Public Service Company of Colorado, Petitioner-Cross-Respondent v. National Labor Relations Board, Respondent-Cross-Petitioner, International Brotherhood of Electrical Workers, Local 111, Intervenor
Docket: 03-9609
Court: Court of Appeals for the Tenth Circuit; April 26, 2005; Federal Appellate Court
The case involves the Public Service Company of Colorado (PSC) challenging the National Labor Relations Board's (NLRB) determination that three of its revenue-protection workers are not "supervisors" under § 2(11) of the National Labor Relations Act (NLRA), thus entitled to union representation. The International Brotherhood of Electrical Workers, Local 111 (Union), petitioned for an election to represent these workers, which led to a NLRB hearing concluding that the workers were not supervisors. Consequently, the workers voted for Union representation, which PSC refused to recognize, prompting the Union to file an unfair labor practice charge. The NLRB found PSC's refusal to bargain constituted an unfair labor practice under §§ 8(a)(1) and (5) of the NLRA.
PSC argues that the workers' classification as supervisors justifies its refusal to bargain, but the NLRB contends otherwise. The Tenth Circuit Court has jurisdiction to review and enforce NLRB orders. The court upheld the NLRB's findings, determining that the revenue-protection workers lack the authority to reward employees or resolve grievances, consistent with the definition of supervisors under the NLRA.
PSC, a subsidiary of Xcel Energy, provides utility services in Colorado and has been represented by the Union since 1946. The dispute centers on a revenue-protection analyst and two investigators who address revenue losses. They are overseen by personnel from Xcel Energy and receive salaries below certain bargaining-unit employees. Their role involves investigating losses and processing bonuses for employees who report unauthorized energy use, as stipulated in collective-bargaining agreements that define bonus structures for reporting such issues. The court denied PSC's petition and granted the NLRB's cross-petition for enforcement of its order.
An employee who identifies potential energy diversion submits a report via the company's computer system, which includes their identification number and the date to establish the identity of the reporting employee. A revenue-protection analyst reviews these reports daily, checking if the reported diversion was authorized (e.g., during construction) and if it has been resolved. If the diversion is corrected without significant revenue loss, the reporting employee, if a bargaining-unit member, receives a $10 bonus. For significant revenue losses, the case is referred to the billing department, which may prorate the account. The analyst records a bonus for the reporter based on the billing department's decision, with the bonus being either $10 or 10% of the additional charges to the customer if those exceed $100.
If the meter issue remains unresolved, the analyst assigns the case to a revenue-protection investigator, who investigates the reported revenue loss and collects physical evidence of theft. The investigator verifies the findings with a meterman and checks the employee's eligibility for a bonus if they are a bargaining-unit member. The investigator reviews billing history to estimate unmetered power usage, primarily using a future-use method over two to four weeks, but may also employ historical data or similar accounts if necessary. Witness interviews may provide additional context for determining unmetered usage duration or adjustments. The customer must demonstrate that usage estimates are excessive, though successful adjustments are rare.
At the conclusion of an investigation, the investigator provides a report to the revenue-protection analyst that includes an estimate of unmetered kilowatt hours, a recommendation on whether to prorate the account, and the eligibility of the reporting employee for a bonus. If proration is recommended, the analyst sends both reports to the billing department, which is not obligated to follow these recommendations but typically does. The billing department calculates the customer’s bill and communicates its decision to the analyst, who records any bonuses for qualifying employees.
Grievances may be filed by employees claiming improper denial or calculation of bonuses. While the investigators and analyst lack authority to resolve these grievances, they inform PSC managers of their calculations and determinations. Adjustments to bonuses can occur, often prior to grievances being filed, as exemplified by a bonus adjustment based on subsequent meter readings.
On December 18, 2002, the Union sought an election under the NLRA to determine if three revenue-protection workers wanted representation. PSC argued these workers were supervisors or managerial employees, making them ineligible for representation. After a hearing, the Regional Director ruled they were neither, leading to an election where all three voted for Union representation. On June 24, 2003, the NLRB certified the Union as the exclusive bargaining representative.
Employers cannot directly seek judicial review of such certifications. Instead, PSC refused to bargain, prompting the Union to file an unfair-labor-practice charge. PSC admitted to this refusal but challenged the Union's certification, asserting the workers were not covered by the NLRA. The NLRB granted summary judgment against PSC, ordering it to bargain with the Union, as PSC failed to present new evidence or special circumstances to warrant a reexamination of the representation decision. PSC then petitioned for review of the Board's order regarding the workers' supervisory status, while the Board cross-petitioned for enforcement, with the Union intervening in support of the Board.
The term "supervisor" refers to an individual with the authority to make significant employment decisions on behalf of the employer, such as hiring, promoting, or disciplining employees, provided the exercise of this authority requires independent judgment rather than being routine or clerical. Jurisprudence establishes that possessing any one of the specified powers suffices for supervisory status, as long as it involves independent judgment. The Supreme Court's decision in NLRB v. Kentucky River Community Care, Inc. outlines a three-part test for determining supervisory status: (1) the individual must possess authority over one of the specified supervisory functions, (2) the exercise of that authority must require independent judgment, and (3) the authority must be exercised in the employer's interest. The burden of proof for establishing supervisory status lies with the party asserting it.
