief, contested the Board's jurisdic- tion on the grounds that Respondent was a political sub- division under Section 2(2) of the Act. It further protest- ed that the Regional Director's decision failed to consid- er the extent Respondent's operations were controlled by the State of Illinois, the inclusion of technical employees and statutory supervisors in the unit was improper, and the Regional Director's findings of fact were faulty. The Board denied the request for review and the motion to remand on September 10. An election was conducted in Case 14-RC-9612 on September 10. The Union received a majority of the valid votes cast. Respondent then filed timely objections to the conduct of the election. On October 19, 1982, the Regional Director issued a supplemental decision and certification of representative that overruled the objec- tions and certified the Union as the exclusive representa- tive of Respondent's employees in the unit he had previ- ously found appropriate. Respondent filed exceptions on November 1 that were denied by the Board on January 10, 1983. Respondent then filed a motion for reconsider- ation and hearing en banc, which was also denied by the Board on February 17, 1983. There has been no further activity in Case 14-RC-9612, so far as the record shows, and that case is not before me. Respondent has, however, continued to contest the Board's jurisdiction before me. II. THE ISSUES A. Jurisdiction At trial the parties stipulated as follows, with the un- derstanding that by so doing Respondent was not waiv- ing its claim of lack of jurisdiction: During the 12 month period ending January 31st, 1983, which period is representative of its oper- ations during all times material hereto, Respondent, in the course and conduct of its business operations derived gross revenues in excess of $250,000 and purchased and caused to be transported and deliv- ered to its Swansea, Illinois, facility, goods and ma- terials valued in excess of $50,000, of which goods and materials valued in excess of $50,000 were transported and delivered to its facility in Swansea, Illinois, directly from points located outside the State of Illinois. Respondent is an Illinois not-for-profit corporation en- gaged in the residential care and training of developmen- tally disabled adults. Whether it be considered a proprie- tary hospital4 or a nursing home s it meets the Board's monetary standards for the assertion of jurisdiction. Re- spondent does not contend otherwise but argues (1) Re- spondent is an exempt political subdivision because it is an administrative arm of the state government; (2) Re- * Medical Center Hospital, 168 NLRB 266 (1967). s University Nursing Home, 168 NLRB 263 (1967) spondent has insufficient control over its labor relations and personnel policites to enable it to bargain with a labor organization; and (3) the Board should not assert jurisdiction over a noncommerical not-for-profit entity with little impact on commerce. These arguments, as well as most of the facts relating thereto, are set forth in Respondent's posttrial brief in the same fashion, often verbatim, as they were presented to the Board in Re- spondent's September 3, 1982 brief in support of request for review. Some further bolstering of the facts was drawn by Respondent from evidence proffered before me in support of its defense to the unilateral change in work schedules allegation of the complaint, and from documents that I rejected. These additional facts merely embellish those previously proffered to the Board. In the absence of newly discovered or previously un- available evidence or special circumstances the Respond- ent is not entitled to relitigate issues that were or could have been litigated in the prior representation proceed- ing.e This principle is applicable to issues of jurisdic- tion.' The record supports no contention there is any newly discovered or previously unavailable evidence of significant import, nor is there any supportable claim of special circumstances. The issues could have been and were litigated in the representation proceeding in Case 14-RC-9612. Accordingly, I find the issue of jurisdiction is res judicata and the Board has properly asserted juris- diction over the Respondent who is an employer en- gaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act. Respondent's argument that the Board should overrule National Transportation Service, 240 NLRB 565 (1979), should more properly be addressed to the Board, not me, because I have no plans to arrogate to myself authority that I not by statute possess. B. The Refusal to Meet and Bargain By letters of October 5, 13, and 22, 1982, the Union requested the Respondent to meet and negotiate a collec- tive-bargaining agreement. Respondent made no reply to these letters. The Respondent did, however, send the fol- lowing telegram to the Union on November 19, 1982: WE ARE THE ATTORNEYS FOR THE PARENTS AND FRIENDS OF THE SPECIALIZED LIVING CENTER IN SWANSEA ILLINOIS. AS YOU ARE AWARE, THE S.L.C. HAS REFUSED TO RECOGNIZE THE UNION AS THE BARGAINING REPRESENTATIVE OF ITS SERVICE AND MAINTENANCE EMPLOYEES, AND THE S.L.C.'S EXCEP- TIONS TO THE REGIONAL DIRECTOR'S REPORT ON OBJECTIONS ARE PENDING BEFORE THE NLRB. AC- CORDINGLY, THE S.L.C. MAINTAINS IT HAS NO LEGAL DUTY TO BARGAIN WITH THE UNION OVER ANY CHANGES IN EMPLOYEE WAGES, HOURS OR WORK- ING CONDITIONS. THE S.L.C. HAS DETERMINED THAT CERTAIN CHANGES IN HOURS OF WORK WILL BE REQUIRED 6 Pittsburgh Plate Glass Co v NLRB, 313 U S. 146, 162 (1941), Rules and Regulations, Sec 102 67(f) and 102 69(c) 7 See, e g, St Joseph Home, 266 NLRB No 88 (Mar 1 , 1983) (not re- ported in Board volumes) SPECIALIZED LIVING CENTER 515 ON DECEMBER 5, 1982 DUE TO: 1. MEDICAL RE- QUIREMENTS OF THE RESIDENTS , 2. CHANGE IN LO- CATION OF WORKSHOP , 3. ECONOMIC NECESSITY, WITHOUT WAIVING ITS POSITION THAT IT IS NOT