Northampton Center for Children and Families

National Labor Relations Board - Board Decisions

Aug 21, 1981

257 N.L.R.B. 870 (N.L.R.B. 1981)

DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Northampton Center for Children and Families, Inc.
and District 65, United Automobile, Aerospace
and Agricultrual Implement Workers of Amer-
ica, Petitioner. Case I-RC- 16915
August 21, 1981
DECISION ON REVIEW AND ORDER
BY MEMBERS FANNING, JENKINS, AND
ZIMMERMAN
On August 21, 1980, the Regional Director for
Region 1 issued a Decision and Direction of Elec-
tion in the above-entitled proceeding, in which he
found that it would effectuate the purposes of the
National Labor Relations Act to assert jurisdiction
over the Employer herein. Thereafter, in accord-
ance with Section 102.67 of the National Labor
Relations Board Rules and Regulations, Series 8, as
amended, the Employer filed a timely request for
review of the Regional Director's decision, con-
tending that the Regional Director erred in assert-
ing jurisdiction over its operations in that, inter
alia, the Employer is a political subdivision of the
Commonwealth of Massachusetts and that, in addi-
tion, it does not possess sufficient control over its
employees to enable it to engage in meaningful bar-
gaining as required by National Transportation Serv-
ice, Inc., 240 NLRB 565 (1979).
By telegraphic order dated September 10, 1980,
the Board granted the request for review with re-
spect to whether the Employer is a political subdi-
vision and whether it meets the National Transpor-
tation criteria for assertion of jurisdiction. Thereaf-
ter, both the Employer and the Petitioner filed
briefs on review.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the Na-
tional Labor Relations Board has delegated its au-
thority in this proceeding to a three-member panel.
The Board has considered the entire record in
this case with respect to the issues under review,
including the briefs on review, and finds that the
Employer is exempt from Board jurisdiction under
Section 2(2) of the Act as a political subdivision of
the Commonwealth of Massachusetts.'
An employer is a political subdivision if it is
either (1) created directly by the State so as to con-
stitute a department or administrative arm of the
Government, or (2) administered by individuals
who are responsible to public officials or to the
general electorate. NV.L.R.B. v. The Natural Gas
Utility District of Hawkins County, Tennessee, 402
' In view of our holding herein, we find it unnecessary to pass on the
issue of whether under N.ational Transportation Services. Inc.. supru, the
Employer retains sufficient control over substantive terms ad conditions
of employment to engage i meaningful bhrgaiting.
257 NLRB No. 114
U.S. 600 (1971). The record demonstrates, and we
find, that the Employer is exempt under the first
part of this test.
The Employer is engaged in providing residen-
tial, educational, and foster care services to emo-
tionally disturbed and learning disabled children. It
was created in 19742 as a day treatment program
which provided comprehensive mental health serv-
ices for children at the Northampton State Hospital
and was directed by Superintendent Mary Jackson
of the Massachusetts Department of Mental Health,
hereinafter DMH. Jackson had been hired the pre-
vious year by DMH to develop such a program as
part of DMH's effort to deinstitutionalize disturbed
children by moving them out of state hospitals and
into less restrictive community programs. The Em-
ployer was administered through DMH and the
Office For Children by a state advisory board,
composed in part of various state officials. 3
In 1975 the Employer incorporated as a private
nonprofit corporation and subsequently the Internal
Revenue Service granted it tax exempt status.
However, no change occurred in the Employer's
operation.
During the next 2 years, DMH narrowed the
Employer's program to its present form, that of an
adolescent residential center providing both resi-
dential and educational services for children aged
13 to 19, and a specialized foster home placement
service for emotionally disturbed children. In 1977
the Employer moved to its present location in
Northampton, Massachusetts, where it currently
occupies six buildings on 10 acres of land. Its facili-
ties include 3 residential buildings which house 21
adolescents, 2 school buildings which provide edu-
cational services for these and 9 additional chil-
dren, and 1 administration building. All facilities
are owned by the Commonwealth.
