Sinai Hospital of Baltimore, Inc. v. NLRB

33 F.4th 715

• Court: Court of Appeals for the Fourth Circuit
• Decided: May 10, 2022
• Docket: 21-1642
• Status: Published

Opinion

PUBLISHED

UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT

No. 21-1642

SINAI HOSPITAL OF BALTIMORE, INC., d/b/a VSP,

Petitioner,

v.

NATIONAL LABOR RELATIONS BOARD,

Respondent,

and

1199 SEIU UNITED HEALTHCARE WORKERS EAST,

Intervenor.

No. 21-1683

Respondent.

Intervenor. On Petition for Review and Cross-Application for Enforcement of an Order of the National Labor Relations Board. (05-CA-265997)

Argued: March 10, 2022 Decided: May 10, 2022

Before NIEMEYER, MOTZ, and KING, Circuit Judges.

Petition for review denied, and cross-application for enforcement granted, by published opinion. Judge King wrote the opinion, in which Judge Niemeyer and Judge Motz joined. Judge Niemeyer wrote a separate concurring opinion.

ARGUED: J. Eric Paltell, KOLLMAN & SAUCIER, P.A., Timonium, Maryland, for Petitioner/Cross-Respondent. Eric C. Weitz, NATIONAL LABOR RELATIONS BOARD, Washington, D.C., for Respondent/Cross-Petitioner. Ashley Evangeline Macaysa, ABATO, RUBENSTEIN & ABATO, P.A., Baltimore, Maryland, for Intervenor. ON BRIEF: Jordan F. Dunham, KOLLMAN & SAUCIER, P.A., Timonium, Maryland, for Petitioner/Cross-Respondent. Jennifer Abruzzo, General Counsel, Peter Sung Ohr, Deputy General Counsel, Ruth E. Burdick, Deputy Associate General Counsel, David Habenstreit, Assistant General Counsel, Kira Dellinger Vol, Supervisory Attorney, Jared D. Cantor, Senior Attorney, NATIONAL LABOR RELATIONS BOARD, Washington, D.C., for Respondent/Cross-Petitioner. James R. Rosenberg, ABATO, RUBENSTEIN & ABATO, P.A., Baltimore, Maryland, for Intervenor.

2 KING, Circuit Judge:

Sinai Hospital of Baltimore, Inc.’s Vocational Services Program (“VSP”) seeks

judicial review of a decision and order of the National Labor Relations Board (the “Board”)

finding that VSP engaged in unfair labor practices, in contravention of § 8(a)(1) and (5) of

the National Labor Relations Act (the “Act”), 29 U.S.C. § 158(a)(1), (5), by refusing to

bargain with a Board-certified bargaining representative, 1199SEIU United Healthcare

Workers East (the “Union”). See Sinai Hosp. of Balt., Inc. d/b/a VSP, 370 NLRB 129

(2021) (the “Bargaining Order”). Specifically, VSP contests the Board’s underlying

determination that certain disabled janitorial workers engaged by VSP are “employees”

within the meaning of the Act. The Board cross-petitions for enforcement of the

Bargaining Order. Because substantial evidence supports the Board’s employee-status

determination, we deny VSP’s petition for judicial review and hereby grant enforcement

of the Bargaining Order.

I.

A.

VSP is a department of Sinai Hospital, an acute care facility in Baltimore, Maryland,

owned by LifeBridge Health, Inc. VSP encompasses a vocational and career-training

program as well as a separate contracts and employment program, both of which are

intended to assist individuals facing barriers to employment with preparation for

competitive employment opportunities. Disabled individuals may be referred to VSP’s

vocational program — which offers career assessments, job skills training, and internships

3 — by any of a variety of nonprofit or government organizations. Following their

graduation from the vocational program, disabled individuals become eligible for job

placements through VSP’s employment program. Such placements may be with Sinai

Hospital itself; with an outside, private employer; or at a VSP contract site. Nondisabled

individuals may also approach VSP seeking enrollment in the employment program, but

are not eligible for participation in the vocational program.

As part of its employment program, VSP has contracted with the Social Security

Administration (the “SSA”) since at least 1987 to provide janitorial staffing at SSA

facilities. VSP’s contract with the SSA is governed by the federal AbilityOne program, a

creation of the Javits-Wagner-O’Day Act (the “Javits Act”) designed to employ disabled

persons in providing commodities and services to the federal government. The terms of

the Javits Act require, inter alia, that at least 75% of the janitors that VSP employs at its

contract sites be “severely disabled.” See 41 U.S.C. § 8501(6). VSP directly employs the

disabled janitors involved in these proceedings at an SSA facility located in Maryland’s

Baltimore County. As of November 2019, VSP employed 44 janitors at that facility.