REQUIRED TO RECOGNIZE THE UNION , THE S.L.C. IS WILLING TO MEET AND CONFER WITH THE UNION CONCERNING REQUIRED CHANGES , IN ORDER TO MEET LEGAL REQUIREMENTS. OFFICIALS OF THE S . L.C. WILL BE AVAILABLE TO MEET AND CONFER WITH YOU OR YOUR REPRESENT- ATIVE ON NOVEMBER 22, 23, 24, OR 26 . PLEASE CON- TACT THE UNDERSIGNED TO MAKE AN APPOINT- MENT. AGAIN, THE S.L.C. REITERATES THAT ITS OFFER TO MEET AND CONFER WITH THE UNION DOES NOT, IN ANY WAY, CONSTITUTE "RECOGNI- TION" OF THE UNION OR DIMINISH THE S .L.C.'S POSI- TION BEFORE THE NLRB. The Union sent a return telegram the same day. It reads, in pertinent part, as follows: THIS IS IN REPLY TO YOUR TELEGRAM OF NOVEM- BER 19, 1982. THE UNION IS UNWILLING TO MEET WITH YOU UNDER THE RESTRICTED CONDITIONS SET FORTH IN YOUR TELEGRAM, AS WE DO NOT BELIEVE THAT ANY MEANINGFUL BARGAINING IN GOOD FAITH CAN TAKE PLACE UNDER THE RESTRICTIONS. IF, OF COURSE, YOU AFFORD RECOGNITION TO THIS UNION, WE WILL PROMPTLY MEET WITH YOU. SHOULD YOU MAKE ANY UNILATERAL CHANGES WITHOUT FIRST NOTIFYING AND BARGAINING WITH US WE WILL HOLD YOU ACCOUNTABLE FOR SUCH ACTION AND WILL FILE APPROPRIATE CHARGES WITH THE NATIONAL LABOR RELATIONS BOARD. IT IS OBVIOUS, HOWEVER, THAT YOUR TELEGRAM OF NOVEMBER 19 IS AN ATTEMPT 'TO CIRCUMVENT THE LAW, NOT COMPLY WITH IT. WHEN YOU ARE WILL- ING TO TRULY ENGAGE IN BARGAINING, WE ARE READY TO DO SO. WE DEMAND THAT NO UNILATER- AL CHANGES BE MADE IN THE MEANTIME, YOUR PROPOSAL TO MEET AND CONFER WITH US IS AN IN- DEQUATE [SIC] WHICH WE WILL NOT DIGNIFY BY FURTHER RESPONSE. The record contains no evidence of further communi- cations between the parties with respect to bargaining. Respondent contends that it has not refused to bargain because the October 5 and 13 demands for bargaining preceded the Regional Director's certification on Octo- ber 19, and the October 22 demand, although after the Regional Director's certification, preceded the Board's final denial of Respondent's motions on February 17, 1983, and further because the Union has made no demand subsequent to the Board's final determination. Concerning the matters that it stated a willingness to confer on, Respondent's telegram denied any intent to recognize the Union by so conferring and expressly stated Respondent's position that it had no duty to rec- ognize or bargain with the Union. A clearer rejection of any obligation to meet and bargain over employee wages, hours, or working conditions is difficult to imag- ine, and such a rejection in the face of the Regional Di- rector's certification is an unlawful refusal to bargain, even though the Board has taken no final action on review. Allstate Insurance Co., 234 NLRB 193 (1978); Madison Detective Bureau , 250 NLRB 398, 399 (1980). There is no need to discuss the renewal of the Union's demand via its charges filed November 12, 1982, and January 17, 1983,8 or the continuing nature of the demand because the October 22 demand was made after the Regional Director's certification, and Respondent's Novmeber 19 telegram was a rejection of that demand in contravention of its duty to bargain with the Union after October 19, 1982. C. Changes in Work Schedule On December 14, 1982, Respondent changed the work schedules of night shift lab techs.9 The complaint does not allege, the General Counsel does not contend, and the record does not support a finding that these employ- ees suffered any loss of wages as a result of the changes. There was, however, some rescheduling of days off until March 26, 1983, when all lab techs on the shift were re- turned to the schedule in effect prior to December 14, 1982. Prior to December 14, full-time night-shift techs were scheduled two weekends and two instances of 2 consecutive weekdays in a 6-week period. They worked 5 days a week and all other days off were single days. After December 14 the lab techs continued to work 5 days a week with 2 days off, but the number of week- ends off and instances of 2 consecutive days were fewer for several employees at different times . In short, the night shift had no reduction in total days, but had fewer instances of 2 consecutive nonwork days. The changes on evening shift were implemented on January 30, 1983. As a result, some of the lab techs on that shift suffered a loss of hours, and presumably wages, at various times. Respondent's "Personnel Policies" handbook , effective January 1 , 1982, which it contends is provided every em- ployee, reads, in revelant part Work Schedule A. Eight and Eighty Hours Schedule (overtime purposes) As a 24-hour residential facility for developmen- tally disabled adults, the SLC will have staff on duty at all times . All full-time employees shall be scheduled to work a schedule not to exceed 8 hours per day and 80 hours within a two week period unless overtime is paid . This schedule may consist of 4 to 6 consecutive or non-consecutive days during the first week and the balance of 10 days during the second week. Certain categories of full- time personnel may have a different work schedule upon mutual agreement of the employee and the Administrator as long as 80 hours are worked within a two-week period . Employees will general- ly be assigned to work during either the regularly s See Sewanee Coal Operators Assn, 167 NLRB 172 (1967) I presume this is shorthand for laboratory technicians , but the parties' stipulation regarding schedule changes calls these employees lab techs 516 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD scheduled day, evening, or night shift. However, the Administrator or Supervisor may assign em- ployees to work during other time schedules, as deemed necessary by the job position and needs of the residents. Part-time employees shall be sched- uled as needed. Respondent has also had an "Employer-Employee Agreement," established December 1981, that is signed by new employees and reads, in relevant part, as