In 1978, the Employer activated its corporate
structure in order to gain access to Federal funds
not otherwise available. The former state advisory
board and Superintendent Jackson became the ini-
tial board of directors and executive director, re-
spectively, and all employees were given the
option of either transferring to other state facilities
or continuing in their employment as employees of
the corporation. DMH and the Employer then en-
tered into a comprehensive contract for the fund-
ing and operation of the residential facilities. The
Employer also entered into funding agreements
with the public school districts and other state and
'Originally, the Employer was named Western Massachusetts Compre-
hensive Children's Center Its name was changed to Northampton Center
for Children and Families in 1979
' i 1977 the Office For Children left the program and DMH assumed
total responsibility for the Employer's operation.
870
NORTHAMPTON CENTER FOR CHILDREN AND FAMILIES
Federal agencies to cover the educational and
foster care programs.
As established by the Employer's bylaws, adopt-
ed at or about this same time, the Employer's
board of directors is self-perpetuating and, at the
time of the hearing, was composed of approximate-
ly 13 members, none of whom it appears is a state
employee or official. However, the Employer's
contract with DMH specifies, as required by
DMH, that the appointment of the executive direc-
tor must be approved by the DMH regional serv-
ices coordinator. Indeed, the current executive di-
rector, Carl Cutchins, hired in July 1979, was not
only approved by this state official, but was also
hired by a search committee composed in part of
four state officials. DMH also requires, and the
contract provides, that the Employer develop an
individualized service plan for each child accepted
into the residential program; meet all state licensing
requirements; participate in the quality assurance
process under the supervision of DMH; and submit
to numerous review requirements. These review re-
quirements concern such matters as program sub-
stance, progress of individual participants, financial
oversight including state audit of records, and the
monitoring by DMH of all the Employer's activi-
ties. The contract also establishes the number and
description of job classifications as well as the ap-
propriate staff/client ratio. In addition, only those
children who reside in region I of DMH (western
Massachusetts) are eligible to attend the Employ-
er's residential program, and the Employer can
accept only those children referred by DMH. If
the Employer refuses to accept a referred child, an
appeal may be taken to the DMH regional service
administrator who makes the final decision. The
contract further permits the Employer to use the
state-owned buildings at Northampton rent free,
and DMH pays the utilities and all repairs in excess
of $250. DMH also retains title to all equipment
purchased by the Employer at a cost of more than
$100.
The Employer's contract with DMH also binds
it to the terms of a consent decree entered into in
1978 by DMH as a result of a class action suit
brought in Federal district court against DMH and
other state officials by patients of the state mental
hospital. This decree generally provides that
DMH will establish a comprehensive system of less
restrictive care for mentally disabled persons and
sets forth requirements concerning salary levels,
employee training, periodic review of programs
and individuals' records, and other operating guide-
lines.
' Brewsler . Dukakis. CA 76 4423-F. (D C. Mass. Dec 7, 1978).
Similar to requirements under the DMH con-
tract, the State Department of Education estab-
lishes the number of students who can be admitted
to the Employer's educational facility, and only
children who are referred by the Department of
Education can attend. The Employer is also subject
to an annual review of its educational program re-
quirements under State Department of Education
regulations.
The Employer receives all of its funds from gov-
ernmental sources. Its residential program is funded
entirely by DMH, and for the contract year July ,
1979, to June 30, 1980, these funds comprised ap-
proximately 60 percent of the Employer's total
budget. Most of the remaining 40 percent came
from the State Department of Education which
provides funds for the Employer's educational pro-
gram and from a Federal grant from the Depart-
ment of Health, Education, and Welfare for the
foster care program. 5 Each grant specifies and
limits the purposes for which the funds may be
used, and thus funds from any one program may
not be transferred into another program. The Em-
ployer has virtually no input in determining the
maximum amount of money the State will provide
under its contract with DMH. Its budget, prepared
in accordance with the total appropriation, must be
approved by DMH line by line. Salaries are deter-
mined by DMH based on state guidelines and in
conformity with the Brewster v. Dukakis consent
decree. The Employer cannot alter its use of funds
midcontract, even though the total budget figure
would remain the same, unless it amends its budget
through a formal process involving DMH and the
Massachusetts Rate Setting Commission. However,
DMH does not allow savings in any line item to be
used to raise salaries. If at the end of the fiscal year
the Employer has not expended its total appropri-
ation, the Rate Setting Commission may retroac-
tively decrease the unit rate to equal the Employ-
er's actual expenditures.