Thirty-five of those VSP janitors were documented by annual employment evaluations as

suffering from “severe” physical or mental disabilities, as defined by the Javits Act. The

other nine VSP janitors working at the facility did not qualify as severely disabled. See

A.R. 26-27, 270-71. 1

1 Citations herein to “A.R. __” refer to the contents of the Administrative Record filed in this matter.

4 The record reflects the following facts pertaining to the employment relationship

between VSP and the janitors working at the Baltimore County SSA facility. All janitors

at the facility — regardless of disability status — have substantially the same terms and

conditions of employment, and the disabled janitors work alongside nondisabled janitors

during standard eight-hour shifts. VSP maintains a progressive discipline system that, by

its terms, applies equally to all janitors, although disabled janitors may receive modified

job duties or counseling in lieu of formal discipline when they face difficulties in

completing their assigned tasks. All VSP janitors can be — and, with some frequency, are

— discharged for inadequate work performance, taking unauthorized breaks, failing to

properly store supplies, and the like, even when a janitor’s disability precipitates their

performance issues. VSP supplies certain counseling and rehabilitative services to both

disabled and nondisabled janitors, principally through a case manager named Veronica

White, but does not employ any full-time counseling personnel at the SSA facility. Janitors

tend to remain in their positions at the facility for several years, and VSP does not maintain

a formal job-placement program. Between 2014 and 2019, VSP discharged 19 disabled

janitors, while only seven left the SSA facility for outside employment during that period.

B.

On July 3, 2019, the Union filed a petition with the Board seeking to represent the

VSP janitors working at the SSA facility. The Union petitioned to represent a bargaining

unit consisting of “[a]ll full time regular and part time janitors and housekeepers employed

by [VSP] at the [SSA facility],” without regard for disability status. See A.R. 257-58. VSP

contested the Board’s jurisdiction over the proposed unit of janitors, asserting that the

5 Union’s petition should be dismissed because the disabled janitors at the SSA facility have

a “primarily rehabilitative” relationship with VSP, such that — under the standard

articulated by the Board in its decision in Brevard Achievement Center, Inc., 342 NLRB

982 (2004) — they are not “employees” as contemplated by § 2(3) of the Act. 2

The Board thereafter conducted two representation hearings in July and September

2019. The Board received testimony and exhibits from four VSP witnesses, including case

manager White, as well as from two janitors employed at the SSA facility — one disabled,

and one nondisabled. VSP and the Union also filed formal briefs with the Board following

each hearing.

On November 29, 2019, the Acting Regional Director for the Board’s Region 5

issued a Decision and Direction of Election resolving that the disabled janitors engaged by

VSP are in fact statutory “employees.” See A.R. 819-45. After assessing the factors set

forth in the Board’s Brevard decision, the Decision and Direction of Election concluded

that VSP had failed to satisfy its burden of demonstrating a “primarily rehabilitative”

employment relationship, and that VSP’s relationship with the disabled janitors was instead

more appropriately classified as “typically industrial.” Id. at 820-21 (citing Brevard, 342

NLRB at 984). The Acting Regional Director acknowledged that certain evidence at the

2 VSP also argued that, if the Board found the disabled janitors not to qualify as statutory “employees,” the nondisabled janitors at the SSA facility should be held as an impermissible “microunit,” thereby prohibiting the Union from representing those janitors independently of the disabled janitors. See A.R. 820. Because it resolved that the disabled janitors are indeed “employees,” the Board dismissed VSP’s contention as moot. Accordingly, the Board ultimately certified the Union as the collective bargaining representative for all janitors employed at the SSA facility. Id. at 841.

6 representation hearings suggested a “rehabilitative” relationship, but found that, on

balance, most of the evidence was illustrative of a traditional economic relationship.

Accordingly, the Acting Regional Director ruled that both the disabled and

nondisabled janitors working at the SSA facility are “employees” as contemplated by the

Act and ordered a Board-supervised secret ballot election. See A.R. 839-41. The Union

prevailed in that election by a vote of 28 to 13 and, on December 30, 2019, the Acting

Regional Director certified the Union as the exclusive collective bargaining representative

of the VSP janitors. VSP sought review of the Decision and Direction of Election’s

employee-status determination, but a three-member panel of the Board denied that request

on May 27, 2020, citing a lack of substantial issues warranting review.

C.

Notwithstanding the Union’s successful election and certification, VSP refused to

recognize it as the janitors’ bargaining representative or to engage in the bargaining

process. The Union thus filed an unfair labor practice charge with the Board on September

11, 2020, and the Board’s General Counsel thereafter issued a complaint alleging that VSP

had violated § 8(a)(1) and (5) of the Act by refusing to bargain in good faith with the Union.

See A.R. 933-39. 3 The General Counsel moved the Board for summary judgment and, in

response, VSP again raised its contention that the disabled janitors are not statutory

3 Section 8 of the Act defines certain unfair labor practices that may not be committed by employers or unions, and subsections (a)(1) and (a)(5) respectively prohibit employers from interfering, restraining, or coercing employees in the exercise of their rights to self-organize and to bargain collectively, and from refusing to bargain with a certified representative. See 29 U.S.C. § 158(a)(1), (5).

7 “employees.” VSP did not dispute its refusal to recognize or bargain with the Union, but

simply maintained that it had no duty in law to bargain because the Board’s underlying

certification of the Union was fatally erroneous.