follows: 2. I will work a basic 60-80 hour, 2 week sched- ule or less than 60-80 hours, 2 week schedule (circle once). This schedule may be changed, and I do not have the authority to change my schedule in any way. I certify in the presence of the undersigned su- pervisor that I carefully and thoroughly read, un- derstand and accept the personnel policies,10 job de- scription and employment agreement I am to work by and that I will abide by this agreement. I have also read, understand and accept those policies and procedures pertaining to my areas of responsibility. I promise to support, uphold, and adhere to these policies and procedures as a condition of my em- ployment. Thus done and signed this day of Supervisor Employee Respondent contends, and the evidence reflects, that its schedule changes were prompted by compelling eco- nomic considerations and business necessity . Most signifi- cantly, the State of Illinois, from which 99 percent of Respondent's operating funds flow, in December enacted a reduction in its payments of 7.66 percent, which trans- lates to a reduction for Respondent of approximately $10,000 a month effective February 1, 1983, and Re- spondent's advisory physician directed alterations in the hours and location of the adult day training program by December 6, 1982, which required rescheduling the evening shift to assure sufficient staff on hand during the hours patients would be present at Respondent's facility under the new patient schedule required by the advisory physician. Failure to reschedule employees to meet the needs of the new patient schedule would violate relevant state regulations, which could result in loss of reimburse- ment, loss of Respondent's license and certification, and reversion of the facility to the State of Illinois, that had deeded the property to Respondent on condition it abide by relevant state laws and regulations. Respondent's implementation of its established policy, known and agreed to by employees on their entry into employment, may not be a change in past policy, but it is a change in past practice. There is no showing the sched- ules were ever before altered. So far as the record before me reveals, the schedule changes alleged were unprece- dented. The Respondent shows compelling economic 10 Emphasis added considerations and a business necessity for the changes, but the Board has stated this to be irrelevant because an employer need not forego needed changes, but must first notify and bargain with the Union. 111 This presupposes that the Union wants to bargain on the changes. The complaint in this case alleges that Respondent made the schedule changes "without having afforded the Union an opportunity to negotiate and bargain." I do not believe the evidence meets the allegation. Respondent clearly of- fered to "meet and confer" before it would implement the schedule changes. The General Counsel's contention that it was a conditional offer because the Respondent reiterated its legal position that it was not required to recognize the Union as the bargaining representative of its employees is rejected. Respondent's telegram placed no condition on meeting and conferring on the changes. It but emphasized that Respondent retained the right to contest its legal duty to bargain with legitimate efforts through the appropriate tribunals even though it would meet and confer with the Union on this one subject. There is nothing in the telegram or elsewhere in the record indicating that Respondent's invitation to meet and confer was made in bad faith with no intention of negotiating an agreement on the schedule changes. To the contrary, the statement of willingness to meet and confer "in order to meet legal requirements" fairly im- plies that Respondent was willing to negotiate on the topic in good faith rather than to risk a violation of the Act by unilaterally making the changes. The Union, not Respondent, refused to bargain on the changes when it put conditions on any such negotiations by insisting on recognition, which amounts to a demand that Respond- ent abandon its contest of the certification. Inasmuch as Respondent did in fact notify the Union and offer to meet and confer regarding the schedule changes, it met its obligation to notify the Union of the contemplated changes and afford it opportunity to bargain thereon. That the Union elected not to avail itself of that opportu- nity does not defeat the validity of the offer. According- ly, I find the implementation of the changes, after the Union refused the offer to meet and confer, did not vio- late Section 8(a)(5) and (1) of the Act. D. The Alleged Threat Donald Melhorn, Respondent's secretary-treasurer, is also the mayor of Swansea, Illinois, and the consumer loan officer of the First National Bank located in Swan- sea. Commencing about 11 or 11:15 a.m. on December 23, 1982, Union Agents McMullen and Barger and four or five12 of Respondent's employees picketed for several minutes the Swansea village building wherein Melhorn's mayoral office is located.' a Signs they bore read, respec- tively, "Melborn is a Scrooge," "Santa Claus is not anti- union," "bonuses for supervisors unfair treatment for workers," "Melborn is unfair," "S.L.C. is unfair to em- " Aeronca, Inc, 253 NLRB 261, 264 (1980) 12 McMullen says four, but the parties stipulated to seven, picket signs. ' 2 Mary Jo Przybysz, the mayor's secretary, estimates no more than 5 to 7 minutes Judy Hagen, police department secretary, says a few min- utes SPECIALIZED LIVING CENTER 517 ployees," "We want to negotiate," and "we want a con- tract." McMullen testified, the signs reflect, and I find that the picketing was directed at Melhorn as secretary- treasurer of Respondent because Respondent had given large bonuses to supervisors but none to unit employees, and in protest of Respondent's refusal to bargain. Hagen and Przybysz