The New York Institute

National Labor Relations Board - Board Decisions

Jan 14, 1981

254 N.L.R.B. 664 (N.L.R.B. 1981)

DECISIONS OF NATIONAL LABOR RELATIONS BOARD
The New York Institute for the Education of the
Blind and Local 2. United Federation of Teach-
ers, AFL-CIO, Petitioner. Cases 2-RC-18532,
2-RC-18533, and 2-RC-18534
January 14, 1981
DECISION AND ORDER
BY CHAIRMAN FANNING AND MEMBERS
PENELLO, TRUESDALE, AND ZIMMERMAN
Upon petitions duly filed under Section 9(c) of
the National Labor Relations Act, as amended, a
hearing was held before Hearing Officer Margaret
M. Kern. Following the hearing, and pursuant to
Section 102.67 of the National Labor Relations
Board Rules and Regulations, Series 8, as amended,
and by direction of the Regional Director for
Region 2, this case was transferred to the National
Labor Relations Board for decision.'
The Board has reviewed the Hearing Officer's
rulings made at the hearing and finds that they are
free from pejudicial error. They are hereby af-
firmed.
Upon the entire record in this proceeding, the
Board finds:
The parties stipulated that "The New York Insti-
tute for the Education of the Blind is a New York
corporation by Special Act of the New York Leg-
islature since 1831. Its principal office and place of
business is at 999 Pelham Parkway North, Bronx,
New York. The Institute is an educational and resi-
dential care facility for blind and blind-multiply
handicapped children. Annually, the Institute de-
rives revenues in excess of $1 million from state
and federal governmental sources, as well as pri-
vate sources, and, in addition, purchases education-
al materials on an annual basis valued in excess of
$10,000 directly from firms located outside the
state of New York."
The Petitioner is a labor organization seeking to
represent certain employees of the Institute (herein-
after also called the Employer).2
On October 2, 1979, the Employer filed a peti-
tion for an advisory opinion in conformity with
i The Petitioner and the Employer filed briefs swith the Regionlal Dti-
rector on December 20 and 21, 1979, respectively. ()O January 26, 19,.
the Petitioner filed a supplemental memorandum
2 The three petitions were filed ion October 24. 1979, and essenltially
duplicated petitions previously filed with the New York State labor Re-
lations Board, as amended The Petitioner herein initially sought separate
units of professional, paraprofessional, and clerical atd service and main-
tenance employees, but amended its petition at the hearing to request ant
overall unit of employees, providing the professional employees an tip-
portunity to vote whether or not they wished to be included itl the over-
all unit. The parties stipulated as to the professional or notlprofessional
status and the supervisory or nonsupervisory status of certlail employee
classifications The Employer contended that the professionial crplo yees
should constitute a separate unit, and that an overall unit is inappropriate,
but took no final position as to the unit, and the status of certain employ-
ees was not resolved.
Sections 102.98 and 102.99 of the National Labor
Relations Board Rules and Regulations, Series 8, as
amended. Thereafter, as indicated above, the Peti-
tioner herein filed the petitions in the instant pro-
ceeding. On December 14, 1979, the Board issued
its Advisory Opinion, 246 NLRB No. 173, in
which it concluded that the petition for an adviso-
ry opinion should be dismissed as premature, inas-
much as the petitions pending herein had advanced
to a formal stage where a binding adjudication of
the jurisdictional issue could be obtained from the
Board. The Employer had also filed an action in
the supreme court of the State of New York,
county of New York, against the New York State
Labor Relations Board, and against the Petitioner
herein, seeking a declaration that the state board
was without jurisdiction over the Employer. On
December 18, 1979, Justice Tyler of the supreme
court, New York County, rendered a decision3
finding, inter alia, that the Institute is a "public em-
ployer" within the meaning of New York state
civil service law, and that the employees of the In-
stitute are public employees.
