Economic Security Corp. Of Southwest Area

National Labor Relations Board - Board Decisions

Aug 24, 1990

299 N.L.R.B. 562 (N.L.R.B. 1990)

562 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
Economic Security Corporation of Southwest Area
and Allied Industrial Workers of America,
AFL-C10, Petitioner. Case 17-RC-9684
August 24, 1990
DECISION ON REVIEW AND ORDER
BY MEMBERS CRACRAFT, DEVANEY, AND
OVIATT
On October 8, 1986, the Regional Director for
Region 17 issued a Supplemental Decision and
Order in the above-entitled proceeding in which he
asserted jurisdiction over the Employer In accord-
ance with Section 102 67 of the Board's Rules and
Regulations, the Employer filed a timely request
for review of the Regional Director's decision By
telegraphic order dated July 17, 1987, the Board
granted the Employer's request for review 1
The Board has considered the entire record, in-
cluding the briefs, and makes the following find-
ings
The facts are undisputed The Employer is incor-
porated in the State of Missouri as a not-for-profit
"commumty action agency" serving a four-county
area 2 Its Articles of Incorporation grant it all
powers a Missoun not-for-profit corporation can
exercise "relating to anti-poverty organizations, or
for the public welfare "Accordingly, the Employ-
er receives Federal and state funds through various
grants and contracts to administer such programs
as Community Development, Employment and
Training, Family Planning, Head Start, and the
Home Weathenzation Energy Assistance Pro-
gram 3
Federal4 and state5 laws require that the Em-
ployer have a board of directors, and that
(A) one-third of the members of the board
are elected public officials, currently holding
office, or their representatives, except that if
1 The election was held March 21, 1985, and the ballots Impounded
On June 30, 1986, the Board remanded the case for further consideration
in light of Res-Care, Inc , 280 NLRB 670 (1986), and Long Stretch Youth
Home, 280 NLRB 678 (1986) The Regional Director, on October 8,
1986, issued a Supplemental Decision and Order asserting jurisdiction and
further ordenng that the impounded ballots be opened and counted, and
that a tally of ballots Issue On October 20, 1986, the Employer requested
review on all issues
2 The four counties served by the Employer are Barton, Jasper,
Newton, and McDonald The Employer was Incorporated in October
1965 by three individuals under the Missoun "General Not For Profit
Corporation Act" On October 6, 1965, the State of Missoun issued its
Certificate of Incorporation
'The Employer's operations are organized into five departments em-
ployment and training, community development, family planning, head
start, and energy While each department has its own director, the Em-
ployer's executive director exercises general oversight over operations
4 Community Services Block Grant Act, 42 U S C § 9901, § 9904(c)(3)
(August 13, 1981)
5 Community Action Agencies, Senate Bill No 564, An Act Relating
to Community Action Agencies (1984)
the number of elected officials reasonably
available and willing to serve is less than one-
third of the membership of the board, member-
ship on the board of appointive public officials
may be counted in meeting such one-third re-
quirement, (B) at least one-third of the members
are persons chosen in accordance with democratic
selection procedures adequate to assure that they
are representative of the poor in the area served,
and (C) the remainder of the members are offi-
cials or members of business, industry, labor,
religious, welfare, education, or other major
groups and interests in the community [Em-
phasis added J6
The Employer has incorporated these requirements
into its bylaws
Section 2(2) of the National Labor Relations Act
provides that the term "employer" shall not in-
clude "any State or political subdivision there-
of "7 To date, the Board has limited the "po-
litical subdivision" exemption to entities "that are
either (1) created directly by the state, so as to
constitute departments or administrative arms of
the government, or (2) administered by individuals
who are responsible to public officials or to the
general electorate" Hawkins County, supra at 604-
605 8
The Regional Director found, and we agree, that
the first part of the Hawkins County test was not
satisfied It is undisputed that the Employer was
not created directly by any government entity No
special legislative act or public official was re-
quired to create it Rather, the Employer was in-
corporated by three private individuals under State
of Missouri law as a not-for-profit corporation See
Truman Medical Center v NLRB, 641 F 2d 570,
572 (8th Cir 1981) (medical center organized under
'The quotation is from the Federal statute See fn 4, supra The state
statute contains a virtually identical provision
7 The "political subdivision" exemption has its basis in Tenth Amend-
ment considerations of state sovereignty and the Eleventh Amendment