agree that they were aware the picketing was directed at Respondent when they saw the "S.L.C." on the signs. During the picketing a woman who had accompanied the pickets, but did not picket, entered the building and inquired as to Melhorn's whereabouts. Hagen truthfully advised he was not there and said he could be reached at the bank where he worked. The woman left. Przybysz, who had been asked by Hagen what bank Melhorn worked at, called Nancy Scott, Respondent's administra- tor, and told her what had happened. Przybysz then called Melhorn and told her what had happened, adding there was reason to believe the pickets were going to the bank. There is no evidence the pickets intended to trans- fer their activities to the bank, and there was picketing at the bank or Respondent's facility. That evening when Melhorn returned home his wife told him pickets had been at the village offices looking for him and were going to picket the bank the following day. Melhorn then called the bank 's chairman of the board and repeat- ed the information to him . His wife had previously given the chairman her information . The chairman told Mel- horn that the bank had the necessary papers drawn up for court action to stop picketing if it occurred. Picket- ing of the bank never occurred. On the day of the picketing Respondent's attorney sent a mailgram to Union Business Representative McMullen, and Respondent posted a copy at its facility on a bulletin board above the employee timeclock on December 27, 1982. It remained posted through mid-January 1983. The mailgram reads as follows: ON OR ABOUT THURSDAY DECEMBER 23 1982 YOUR UNION, THROUGH ITS OFFICERS, AGENTS, REPRE- SENTATIVES AND/OR EMPLOYEES IMPROPERLY PICK- ETED SWANSEA CITY HALL, THE BUSINESS LOCATION OF ONE OF OUR DIRECTORS, SUCH PICKETING VIO- LATES SECTION 8G [SIC] OF THE NATIONAL LABOR RELATIONS ACT AND FURTHER MORE AMOUNTS TO ILLEGAL SECONDARY ACTIVITY UNDER THE ACT. PLEASE BE ADVISED THAT YOUR UNION AND/OR IN- DIVIDUALS ENGAGED IN SUCH PICKETING MAY BE LIABLE FOR ALL DAMAGES SUFFERED BY THE PAR- ENTS AND FRIENDS OF THE SPECIALIZED LIVING CENTER AS A RESULT OF THIS ILLEGAL PICKETING AS PROVIDED BY FEDERAL LAW. Respondent contends that the mailgram was not a threat to file a lawsuit against employees engaged in lawful picketing as the complaint alleges. To support this contention Respondent urges that (1) there is no specific threat to file a lawsuit or take other action against em- ployees; (2) there was no accompanying threatening or coercive communication, (3) the mailgrarn is nothing more than a statement Respondent would invoke its rem- edies under the Act and, thus, is akin to an employee's protected statement that he intends to file a charge against his employer; and (4) Respondent reasonably be- lieved the picketing was illegal secondary activity or it was illegal because the Union failed to give the 10-day notice required by the Act. This is an interesting but un- persuasive argument. As to (1), a threat need not be spe- cific but may be implied. Item (2) is irrelevant. Item (3) ignores the remarks about damage from individual em- ployees, certainly not provided for in the Act, and posits a nonexistent parallel based on a initial incorrect assess- ment of the mailgram's contents. Regarding (4), I am not convinced that the mailgram, prepared by presumably competent counsel, was based on a reasonable belief of strike illegality. If any such belief existed, it was in fact wrong, and it would take far more evidence than this record contains to persuade me that the asserted belief the bank would be picketed, posited on a bare inquiry into the whereabouts of Melhorn even though later com- pounded by flights of imagination by several persons un- connected with the Union or the employees, is one that a reasonable person could entertain. Seldom has so little panicked so many. The picketing was plainly aimed at Melhorn in his ca- pacity as an officer of Respondent. Leaving aside the question of jurisdiction over the Respondent or the vil- lage of Swansea, neither the conduct nor the objects re- quired by the Act as elements of illegal secondary activi- ty were present during the picketing (or before or after as far as the record shows). Moreover there is no evi- dence Respondent believed they were. The conclusion that the picketing was illegal secondary activity is there- fore not shown to have been supported by the slightest modicum of evidence that might possibly warrant such a conclusion. The mailgram assertion that the picketing violated Section 8(g) of the Act is similarly far-fetched. Section 8(g) requires a 10-day prior notice of "any strike, picketing, or other concerted refusal to work at any health care institution." The village hall is certainly no health care institution, whether Melhorn was present or not, and none of the activities requiring prior notice took place at the facility. There is no contention the picketing was unlawful on any other ground. Accordingly, the mailgram's advice that "individuals engaged in such picketing may be liable for all damages suffered by [Re- spondent's]" must be examined under the established guidelines for determining violations of Section 8(a)(1) of the Act. Neither the intent of Respondent or the subjective re- action of its employees are relevant. The test is whether an employer's conduct reasonably tends to interfere with, restrain, or coerce employees in the free exercise of their Section 7 rights. 