Hyde Leadership Charter School - Brooklyn

National Labor Relations Board - Board Decisions

Aug 24, 2016

364 N.L.R.B. 88 (N.L.R.B. 2016)

364 NLRB No. 88 NOTICE: This opinion is subject to formal revision before publication in the bound volumes of NLRB decisions. Readers are requested to notify the Ex- ecutive Secretary, National Labor Relations Board, Washington, D.C. 20570, of any typographical or other formal errors so that corrections can be included in the bound volumes. Hyde Leadership Charter School-Brooklyn and United Federation of Teachers, Local 2, AFT, AFL-CIO. Case 29-RM-126444 August 24, 2016 DECISION ON REVIEW AND ORDER BY MEMBERS MISCIMARRA, HIROZAWA, AND MCFERRAN The issue in this case is whether the Hyde Leadership Charter School-Brooklyn (Hyde or School) is a political subdivision within the meaning of Section 2(2) of the National Labor Relations Act, and therefore exempt from the Board’s jurisdiction.1 The Regional Director, apply- ing the Board’s longstanding test,2 found that Hyde is not a political subdivision because it was neither created di- rectly by the state so as to constitute a department or ad- ministrative arm of the government nor is it administered by individuals who are responsible to public officials or the general electorate. Having carefully considered the entire record, including the parties’ briefs and amicus briefs, we agree with the Regional Director’s conclusion that Hyde is not a political subdivision. We further find that there are no compelling reasons for declining, as a matter of discretion, to exercise our jurisdiction. Accord- ingly, we remand the case to the Regional Director to take appropriate action.3 I. BACKGROUND On April 14, 2014, the Union filed a petition with the New York State Public Employment Relations Board (PERB) seeking to represent the School’s 35 teachers. The same day, Hyde filed the instant petition with the Board seeking an election in the same unit. On May 28, 2014, after a hearing, the Regional Director issued a De- cision and Direction of Election finding that Hyde was not exempt from the Board’s jurisdiction under the Haw- kins County test. The Union sought review, arguing that Hyde is exempt. Alternatively, the Union argues that the Board should, in the exercise of its discretion, decline to 1 Sec. 2(2) provides that the term “employer” shall not include any state or political subdivision thereof. 2 See NLRB v. National Gas Utility District of Hawkins County, 402 U.S. 600 (1971). In Pennsylvania Virtual Charter School, 364 NLRB 87 (2016), the Board adopted the Hawkins County test as the Board’s framework for evaluating whether a charter school is a political subdi- vision. 3 The National Labor Relations Board has delegated its authority in this proceeding to a three-member panel. assert jurisdiction over charter schools in New York. The Board granted review and received amicus briefs, as well as briefs and reply briefs from the Union and Hyde.4 New York Charter Schools Law The Hyde Leadership Charter School-Brooklyn op- erates under the New York Charter Schools Act of 1998, as amended in 2014 (CSA).5 Pursuant to the CSA, an individual seeking to establish a charter school files an application with a “charter entity”: a local school dis- trict, the New York City schools chancellor, the Board of Trustees of the State University of New York, or the Board of Regents, the governing body of the state’s De- partment of Education. CSA § 2851(3)(a)-(c). The ap- plication must contain detailed information about the proposed school’s educational program, fiscal plan, stu- dent admissions and enrollment criteria, and governance structure, including the names of the initial trustees and the method of appointment for future trustees. CSA § 2851(2)(a)-(x). If the charter entity approves the appli- cation, it enters into a charter agreement, also known as a proposed charter, with the applicant, and submits the proposed charter to the Board of Regents for approval. CSA § 2852(5) & 2853(3). If the Board of Regents ap- proves the proposed charter, it issues a provisional char- ter for a period of up to 5 years and incorporates the new entity as a non-profit education corporation to operate the school. CSA § 2853(1)(a). A charter may be renewed, upon application, for a term of up to 5 years. The renew- al application is submitted to a charter entity and in- cludes a progress report, financial statements, annual reports, indications of parent and student satisfaction, and retention and enrollment plans. CSA § 2851(4)(a)- (e). The CSA defines a charter school as “an independent and autonomous public school, except as otherwise pro- vided in this article, and a political subdivision having boundaries conterminous with the school district . . . in which the charter school is located.” CSA § 2853(c). Charter schools must comply with state requirements regarding health and safety, civil rights, and student as- sessments but are “exempt from all other state and local laws, rules, regulations, or policies governing public or private schools, boards of education, school districts, and political subdivisions . . . except as specifically provided 4 The Board received amicus briefs from the Council of School Su- pervisors and Administrators, Local 1 American Federation of School Administrators, AFL-CIO (CSSA) and the AFLCIO, and a joint ami- cus brief from the American Federation of Teachers, AFL-CIO (AFT) and the National Education Association (NEA). 5 The CSA is part of the New York Education Law, and applies to charter schools in the State of New York. NY Educ. Law Ch. 16, Title II, Art. 56. DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD2 in the school’s charter or in this article.” CSA § 2854(1)(b). The Board of Regents and the charter enti- ty oversee the school’s compliance with applicable laws, regulations, and the terms of the new charter. CSA § 2853(c). The Board of Regents is authorized to visit the school and inspect its records, and the charter school must submit annual reports to the charter entity and the Board of Regents. CSA § 2857. However, the charter school’s board of trustees, its governing body, has “the final authority for policy and operational decisions of the school.” CSA § 2853(f). Trustees must comply with “public officer” laws regarding transparency and con- flicts of interest. CSA § 2854(1)(e). The CSA provides that charter school employees are employees of the education corporation and that they are employees for the purposes of the New York Public Em- ployees Fair Employment Act, also known as the “Taylor Law.” Charter school employees may be deemed public employees of the local school district for purposes of providing retirement benefits. CSA § 2854(3)(c). Public school teachers may request a leave of absence to teach in a charter school and may return to their former public school position without losing seniority. CSA § 2854(3)(d). Generally, employees of a charter school are not part of the local school district’s bargaining unit and not covered by its collective-bargaining agreement. If the charter school has more than 250 students, the CSA provides that the school’s employees will be repre- sented by the same union as the local school district em- ployees’ union, but in a separate bargaining unit. CSA § 2854(3)(b-1). The charter entity or the Board of Regents may revoke a school’s charter for fiscal mismanagement, not meeting student assessment measures, or if the school demon- strates a practice and pattern of “egregious and intention- al violations of” the Taylor Law. CSA § 2855(1)(d). Charter schools receive their funding primarily from school districts, which pay a set fee, or tuition, for each student enrolled in the school, along with extra funding for students with disabilities. CSA § 2856. The charter school may accept private donations and gifts. CSA § 2856. Hyde Leadership Charter School-Brooklyn Hyde opened on September 8, 2010, pursuant to a 5- year provisional charter issued by the Board of Regents. The School has 35 teachers and 330 students, in kinder- garten through fourth grade. The initial application to establish the School was submitted to the chancellor of the New York City De- partment of Education in 2009 by Dr. Sandra Dupree, who would eventually become Hyde’s executive direc- tor.6 As required by the CSA, the application included detailed information about the proposed school’s educa- tional program, fiscal plan, and governance structure, including the names of the initial trustees and the method of appointment for future trustees. In October 2009, Dr. Dupree, on behalf of Hyde, entered into a charter agreement with the chief of staff for the chancellor of the Department of Education. The agreement contained in- formation about the School’s operations, including sec- tions regarding services to students with disabilities, per- sonnel policies and hiring, fiscal management, annual reports and oversight by the Department of Education, and renewal applications and revocation of the charter. Pursuant to the CSA, after public notice and comment, the Department of Education approved the co-location of Hyde within a currently operating public elementary school building in Brooklyn, New York. CSA § 2853(a- 3)(1). The Department of Education submitted the proposed charter, along with the application, to the Board of Re- gents for approval. In January 2010, the Board of Re- gents approved the proposed charter, issued a 5-year provisional charter, and incorporated Dr. DuPree and 7 others-the initial board of trustees-as an education corporation to operate the School. The initial trustees became the governing board of trustees and hired Dr. Dupree as the executive director of the School. Dr. Dupree hired the School’s staff, including all of the teachers. Pursuant to Hyde’s bylaws, the board of trustees is composed of five to nine members, is “responsible for establishing an overall policy of the School,” and has “the power to control and manage the affairs and proper- ty of the Corporation.” The board of trustees approves the School’s policies and budget and appoints the execu- tive director. Trustees are elected by the current trustees for a term of three years and may be reelected for unlim- ited successive terms. A trustee may be removed or sus- pended from office by vote of the majority of the board for misconduct, incapacity, or neglect of duty. Likewise, if a vacancy results from removal of a trustee, it may be filled by a vote of the trustees. Trustees may be appoint- ed by majority vote to serve on different committees, such as the executive, education, and the finance and audit committees. No member of Hyde’s original board of trustees or those appointed since has been affiliated with a public entity or the Department of Education, ex- cept that one member happens to be a public school teacher. 