grant of judicial immunity to the States Cresthne Memorial Hospital Assn
v NLRB, 668 F 2d 243, 245 fn 1 (6th Or 1982) While the term "politi-
cal subdivision" is not defined in the Act, the Supreme Court in NLRB v
Atkins d1 Co. 331 U S 398, 441 (1947), stated that in interpreting Sec 2
definitions, "the responsibility of representing the public interest and
of reaching a judgment after giving due weight to all the relevant factors
lay[s] primarily with the Board" See also NLRB v Natural Gas Utility
District of Hawkins County (Hawkins County), 402 U S 600, 605 (1971)
("The Board's construction of the [political subdivision exemption] is, of
course, entitled to great respect ")
8 The Board and courts have also examined other evidence in deter-
mining whether an entity is a political subdivision See Hawkins County,
supra at 608 See also Truman Medical Center v NLRB, 641 F 2d 570,
572-573 fn 2 (8th Or 1981), and Cape Girardeau Care Center, 278
NLRB 1018, 1019 fn 5 (1986) Evidence pertaining to power of eminent
domain, power to levy taxes, public meetings, etc, provides additional
support for finding an entity to be a political subdivision, however, such
evidence is not crucial to the determination See Woodbury County Com-
munity Action Agency, 299 NLRB No 65, slip op at fn 5 (1990)
299 NLRB No 68
ECONOMIC SECURITY CORP 563
Missouri not-for-profit statute not created directly
by the State so as to constitute a department or ad-
ministrative arm of the government)
The second part of Hawkins County requires that
the entity be "administered by individuals who are
responsible to public officials or to the general
electorate" The Regional Director found that 8 of
the Employer's 24-member board of directors9 are
elected public officials, but that "a majority of the
board is neither appointed by nor subject to remov-
al by public officials or the general electorate or
has no official connection with to [sic] any govern-
mental body "" The Regional Director did not
discuss the significance of the one-third "represent-
ative of the poor" members on the board of direc-
tors, but merely concluded the Employer had not
satisfied this portion of the Hawkins County test,
citing Jefferson County Community Center, supra
The Employer, on the other hand, argues that its
tripartite board of director structure means that it
is administered by individuals responsible to public
officials and the general electorate We agree
In Jefferson County Community Center, supra at
125, the Tenth Circuit Court of Appeals applied
the second branch of the Hawkins County test to a
nonprofit Colorado corporation providing a variety
of educational and vocational services for the men-
tally retarded and seriously handicapped Manage-
ment of the agency was vested in a 15-member
board of directors and, in finding that the board
was not "administered by individuals responsible to
public officials or the general electorate," the court
found that the board's composition was established
"not by statute but by the bylaws of the corpora-
tion" Id at fn 3 The court concluded, therefore,
that to the extent the board was accountable to
public officials, they were accountable "by choice
9 The Employer in its March 6, 1985 brief states that there are 22 cur-
rent members of the board of directors, of which 8 are public officials or
their appointed representatives The Employer in its October 18, 1986
bnef, however, states there are 19 current members of the board of direc-
tors, of which 7 are public officials or their appointed representatives
''' The phrase in Hawkins County that to constitute a political subdivi-
sion the entity must be "administered by" individuals responsible to
public officials or to the general electorate has been interpreted as requir-
ing majority control of the entity See Jefferson County Community Center
v NLRB, 732 F 2d 122, 126 (10th Or 1984) (although 7 of 15 directors
were appointed by public agencies under the entity's bylaws, a "majority
of the Board" was neither appointed by nor subject to removal by public
officials or the general electorate) Cf Truman Medical Center v NLRB,
supra at 573 (medical center not political subdivision where 31 of 49 di-
rectors were not appointed by or subject to removal by public officials or
general public), Pennsylvania State Assn of Boroughs, 267 NLRB 71, 72
(1983) (nonprofit corporation a political subdivision where It was "gov-
erned" by officers and board of directors, all of whom "must be either
elected or appointed officials"), Northern Community Mental Health
Center, 241 NLRB 323 (1979) (outpatient mental health care entity a po-
litical subdivision where 12 of 14 members of board of directors appoint-
ed by respective county boards of supervisors)
rather than law" and, accordmgly, did not qualify
as a political subdivision 1'
Here, unlike Jefferson County Community Center,
the composition of the Employer's board of direc-
tors is established by both Federal and state stat-