114 The advice that employees who en- gaged in the picketing "may be liable" for damages under Federal law, when read by employees who cannot be reasonably expected to be versed in the intricacies of the law, was more than innocuous innuendo, amounted to an implied threat of legal proceedings, and reasonably tended to be sufficiently coercive to cause employees to 14 NLRB v Berger Transfer & Storage Co, 678 F.2d 679 (7th Cir 1982), Soule Glass & Glazing Co v NLRB, 652 F 2d 1055 (1st Cir 1981), G. H. Hess, Inc, 82 NLRB 463, 463-464 fn 3 (1949) 518 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD refrain from exercising their statutory right to lawfully picket and therefore violated Section 8(a)(1) of the Act.15 CONCLUSIONS OF LAW 1. Parents and Friends of the Specialized Living Center, Respondent, is an employer engaged in com- merce within the meaning of Section 2(2), (6), and (7). 2. Nursing and Convalescent Home Division, Service Employees' International Union, Local 50, AFL-CIO, CLC, the Union, is a labor organization within the mean- ing of Section 2(5) of the Act. 3. All full-time and regular part-time employees em- ployed by Respondent at its 1450 Caseyville Avenue, Swansea, Illinois facility EXCLUDING licensed practi- cal nurses, managerial employees, business office cleri- cals, professional employees, guards, and supervisors as defined in the Act constitute a unit appropriate for the purposes of collective bargaining within the meaning of Section 9(b) of the Act. 4. Since October 19, 1982, the above-named labor or- ganization has been and now is the certified and exclu- sive representative of all employees in the aforesaid ap- proriate unit for the purpose of collective bargaining within the meaning of Section 9(a) of the Act. 5. By refusing on or about November 19, 1982, and at all time thereafter, to bargain collectively with the above-named labor organization as the exclusive bargain- ing representative of all the employees of Respondent in the appropriate unit, Respondent has engaged in and is engaging in unfair labor practices within the meaning of Section 8(a)(5) of the Act. 6. By the aforesaid refusal to bargain, Respondent has interfered with, restrained, and coerced, and is interfer- ing with, restraining, and coercing employees in the ex- ercise of the rights guaranteed them in Section 7 of the Act, and thereby has engaged in and is engaging in unfair labor practices within the meaning of Section (8)(axl) of the Act. 7. By threatening to institute legal proceedings against employees because they engaged in lawful picketing, Re- spondent has interfered with, restrained, and coerced em- ployees in the exercise of the rights guaranteed them in Section 7 of the Act, and thereby engaged in an unfair labor practice within the meaning of Section 8(a)(1) of the Act. 8. The aforesaid unfair labor practices are unfair labor practices affecting commerce within the meaning of Sec- tion 2(6) and (7) of the Act. THE REMEDY Having found that Respondent has engaged in and is engaging in unfair labor practices within the meaning of Section 8(a)(5) and (1) of the Act, my recommended order will require that it cease and desist therefrom, and, on request, bargain collectively with the Union as the ex- clusive representative of all employees in the appropriate unit, and, if an understanding is reached, embody such understanding in a signed agreement. 15 Cutting, Inc, 255 NLRB 534, 543 (1981) In order to ensure that the employees in the appropri- ate unit will be accorded the services of their selected bargaining agent for the period provided by law, I rec- ommend that the Board order the initial period of certifi- cation shall be construed beginning on the date Respond- ent commences to bargain in good faith with the Union as the recognized bargaining representative in the appro- priate unit. See Mar-Jac Poultry Co., 136 NLRB 785 (1962); Lamar Hotel, 140 NLRB 226, 229 (1962), enfd. 328 F.2d 600 (5th Cir. 1964), cert. denied 379 U.S. 817 (1964); Burnett Construction Co., 149 NLRB 1419, 1421 (1964), enfd. 350 F.2d 57 (10th Cir. 1965). [Recommended Order omitted from publication.] Mary J. Tobey, Esq., for the General Counsel. Bettye S. Kitch, Esq., for the Respondent. SUPPLEMENTAL DECISION CLAUDE R. WOLFE, Administrative Law Judge. The original decision in this proceeding was issued by me on 17 August 1983. By its Order of 25 July 1986 and its Order correcting of 1 August 1986, the Board remanded this proceeding to me for further consideration of the ju- risdictional issue consistent with the Decision and Orders in Res-Care, Inc., 280 NLRB 670 (1986), and Long Stretch Youth Home, 280 NLRB 678 (1986). The record was reopened and further hearing held on 14 October 1986 at St. Louis, Missouri. The parties were given op- portunity to, and did, submit further evidence relating to the issue on remand. Able posttrial briefs were filed by the parties.' Respondent's preliminary agrument that it is an exempt employer under Section 2(2) of the Act as an arm of state government is rejected, and after consider- ing the evidence, the briefs of the parties, and Res-Care and Long Stretch and their progeny, I conclude and find on the following facts and for the following reasons that it will effectuate the purposes and policies of the Act for the Board to assert jurisdiction in this matter. Respondent was formed as a not-for-profit Illinois cor- poration in 1981 for the purpose of assuming the oper- ation of a specialized living center previously construct- ed by the State of Illinois in Swansea, Illinois, in 1979 as a residential care and training facility for severely and profoundly retarded adults. The center was constructed pursuant to the Illinois Specialized Living Centers Act, and was first deeded to St. Clair County, Illinois, who operated it from February 1980 through 31 December 1981 when ownership of the facility reverted to the State. Respondent took over the operation of the center on 1 January 1982 pursuant to a contract between it, the Illinois Department of Mental Health and Developmental Disabilities (DMH), and the Illinois Capital Development Board (CDB). In accord with the terms of the agree- ment, CDB gave Respondent a warranty deed to the fa- cility and leased the durable