6 Dr. Dupree previously worked for the Hyde Foundation, a nonprof- it institution that also operates a charter school in the Bronx, New York. HYDE LEADERSHIP CHARTER SCHOOL-BROOKLYN 3 Hyde receives 91 percent of its funding from the New York Department of Education, 8 percent from Federal grants, and 1 percent from private contributions, interest, and “other income.” According to an annual report for the 2012-2013 school year, Hyde received close to 4 million dollars in “per pupil” funding from government sources, which was 99 percent of its revenue for the year. Consistent with the CSA, Hyde does not pay rent or oth- er fees to the Department of Education for its use of a public school building. The Regional Director’s Decision Under the Hawkins County test, an entity may be con- sidered a political subdivision exempt from the coverage of the National Labor Relations Act if it is either (1) cre- ated directly by the state so as to constitute a department or administrative arm of the government, or (2) adminis- tered by individuals who are responsible to public offi- cials or to the general electorate. 402 U.S. at 604-605; The Pennsylvania Virtual Charter School, 364 NLRB No. 87, slip op. at 3. The Regional Director found that Hyde is not exempt under either prong of that test. The Regional Director relied mainly on two Board decisions, Chicago Mathematics & Science Academy7 and Pennsyl- vania Cyber Charter School,8 where the Board applied the Hawkins County test and found that neither of the charter schools involved was an exempt political subdi- vision. The Regional Director also noted that, although New York’s Public Employee Relations Board (PERB) has issued decisions in which it asserted jurisdiction over charter schools,9 the state’s highest court has ruled that charter schools are not public entities (New York Charter Schools Association v. Smith, 15 N.Y.3d 403, 410 (N.Y. 2010)) and are not political subdivisions of the state 7 359 NLRB No. 41 (2012). In Chicago Mathematics, the Board ap- plied Hawkins County and determined that a private nonprofit corpora- tion that established and operated a public charter school in Chicago, Illinois was subject to the Board’s jurisdiction. The Union correctly notes that Chicago Mathematics, which was decided by a Board that included two recess appointees, was later rendered invalid by the Su- preme Court’s decision in NLRB v. Noel Canning, 134 S.Ct. 2550 (2014). The Union, however, does not dispute that Hawkins County is the appropriate test in these cases. 8 06-RC-120811, 2014 WL 1390806 (April 9, 2014) (unpublished) (Board majority denied employer’s request for review of regional direc- tor’s decision and direction of election finding a Pennsylvania nonprofit charter school was not a political subdivision). 9 Brooklyn Excelsior Charter School, 44 PERB ¶ 3001 (2001) (as- serting jurisdiction over charter school); Buffalo United Charter School v. New York State Public Employment Relations Board, 107 A.D.3d 1437, 965 N.Y.S.2d 905 (N.Y. App. Div. 2013) (reserving decision on appeal from PERB assertion of jurisdiction pending NLRB determina- tion). The Regional Director noted that the New York Appellate Divi- sion is holding Brooklyn Excelsior and Buffalo United in abeyance pending the Board’s determination of whether its jurisdiction preempts PERB’s assertion of jurisdiction. (New York Charter Schools Association v. DiNapoli, 13 N.Y.3d 120 (N.Y. 2009)).10 The Regional Director, comparing the present case to Chicago Mathematics and Pennsylvania Cyber Charter, found that Hyde did not meet either prong of the Haw- kins County test. Regarding the first prong, the Regional Director found that Hyde was not created directly by the State of New York but by a group of private individuals. He acknowledged that the Chicago Mathematics Board found it significant that the individuals incorporated the charter school before a charter was issued by the Illinois Department of Education. The same sequence- incorporation before issuance of the charter-occurred in Pennsylvania Charter. Here, however, the Board of Re- gents incorporated Hyde as an education corporation after issuing the School’s charter. Nonetheless, the Re- gional Director reasoned that Dr. DuPree and the found- ing board “created” the charter school corporation and that the Board of Regents’ act of incorporating the School did not amount to “directly creating” it under Hawkins County. Further, the Regional Director found that even if the CSA directly authorized the Board of Regents to create a charter school, it did not authorize the Board of Regents to do so as an administrative arm of the government. See Research Foundation of the City Univ. of New York, 337 NLRB 965, 968 (2002) (nonprofit corporation founded to assist a public university was not intended to operate as an independent arm of the university). The Regional Director reasoned that the governance and control of the School is “vested solely with the private incorporators” rather than public entities, such as the Department of Education. Id. He further found that, although the CSA may state that the New York state legislature intended charter schools to be public schools in many respects, the CSA is not binding on a federal agency like the Board. See Hinds County Human Resource Agency, 331 NLRB 1404, 1404 (2000) citing Hawkins County, 402 U.S. at 602 (state’s characterization of entity is “worthy of care- 10 We acknowledge that these state court decisions are distinguisha- ble. In Smith, where the Court of Appeals of New York held that char- ter schools are not public entities, 15 N.Y.3d at 409, the precise ques- tion was whether the state’s prevailing wage laws applied to charter school projects. Id. In DiNapoli, where the court held that charter schools are not political subdivisions, the precise question was whether the state legislature could assign charter school audits to the state comptroller, pursuant to the comptroller’s authority over the state and its political subdivisions. 13 N.Y.3d at 131. In addition, the Court of Appeals did not apply the Hawkins County test, which is controlling, in either case. That said, we regard these decisions of New York’s highest court as significant support for our determination that charter schools in the state of New York are not arms of the state and should not be ex- empt from the jurisdiction of the Board. See additional discussion below, fn. 15. DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD4 ful consideration” but is “not controlling in ascertaining whether an entity is a political subdivision.”). Regarding the second prong of Hawkins County, the Regional Director found that Hyde was not administered by individuals who are responsible either to public offi- cials or to the general electorate. Rather, the CSA places decision-making authority for Hyde’s policy and opera- tions in the self-appointed and self-perpetuating board of trustees rather than any public entity. The Regional Di- rector found that public officials did not appoint any of the trustees on the School’s board and that the Depart- ment of Education could remove a trustee only in specif- ic, limited circumstances set out in the charter agreement itself, namely for material misstatements or omissions in the trustee’s background information and financial dis- closure reports. Contentions of the Parties and Amici The Union urges the Board to reverse the Regional Di- rector, find that the School is exempt as a political subdi- vision under both prongs of the Hawkins County test, and dismiss the petition. Alternatively, even if the Board finds that Hyde is not exempt, the Union urges the Board to decline to exercise jurisdiction over charter schools in New York. Regarding the first prong of Hawkins County, the Un- ion argues that the language of the CSA shows that the School was created directly by the Board of Regents, a state entity. The Union emphasizes that only the charter entity can submit the proposed charter to the Board of Regents for review and that the final step of the process requires the Board of Regents to issue a provisional char- ter. The Union also asserts that the Board of Regents cre- ated the School to operate as a public school-an admin- istrative arm of government. The Union notes that the Board of Regents incorporated the charter school as a New York State education corporation. Further, under the CSA, charter schools, like public schools, must com- ply with health, safety, and sanitary requirements, civil rights laws, and student assessment criteria. The School does not pay rent for the use of a public school building and is overseen by the Board of Regents. Moreover, under the CSA, if the charter school closed, students would automatically be transferred to the school district where the charter school was located, and the funds would be relinquished to that public school. The Union also focuses on the CSA’s references to the Taylor Law, under which charter schools are designated as public employers and employees of charter schools are declared public employees subject to that law. Under the CSA, a charter entity can terminate a charter if there is a “prac- tice and pattern of egregious violations of” the Taylor Law. Regarding the second prong of Hawkins County, the Union argues that the Regional Director incorrectly de- termined that the members of the board of trustees are not responsible to public officials. The Union points out that each member of the Board of Regents is elected by the New York State legislature to a 7-year term. In turn, the Board Regents appointed the initial trustees, and eve- ry trustee is subject to removal by the Board of Regents for certain kinds of misconduct. The Union argues that the Regional Director erred by relying on New York State court of appeals cases DiNapoli and Smith, supra, as neither case concerned the CSA. Instead, the Union urges the Board to rely on the PERB decisions in Brooklyn Excelsior and Buffalo Unit- ed, supra. Finally, the Union argues that if the Board determines that the School is not a political subdivision, it should nevertheless decline to exercise jurisdiction. The Union contends that public education is a matter of local con- cern and highly regulated at the state level. The Union relies on cases in which the Board has discretionarily declined to assert jurisdiction over the horseracing and dogracing industries. Three amicus briefs were filed in support of the Un- ion’s contention that Hyde is exempt from the Board’s jurisdiction. Amici fully adopt the Union’s arguments above. The amicus brief of the Council of School Su- pervisors and Administrators, Local 1 (CSSA) and the joint amicus brief of the AFT and the NEA additionally focus on why the Board should exercise its discretion to decline jurisdiction over New York charter schools. In essence, they