utes, mcludmg the requirement that one-third of
the members be "representative of the poor" and
be chosen in accordance with "democratic selec-
tion procedures" In our opimon, the Federal and
state statutes envision an election by the poor of
one-third of the members of the board, and we find
that mdividuals so chosen are "responsible" by law
"to the general electorate" within the meaning of
Hawkins County
This opinion is confirmed by the way the Em-
ployer has, in fact, applied the requirement that
one-third of the board of directors be chosen under
democratic selection procedures adequate to assure
that they are representatives of the poor in the area
served 12 As noted above, the State of Missouri
has adopted verbatim the Federal statute's require-
ment that "democratic selection procedures" be ap-
plied in selecting "representative of the poor"
members Likewise, the Employer's revised bylaws
require that the Employer's "business and affairs"
be managed by a tripartite board of directors, com-
posed of not less than 15 or more than 36 members,
as follows one-third are "elected public officials,
"See also Cresthne Memorial Hospital Assn v NLRB, 668 F 2d at 245
(no political subdivision where board of directors was not "responsible
by law to the electorate since the decision to include all citizens as
members of the Hospital corporation is entirely the corporation's (den y-
mg solely from the corporate constitution) and is subject to change"),
Southwest Texas Public Broadcasting Council, 227 NLRB 1560, 1562 (1977)
(television station not a political subdivision where the Board, Inter aim
found that Is]ignificantly, both the representation of public institutions
on the Employer's board of trustees and the number of trustees appointed
by such institutions are determined solely by the Employer's own articles
of incorporation")
is The electorate in this case consists of two groups of voters in the
four-county area served The "representative of the poor in the area
served" are elected by "low income" individuals in the area served by
the Employer See fn 15, Infra The "elected public official" board mem-
bers are presumably elected by eligible voters in their respective jurisdic-
tions In any event, the Hawkins County phrase "general electorate"
clearly covers the four-county area served by the Employer, as that term
has been broadly defined to encompass even limited groups of electors
See Salt River Project, 231 NLRB 11, 12 (1977) (board of directors elect-
ed by property owners within the district), Electrical District Number
Two, 224 NLRB 904 (1976) (board of directors elected by "property tax-
payers of the proposed district who are qualified electors in the State of
Arizona and in the proposed electrical district"), Oxnard Harbor District,
34 NLRB 1285, 1289 (1941) (pre-Hawkins County case, board of harbor
commissioners elected by "qualified voters of the distnct") See also
Lewiston Orchards Irrigation District v NLRB, 469 F 2d 698 (9th Cir
1972) (per cunam), denying enf 186 NLRB 827, 828 (1970) In Lewiston,
the Board had relied on a pre-Hawkins County analysis in finding the em-
ployer was not exempt as a political subdivision of the State of Idaho be-
cause, inter aim, the board of directors was not elected by "qualified
voters of the district," but merely by a "special class of voters, land
owners, for the benefit of the particular member landowners " In
denying enforcement, the court stated that its examination of Hawkins
County led It to conclude that the employer was an exempt political sub-
division
564 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
currently holding office, or their representa-
tives"," "at least one-third" are persons chosen in
accordance with "democratic selection procedures
adequate to assure that they are representative of
the poor in the area served", and the remainder are
officials or members of "business, industry, labor,
religious, welfare, education, or other major groups
and interests in the community"
Section 2 of the Employer's revised bylaws sets
forth the procedure for selecting the "representa-
tive of the poor" board members There are annual
elections" at which two "low income representa-
tives" 15 and two "alternates" are elected from
each of the four counties served by the Employer
A candidate and alternate may be nominated by
the Policy Advisory Council 18 serving the county,
if at least 50 percent of the low-income members of
a council approve the nominee Interested low-
income persons may also file for election with the
chairman of the Community Involvement Commit-
tee," provided they sign a statement verifying
they are a low-income person in compliance with
the income guidelines then currently in effect Fi-
nally, any group of 35 or more low-income persons
may petition the Community Involvement Commit-
tee to place a non-low-mcome person's name on
the ballot 18
The bylaws further provide "that if the number of elected officials
reasonably available and willing to serve is less than one-third of the