movable equipment at the I Respondent moved to dismiss the proceeding at the beginning of the 14 October 1986 hearing on grounds of an 80-percent turnover in the bar- gaining unit and the Board's delay in issuing a decision in this proceed- ing The motion was denied by me Respondent again raises this motion in its posttrial brief The motion is again denied SPECIALIZED LIVING CENTER facility to Respondent for $1 a year for 8 years. As con- sideration therefor, Respondent is required to operate its facility in accord with "Minimum Rules and Regulations for Specialized Living Centers" promulgated by DMH. Failure to so do shall cause title to the real and personal property to revert to the CDB. Among other things, Re- spondent must provide its residents with adequate pro- gramming, maintain the appropriate state or local li- censes, remain financially solvent, avoid liens on the property, immediately correct any I ax delinquencies that might occur, annually file written reports on the finan- cial condition of the Specialized Living Center, maintain adequate insurance coverage, and submit an annual orga- nizational structure including names, positions, and func- tions of the individuals involved. The agreement specifi- cally provides that no revenues are to be derived from the property, and any revenue so derived must be put in Respondent's general fund to be used in its dealings with the individuals it serves. Respondent's nine-member board of directors is com- posed of local persons. Some must be parents or guard- ians of Respondent's clients, and some must be profes- sionals involved in the ocmmunity, such as accountants or lawyers. There is no requirement that the board of di- rectors include any civil servant or official of the State. The directors are elected by Respondent's corporate membership, which is open to anyone paying a $10 annual fee. The State of Illinois is not involved in the se- lection of directors and has no authority to remove a di- rector. The State does require that Respondent's execu- tive director, who is responsible for day-to-day oper- ations and reports to the board of directors, be licensed as a nursing home administrator. The executive director is hired by the board of directors without need of ap- proval by the State. Respondent is required by DMH to have an occupational therapist, a speech therapist, a physical therapist, a medical record keeper, and a psy- chologist physician as consultants . These persons are re- tained by Respondent as independent conl ractors. Re- spondent is also required to employ licensed administra- tive employees, a professional staff, and dietary, house- keeping, maintenance, and training persons. According to Respondent's executive director, Agnes Schloemann, the state-mandated staffing ratio is four clients to each direct care employee. More than half of Respondent's employ- ees are certified habilitation technicians (HT) who are fully engaged in direct client care on an around-the- clock basis. Respondent receives all its operating funds through the State in the form of monthly dump payments from the Illinois Department of Public Aid (DPA). The amount to be received during a given year is calculated on the basis of annual cost reports submitted by all the specialized living centers in a designated region. These reports set forth Respondent's expenditures in great detail, including the total and average hourly wage paid to employees in each job classification at the facility. DPA audits Respondent's annual report and then utilizes it, along with the others submitted in the region, to de- velop a level of reimbursement for the second year after the year covered by the report, e.g., the audited cost report for 1987 will determine the amount a specialized 519 living center is reimbursed in 1989. The audited cost report in effect becomes the budget for the second year following. Although Respondent provides a breakdown of wage rates in its cost report, the only control the DPA exerts over wage rates, with the single exceptions of habilitation technician trainees, is a limitation on wage reimbursement to the result of multiplication of total re- imbursable hours worked by the regional mean wage rate. This clearly does not mean that DPA sets maximum reimbursable wage rates for any specific classification other than the aforementioned trainees. Respondent ac- knowledges in its posttrial brief that there has been no occasion for state officials to disapprove a wage rate paid by Respondent. The DPA does not say Respondent cannot pay more than it allocates for total wages, but it does say Respondent will not be reimbursed for any amount exceeding its total wage allocation that is based on the regional mean hourly rate. These conclusions re- garding the State's control over wages, as well as other expenditures, are supported by the candid testimony of Schloemann reported below in pertinent part: Q. Okay. After the training period [for habilita- tion technicians], then the state does not set any particular wage rate that you must pay your em- ployees? A. No. As long as you don't go over that aver- age mean weighted rate per hour for our HSA-for each facility HSA. Q. The average mean, what happens if you go over that? A. You're not reimbursed for it. Q. But the state doesn't specifically say that you cannot pay more than that? A. No, they do not say you cannot. You're just not reimbursed for it. BY Ms. TOBEY: Q. Isn't the average mean support rate or the av- erage mean wage rate, that's just one portion of the program rate, is it? A. That's right. Q. Which is only one portion of the entire reim- bursement rate, correct? A. They give us a per diem, per client. Q. Do you get-does the state just give you a lump sum then each month? A. They give us a per diem, per client. Q. Okay. And are there any requirements as to how you distribute that lump