argue that the Board should decline juris- diction because of the state’s unique responsibility for providing and overseeing education and the state’s ex- tensive role in regulating the employment of teachers and other employees in the public school system. Although the AFL-CIO’s amicus brief does not ex- pressly argue that the Board should decline jurisdiction over New York charter schools, it argues that the lan- guage of the CSA evinces the legislature’s intent to inte- grate charter schools into the existing public school sys- tem. The AFL-CIO further contends that the legislature went to great lengths to ensure that charter school teach- ers, like other public schools teachers in the state, could not interfere with the orderly provision of public educa- tion by engaging in strikes and other work stoppages under the Taylor Law. Hyde agrees with the Regional Director that the School is an “employer” within the meaning of Section 2(2) of the Act. Under the first prong of the Hawkins HYDE LEADERSHIP CHARTER SCHOOL-BROOKLYN 5 County test, Hyde asserts that the School was created through the work of Dr. Dupree and the founding board in planning its operations, submitting the technical appli- cation, and navigating the process to establish a charter school. Further, Hyde agrees with the Regional Director that the CSA’s characterization of the School as a public school is not controlling under Board law and, in any event, has been refuted by two New York Court of Ap- peals cases, DiNapoli and Smith, supra, where the court found that the charter schools are not public entities. In response to the amici’s argument that there will be a lack of uniformity if the Board asserts jurisdiction over char- ter schools in New York, Hyde points out that uniformity is already lacking. For example, wages and benefits vary from one New York charter school to another, and per pupil spending varies dramatically among New York state school districts. This lack of uniformity will con- tinue whether or not the Board declines to exercise juris- diction. II. APPLICATION Hyde was Not “Created Directly by the State” As stated in Pennsylvania Virtual Charter School, su- pra, in order to determine whether an entity is a political subdivision under the first prong of the Hawkins County test, the Board determines first whether the entity was created directly by the state, such as a government entity, legislative act, or public official.11 If it was, the Board then considers whether the entity was created so as to constitute a department or administrative arm of the gov- ernment.12 Both of these criteria need to be met for the employer to be exempt under this prong. We find that Hyde does not share the key characteristic of political subdivision status with entities that the Board has found to be exempt. That is, Hyde was not created directly by any New York government entity, special statute, legisla- tion, or public official, but instead by private individuals as a nonprofit corporation. The Board has consistently held that entities created by private individuals as nonprofit corporations are not ex- empt under the first prong of Hawkins County.13 Fur- 11 See e.g., New York Institute for the Blind, 254 NLRB 664, 667 (1981) (corporation formed by special act of New York State legisla- ture); University of Vermont, 297 NLRB 291 (1989) (university created directly by special act of Vermont General Assembly). 12 Hawkins County, supra, at 604; Hinds County Human Resource Agency, supra, at 331 NLRB at 1404. 13 Pennsylvania Virtual, slip op. at 3. See also Research Foundation of the City University of New York, 337 NLRB 965 (2002) (private individuals created employer as nonprofit education corporation under the New York State Educational Law; employer was acting as govern- ment contractor and was not created directly by state as an arm of gov- ernment). thermore, an entity is not exempt simply because it re- ceives public funding or operates pursuant to a contract with a government entity, as does Hyde. The Board rou- tinely asserts jurisdiction over private employers that have agreements with government entities to provide services.14 As the Board stated in Research Foundation, supra, 337 NLRB at 968, the “plain language” of Section 2(2) does not exempt private entities acting as govern- ment contractors from the Board’s jurisdiction. Further, “[t]he creation of the Employer by private individuals as a private corporation, without any state enabling action or intent, clearly leaves the Employer outside the ambit of the Section 2(2) exemption.” Id. The School was founded in 2010, when Dr. Dupree and the other members of the founding board prepared and filed a comprehensive application to establish the charter school. The application contained detailed in- formation about the proposed school, including the names of the initial trustees. Thereafter, Dupree and the Department of Education entered into a charter agree- ment, which included the application. The Board of Re- gents then approved the charter and incorporated Hyde as a nonprofit education corporation. There is no evidence that the Board of Regents amended any part of the School’s proposed charter or rejected any of the initial trustees. After incorporation, the founding board became the governing board of trustees, who then appointed Dr. Dupree as the executive director. Citing the CSA, the Union and the dissent argue that the Board of Regents, a state agency, is the only entity that may incorporate a charter school, and until then, a charter school does not exist as a legal entity. Thus, they argue that the state “directly created” Hyde. We do not agree with this narrow interpretation. Rather, we agree with the Regional Director that it was Dr. Dupree’s initi- ative and her and the founding board’s preparatory work, including the promulgation of the School’s governing and operating documents, that “created” the School, not the Board of Regents’ approval of the charter and incor- poration of the School. See Pennsylvania Virtual Char- ter School, slip op. at 6 (finding charter school was not created directly by the state but by a group of private individuals who organized and filed a comprehensive application for a charter with a state entity). 14 See, e.g., Connecticut State Conference Board, Amalgamated Transit Union, 339 NLRB 760 (2003) (private employer contracted with the state to provide public bus service); Jefferson County Commu- nity Center, Inc., 259 NLRB 186 (1981), enfd. 732 F.2d 122 (10th Cir. 1984), cert. denied 469 U.S. 1086 (1984) (employer that contracted with or was licensed by the state to perform services for citizens with special needs); Parents and Friends of the Specialized Living Center, 879 F.2d 1442 (7th Cir. 1989) (same). DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD6 In sum, we find that Hyde does not satisfy the first prong of the Hawkins County test, because the School was not directly created by a New York government enti- ty, special statute, legislation, or public official, but in- stead by private individuals as a nonprofit corporation.15 Hyde is Not Administered by Individuals Who Are Re- sponsible to Public Officials or the General Electorate Under the second prong of the Hawkins County test, an entity will be deemed a political subdivision if “it is ad- ministered by individuals who are responsible to public officials or the general electorate.” Hawkins County, supra at 605. In making this determination, the disposi- tive question is whether a majority of the individuals who administer the entity-Hyde’s governing board members and executive officers-are appointed by or subject to removal by public officials.16 The Board ex- amines whether the composition, selection, and removal of the members of an employer’s governing board are determined by law, or solely by the employer’s govern- ing documents.17 The latter indicate that appointment and removal are controlled by private individuals-as 15 In light of our finding that Hyde was not directly created by the state, we find it unnecessary to decide whether Hyde was created to be an administrative arm of government. Pennsylvania Virtual Charter, slip op. at 6 (unnecessary to examine whether charter school is an ad- ministrative arm of government because Board found it was not directly created by the state); see also Regional Medical Center of Memphis, 343 NLRB 346, 358 (2004) (because employer was not created by the state, it could be exempt under Hawkins County only under a second prong analysis, i.e., “only if officials who are responsible to public officials or to the general electorate administer it.”). However, if we were to address this issue, we would find that the record evidence does not support the Union’s and dissent’s claim that Hyde was created to be an administrative arm of the state’s govern- ment. We find no merit in the dissent’s reliance on the CSA’s language that a charter school is a “political subdivision” that “performs … es- sential public services.” As explained above, federal, not state, law governs the determination of whether an entity created under state law is a political subdivision under Sec. 2(2) of the Act. Hawkins County, 402 U.S. at 602-603. And in any event, as stated above, decisions of the New York’s highest court support our determination that charter schools are not political subdivisions. See discussion above, p. 3 and fn. 10. Nor are we persuaded by the dissent’s argument that the struc- ture and operation of Hyde, including the fact that Hyde receives public funds and that the Board of Regents oversees Hyde, offer compelling reasons to find that Hyde is an administrative arm of government. See cases cited in fn. 14 above. 16 See Pennsylvania Virtual, slip op. at 7; Hawkins County, supra at 608; Aramark Corp. v. NLRB, 156 F.3d 1087, 1093 (10th Cir. 1998), vacated in part on rehearing en banc 179 F.3d 872 (10th Cir. 1999); Research Foundation, 337 NLRB at 969, citing FiveCAP, Inc., 331 NLRB 1165 (2000); and Enrichment Services Program, 325 NLRB at 819. “This requirement is consistently evidenced throughout Board decisions.” Regional Medical Center at Memphis, 343 NLRB at 359. 