membership of the board, memberslup on the board by appointive public
officials may be counted in meeting such one-third reqturement "
' 4 The determination of individuals to serve on the board is made each
February The term of office Is 1 year, and is limited to "five consecutive
years or a total of ten years with one year in between" In addition, there
is a procedure by which any "community agency or representative
groups of the poor may petition for representation" on the board
12 The bylaws state that a candidate is considered "low income" if she
meets the Income guidelines "currently in effect at the time of the elec-
tion"
16 Art III of the revised bylaws states that Policy Advisory Councils
of programs sponsored by or administered by the Employer shall be "in-
cluded in the business of [the Employer] in an advisory capacity in the
planning of programs, operation of programs, and the evaluation of pro-
grams, and further provides for representation by "low Income" persons
on the councils, with a minimum of nine members on each council In
selecting a nominee, a record of the minutes with the vote at a regular
meeting must be maintained
12 The board's Community Involvement Committee conducts the elec-
tion The committee consists of representatives of , each of the three
groups, who are appointed. by the president of the board for a. 1-year
term The committee may also prescnbe any other election procedures as
necessary
12 If any "community agency or representative groups of the poor" be-
lieves it is Inadequately represented on the board of directors, It may peti-
tion the board for representation by several procedures A group can
nominate a candidate by obtaining 50 signatures and submitting. its peti-
tion to the Board at least 30 days before the election That group is then
precluded from the use of any other procedures within 90 days before,
and 30 days after, the election Or, any group representing the poor or a
community agency can nominate a candidate by obtaining 35 signatures
of low-Income persons residing in the area and submit it to the Communi-
ty Involvement Committee at least 30 days after, and not later that 90
days before, the annual election The petition must set forth the petition-
er's reasons for believing It is Inadequately represented The committee's
chairman requests that the matter be placed on the board's agenda at Its
next regular meeting, and the petitioner is Invited to present its case on
The ballots are then drafted, with all nominees
listed on the ballot "under the program that nomi-
nated them or that they identify with " 19 The re-
vised bylaws further provide that voters must vote
for candidates from two different program areas in
order for the ballot to be counted 20
On the day of the election, ballot boxes are
placed at election sites at the centers and training
facilities "controlled or working in cooperation"
with the Employer 21 Each voting site is super-
vised by a judge selected by the Community In-
volvement Committee
All ballot boxes are sealed and checked follow-
ing the balloting 22 The eight candidates, and alter-
nates, receivmg the highest number of votes win,
and receive a number signifying their rank 23
This elaborate election procedure ensures that
"representative of the poor" board members are
chosen "in accordance with democratic selection
procedures adequate to assure they are representa-
tive of the poor in the area to be served" In effect,
this one-third of the board of directors is popularly
elected by the clientele the Employer serves When
this one-third "representative of the poor" board
members is combined with the one-third "public
officials or their representatives" members, two-
thirds of the board of directors are responsible to
public officials or to the general electorate
That the board of directors are not subject to re-
moval from their positions under the Federal or
state statute does not alter our finding that they are
responsible to public officials or the general elec-
torate 24 Responsibility to public officials or the
general electorate has never been interpreted, to re-
quire that the board members be subject to remov-
al from office by public officials or the general
electorate in addition to being placed m office by
public officials or the general electorate Indeed,
the Board has found an entity to be a political sub-
representation A, two-thirds vote of the board is required to sustain a pe-
tition and, if successful, the candidate holds office until the next annual
election
12 Any persons filing individually will be listed under a category indi-
cating this fact
2° Each voter must be at least 14 years or older, and must sign a regis-
ter certifying that he is a low-income person in compliance with the
Income guidelines displayed at the election site and established by an
office of management and budget
Si The revised bylaws list the following sites All Senior Citizens Cen-