As noted above, the Institute is a residential care
educational facility for blind and blind multiply-
handicapped children. At the time of the hearing
159 students attended the Institute. 4 The Institute
receives approximately 70 percent of its funding
from the State, 20 percent from the Federal gov-
ernment through Title VI, and 10 percent from pri-
vate contributions.5 The Institute has a staff of ap-
proximately 239 employees.6
The Institute takes the position that the Board
should not assert jurisdiction over it (a) because the
Employer is a "political sub-division" within the
meaning of Section 2(2) of the Act; (b) because the
Employer is an "adjunct" to the New York school
system and therefore exempt; or (c) because New
York State controls its labor relations, hence it
could not effectively engage in collective bargain-
ing. The Petitioner on the other hand takes the po-
sition that the Institute is an Employer within the
meaning of Section 2(2) of the Act and exercises
sufficient control over its own labor relations to
engage in meaningful collective bargaining. Thus,
:1 Ithc .ANt York Institutie for he ducation oi the Blind v he United
liad ration of lachers' Corntliitel o the V'e York Insitute /fr the EIduca-
rton o the Blind. he U'nted fideration of lia-hers. Local 2, AFL-CIO,
and Ne York Stlate l.abor Raitin Board, Index number 17672/1979
(hereinafter he Inritute)
4 f these, approximately 25 to 30 were day students, and the remain-
der were resideilts.
" Although only about 10 percent of the Institute's income derived
from private contrihuttions, it is nolted that as of June 1975 the Itstitute
had a capital funld totaling almost 519 millioni, f hich almlost 12 mil-
lio rpresenl ted in stinlen t inl sttcks alnd botds
()Of these. 195 were funded by the Stale, 4() through Title VI, and 4
stc hired pursulant t ctract with the City f New York, through
Cl' 'A
254 NLRB No. 85
664
NEW YORK INSTITUTE FOR EDUCATION OF THE BLIND
the Petitioner contends that, while the Institute was
admittedly incorporated by act of the New York
state legislature, "it was not done in such a fashion
so as to constitute an arm of government; "that the
Board announced in National Transportation Ser-
vice, Inc., 240 NLRB 565 (1979), that it would no
longer utilize the "intimate connection" test relied
on by the Employer; 7 and, while conceding that
the facts in certain cases cited by the Employer 8
are similar to the facts in the instant case, the Peti-
tioner contends that "the jurisdictional test estab-
lished in those cases is no longer controlling."
In National Transportation Service, supra, the
Board concluded that it would no longer utilize the
so-called "intimate connection" test, but would in-
stead "determine whether the employer itself meets
the definition of 'employer' in Section 2(2) of the
Act and, if so, determine whether the employer has
sufficient control over the employment conditions
of its employees to enable it to bargain with a labor
organization as their representative.
In the subsequent Watson Home case, 9 involving
assertion of jurisdiction over an employer as a
health care institution, the employer there contend-
ed that the Board should decline to assert jurisdic-
tion on the basis of Overbrook School for the Blind,
supra, and Pennsylvania School for the Deaf, 213
NLRB 513 (1974), where the Board refused to
assert jurisdiction over private nonprofit schools
for blind and deaf children. In rejecting the conten-
tion in Watson Home the Board stated that "when
ascertaining whether jurisdiction should be asserted
over an employer which appears to maintain close
ties to an exempt governmental entity," it would
no longer decline jurisdiction "solely because of
the relationship between the 'purposes' of the
exempt entity and the nature of the services pro-
vided to it" by an employer; but, for the reasons
expressed in National Transportation Service, would
henceforth resolve such jurisdictional questions as
set forth above. The Board further concluded that,
"to the extent that they are inconsistent," the cases
cited by the Employer were no longer controlling.
While, as noted by the Institute, that conclusion
did not necessarily mean that the Board would no
longer consider the "adjunct" test-at least insofar
as schools are concerned- 0 -"the fact that the
7 In addition to National Transportation, supra. the Petitioner cites for
example D. T Watson Home for Crippled Children, 242 NLRB 1368
(1979); The Krebs School Foundation. Inc., 243 NLRB 514 (1979) Resident
Home for the Mentally Retarded of Hamilton County. Inc., 239 NLRB 3
(1978).
s Overbrook School for the Blind. 213 NLRB 511 (1974); Perkins School
for the Blind. 225 NLRB 1293 (1976).