17 Pennsylvania Virtual, slip op. at 8. See also Research Founda- tion, supra at 969. opposed to public officials-and the entity will be sub- ject to the Board’s jurisdiction.18 Hyde is a private corporation whose governing board members are privately appointed and removed. The method of selection of Hyde’s governing board is dictat- ed by its bylaws, and not by the CSA or any other law, statute, or governmental regulation. Those bylaws pro- vide that only sitting members may appoint, remove, and fill vacancies on the Hyde board of trustees, and only board members may appoint and remove Hyde’s execu- tive director. The record contains no evidence that any local or state official has had any involvement in the se- lection or removal of any members of the board of trus- tees, or in the hiring of the School’s staff, including its executive director. The bylaws list reasons for which a trustee may be removed, all of which require a majority vote of the board and no action by a state official. We find no merit in the Union’s and the dissent’s ar- gument that the School is exempt under this prong be- cause the Board of Regents appointed the initial board of trustees and may, under certain limited circumstances, remove Hyde’s trustees. It was Dr. Dupree who, on her application to establish the School, identified the indi- viduals who would be members of the “founding board”; her application also included background information for each trustee and the method of appointment for future trustees in describing the School’s proposed governance structure. After incorporation, the initial founding board of trustees became Hyde’s governing board. Moreover, since the School’s incorporation, the board has appointed additional trustees, none of whom were appointed by any public entity, nor are any of the trustees otherwise affili- ated with the Department of Education.19 This is con- sistent with the CSA, which has no requirement that trus- tees be public officials. Thus, the governance and struc- 18 See, e.g., Research Foundation, supra at 969 (no exemption where employer’s bylaws, not state law, defined appointment and removal of members of the board of directors). St. Paul Ramsey Medical Center, 291 NLRB 755 (1988) (medical center not a political subdivision be- cause there was no requirement that board of directors be public offi- cials or appointed and removed by public officials). 19 In support of his assertion that Hyde’s board of trustees is respon- sible to public officials, the dissent relies on a provision in the charter agreement requiring that, prior to its appointment of a member, the board provide the chancellor with the proposed member’s name and background information. The dissent emphasizes the language in this provision that “[w]ithin forty-five days of receiving the name of the proposed member of the Board, [the chancellor] shall…reject or ap- prove such individual.” The significance of this language is dimin- ished, however, by the very next sentence, which states, “In the event that [the chancellor] does not provide in writing an approval or rejec- tion within forty-five days (45) . . . the proposed member may be seated by the Board.” In this case, Dr. Dupree’s uncontroverted testimony was that the board appointed all subsequent members; she made no mention of the chancellor playing any role in those appointments. HYDE LEADERSHIP CHARTER SCHOOL-BROOKLYN 7 ture of the School lies with private individuals- Dr. Dupree and the board of trustees-not the state. See CSA § 2853 (1)(f) (once the Board of Regents has ap- proved the charter, the board of trustees has final authori- ty for “policy and operational decisions of the school”). Although the charter agreement allows the Board of Regents or the Department of Education to remove trus- tees, we find, contrary to the dissent, that the Regional Director correctly found that the grounds for such re- moval are limited to certain specific rules in the charter agreement requiring background information and finan- cial interest disclosure reports. The removal authority is thus based on Hyde’s own governing documents and does not appear to be required by the CSA.20 See Tru- man Medical Center v. NLRB, 641 F.2d 570, 573 (8th Cir. 1981) (the court noted that the responsibility of the hospital’s self-perpetuating board of directors to public agencies, “while undoubtedly heavy, derive[d] from the contractual relations between [the hospital] and these political subdivisions, and is not the sort of direct per- sonal accountability to public officials or to the general public required to support a claim of exemption under 2(2).”). We reject the contention by the Union and the dissent that New York Education Law § 226(4), which authoriz- es the Board of Regents to remove any trustee of a cor- poration for “misconduct, incapacity, neglect of duty, or . . . fail[ing] or refus[ing] to carry into effect its education- al purposes,” establishes trustee responsibility to public officials for purposes of the Hawkins County standard. We find that the Board of Regents’ limited authority to remove a trustee for malfeasance, which applies to the trustees of all educational institutions in the State of New York, public and private,21 is insufficient to make the 20 In determining whether the individuals who administer the entity are responsible to public officials, the Board examines whether the composition, selection, and removal of the members of an employer’s governing board are determined by law or solely by the employer’s governing documents. Charter School Administration Services, 353 NLRB 394, 397 (2008), adopted by Pennsylvania Virtual, slip op. at 7. See also Hawkins County, supra at 605; Aramark Corp. v. NLRB, 156 F.3d 1087, 1093 (10th Cir. 1998), vacated in part on rehearing en banc 179 F.3d 872 (10th Cir. 1999); Research Foundation, 337 NLRB at 969, citing FiveCAP, Inc., 331 NLRB 1165 (2000); and Enrichment Services Program, 325 NLRB at 819. “This requirement is consistently evidenced throughout Board decisions.” Regional Medical Center at Memphis, 343 NLRB at 359. 21 Section 226 applies, by its terms, to “[t]he trustees of every corpo- ration created by the [Board of Regents],” which is to say, of every educational institution established in the State of New York. Thus, the New York courts have applied it to such unquestionably private institu- tions as Columbia University, Adelphi University, and the Masters School. See, e.g., Sheridan v. Trustees of Columbia University, 296 A.D.2d 314, 745 N.Y.S.2d 18 (1st Dept. 2002), leave to appeal denied, 99 N.Y.2d 505, 755 N.Y.S.2d 711 (2003); Adelphi University v. Board trustees individuals who have “direct personal accounta- bility” to public officials or to the general electorate within the meaning of Hawkins County. Cape Girardeau Care Center, 278 NLRB 1018, 1019 (1986) and cases cited therein. Given the method of appointment and removal of Hyde’s board members, we find that none of the trustees are responsible to public officials in their capacity as board members, and therefore that Hyde is not “adminis- tered” by individuals who are responsible to public offi- cials or the general electorate. Accordingly, Hyde is not a political subdivision under the second prong of Haw- kins County. The Board Should Not Decline to Assert Jurisdiction over Hyde In the alternative, the Union and amici argue that even if the Board has statutory jurisdiction over the School, the Board should nonetheless decline jurisdiction over New York charter schools under Section 14(c)(1) of the Act, because public education is a matter of local con- cern to the state and because the state legislature intended charter schools established in New York to be public schools. The dissent likewise argues that the Board should decline jurisdiction under Section 14(c)(1), not only over Hyde but over all charter schools, because charter schools assertedly have an insubstantial effect on interstate commerce and the Board’s exercise of jurisdic- tion over charter schools would lead to instability and confusion. We reject those arguments.22 Under Section 14(c)(1) of the Act, the Board may “in its discretion . . . decline to assert jurisdiction over any labor dispute involving any class or category of employ- ers, where, in the opinion of the Board, the effect of such labor dispute on commerce is not sufficiently substantial to warrant the exercise of its jurisdiction.” The Union argues that in determining whether to de- cline jurisdiction under Section 14(c)(1), the Board often takes into account a number of factors in addition to whether the dispute has an effect on interstate commerce. of Regents, 229 A.D.2d 36, 652 N.Y.S.2d 837 (3d Dept. 1997); The Masters School v. Town of Greenburgh, 140 N.Y.S.2d 399 (Sup. Ct. Spec. Term 1955). Consistent with the Board’s long-established prac- tice of asserting jurisdiction over private educational institutions, the Board, of course, asserted jurisdiction over each of those institutions, notwithstanding the Board of Regents’ limited removal power under Section 226. See, e.g., Trustees of Columbia University, 222 NLRB 309 (1976); Adelphi University, 195 NLRB 639 (1972); The Masters School, Case No. 02-RC-023472 (Cert. of Rep. issued June 22, 2010). 22 Our colleague repeats the same policy arguments that he raised in Pennsylvania Virtual Charter School. We reject those arguments for the reasons stated in that decision. See slip op. at 9-11. DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD8 For example, the Board has consistently declined to as- sert jurisdiction over the horseracing and dogracing in- dustries owing to the local nature of these industries. See Yonkers Raceway, Inc., 196 NLRB No. 81 (1972); Meadow Stud, Inc., 130 NLRB No. 121 (1961); Jefferson Downs, Inc., 125 NLRB No. 58 (1959); Hialeah Race Course, Inc., 125 NLRB No. 57 (1959). Here, the Union argues that the state has a substantial interest in and re- sponsibility for public education, and that public educa- tion is highly regulated by the state. Thus, the Union argues that New York should continue to be allowed to promulgate policies concerning public education, includ- ing the manner in which charter schools are regulated. Moreover, the Union argues, the language of the CSA shows the legislature intended charter schools to be pub- lic schools, including defining charter schools as public and charter school teachers as public school teachers. § CSA 2853(1)(c) and 2854(3)(a). The Union emphasiz- es the state’s regulation and oversight of charter schools, including through audits, site visits, and annual reports. Further, the Union argues there is a direct issue of feder- al-state comity before the Board because PERB has as- serted jurisdiction over New York charter schools. Fi- nally, the Union argues that PERB retains jurisdiction over some charter school employees, such as employees of pre-existing public schools that have been converted to charter schools, and that it would therefore be irration- al to subject other charter school employees to the juris- diction of the NLRB. Such lack of uniformity, the Union argues, would diminish the Board of Regents’ authority to revoke a charter under the CSA when a charter school engages in a “pattern of egregious and intentional viola- tions of the Taylor Law.” CSA § 2855(1)(d). Having carefully considered the Union’s and amici’s contentions, we have decided that the Board should not, under Section 14(c)(1), decline to assert jurisdiction over Hyde on the basis of the charter