ters and Satellite Centers where permission is granted to do so, Head
Start Centers, Work Expenence Sites, Family Planning Clinics, Commu-
nity Development Offices, and the Employer's business office
22 If It "appears that the box has been opened," all ballots are voided
22 All ballots are totaled and compared against the number of persons
signing the register for that voting place If the number of ballots exceeds
the number of registrations, all ballots in that box are voided
24 The Employer's revised bylaws provide that a director shall be re-
moved automatically for falling to attend three consecutive board meet-
ings The revised bylaws further provide that a director may be removed
for cause by a two-thirds vote of the board
ECONOMIC SECURITY CORP 565
division in the absence of any evidence concerning
removal of the board members Prairie Home Cem-
etery, 266 NLRB 678 (1983), Community Health &
Home Care, 251 NLRB 509 (1980), Northern Com-
munity Mental Health Center, 241 NLRB 323
(1979), and City of Austell Natural Gas System, 186
NLRB 280 (1970) See also University of Vermont,
297 NLRB 291, 295 fn 23 (1989), and Salt River,
supra, in which the Board found political subdivi-
sions where the record was inconclusive concern-
ing removal
Although the Sixth Circuit stated in Skills Devel-
opment Services v Donovan, 728 F 2d 294, 300
(1984) (a case involving the applicability of the
Fair Labor Standards Act to a state contractor
providing services for the mentally retarded), that
removal is the determinative factor in considering
whether administrators are responsible to public of-
ficials or the general electorate, the precedent cited
in Skills does not support such a strict construction
In Hawkins County, supra at 607-608, the Supreme
Court, in pointing out that the Board had erred,
found that the commissioners were subject to re-
moval from office by the governor, state attorney
general, county prosecutor, or a group of 10 citi-
zens, in accordance with the State's General Ouster
Law Notwithstanding this evidence of removal au-
thority vested in those particular public officials
and the citizenry, the Court concluded that the
commissioners were responsible to the public offi-
cial who appointed them, a county judge Id at
609 The Eighth Circuit in NLRB v St Louis Com-
prehensive Health Center, 633 F 2d 1268, 1270 fn 3
(1980), cert denied 454 U S 819 (1981), held that
the board members do not "serve at the pleasure of
public officials or the general electorate", however,
the court did not elaborate on the meaning of
"serve at the pleasure" Even more significantly,
neither the court decision nor the underlying
Board decision, 244 NLRB 784 (1979), contain any
reference to evidence concerning the board's com-
position, appointment procedures, or removal pro-
cedures In Truman Medical Center v NLRB, 641
F 2d 570, 573 (8th Cr 1981), the court's finding
that the majority of board members were "neither
appointed by nor subject to removal by public offi-
cials or the General electorate" was only one of
several factors the court examined in reaching the
conclusion that the employer was not administered
by individuals responsible to public officials or the
general electorate Thus, the cited cases make re-
moval a factor, but not the critical factor, which is
consistent with Board precedent 25
The Sixth Circuit in Skills also relied on NLRB
v Natchez Trace Electric Power Assn, 476 F 2d 1042
(5th Or 1973), which found that the directors,
elected by the association's membership, were not
responsible to public officials or the general elec-
torate In so finding, the court, consistent with the
underlying Board decision, 193 NLRB 1098 (1971),
apparently determined that the association's mem-
bership did not constitute the "general electorate"
We give little weight to the discussion of nonre-
sponsibility because the determination that the asso-
ciation's membership does not constitute the gener-
al electorate appears inconsistent with the line of
cases clearly holding that limited groups of electors
such as the association's membership are encom-
passed by the term "general electorate" See fn 12,
supra
Inasmuch as removal by public officials or the
general electorate has never been the critical factor
in determining responsibility to public officials or
the general electorate, the absence of such removal
authority here does not require a different result
Accordingly, because a majonty of the board of
directors are responsible to public officials or to
the general electorate, we find the entity here to be
an exempt political subdivision of the State of Mis-
souri Accordingly, we do not have jurisdiction
over the Employer and will dismiss the petition 26
ORDER
The petition is dismissed
25 See Pennsylvania State Assn of Boroughs, supra, in which the fact
that the association's directors, who are either elected or appointed bor-
ough officials, cannot continue to serve as directors after losing borough