In this case, PSC argues that revenue-protection workers are supervisors based on their ability to reward employees, adjust grievances, potential conflicts of interest under the NLRA, and other indicators of supervisory status. However, the review of these claims is limited to ensuring that factual findings are supported by substantial evidence. The Board's legal interpretations of the NLRA are afforded deference, provided they are reasonable. The analysis will focus on whether the revenue-protection workers exercise independent judgment in rewarding or recommending rewards for other employees in the interest of PSC.
The revenue-protection analyst demonstrates minimal independent judgment, relying on strict criteria to assess employee bonus eligibility: membership in a bargaining unit and authorization of power diversion. She applies a mathematical formula for bonus calculations and has limited discretion in determining if a loss is significant enough to warrant forwarding to the billing department, which can only potentially increase a bonus but never decrease it.
Revenue-protection investigators have somewhat more discretion, primarily in verifying the meterman's findings regarding diversion causes and the eligibility of reporting employees based on collective-bargaining unit membership. Their discretion appears limited to rectifying clerical errors, although instances of such errors are unclear.
Calculating unmetered use involves more complexity, yet the Board maintains that investigator discretion is still constrained. Investigators utilize objective criteria for calculation methods and standard formulas for reported data. Their primary judgment lies in assessing whether customers have sufficiently demonstrated inaccuracies in their unmetered usage calculations, which is based on objective evidence and occurs infrequently.
The Supreme Court emphasizes that many supervisory tasks do not require sufficient judgment to confer supervisory status under the Act, allowing the Board to determine the scope of discretion necessary for such classification. It is acknowledged that detailed management orders can diminish the level of judgment required for a task.
The principal purpose of the investigators' estimate of unmetered usage is to enable the PSC to collect the value of electricity or gas consumed by customers without payment, with bonuses received by workers being indirect and incidental. The revenue-protection staff's role does not involve evaluating or improving fellow employees' performance, similar to how a player in a baseball game does not provide souvenirs for fans. The Regional Director referenced the case of Brown, Sharpe Mfg. Co., where the appellate court found that time-study personnel, while affecting employee earnings, did not exercise bona fide supervisory power. Their primary role was to establish time standards for operations, and any impact on other employees' earnings was incidental. The PSC's argument included cases where employees were deemed supervisors due to their ability to recommend rewards, such as in Bayou Manor Health Center and Pine Manor Nursing Center. However, these cases are distinguishable as the evaluations directly influenced employee performance and pay, unlike the investigators' calculations of unmetered usage, which are solely aimed at customer billing and not employee compensation.
The Board interprets "reward other employees" in the definition of supervisor under 29 U.S.C. § 152(11) as excluding actions that only incidentally benefit other workers. This interpretation, which focuses on the intent to influence job performance, warrants deference. Consequently, the Board affirmed the rejection of PSC's claim that three revenue-protection workers are supervisors based on their supposed role in rewarding other employees.
Regarding the authority to adjust grievances, PSC argued that these workers exercise independent judgment in recommending grievance adjustments. However, the Regional Director found that their involvement is limited to relaying bonus decision rationales to management, with no authority to grant or compromise grievances. Testimony confirmed they had never participated in grievance meetings, and their calculations of unmetered usage do not equate to grievance adjustment. The distinction between true grievance adjustment and merely correcting mistakes was emphasized, supporting the Board's rejection of PSC's claims.
Finally, PSC argued that labeling these workers as non-supervisors undermines the NLRA's aim of preventing divided loyalties. The Supreme Court has noted that the supervisor and manager exceptions to the NLRA stem from the need for employers to have the undivided loyalty of their representatives.
The statutory definition of a supervisor does not indicate a significant risk of divided loyalties in the case of revenue-protection workers at PSC. The bonus structure aligns the interests of PSC and its employees, as bonuses are awarded based on reported income losses that require correction. This system incentivizes accurate reporting since larger losses lead to higher bonuses for workers and increased billing for PSC. Any potential for harm to PSC from overcharging customers is mitigated by the transparency of customer complaints, allowing for corrective actions.
PSC's argument regarding the Union's constitution imposing a conflict of loyalty on revenue-protection workers lacks substantiation, as the company did not investigate the constitutional provisions during the hearing. Speculative concerns about workers facing Union sanctions for fulfilling bonus requests are insufficient to overturn the Board's ruling. Additionally, PSC's claim of potential loyalty conflicts arising from investigators' authority to adjust customer bills is dismissed because such authority was denied by the investigators, and evidence supporting this claim was ambiguous. The infrequency of bill adjustments further weakens PSC's position.
Finally, PSC's assertion that revenue-protection workers should be classified as supervisors based on secondary indicia, such as their salaried status and oversight from Minnesota officials, is deemed of marginal relevance. The court references NLRB v. Dole Fresh Vegetables, Inc., indicating that secondary indicia should not override the statutory definition of a supervisor.
Secondary indicia of supervisory status are relevant in limited circumstances, particularly in borderline cases, as established by various Circuit Courts. While some courts emphasize the importance of statutory text over secondary indicia, others acknowledge that secondary indicia can support a finding of supervisory status when accompanied by at least one primary indicator. However, these secondary indicia alone are not decisive. In the present case, the secondary indicia available are deemed too insignificant to influence the outcome. The conclusion affirms the Board's determination that three revenue-protection workers are not statutory supervisors and that PSC committed an unfair labor practice, resulting in the denial of PSC's petition for review and the enforcement of the Board's order.