schools’ local character. It is true that the Board does not assert jurisdiction over public schools established by state or local governments, but that is because unlike Hyde, they do not come within the Section 2(2) definition of “employer.” The Chil- dren’s Village, Inc., 197 NLRB 1218, 1220 (1972). As we have explained, Hyde was not established by a state or local government, and is not itself a public school. Notwithstanding the state’s statutory characteri- zation of charter schools as being “within the public school system,” state law does not mandate the estab- lishment of charter schools as a means of fulfilling “the state’s obligation to provide public education” in the same manner that it mandates the establishment of public schools. The Board has long exercised jurisdiction over private schools, both for-profit and nonprofit. See The Windsor School, 200 NLRB 991 (1972); Shattuck School, 189 NLRB 886 (1971). The Board exercises its discretionary jurisdiction when doing so would effectuate the purposes of the Act and fairly protect the interests of employees. In keeping with these purposes, we have asserted jurisdiction over both private schools and nonprofit organizations, even when such entities have some relationship to the state or local government. See, e.g., Boys and Girls Aid Society, 224 NLRB 1614 (1976); St. Aloysius Home, 224 NLRB 1344 (1976). As earlier discussed, we find that the relation- ship between the State of New York and its charter schools resembles that of contractors providing services to the government, over which the Board routinely as- serts jurisdiction.23 We are not persuaded that the Board’s determination to decline jurisdiction over the horseracing and dograc- ing industries serves as guiding precedent here. That determination-which codified the holding of prior cas- es-was a response to the unique character of those in- dustries, including, notably, the extensive involvement of state regulatory bodies to preserve the integrity of those activities.24 Those rules do not establish a general intent or inclination to decline jurisdiction over any industry that may be regulated by the state. Furthermore, even though, as the Union suggests, Hyde and other New York charter schools may be subject to state and local regulatory oversight, we find that in many, if not most, respects, charter school cases are not much different from other Board cases involving government contractors. Many government contractors are subject to exacting oversight by statute,25 regulation, or agreement. Yet the Board routinely asserts jurisdiction over private entities that provide services, under contract, to governmental bodies.26 “The plain language of Section 2(2) ‘exempts only government entities or wholly owned government 23 Pennsylvania Virtual, slip op. at 10, fn. 31. 24 Sec. 103.3, Board’s Rules and Regulations, 29 CFR 103.3 (1989). 25 See, e.g., McNamara-O’Hara Service Contract Act of 1965 (SCA) (covering most federal contractors), 41 U.S.C. §§ 351-358. 26 See, e.g., Connecticut State Conference Board, 339 NLRB 760 (2003) (employer managed and operated public bus system pursuant to contract with state); Bergensons Property Services, 338 NLRB 883 (2003) (private corporation performed road work for State of New Jersey); Servicios Correccionales de Puerto Rico, 330 NLRB 663 (2000), enfd. 234 F.3d 1321 (D.C. Cir. 2000) (Delaware corporation operated and managed prisons in Puerto Rico); Correctional Medical Services, 325 NLRB 1061 (1998) (private employer provided health care services at prisons pursuant to contract with state). We are not saying, as the dissent asserts, that government contractor cases are exactly like charter school cases and therefore that the same analytical framework applies in both. Rather, we observe that the Board has routinely asserted jurisdiction over government contractors, who similar to charter schools, provide public services and are subject to government oversight and regulation. HYDE LEADERSHIP CHARTER SCHOOL-BROOKLYN 9 corporations from its coverage-not private entities act- ing as contractors for the government.’” Research Foundation, supra 337 NLRB at 968, quoting Aramark Corp. v. NLRB, 179 F.3d at 878. In sum, we find no compelling reasons to discretionari- ly decline to assert jurisdiction over this private, nonprof- it education corporation.27 III. CONCLUSION For all of these reasons, we find that Hyde is an em- ployer within the meaning of Section 2(2) of the Act. As Hyde satisfies the Board’s monetary jurisdictional stand- ards, we find that the Board should assert jurisdiction over Hyde. Accordingly, we shall remand the case to the Regional Director for further processing. ORDER The case is remanded to the Regional Director for ap- propriate action. Dated, Washington, D.C. August 24, 2016 ______________________________________ Kent Y. Hirozawa, Member ______________________________________ Lauren McFerran, Member (SEAL) NATIONAL LABOR RELATIONS BOARD MEMBER MISCIMARRA, dissenting. Section 2(2) of the National Labor Relations Act (NLRA or Act) defines the term employer as “any person acting as an agent of an employer, directly or indirectly, but shall not include the United States or any wholly owned Government corporation, or any Federal Reserve Bank, or any State or political subdivision thereof.”1 In NLRB v. Natural Gas Utility District of Hawkins Coun- ty,2 the Supreme Court held that entities are “political subdivisions” of a state if they are “either (1) created directly by the state, so as to constitute departments or 27 Additionally, we note that New York’s Appellate Division has in- dicated that it will hold cases involving this jurisdictional issue in abey- ance pending the Board’s determination, and neither the State of New York nor any state agency, including PERB, has sought to intervene or otherwise participate in this proceeding. 1 Sec. 2(2) (emphasis added). Sec. 2(2) also excludes from the Act’s definition of employer “any person subject to the Railway Labor Act, as amended from time to time, or any labor organization (other than when acting as an employer), or anyone acting in the capacity of officer or agent of such labor organization.” 2 402 U.S. 600 (1971). administrative arms of the government, or (2) adminis- tered by individuals who are responsible to public offi- cials or to the general electorate.”3 I believe the record clearly establishes that Hyde Leadership Charter School-Brooklyn (Hyde Leadership or the School) is a “political subdivision” of the State of New York under both of the Hawkins County standards, which divests the Board of jurisdiction under Section 2(2). That is, the evidence proves that Hyde Leadership was “created directly by the state, so as to constitute [a] department[] or administrative arm[] of the government,” and that Hyde Leadership is “administered by individu- als who are responsible to public officials or to the gen- eral electorate.” Again, if either of these standards is met, a charter school constitutes a “political subdivi- sion,” which means the Board lacks jurisdiction under Section 2(2). Accordingly, I respectfully disagree with my colleagues, who find that Hyde Leadership fails to satisfy either Hawkins County test, and therefore that Section 2(2) jurisdiction exists in this case. Even if Section 2(2) jurisdiction existed here (i.e., if Hyde Leadership did not constitute a “political subdivi- sion” of New York State), this would not dictate the out- come of this case or other charter school cases, for two reasons. First, even if statutory jurisdiction exists under Section 2(2), the Board may nonetheless decline to exer- cise jurisdiction over charter schools as a class or catego- ry of employers, consistent with Section 14(c)(1) of the Act. Second, the existence of Section 2(2) jurisdiction over Hyde Leadership does not mean that the Board has Section 2(2) jurisdiction over other charter schools. Ra- ther, under the Hawkins County test, the question of Sec- tion 2(2) jurisdiction over any charter school depends on the particular facts of each case, which vary significantly because many different state and local laws govern the creation, structure and operation of charter schools. In my view, the Board should decline to exercise juris- diction over Hyde Leadership, and charter schools gener- ally, for reasons explained more fully in Part C below and in my dissenting opinion in Pennsylvania Virtual Charter School (Pennsylvania Virtual),4 a second charter school case decided by the Board today. I believe the Board should decline to exercise jurisdiction based on the following considerations:  The Board should decline to exercise jurisdic- tion here and in other charter school cases, consistent with Section 14(c)(1) of the Act, because any dispute involving this particular 3 Id. at 604-605. 4 364 NLRB No. 87, slip op. at 11-18 (2016) (Member Miscimarra, dissenting). DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD10 “class or category of employers” will have an insubstantial effect on interstate commerce. Id., slip op. at 11-15 (Member Miscimarra, dissenting). This conclusion is reinforced by the fact that state and local issues overwhelm- ingly predominate the creation, structure and operation of charter schools, which exist for the purpose of satisfying public education re- quirements between kindergarten and grade 12 (K-12), spanning elementary school, mid- dle school, and high school.  Even if Section 2(2) jurisdiction existed here, there is little question that Section 2(2) juris- diction will not exist in various other charter school cases. Moreover, based on the fact- specific inquiry required under Hawkins County, there is no way for parties to reliably determine, in advance, whether or not Section 2(2) jurisdiction exists, and this uncertainty will persist given the length of time that it takes to obtain a Board determination regard- ing Section 2(2) jurisdiction, not to mention the uncertainty associated with potential court appeals from any Board decision. Therefore, the only certain outcome of the Board’s at- tempted exercise of jurisdiction here and in other charter school cases will be substantial uncertainty and long-lasting instability.  One of the Board’s primary roles is to foster “stability of labor relations,”5 and the policy underlying our statute is to produce a “single, uniform, national rule” displacing the “varie- gated laws of the several States.”6 As I have explained more fully in Pennsylvania Virtual, the most that could result from Board efforts to exercise jurisdiction over charter schools will be a jurisdictional patchwork-where federal jurisdiction exists here and state juris- diction exists there, depending on how the “political subdivision” question is resolved- with substantial uncertainty for employees, unions, employers, and state and local gov- ernments. Id. slip op. at 16. Therefore, I be- lieve the Board’s involvement in these cases will be self-defeating: the Board cannot pos- sibly achieve “stability of labor relations,”7 5 Colgate-Palmolive-Peet Co. v. NLRB, 338 U.S. at 362-363; NLRB v. Appleton Electric Co., 296 F.2d at 206; Northwestern University, 362 NLRB No. 167, slip op. at 1. See also fn. 53, infra. 