I D. T Watson Homefor Crippled Children. supra.
'O The Krebs School Foundation. Inc.. supra There, the employer con-
tended that the Board should not assert jurisdiction both because it as
an adjunct of the exempt public school system, and was intimately con-
nected with the function o the state and local government. Assessing the
record under the first of those tests. the Board concluded that the evi-
school performs an educational function for the
[State] which, by law, is required to guarantee an
education," does not of itself make the school an
adjunct of the public school system. i' According-
ly, we turn first to consideration of the Employer's
contention that it is exempt as a political subdivi-
sion within the meaning of Section 2(2) of the Act.
As stated by the Supreme Court in Hawkinst 2
the Board has "limited the exemption for political
subdivisions to entities that are either (1) created
directly by the state, so as to constitute department
or administrative arms of the government, or (2)
administered by individuals who are responsible to
public officials or to the general electorate."' 3
Federal rather than state law governs the determi-
nation of whether an entity created under state law
qualifies for the exemtpion, although state law dec-
larations and interpretations are given careful con-
sideration.
Here, an act of the legislature established the In-
stitute in 1831.' 4 When the legislature (Laws of
1867; Chapt. 744) subsequently established the
state-owned New York State School for the Blind
in upstate Batavia, it provided for the Institute to
continue to educate the state pupils appointed to it
until Batavia was completed. It further provided
that upon completion of Batavia, the Institute
would be the school to which state pupils from
New York and Kings Counties would be appoint-
ed. ' ," It appears that the initial name (New York
Institute for the Blind) was changed to include the
words "Education of" in 1912. 16
The Institute operates under the supervision of
the New York state board of regents. New York
state residents are appointed and attend free of
charge. Blind children from other States also are
dence did not show that the school was an adjunct of the exempt public
school system The Board went on to note that as stated in National
Transporatioln Service. supra, it would "no longer consider the so-called
intimate connection test in ascertaining whether to assert jurisdiction."
and asserted jurisdiction over the employer as a "specialized child care
institution "
" Kreh. upra.
12 N L.R.B. v The Natural Gas Utility District of Hawkins County, Ten-
nessee, 402 U.S 600 (1971)
la Id at 604-605 As the Court concluded in Hawkins that the Board
had erred in its reading of the Tennessee statute, it found it unnecessary
for the Court to decide "whether 'the actual operations and characteris-
tics' of an entity must necessarily feature one or the other of the Board's
limitations to qualify an entity for the exemption . ." (Id. at 605.)
4 IL.ass of New York, 54th sess., chapt. 214. The act was to continue
until 1852. By act passed April 16. 1852, the original act was continued
permanently Laws of New York. 75th sess, chapt 333.
L" Subsequently, the jurisdiction of the Institute as expanded by the
legislature to include Queens, Suffolk Richmond, Westchester Putnam.
and Rockland Counties. Chapt 5661 of the LaAs of 1894. See The Insrti-
tlufe. iiprda
" Audit Report NY-ST 15-77. office of the state comptroller. report
filed May 5. 1978
665
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
accepted, but charged tuition.17 The Institute has
five major programs identified as Lower School,
Upper School, Cerebral Palsy, Multi-Handicapped,
and Deaf-Blind. The Lower School serves children
between the ages of 4 and 13, providing an aca-
demic program, and training in traveling and the
activities of daily living. The Upper School con-
sists of a high school, junior high school, and learn-
ing center, with programs designed to prepare a
blind student for college or for a training program.
This Upper School, chartered by the University of
the State of New York, offers a regents' diploma.