office was one of several factors the Board relied on to conclude that the
association is administered by individuals who are responsible to public
officials or the general electorate
We concur in our dissenting colleague's sentiments that fundamental to
democracy is the pnnciple that those in political office remain responsible
to the electorate Our dissenting colleague, however, accords insufficient
weight to the fact that the representatives of the poor in this case are
elected and that the election procedure is designed to fulfill the statutory
mandates that the representatives of the poor be chosen in accord with
democratic selection procedures Because the statute mandates the appli-
cation of democratic principles in the selection of the representatives of
the poor, we believe our colleague's statement that the bylaws voluntari-
ly establish the election process misses the point
It is also the statute's mandating democratic principles that compels us
to regard as less significant the absence of removal powers than our col-
league does Certainly, in the cases on which the dissent relies, removal is
an important factor, for in those cases the individual who could be re-
moved was appointed, not elected Here, however, where the representa-
tives of the poor are, pursuant to the statutory mandate, elected by the
general electorate, we do not believe it appropriate to Ignore the bedrock
principle of democracy—election—simply because the elected individual
(who only serves for I year) is not subject to removal by the general
electorate
26 We find It unnecessary to address the other Issues rased in the Em-
ployer's request for review
566 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
MEMBER OVIATT, dissenting
For the reasons discussed below, I find that the
Employer is not a "political subdivision" within
the meaning of Section 2(3) of the Act, and is
therefore subject to the Board's jurisdiction The
issue here is whether representatives of the poor
serving on the Employer's board of directors are
"responsible" to the electorate under the Supreme
Court's interpretation of Section 2(3) in Hawkins
County, supra
In accordance with the requirements of Federal
and state laws for community action agencies re-
ceiving Federal funds, the Employer's board of di-
rectors is tripartite One-third are elected public of-
ficials currently holding office, or their representa-
tives, one-third are members of business, industry,
labor, religious, welfare, educational, or other
major groups and interests in the community, and
one-third are representatives of the poor Neither
Federal nor state law, however, specifies the term
of office of the representatives of the poor, and nei-
ther requires that procedures be established by
which the poor may remove their representatives,
once those representatives have been elected The
Employer's bylaws alone address these matters
Under the Employer's bylaws, the representa-
tives of the poor are chosen at secret-ballot elec-
tions in each of the four counties served by the
Employer Each has a 1-year term, renewable for 4
more consecutive years After a" 1-year break, each
may serve another 5 consecutive years All direc-
tors, including those representmg the poor, may be
removed for cause, but only by a two-thirds vote
of the board No procedure exists by which poor
persons can recall or remove their elected repre-
sentatives
The board of directors alone can amend the Em-
ployer's bylaws This may be done by a two-thirds
vote of those board members present and voting2
at any regular board meeting, on 5 days' notice to
the directors There is no requirement that the di-
rectors' constituents be notified
The Employer asserts that it is a political subdi-
vision, exempt from the Board's junsdiction under
Section 2(3) of the Act The Employer is not cre-
ated directly by the State, however If it is to qual-
ify as a political subdivision under our Act, there-
fore, a majority of the individuals administering the
Employer must be "responsible" to public officials
1 A political subdivision must have been created directly by the Feder-
al, state, or local government or be administered by individuals who are
responsible to public officials or to the general electorate NLRB v Natu-
ral Gas Utility District of Hawkins County, 402 US 600, 604-605 (1971)
' A quorum consists of at least 50 percent of the nonvacant seats on
the board (12 of the board's present 24 members)
or to the general electorate 3 Only one-third of the
-Employer's directors are elected public officials
One-third are members of major community groups
or interests, but these directors are not chosen by
public officials or by the general electorate Thus,
for the Employer to succeed in its argument, it
must demonstrate that the one-third of its directors
elected by the poor are "responsible" to the elec-
torate
The Regional Director found that the Employer
had not met its burden The majority reverses, rea-
soning that because the composition of the Em-