6 San Diego Building Trades Council v. Garmon, 359 U.S. 236, 239 (1959). 7 See cases cited in fn. 5 supra. nor can there be any hope that a “single, uni- form, national rule” will displace the “varie- gated laws of the several States.”8  By declining to exercise jurisdiction here and in other charter school cases, the Board would permit state and local governments to regulate charter school labor relations. Again, contrary to my colleagues, I believe jurisdiction is foreclosed in the instant case by Section 2(2) and the “political subdivision” test set forth in Hawkins County. More generally, the Board should decline to exercise jurisdiction in any event consistent with Section 14(c)(1) of the Act. Accordingly, I respectfully dissent. DISCUSSION A. Hyde Leadership Was Created Directly by the State as an Administrative Arm of the Government The process of bringing a charter school into existence in the State of New York is complex. However, for pur- poses of determining, under Hawkins County, whether Hyde Leadership was created directly by the state, the key point is simple, and it is this: each and every charter school in the State of New York is created by the state through the New York State Board of Regents, not by private entities or individuals. The State of New York enacted the New York Charter Schools Act of 1998, last amended in 2014 (hereinafter “CSA”), to open a new approach to public education that would improve learning, encourage innovation, expand choice for parents and students, provide new opportuni- ties for educators, and increase performance-based ac- countability.9 The CSA gives “teachers, parents, school administrators, community residents or any combination thereof” the opportunity to apply to establish a charter school.10 Under the CSA, any charter school approved by the state under the procedure described below is “an independent and autonomous public school, except as otherwise provided in this article, and a political subdivi- sion having boundaries coterminous with the school dis- trict or community school district in which the charter school is located.”11 Charter schools are publicly funded on a per-student basis from the funds of the school dis- trict in which the student lives.12 Charter schools cannot 8 Id. 9 CSA § 2850. 10 CSA § 2851(1). The application may be filed in conjunction with, but not solely by, “a college, university, museum, educational institu- tion, [Sec. 501(c)(3)] not-for-profit corporation . . . or for-profit busi- ness or corporate entity authorized to do business in New York state.” CSA § 2851(1). 11 CSA § 2853(1)(c). 12 CSA § 2856. HYDE LEADERSHIP CHARTER SCHOOL-BROOKLYN 11 “charge tuition or fees,” and “[a]ny child who is qualified under the laws of this state for admission to a public school is qualified for admission to a charter school.”13 In sum, charter schools are alternative public schools to New York State’s traditional public schools. Under the CSA, “[t]he powers granted to a charter school . . . constitute the performance of essential public purposes and governmental purposes of this state,”14 and the state oversees each charter school to ensure these public, governmental purposes are carried out. Specifi- cally, the New York State Board of Regents-the presid- ing body over the New York State Education Depart- ment-and the “charter entity” (explained more fully below) “shall oversee each school approved by such [charter] entity, and may visit, examine into and inspect any charter school, including the records of such school, under its oversight. Oversight by a charter entity and the Board of Regents shall be sufficient to ensure that the charter school is in compliance with all applicable laws, regulations and charter provisions.”15 In addition, charter schools must submit to the Board of Regents and the charter entity a detailed annual report on academic and fiscal performance.16 The CSA also provides that the labor relations of charter-school employees are governed by the New York Public Employees’ Fair Employment Act,17 which prohibits public employees from striking.18 Charter schools possess other characteristics of govern- ment entities, including exemption from taxation and being shielded from civil liability.19 To initiate the process of establishing a charter school, a detailed application must be filed with the charter enti- ty, setting forth the proposed charter school’s anticipated goals, operational details, and much more.20 The charter entity may be the school district (specifically, the school district’s board of education or, in New York City, the New York City Schools Chancellor) where the charter school would operate, the Board of Regents, or the Board of Trustees of the State University of New York.21 The charter entity reviews the application and decides wheth- 13 CSA § 2854(2)(a)-(b). If there are more applicants than space at the school, admission is by a “random selection process.” CSA § 2854(2)(b). 14 CSA § 2853(1)(d). 15 CSA § 2853(2). The charter entity may be, but need not be, the local school district. Even if the local school district is not the charter entity, it still has the right to visit, examine, and inspect the charter school and to forward any evidence of noncompliance to the charter entity or the Board of Regents. CSA § 2853(2-a). 16 CSA § 2857(2). 17 N.Y. Civ. Serv. §§ 200-214. 18 CSA § 2854(3)(a). 19 CSA § 2853(1)(d), (g). 20 CSA § 2851. 21 CSA § 2851(3). er to approve, deny, or require modifications to the ap- plication.22 When the charter entity approves an applica- tion, it enters into a detailed proposed charter with the applicant(s).23 Assuming the charter entity is not the Board of Regents, the charter entity then sends the pro- posed charter and application materials to the Board of Regents for approval.24 At this point in the process, the charter school as a le- gal entity does not exist. If the Board of Regents ap- proves the proposed charter, the Charter Schools Act provides that the Board of Regents “shall incorporate the charter school as an education corporation for a term not to exceed five years.”25 This certificate of incorporation is called the “provisional charter.”26 The charter entity or the Board of Regents may terminate the charter during its term if the charter school falls below certain student- achievement levels or for “serious violations of law,” “material and substantial violation of the charter, includ- ing fiscal mismanagement,” a pattern of egregious or intentional violations of the Public Employees’ Fair Em- ployment Act, or repeated failure to comply with enroll- ment and retention targets of certain students.27 Moreo- ver, charter schools must apply to renew their charter every 5 years.28 “Upon termination or nonrenewal of the charter . . . , the certificate of incorporation of the charter school shall be revoked by the board of regents,” and “the charter school shall proceed with dissolution.”29 When the Board of Regents revokes the charter school’s certificate of incorporation, the legal entity ceases to ex- ist. In 2009, Dr. Sandra Dupree submitted an application for the creation of Hyde Leadership to the New York City Schools Chancellor as the charter entity. In October 2009, the Chancellor approved the application and en- tered into a proposed charter with Dr. Dupree. The Chancellor sent the proposed charter and application materials to the Board of Regents. The Board of Regents approved the proposed charter and incorporated Hyde Leadership as an education corporation, effective January 12, 2010, through January 11, 2015. Co-located with an existing traditional public school, Hyde Leadership opened its doors in fall 2010 to provide public elemen- tary education under the framework of the CSA. 22 CSA § 2852. 23 CSA § 2852(5). 24 Id. 25 CSA § 2853(1)(a). 26 Id. 27 CSA § 2855. 28 CSA § 2851(4). 29 CSA §§ 2853(1)(a), 2855(2). DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD12 Under any reasonable interpretation of the Hawkins County standard, Hyde Leadership was “created directly by the state.” It did not exist as a legal entity until the New York State Board of Regents-the governing body of the New York State Education Department-exercised the power bestowed on it by the state legislature in the CSA and created Hyde Leadership on January 12, 2010, through the certificate of incorporation or “provisional charter.” In fact, Hyde Leadership is entirely a creature of the state: it was created by the state, and it will cease to exist as a legal entity if and when the Board of Re- gents or the New York City Schools Chancellor either terminates or decides not to renew the provisional char- ter. My colleagues reason that Hyde Leadership was not “created directly by the state” because Dr. Dupree pro- vided the “initiative” for Hyde Leadership and was re- sponsible for “preparatory work,” which, in turn, “creat- ed” the School. I believe this analysis distorts the unam- biguous language in Hawkins County, which makes no reference to who provides the “initiative” or engages in “preparatory work.” The Supreme Court in Hawkins County stated that an entity is a “political subdivision” of a state if it was “created” directly by the state to consti- tute a department or administrative arm of the govern- ment.30 The term “create” means “to bring into exist- ence.”31 An entity is not “created” whenever someone takes the “initiative” to do “preparatory work” that is followed by the entity’s creation. As a matter of law under the New York Charter Schools Act, a single gov- ernmental body “created” Hyde Leadership: the Board of Regents brought Hyde Leadership into existence, just as it creates every other charter school in New York State.32 Under the first part of the Hawkins County test, the Board must further determine whether the entity was created directly by the state “so as to constitute [a] de- partment[] or administrative arm[] of the government.”33 30 402 U.S. at 604-605. 31 http://www.merriam-webster.com/dictionary/create (last viewed July 13, 2016). 32 CSA § 2853(1)(a). In contrast, in the other charter school case the Board issues today, Pennsylvania Virtual, private individuals incorpo- rated a public non-profit corporation for educational purposes, and the Pennsylvania Department of Education subsequently issued the charter to that corporation. Thus, my colleagues in Pennsylvania Virtual find that the legal entity was directly created by the private individuals who incorporated it under Pennsylvania law and was not “created directly by the state.” 