The Employer's proposed budget for its educa-
tional program must be approved by the Depart-
ment of Education and the Rate Setting Commis-
sion. The funds for the program are determined by
a rate established by the Commission and come
from the school districts in which the students
reside.
The contract also prohibits the Employer from
charging tuition or fees from its clients. Although
the Employer may accept private funds, Executive
Director Cutchins testified that DMH has reserved
the right to direct the use of any such funds. How-
:' The HEW grant sas. for yealrs it $(X).(XX) per ear and, at the lime
of the hearing. was scheduled to expire ill the end of ()clher 198X(
871
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
ever, the record indicates that DMH has no objec-
tion to the Employer using outside funds to supple-
ment salaries. In any event, the Employer does not
solicit private funds and since its creation has re-
ceived only $50 in private donations.
The Employer's personnel policy manual is re-
quired by both DMH and the Department of Edu-
cation. The Employer used the personnel policies
of state agencies as guidelines in the initial prepara-
tion of its manual. In addition, DMH requires that
all fringe benefits must be available to all employ-
ees; that the Employer establish a grievance proce-
dure, maternity leave, and vacation provisions; that
group life insurance be term insurance and may not
exceed the employee's gross annual salary; and that
group health insurance be contributed to by both
the Employer and the employee. Although the
Employer's executive director and board of direc-
tors have ultimate authority to resolve employee
grievances, DMH has the responsibility to investi-
gate complaints filed with the Department against
the Employer. If the executive director and the
DMH area director cannot resolve the issue, the
matter may be appealed to the regional services ad-
ministrator. The record indicates that, in several
cases, complaints directed to DMH concerning the
Employer's staff employees have led to DMH's ter-
mination of those employees.
In light of the above and the record as a whole,
we find that the Employer is an agency of the
Massachusetts Department of Mental Health and is
thus exempt from the Board's jurisdiction as a po-
litical subdivision of the Commonwealth of Massa-
chusetts. 6 The Employer was created directly by
6 See Association for the Developmentally Disabled, 231 NLRB 784
(1977); Madison County Mental Health Center, Inc., 253 NLRB 258
(1980); The New York Institute for the Education of the Blind, 254 NLRB
664 (1981). Truman Medical Center Incorporated, 239 NLRB 1067 (1978),
relied on by the Petitioner, is distinguishable. In that case the center not
only contracted with the city department of health from which it was
incorporated but also had separate contracts with the county for the op-
eration of a number of other facilities. There is also no evidence in
Truman that the center is entirely funded by government sources; that
the city/county exercises any control over employment relations (except
that benefits must be at least equal to those provided government cm-
the Department of Mental Health, a component of
the Commonwealth of Massachusetts. Virtually all
of the Employer's funds come from governmental
sources and the amount of and use of those funds is
specified and controlled by governmental contracts
and grants; the Employer cannot accept private tu-
ition; the use of private donations is taken into con-
sideration by DMH, and, in any event, such dona-
tions are negligible; and any excess funds revert to
the State. Moreover, job classifications, salaries,
staff/client ratio, and licensing are specified by
contract with DMH, and the Employer is subject
to extensive review by DMH and the State Depart-
ment of Education. In addition, DMH investigates
complaints filed against the Employer's employees
and has terminated such employees. DMH also re-
quires that the Employer provide certain fringe
benefits and determines the kind and scope of other
benefits. The Employer's executive director must
be approved by DMH; the Employer uses state-
owned buildings rent free and title to all major
equipment purchased by the Employer vests in
DMH. DMH and the State Department of Educa-
tion select which children can attend the Employ-
er's facilities and only state residents are eligible.
Finally, the Employer is bound to the terms of the
Brewster v. Dukakis consent decree. It is clear from
the foregoing that, in spite of its separate incorpo-
ration in 1975 and the use of its corporate structure
in 1978 to qualify for Federal funds, the Employer
is for all intents and purposes an arm of the Com-
monwealth of Massachusetts and is therefore
exempt from Board jurisdiction under Section 2(2)
of the Act.
As we have concluded that the Employer is
exempt from coverage of the Act, we shall dismiss
the instant petition.
ORDER
It is hereby ordered that the petition filed herein
be dismissed.
ployees); or that the city/county determines who, and in what circum-
stances, can use the facilities operated by the center.
872