The Cerebral-Palsy program includes academic and
daily living skills, with speech and physical therapy
as an integral part of the program. The Multi-
Handicapped program is designed to develop so-
cialization, sensory-motor skills, and daily living
activities. Facilities especially designed for blind
children include a library, three gymnasiums, a
bowling alley, two swimming pools, science and
physics laboratories, a music conservatory, and a
vocational training program for those blind stu-
dents who wish to prepare for employment as tran-
scriptionists. The Institute developed and main-
tained the first formal training program in New
York State for the multi-handicapped-that is,
deaf-blind, cerebral palsy-blind, mentally retarded-
blind, and neurologically impaired-blind. In 1968,
the Institute was designated as a regional center for
the deaf-blind by the United States Office of Edu-
cation, Department of Health, Education and Wel-
fare. 1
Under article 85, of section 4201 of the State's
education law, certain institutions for the instruc-
tion of the deaf and of the blind are subject to visi-
tation of the commissioner of education. There are
12 such institutions, known as the "4201"
schools.'9 Two of the 12 are state-owned and op-
17 The handicaps of most of the students at the Institute require resl-
dential care in the judgment of the commissioner of education of the
State. Of the 159 students at the Institute at the time of the hearing
herein, 156 were New York "State pupils." The remaining three were ap-
pointed by their respective states of residence. Nonresidents of New
York are accepted only when there is no waiting list for residents at the
educational level of the out-of-state child.
L New York State Audit Report, supra at pp. 1-2. The center has re-
sponsibility in New York, New Jersey, Delaware, and the Caribbean for
identification of, and development of, programs for deaf-blind children
and providing funding or awarding subcontracts to various subcontract-
ing schools of agencies, e.g., The Department of Health in Puerto Rico.
19 Sec. 4201 provides that it shall be the duty of the commissioner:
a. To inquire into the organization of the several schools and the
methods of instruction employed therein.
b. To prescribed courses of study and methods of instruction that
will meet the requirements of the State for the education of State
pupils.
c. To make appointments of pupils to the several schools, to trans-
fer such pupils from one school to another as circumstances may re-
quire; to cancel appointments for a sufficient reason.
d. To ascertain by a comparison with other similar institutions
whether any improvements in instruction and discipline can be made:
erated; the remainder, including the Institute, re-
ceive state support. Section 4201 does not distin-
guish among these schools insofar as the duties of
the commissioner of education are concerned. The
record indicates that there are other privately oper-
ated schools providing special education for handi-
capped children that are not included by the State
among the 4201 schools. Regulations under the
statute provide that the Institute must annually
submit budgets containing justifications for all pro-
posed expenditures for which state aid is required,
and all new positions requested, and all expendi-
tures must be justified to the Commissioner. The
appointment of pupils is regulated both by article
85 and the commissioner's regulations thereun-
der.2 0 The same appointment process applies to the
Institute as well as the state-operated school at Ba-
tavia: the parent or guardian of a blind child ap-
plies to the commissioner, supplying documentation
of the child's legal blindness. The commissioner
then refers the child to the Institute or Batavia for
evaluation and for recommendation as to whether
the child would be suitable for the program. It ap-
pears that, except for the possible availability of
specific programs, the commissioner of education
relies solely upon geographical accessibility in as-
signing a child to one school or the other.2 1
The operations of the Institute are under the
overall direction of its board of managers, a body
of private citizens elected on an annual basis. 2 2
The board of managers hires a director, who hires,
disciplines, and fires employees, which the State
does not review. The salary of employees is based
on the state salary paid to employees at the two
state-owned schools (called the state salary "grid").
The Institute uses its private moneys to supplement
the salaries of Title VI employees to bring them to
the state level, and to supplement the salaries of
and for that purpose to appoint from time to time, suitable persons to
visit the schools.
e. To suggest to the directors of such institutions and to the legis-
lature such improvements as he shall judge expedient.
f. To make an Annual Report to the legislature on all of the mat-
ters enumerated in this subdivision and particularly as to the condi-
tion of the schools, the improvement of the pupils, and their treat-
ment with respect to board and lodging
20 The relevant regulation, sec. 206, is entitled "State Aid to Blind
in certain state-operated and state-supported schools provided by Article
85, 87 and 88 of the Education Law and Chapter 1060 of the Laws of
1974."