sum? A. No. Remember that back into our cost report from two years ago to come up with that per diem. Q. Okay. But it's up to the SLC to determine how to distribute the actual funds? A. Yes. Based on those categories within the sep- arate components. Q. Is there any requirement that you-I mean, is there an earmarking of funds for particular catego- ries when the state gives you your check? A. No. When the check comes there is not. Re- member that rate reimbursement, your daily per 520 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD diem comes from your cost report that was submit- ted two years before. Q. Explain to me exacly then-you stated you cannot pay more than the updated weighted region- al mean wage rate per hour. A. No. I said you would not be reimbursed for more than the updated mean rate. BY Ms. TOBEY: Q. And they get this figure from looking at all the facilities in your region, correct? A. That's correct. Q. Okay. This regional mean wage rate, that's for which employees? A. That's all direct hands on. Q. Okay. Other than habilitation techs, who would that include? A. It can include some program assistants, those that are in charge of each individual part. It can in- clude-I'm trying to think who besides that. It would include the AOD's, they would be in that component. Personal care technicians would be in that component. I believe that is all I can think of at this point in time. DPA has set a specific reimbursement level for habilita- tion technicians in training. According to Schloemann, these employees' salaries are reimbursed at a set level during 40 hours of classroom training and 80 hours of on-the-job training. The General Counsel correctly points out that the DPA's policy for training habilitation technicians specifically states no payment will be made for the salary of such trainees when they are engaged in practical training at their place of work because they then are included in the staffing ratios and reimburse- ment for their salaries during the service will be secured through the annual cost report. On the other hand, the same document states DPA will reimburse for up to 130 hours. Whether the reimbursement is for 40 or 120 hours does not strike me as a signficant matter in determining whether meaningful collective bargaining can take place. The foregoing facts persuade me that Respondent's ar- gument that Respondent cannot bargain over wages be- cause wage rates are prescribed by the State and utilized by it to establish a reimbursement rate and therefore an effort to change the wages "would be outside the param- eters established by the State" has no firm foundation. Respondent clearly can and does unilaterally establish different wage rates when it deems it appropriate, with- out any necessity of first securing state permission. Here, as in Long Stretch, the State of Illinois has no direct con- trol over the setting of salaries for individual job classifi- cations. Its only control is the authority to withhold re- imbursement to the extent Respondent's average wage exceeds the regional mean average wage. What individ- uals are paid, except for the aforementioned trainees, is of no concern to the State so long as the mean average is not exceeded. Even then, the State will not change the individual wages, but simply will not reimburse Re- spondent for the excess. This does not preclude bargain- ing on the allocation of reimbursed funds to individual job classifications. With respect to fringe benefits , Schloemann testified that the State of Illinois does not determine which em- ployee benefits or what level of benefits Respondent shall provide, and Respondent can change benefits if it wishes . The only limitation is the maximum monetary re- imbursement level the State sets for benefits . Respondent therefore has discretion in selecting the benefits it will provide within the limits of available funds. Respondent's personnel policies were drafted by Schloemann and approved by Respondent's board of di- rectors. The thrust of Schloemann's testimony is that personnel policies additional to those required by gov- ernmental authorities need no prior approval and may be altered as Respondent finds appropriate without prior consultation with the State. The personnel policies are submitted to the State for review, but I am persuaded this review is concerned with assuring that items re- quired by the state or Federal governments are included. The Illinois Administrative Code2 requires Respondent to have written personnel policies including employment application forms, individual personnel files containing "pertinent personnel data such as health records and evaluations of performance," provisions for physical ex- aminations for past or present tuberculosis and existing communicable diseases, and provisions requring training and/or experience in the job assigned, general facility and resident orientation, annual in-service training pro- grams for all employees except interns, the restriction of assigned duties to those directly related to the employ- ees' job function, a plan of substitution of personnel for regular staff when the latter are absent, and a posted weekly employee time schedule. Neither the statute nor any other evidence of record sets forth further detailed requirements by the funding bodies. In addition to items required by the state and Federal agencies, Respondent's personnel handbook includes provisions for holidays, va- cations, sick pay, leaves of absence, jury duty, insurance, free meals, retirement benefits, a detailed grievance pro- cedure, and disciplinary policies and procedures includ- ing the enumeration of 16 reasons for disciplinary action short of discharge and 16 reasons for immediate dis- charge. The State takes no part in the actual interview, selec- tion, hiring, or firing of employees, nor do its agents take part in