ployer's board of directors conforms to Federal
and state funding requirements and because one-
third of the board members are "representatives of
the poor," a majority of the directors are therefore
responsible to public officials or to the general
electorate 4 True enough, when the one-third who
are public officials is combined with the one-third
who represent the poor, there is a majority But,
whether this majority "is responsible to" public of-
ficials or to the general electorate is an entirely dif-
ferent matter The question is whether the election
of the poor's representatives by itself is sufficient to
make those representatives "responsible" to the
poor
The Court in Hawkins County, supra, emphasized
the importance of whether the persons governing
an entity alleged to be a political subdivision are
"subject to removal proceedings at the instance" of
elected officials or private citizens Hawkins
County, supra, 402 U S at 605 The Court took
pains to correct the Board's erroneous finding in
the case that the Hawkins County commissioners
were not subject to removal Id at 607 The Court
concluded (402 U S at 608)
Plainly, commissioners who are beholden to an
elected public official for their appointment,
and are subject to removal procedures applica-
ble to all public officials, qualify as "individ-
uals who are responsible to public officials or
to the general electorate" within the Board's
test [Emphasis added ]
The Supreme Court's analysis has been strictly
followed by the courts of appeals and the Board
Thus, in Truman Medical Center v NLRB, 641
F 2d 570 (8th Cir 1981), the Eighth Circuit, en-
'I accept for the purposes of this case my colleagues' conclusion that
majority control by such persons is enough to show that an entity is "ad-
ministered" by individuals responsible to public officials or to the general
electorate (see fn 10, supra, and cases cited there)
4 It can be contended that, as the poor are only a part of the general
electorate, the poor's choice of representatives to the Employer's board is
not the choice of the electorate at large I find much to commend this
position See Chairman Stephens' dissent in Woodbury County Community
Action Agency, 299 NLRB No 65 (1990) I shall assume for argument's
sake, however, that the "poor" are synonymous with the "electorate"
ECONOMIC SECURITY CORP 567
forcing a Board order, found that the Center, a mi-
nority of whose directors were appointed by or as-
sociated with local governmental bodies or the
University of Missouri, was not a political subdivi-
sion The court stressed that a majority of the Cen-
ter's governing directors were "neither appointed
by nor subject to removal by public officials or the
general public" and that, while the University of
Missouri had a theoretical veto power over ap-
pointment of the Center's top officials, the Univer-
sity did "not possess the power to remove any of
the officials once they [had] been appointed" Id at
573 In Skills Development Services v Donovan, 728
F 2d 294, 300 (6th Cir 1984), the court identified
the critical point under Hawkins County as "an abil-
ity by public officials or the general public to
remove an offending administrator" Also see,
NLRB v Natchez Trace Electric Power Assn, 476
F 2d 1041, 1045 (5th Or 1973), Cape Girardeau
Care Center, 278 NLRB 1018, 1019 (1986) 5 Thus,
the case law advances the fundamental principle
underlying our representative form of govern-
ment—those who manage a political entity must
continue to be responsible to those who put them
5 My colleagues in the majority contend that the precedent cited in
Skills does not support what they term the Sixth Circuit's "strict con-
struction" Among the cases cited by the majority in support of its posi-
tion that the Board has found an entity to be a political subdivision in the
absence of any evidence of the electorate's authority to remove its board
members is City of Austell Natural Gas System, 186 NLRB 280 (1970)
That case preceded the Supreme Court's decision in Hawkins County,
however, and turned on the fact that the gas system was created directly
by the State of Georgia and that the gas system board constituted an ad-
ministrative or departmental arm of the City of Austell, Georgia The
NLRB never reached the question whether the gas system board was ad-
ministered by individuals who were "responsible" to public officials or
the general electorate As for Prairie Home Cemetery, 266 NLRB 678
(1983), Community Health & Home Care, 251 NLRB 509 (1980), and
Northern Community Mental Health Center, 241 NLRB 323 (1979) also
cited by the majonty, the decisions do not reveal whether the Board fo-
cused on, or specifically considered, the removal question Thus, the
mere fact that removal was not specifically discussed in these Board cases
hardly proves that removal authority is not an Important consideration
The majority also contends that Hawkins County does not stand for the
proposition that the authority to remove is cntical to the analysis of