21 The regulations specify that a blind child "will be appointed to the
school for the . . . blind nearest [hisl place of residence. ." In ap-
pointing students, terminating students, or in exercising the power to
transfer students, the record discloses that the commissioner may and in
fact has taken such action contrary to the Institute's recommendations.
The Institute must continue the student until the commissioner either ter-
minates the appointment or transfers the student.
e2 The State currently has no input in the election of the board of
managers. The original board of managers, and the officers, were ap-
pointed by the legislature. Secs 2 and 3 of the Act of 1831 established
the method of selecting the board of managers and officers.
666
NEW YORK INSTITUTE FOR EDUCATION OF THE BLIND
four employees above the state level. The state-
funded employees must participate in the state em-
ployee retirement system, and all employees are
permitted to participate in the state health care
plan. The Institute must submit an annual budget to
the commissioner prior to the commencement of its
fiscal year, as the state education department will
not advance funds until the budget is submitted. On
two occasions, the Institute used moneys from pri-
vate contributions to remain in operation during a
delay in receipt of state funds. In addition, the state
comptroller conducts regular audits of the Institute.
As noted above, in determining whether to assert
jurisdiction herein, Federal rather than state law
controls. We find persuasive, however, some of the
facts enumerated in the collateral state court deci-
sion. 2 3 The state legislature, during a period of
almost 150 years, has consciously and specifically
denominated the Institute, inter alia, as its agent in
satisfying the State's perceived obligation or consti-
tutionally mandated requirement of providing the
State's residents with a suitable education. The
State, through the commissioner of education, exer-
cises full power of appointment of students. 2 4
Moreover, although the Institute receives private
funds, the record establishes that the State as a
practical matter exercises significant control over
the Institute's expenditures by reason of the re-
quired submission of budgets in advance of the
fiscal year and the applicabilty of state audit proce-
23 We need not reach, however, and do not indicate any view as to
the state court's holding, or whether the Institute would be subject to ju-
risdiction of the New York State Labor Relations Board under New
York State's "Taylor" Law. We note in passing, however, that, in the
instances cited by the Petitioner as analogous in support of its position
that bargaining herein would be appropriate, two involve state-owned
and operated schools, and a third entailed intervention by the State at an-
other 4201 school.
2z Cf. The Krebs School Foundortion. Inc., supra.
dures. Considering this degree of budgetary and
audit control in light of the long history of the
state-created 2 5 Institute as a state-authorized and
state-utilized facility, we conclude that the Institute
is an agent of the State and, in the words of the
Supreme Court in Hawkins, an "administrative
arm" of the State, in providing educational services
for the handicapped. 2 6
Accordingly, we shall dismiss the petitions
herein.
ORDER
It is hereby ordered that the petitions filed herein
shall be, and they hereby are, dismissed.
MEMBER PENELLO, concurring:
I agree with my colleagues, for the reasons they
have cited, that the Employer is a political subdivi-
sion within the meaning of Section 2(2) of the Act
and thus exempt from our jurisdiction. Contrary to
the majority, I continue to adhere to the "intimate
connection" test for determining whether to assert
jurisdiction.2 7 I also continue to adhere to the "ad-
junct" test for deciding whether to take jurisdic-
tion. 2 8
2' For further detailed history of legislative involvement and appropri-
ations, including support of students, purchase of land, and construction
of buildings, see People v. Fitch. 154 N.Y 14, 47 N.E. 93 (1897); notes of
decisions, New York Education Law, art. 85, Title 6 sec. 4201
"2 Member Truesdale agrees with his colleagues that in the unique cir-
cumstances of this case the Institute is an exempt employer under Sec
2(2) of the Act. Among the special factors which Member Truesdale be-
lieves support this finding are the State of New York's long involvement
with the Institute, the required participation of state-funded employees in
the State's employee retirement plan, and the appointment power of the
commissioner of education in referring children to the Institute.
27 See my dissent in ational Transportation Service, Inc., 240 NLRB
565, 566.
2 Overbrook School for the Blind, 213 NLRB 511: Pennsylvania School
for the Deaf, 213 NLRB 513
667