364 NLRB No. 87, slip op. at 5 relying on Hawkins County, 402 U.S. at 604-605. In contrast, under New York law, as described in the text above, the New York State Education Department, acting through its governing Board of Regents, incorporates charter schools and incorporated Hyde Leadership. 33 402 U.S. at 604-605. In my view, the record supports a finding that Hyde Leadership meets this further test.34 Several considera- tions support this conclusion. First, although not determinative, “the state’s charac- terization of an entity [is] an important factor in deter- mining the more specific issue of whether the [e]mployer was created so as to constitute a department or adminis- trative arm of government.” Hinds County Human Re- source Agency, 331 NLRB 1404, 1404 (2000). As men- tioned above, the CSA characterizes charter schools as “a political subdivision” of the state. CSA § 2853(1)(d). The CSA also states that charter schools “perform[] . . . essential public purposes and governmental purposes of this state.” Id. These are phrases describing an adminis- trative arm of the state.35 Second, Hyde Leadership is a public school, both in name and in fact. The CSA describes charter schools as “public schools,” and all children qualified to attend a traditional New York public school must be allowed to attend Hyde Leadership (space permitting) free of charge. “Providing public schools ranks at the very apex of the function of a State,” Wisconsin v. Yoder, 406 U.S. 205, 213 (1972), and by providing public elementary education, Hyde Leadership is performing a core state function. Cf. State Bar of New Mexico, 346 NLRB 674, 677 (2006) (finding state bar to be an administrative arm of the government because it “was created to assist the judicial branch of the State of New Mexico in regulating the legal profession”). Third, other details regarding the structure and opera- tion of Hyde Leadership reinforce a conclusion that it is an administrative arm of the state. Nearly all of Hyde Leadership’s funds come from public sources. Hyde Leadership is exempt from taxation and civil liability. The Board of Regents and the New York City Schools 34 Id. 35 The majority dismisses the fact that the State of New York itself, in the New York Charter Schools Act, has characterized charter schools as political subdivisions of the state, on the grounds that federal, not state law is determinative. Paradoxically, they then rely on state court decisions regarding the status of charter schools for other purposes, under other provisions of state law, in decisions that do not apply the Hawkins County test, as “significant support” for their position. See New York Charter Schools Association v. Smith, 15 N.Y.3d 403 (N.Y. 2010) (charter schools are not “public entities” for purpose of state prevailing wage laws); New York Charter Schools Association v. DiNapoli, 13 N.Y. 3d 120 (N.Y. 2009) (provision of state constitution limiting legislature’s authority to assign duties to state comptroller did not authorize assigning charter school audits to comptroller). Contrary to my colleagues, I believe that the provisions of the CSA, and the decisions of the New York Public Employment Relations Board assert- ing jurisdiction over charter schools pursuant to the CSA, discussed below, are entitled to substantial weight in determining whether charter schools are political subdivisions of the state within the meaning of Sec. 2(2) of the Act. HYDE LEADERSHIP CHARTER SCHOOL-BROOKLYN 13 Chancellor (as charter entity) retain broad oversight au- thority over Hyde Leadership. They have unlimited ac- cess to Hyde Leadership and its records. Failing to fulfill its educational mission or fiscal mismanagement, among other things, can lead to the Board of Regents’ or the Chancellor’s terminating or not renewing Hyde Leader- ship’s certificate of incorporation. Hyde Leadership’s employees are public employees under the New York Public Employees’ Fair Employment Act, which means, for example, that, like other public employees of New York State, they are prohibited from striking. Hyde Leadership’s board of trustees has the latitude to make the “policy and operational decisions of the school,”36 but this is no different than authority that might be exer- cised by any other political subdivision, which can range from a small state agency to a large city. See Hinds County, supra at 1405 (fact that the entity’s board is re- sponsible for the entity’s “plans, priorities, and activities . . . . do[es] not negate a finding that the [entity] was cre- ated as an administrative arm of government”). All these considerations support a finding that Hyde Leadership is an administrative arm of the state. See id. at 1404-1406 (finding that Hinds County Human Resource Agency was an administrative arm of the government based in part on the fact that it “receives virtually all of its funds from State and Federal governmental sources,” is subject to state oversight, and is exempt from taxes). Therefore, even if one considers only the portion of the Hawkins County test regarding whether an entity is “cre- ated directly by the state, so as to constitute [a] depart- ment[] or administrative arm[] of the government,”37 I believe the Board must conclude that Hyde Leadership is a “political subdivision” for purposes of Section 2(2), which divests the Board of jurisdiction in the instant case. B. Hyde Leadership Is Administered by Trustees Who Are Responsible to Public Officials. Under the Hawkins County test, even if an entity is not “created directly by the state,” it still constitutes a “polit- ical subdivision” of a state-meaning the Board lacks jurisdiction-if the entity is “administered by individuals who are responsible to public officials or to the general electorate.”38 The Board has held that this portion of the Hawkins County test is satisfied when a majority of an entity’s board of trustees is “appointed by and subject to removal by public officials.” Research Foundation of the City Univ. of New York, 337 NLRB 965, 969 (2002). 36 CSA § 2853(f). 37 402 U.S. at 604-605. 38 Id. This aspect of the Hawkins County test separately war- rants a finding that Hyde Leadership is a “political sub- division” over which the Board lacks jurisdiction under Section 2(2) of the Act. Several aspects of the record and New York law compel a conclusion that Hyde Lead- ership is administered by individuals who are “responsi- ble to public officials or to the general electorate.”39 First, the Board of Regents appointed Hyde Leader- ship’s initial board of trustees. Under the CSA, the ap- plicant(s) for the charter school must “includ[e] a list of members of the initial board of trustees” together with “background information on . . . proposed members of the board of trustees.”40 If any of the proposed initial trustees are deemed unacceptable, the charter entity or Board of Regents requires the application to be amended to replace them with different proposed initial trustees. When the Board of Regents incorporates an approved charter school, it sets forth in the certificate of incorpora- tion (the provisional charter) a list of the names and ad- dresses of the initial trustees. Thus, just as the Board of Regents creates the charter school entity, it also appoints the initial trustees. Accordingly, the Board of Regents, consistent with New York law, appointed Hyde Leader- ship’s initial trustees.41 Second, under the Hyde Leadership charter agreement, only the New York City Schools Chancellor’s Office of Portfolio Development (OPD) has the authority to ap- prove new trustees to the School’s board of trustees. The charter agreement provides as follows: Prior to the appointment or election of any individual to the Board who is not a Founding School Trustee, the Board must submit to OPD (pursuant to and together with a duly approved resolution of the Board), the name of the proposed member of the Board and such individual must timely provide to OPD, in writing and/or in person, such background information as OPD shall require . . . . Within forty-five days of receiving the name of the proposed member of the Board, OPD shall in writing reject or approve such individual. In the event that OPD does not provide in writing an ap- proval or rejection within the forty-five (45) day time period, the proposed member may be seated by the Board.42 39 402 U.S. at 604-605. 40 CSA § 2851(2)(c), (m). 41 Dr. Dupree could exercise no authority regarding the initial trus- tees except to propose individuals for consideration by the Board of Regents. 42 Emphasis added. DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD14 Here, there is no suggestion that any new trustee’s appoint- ment was handled in a manner that differed from the man- datory process set forth in Hyde Leadership’s charter agreement. New trustees cannot serve on the Board unless they have been approved by a “public official[]”43- namely, the New York City Schools Chancellor, acting through the OPD-and this is the exclusive manner in which new trustees can be approved.44 Third, the trustees who administer Hyde Leadership are “responsible to public officials or to the general elec- torate”45 in yet another way: they are “subject to remov- al by public officials.”46 Hyde Leadership’s charter agreement provides that the Board of Regents may re- move a Hyde Leadership trustee if his or her background information contained “material misstatements or mate- rial omissions of fact.” And the charter agreement em- powers the New York City Schools Chancellor to require a Hyde Leadership trustee’s removal if he or she fails to file an annual financial-interest disclosure report or if the report, in material respects, is “incomplete, misleading or untruthful.” As described above, therefore, I believe the record es- tablishes that Hyde Leadership must be considered a “po- litical subdivision” of the State of New York under Sec- tion 2(2), based on the second test in Hawkins County under which the Board lacks jurisdiction over entities “administered by individuals who are responsible to pub- lic officials or to the general electorate,”47 which is satis- fied when a majority of an entity’s board of trustees is “appointed by and subject to removal by public offi- cials.”48 C. Even If the Board Has Section 2(2) Jurisdiction over Hyde Leadership, the Board Should Decline to Exercise Jurisdiction in This Case and Similar Charter School Cases. Even if Section 2(2) jurisdiction otherwise existed, I believe the Board should decline to exercise its jurisdic- tion in this case and in charter school cases generally for the reasons set forth more fully in my separate opinion in Pennsylvania Virtual Charter School, supra, slip op. at 11-18 (Member Miscimarra, dissenting). 43 402 U.S. at 604-605. 