whether the entity's directors are "responsible" to public officials or the
general electorate The majonty relies on the fact that in the Court's
summary conclusion at the end of its opinion the Court states that the
commissioners were "responsible" to an elected county judge (The judge
was not the person who could remove the commissioners ) Hawkins
County, supra, 402 U S at 609 But the operative language on this Issue
occurs earlier in the Court's opinion, where, as I have already observed,
the Court gives equal weight to the fact that the commissioners were ap-
pointed by an elected official and to the fact that they could be removed
under procedures initiated by elected officials or members of the general
electorate Id at 608 Thus, the commissioners need not have been sub-
ject to removal by the same elected official who appointed them, but, in
the Court's view, at the very least they had to be subject to removal at
the instance of an elected public official or the general electorate
Both the Ninth and Eleventh Circuits have explicitly adopted the Skills
approach in Powell v Tucson Air Museum Foundation of Pima, 771 F 2d
1309, 1311-1312 (9th Cir 1985), and in Williams v Eastside Mental Health
Center, 669 F 2d 671, 679 (11th Cif ), cert denied 459 US 976 (1982)
The Eighth Circuit has also made the ability of public officials to remove
board members the focus of Its inquiry into whether the board members
are "responsible" to public officials or to the general electorate St Jude
Industrial Park Board v NLRB, 760 F 2d 223, 225-226 (8th Cir 1985)
in office And, the electorate's check on the misuse
or abuse of the power conferred on their elected
representatives is through the electorate's right of
removal of those representatives during their term
of office, however seldom that right may be exer-
cised
In this case, a director on the board elected by
the poor who has abused his office cannot be re-
moved or recalled during his term by the people
who elected him Only two-thirds of the board of
directors itself can remove a director, and this right
derives solely from the Employer's bylaws Thus,
not only are directors removable by the Employ-
er's choice rather than by law, but also, to the
extent that the directors are removable, it is only
by other board members and not by the electorate
That, in my view, is not the kind of removal au-
thority contemplated in Hawkins County or its
progeny For it makes the colleagues of a director
representing the poor (one-third of whom are not
elected by anyone and another one-third of whom
are not elected by the poor), rather than the direc-
tor's constituents, the sole judges of that director's
conduct 6
If the public laws governing the election of the
representatives of the poor required their annual
election, I would be more inclined to find them re-
sponsible to their constituents With a 1-year term
embedded in the organic statutes, representatives
engaging in misconduct could quickly be voted out
of office by their constituents While the directors
here have a 1-year term of office, that term is es-
tablished not by Federal or state statute but by the
Employer's bylaws These bylaws can be changed
by a two-thirds' vote of those members in attend-
ance at a regular board meeting If there is a bare
quorum of 12 directors present, as few as 8 can
amend the bylaws and presumably can mcrease the
directors' term of office and abolish any removal
procedure Thus, to the extent that the present 1-
year term confers upon the directors some degree
of responsibility to the electorate, "they are so ac-
countable by choice rather than by law" Jefferson
County Community Center v NLRB, 732 F 2d 122,
125 fn 3 (10th Cir ), cert denied 469 U S 1086
(1984) In my view, that is not the type of responsi-
bility that qualifies an entity as a political subdivi-
6 Much effort is expended by the majority in demonstrating that, as re-
quired by Federal and state statutes establishing the community services
block grants and community action agencies, one-third of the Employer's
board of directors are "persons chosen in accordance with democratic se-
lection procedures" See Community Services Block Grant Act, 42 U S C §
9901, 9904(c)(3) (1981) Whether the procedures for electing the poor in
the first Instance are "democratic" does not answer fully the question
under our statute addressed by the Hawkins County test—whether those
representatives, once elected, continue to be accountable to the elector-
ate That is the question posed by this case
568 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
sion under Section 2(3) of the Act Cresthne Memo-
rial Hospital Assn v NLRB, 668 F 2d 243 (6th Cir
1982), Jefferson County Community Center v
NLRB, supra
In sum, I conclude, as did the Regional Director,
that under Section 2(3) of the Act, the Employer is
not an entity entitled to exemption from our juris-
diction Accordingly, I would process the election
petition