the day-to-day operation of the facility. Respond- ent not only has employment criteria additional to those required, it has its own job interview and preemploy- ment procedures and probationary policy, all of which it is free to change at its discretion. Respondent points out that it is required to notify the State of any labor dispute, and the annual cost reports require Respondent to answer whether nursing employ- ees, specifically registered nurses, licensed practical nurses, and nurse aides are represented by a union. A re- sponse to these questions does not , standing alone, indi- cate any meaningful state control over Respondent's 2 Title 77 Public Health, Chapter I Department of Public Health, Subchapter C Long-term care facilities, sec 350 670 SPECIALIZED LIVING CENTER 521 labor relations, nor does the fact that the State might possibly elect to temporarily assign its own employees to staff a struck facility in order to maintain its operation. In Res-Care the Board reaffirmed the holding in Na- tional Transporation Service, 240 NLRB 565 (1979), that the appropriate inquiry in cases involving an employer with close ties to an exempt government entity would be "whether the employer itself met the defintion of an 'em- ployer' in Section 2(2) of the Act and, if so, whether the employer retained sufficient control over the employ- ment conditions of its employees to enable it to engage in `effective' or `meaningful' bargaining with a labor or- ganization." The Board further explained that application of the test requires an evaluation of both the control over essential terms and conditions of employment held by the employer and the control exercised by the exempt entity over the employer's labor relations. Applying the National Transportation Service test as so defined, the Board in Res-Care determined that notwithstanding the employer's absolute control over hiring, firing, promo- tions, demotions, and transfer, plus final authority over grievances, there was no jurisdiction because the em- ployer did not have the final say on wages and fringe benefits, and this rendered meaningful bargaining impos- sible. Respondent contends that Res-Care requires the Board to decline jurisdiction in the instant case. The General Counsel argues that Long Stretch is con- trolling and jurisdiction should be asserted. The Board, in asserting jurisdiction over Long Stretch, noted that state funding was not directly tied to proposed expendi- tures for wages and benefits and, in the absence of specif- ic limits on employee compensation such as those present in Res-Care, a ceiling placed on such expenditures by the funding agency is not the type of control over labor rela- tions that would cause the Board to decline jurisdiction. The Board continued that the State had "little or no con- trol over the setting of salaries, the content of the bene- fits provided, or the content of other personnel policies, so long as Long Stretch satisfies minimum standards and qualification. Accordingly, Long Stretch retains substan- tial control over economic matters that are central to the employer-employee relationship."3 A state requirement that Long Stretch fill specific job classifications with em- ployees meeting the minimum qualification for those jobs was also held to be a minimal limitation on the authority to fire and hire, which did not significantly impair Long Stretch's ability to engage in meaningful bargaining. 3 Res-Care, supra. The State of Illinois, although it limits the total amount reimbursed for wages and benefits, does not, as the U.S. Department of Labor did in Res-Care, prescribe maximum or minimum wage ranges or the substantive terms of specific employee benefits such as sick leave pay, vacation accrual, and the number of paid holidays for Respondent's employees, nor does Respondent need prior approval from the State for changes in wages paid to individual employees, with the single exception of those of habilitation technicians in training , or changes in existing benefits . The State's limitations in these matters extend only to the total amounts available for spending. The State requires that Respondent maintain certain job classifications and fill them with persons meeting the State's qualification, but leaves it to Respondent's discre- tion who shall be hired among those applicants meeting the qualifications. This, as well as the State's power to require that unqualified employees not be retained, is, as in Long Stretch, a minimal limitation on Respondent's hiring and firing authority. Here, the Respondent other- wise has sole control over who shall be hired, who is fired, and why. Moreover, Respondent has unilaterally constructed hiring, disciplinary, and firing rules and pro- cedures, and other personnel policies, going far beyond the bare requirements set by the State. The State plainly does have, and exercises, pervasive operational controls over Respondent in matters other than those pertaining to labor relations, but this does not mean Respondent is thereby disabled from engaging in meaningful bargaining.4 On the evidence presented, I am persuaded that Respondent has sufficient control over es- sential terms and conditions of its employees' employ- ment to enable it to engage in meaningful collective bar- gaining with the Charging Union. It will therefore effec- tuate the purposes and policies of the Act to assert juris- diction. On these findings of fact and conclusions of law and on the entire record, I issue the following recommend- ed5 ORDER Jurisdiction is asserted in this proceeding. * Res-Care, supra s If no exceptions are filed as provided by Sec 102 46 of the Board's Rules and Regulations , the findings, conclusions, and recommended Order shall, as provided in Sec 102 48 of the Rules, be adopted by the Board and all objections to them shall be deemed waived for all pur- poses