44 Contrary to the majority, I do not believe that the provision allow- ing proposed trustees to be seated absent timely action by OPD negates OPD’s approval authority for the purpose of determining jurisdiction under Hawkins County. 45 Id. 46 Research Foundation of the City Univ. of New York, supra. 47 Id. 48 Research Foundation of the City Univ. of New York, 337 NLRB at 969. As explained in Pennsylvania Virtual, the Board has previously decided against the exercise of jurisdiction over certain employers in reliance on Section 14(c)(1) of the Act, which states that the Board has “discretion . . . [to] decline to assert jurisdiction over any labor dispute involving any class or category of employers, where, in the opinion of the Board, the effect of such labor dispute on commerce is not sufficiently substantial to warrant the exercise of its jurisdiction.”49 Like other employers over which the Board has declined to exercise jurisdiction under Section 14(c)(1), charter schools are “essentially local in nature”50 and their operations are “peculiarly related to, and regulated by, local governments.”51 As this case and Pennsylvania Virtual illustrate, state and local issues overwhelmingly predominate the creation, structure and operation of charter schools, which exist for the purpose of satisfying public K-12 education re- quirements spanning elementary school, middle school, and high school.52 I fully support the protection afforded by our statute to employees, unions, and employers who are subject to the Act. For several reasons, however, I believe our efforts to assert jurisdiction over charter schools will be self- defeating and will operate to the substantial detriment of the parties in many or most cases. First, the Board can only choose to exercise jurisdic- tion over charter schools in those cases where Section 2(2) jurisdiction exists, and this means the Board will not even have the option of exercising jurisdiction when charter schools qualify as “political subdivisions” of a state under the Hawkins County test described and ap- plied above. The result of Board efforts to assert juris- diction over charter schools will be a jurisdictional patchwork-where federal jurisdiction exists here and state jurisdiction exists there, depending on how the “po- litical subdivision” question is resolved-with substan- tial uncertainty for employees, unions, employers, and state and local governments. 49 Sec. 14(c)(1). 50 Hialeah Race Course, Inc., 125 NLRB 388, 391 (1959). 51 38 Fed. Reg. 9537, 9537 (1973). 52 My colleagues say that charter schools are little different from government contractors, in that both operate under governmental over- sight. The comparison is misleading. Historically, the dispositive question regarding whether the Board would exercise jurisdiction over particular government contractors was whether the contractor had suffi- cient control over its employees’ terms and conditions of employment to enable it to engage in meaningful collective bargaining. See Res- Care, Inc. 280 NLRB 670 (1986). The need to make that challenging determination vanished in 1995, when the Board rejected the Res-Care “extent of control” test. Management Training Corp., 317 NLRB 1355, 1358 (1995). Thus, the extent of regulatory oversight is simply not an issue in cases involving government contractors. HYDE LEADERSHIP CHARTER SCHOOL-BROOKLYN 15 Second, one of the Board’s primary roles is to foster “stability of labor relations,”53 and the policy underlying our statute is to produce a “single, uniform, national rule” displacing the “variegated laws of the several States.”54 Declining to exercise jurisdiction is the only way that the Board can foster stability, certainty and pre- dictability in this important area. Based on the fact- specific inquiry required under Hawkins County, there is no way for parties to reliably determine, in advance, whether or not Section 2(2) jurisdiction exists, and this uncertainty will persist given the length of time that it takes to obtain a Board determination regarding Section 2(2) jurisdiction, not to mention the uncertainty associat- ed with potential court appeals from any Board decision. Therefore, the only certain outcome of the Board’s at- tempted exercise of jurisdiction here and in other charter school cases will be substantial uncertainty and long- lasting instability. Third, the instant case and Pennsylvania Virtual illus- trate these problems. Here, New York law gives charter school employees the right to form a union and bargain under the New York Public Employees’ Fair Employ- ment Act,55 and the New York’s Public Employment Relations Board (PERB) decided in 2011 that it has ju- risdiction over New York charter schools.56 After the PERB decision was upheld by a state trial court, a further appeal to the Appellate Division of the New York Su- preme Court was held in abeyance after an NLRB major- ity in Chicago Mathematics asserted jurisdiction over the charter school in that case.57 In 2013, the Appellate Di- vision stayed the PERB appeal indefinitely “pending a determination of the NLRB whether the NLRA applies to the collective bargaining matters herein at issue and thus 53 Colgate-Palmolive-Peet Co. v. NLRB, 338 U.S. 355, 362-363 (1949) (“To achieve stability of labor relations was the primary objec- tive of Congress in enacting the National Labor Relations Act.”); NLRB v. Appleton Electric Co., 296 F.2d 202, 206 (7th Cir. 1961) (“A basic policy of the Act [is] to achieve stability of labor relations.”); North- western University, 362 NLRB No. 167, slip op. at 1 (2015) (declining to assert jurisdiction where the union sought to represent grant-in-aid scholarship football players because doing so “would not serve to pro- mote stability in labor relations”). 54 San Diego Building Trades Council v. Garmon, 359 U.S. at 239. 55 N.Y. Civ. Serv. §§ 200-214. See New York Charter Schools Act of 1998, as amended, § 2854(3)(a). 56 See Brooklyn Excelsior Charter School, 44 PERB ¶ 3001 (2011). 57 See Chicago Mathematics & Science Academy Charter School, 359 NLRB No. 41 (2012). The Board’s decision in Chicago Mathe- matics was invalidated by the Supreme Court decision in NLRB v. Noel Canning, 134 S. Ct. 2550 (2014), because some Board members who participated in Chicago Mathematics received recess appointments that were held to be unconstitutional in Noel Canning. Former Member Hayes dissented from the majority decision in Chicago Mathematics. Id., slip op. at 12-14 (Member Hayes, dissenting). preempts PERB’s jurisdiction.”58 In 2014, however, the Supreme Court’s Noel Canning decision resulted in the invalidation of the NLRB’s decision in Chicago Mathe- matics,59 and even if Chicago Mathematics had not been invalidated, it would not control the jurisdictional deter- mination here, which depends on the particular facts pre- sented in this case. In sum, the Board’s efforts to assert jurisdiction over charter schools have produced years of uncertainty regarding the applicability of federal law, and employees have been denied years of protection they would otherwise have had under New York state law. The NLRB’s efforts to exercise jurisdiction over charter schools produced a similar sequence of events in Penn- sylvania Virtual, where for years, employees, unions and employers have been denied the protection of Pennsyl- vania state law regarding union representation and col- lective bargaining.60 Finally, charter schools remain relatively new, and the states-along with local governments and school dis- tricts-have been laboratories for experimentation.61 Based on the approach embraced by my colleagues to- day, employees concerned about their working condi- tions will not know what set of rules apply to them or to whom to turn if the employer infringes on their rights, and employees are likely to face years of delay if they try to secure relief from the NLRB. Unions and employers will have difficulty understanding their respective rights and obligations, given the uncertainty about whether fed- eral, state, or local laws apply. Most poorly served will be the students whose education is the primary focus of every charter school. In most instances, the likely result will be protracted disputes that are not definitively re- solved until many or most students (and many teachers and other employees) have come and gone. For the reasons set forth above, I believe that the Board’s effort to assert jurisdiction over charter schools 58 Buffalo United Charter School v. New York State Public Employ- ment Relations Board, 107 A.D.3d 1437 (N.Y. App. Div. 2013). 59 See explanation in fn. 57, supra. 60 Charter school employees have the right to form unions and en- gage in collective bargaining under Pennsylvania state law, but the Pennsylvania Labor Relations Board dismissed two proceedings in- volving that state’s charter schools based on a divided NLRB’s asser- tion of jurisdiction in Chicago Mathematics, which was subsequently invalidated by the Supreme Court’s Noel Canning decision. See Penn- sylvania Virtual, supra, slip op. at 19, fn. 45 (Member Miscimarra, dissenting). Although the events in Pennsylvania Virtual took a differ- ent route than those in this case, the destination is the same: the NLRB’s effort to assert jurisdiction over charter schools has deprived employees of protection they otherwise would have had under state law. 61 See, e.g., Christopher A. Lubienski & Peter C. Weitzel (eds.), THE CHARTER SCHOOL EXPERIMENT: EXPECTATIONS, EVIDENCE, AND IMPLICATIONS (Harvard Educ. Press 2010). DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD16 is not likely to advance any policy goal under the Na- tional Labor Relations Act. Therefore, in my view, the Board should decline to exercise jurisdiction in this case and in other cases involving charter schools, even if Sec- tion 2(2) jurisdiction otherwise exists. CONCLUSION I believe that the Board lacks statutory jurisdiction in the instant case under Section 2(2) of the Act because Hyde Leadership constitutes a “political subdivision” of the State of New York under both tests established by the Supreme Court in Hawkins County. Furthermore, even if Section 2(2) jurisdiction exists, I believe the Board should decline to exercise jurisdiction over charter schools consistent with Section 14(c)(1), which would permit state and local governments to regulate charter school labor relations, as described more fully in my dis- senting opinion in Pennsylvania Virtual. This will pro- vide much greater certainty and predictability than could ever be afforded by the NLRB in this area, and the rights of charter school employees would more closely align with those afforded to public school employees under state and local laws. Accordingly, I respectfully dissent. Dated, Washington, D.C. August 24, 2016 ______________________________________ Philip A. Miscimarra, Member NATIONAL LABOR RELATIONS BOARD