On May 25, 2021, a three-member panel of the Board granted the General Counsel’s

motion for summary judgment, ruling in its Bargaining Order that VSP’s refusal to bargain

with the Union constituted an unfair labor practice under the Act. The Bargaining Order

directed VSP to recognize the Union as the certified representative of the janitors working

at the SSA facility; to engage in the bargaining process at the request of the Union; to

refrain from intrusions on the rights afforded to the janitors by § 7 of the Act; and to post

certain remedial notices at the SSA facility. See Bargaining Order 3. The Board declined

to address VSP’s renewed employee-status argument, resolving that because VSP had

failed to adduce newly discovered evidence or special circumstances calling for

reconsideration of the Board’s earlier factual determination, it had not presented a

“properly litigable” issue in the unfair labor practice proceeding. Id. at 1.

VSP timely filed a petition for review of the Bargaining Order with this Court on

June 2, 2021. Because the Bargaining Order was based in part on the Board’s

determination in the 2019 Decision and Direction of Election that the disabled VSP janitors

are statutory “employees,” that determination and the associated administrative record are

also before the Court in this matter. See 29 U.S.C. § 159(d) (permitting review of

underlying representation proceedings where court of appeals reviews an unfair labor

practice order predicated on such proceedings); see also Boire v. Greyhound Corp., 376

U.S. 473, 477 (1964). Two weeks later, on June 16, 2021, the Board filed a cross-

8 application for enforcement of the Bargaining Order, and the Union was thereafter

permitted to intervene in these proceedings in support of the Board’s cross-application.

We possess jurisdiction pursuant to 29 U.S.C. § 160(e)-(f) (authorizing petition for review

or enforcement of final order of Board in appropriate court of appeals).

II.

VSP now advances its prior position — asserted in the underlying representation

and unfair labor practice proceedings — that its relationship with the disabled janitors

working at the Baltimore County SSA facility is “primarily rehabilitative” in nature, and

that the Board’s Decision and Direction of Election incorrectly classified the disabled

janitors as statutory “employees.” VSP argues that the Board therefore lacked jurisdiction

to certify the Union as the janitors’ collective bargaining representative and that the

Bargaining Order was in error by association.

We review the Board’s findings of fact — including the status of workers as

“employees” within the meaning of the Act — only to determine if those findings are

“supported by substantial evidence in the record as a whole.” See Lee v. NLRB, 393 F.3d

491, 494 (4th Cir. 2005) (citing Universal Camera Corp. v. NLRB, 340 U.S. 474, 488

(1951)). “Substantial evidence” means “more than a scintilla of evidence, but less than a

preponderance.” See Pac Tell Grp., Inc. v. NLRB, 817 F.3d 85, 90 (4th Cir. 2015). As a

result, our review of the Board’s decision is “limited,” see Tenocap, LLC v. NLRB, 1 F.4th

304, 312 (4th Cir. 2021), and we “extend considerable deference to the NLRB’s

interpretation of [the Act’s definition of ‘employee’] and its application of [that] provision

9 to a particular worker or class of workers,” see NLRB v. Labor Ready, Inc., 253 F.3d 195,

199 (4th Cir. 2001). In these circumstances, because ample record evidence supports the

Board’s employee-status determination, we are obliged to enforce its Bargaining Order.

III.

Section 7 of the Act vests the right to engage in concerted activity for purposes of

collective bargaining “or other mutual aid or protection” only in “employees.” See 29

U.S.C. § 157. Section 2(3) of the Act, meanwhile, defines an “employee” simply — if

perhaps unhelpfully — as “any employee.” Id. § 152(3). The Supreme Court has observed

that the Act “seems to reiterate the breadth of the ordinary dictionary definition” of that

term, such that it captures “any person who works for another in return for financial or

other compensation.” See NLRB v. Town & Country Elec., Inc., 516 U.S. 85, 90 (1995)

(quoting American Heritage Dictionary 604 (3d ed. 1992)).

Under Board precedent, the statutory “employee” status of disabled individuals

working in rehabilitative vocational settings turns on whether the relationship between

worker and putative employer is best characterized as “typically industrial” or instead

“primarily rehabilitative.” See Brevard Achievement Ctr., Inc., 342 NLRB 982, 983-84

(2004); Goodwill Indus. of Denver, 304 NLRB 764, 765 (1991). The Board declines to

assert jurisdiction over “primarily rehabilitative” employment relationships as a prudential

matter, in recognition of the fact that the Act “contemplates a primarily economic

relationship between employer and employee,” wherein “employees who do not possess

10 full freedom of association or actual liberty of contract” will experience an inequity of

bargaining power as compared to their better-organized employers. See Brevard, 342

NLRB at 984-85 (quoting 29 U.S.C. § 151). But “[i]t is well-established that the Board is

not precluded from asserting its jurisdiction merely because an employer is . . . engaged in

a worthy purpose,” and the Board classifies individuals working in rehabilitative settings

as “employees” if there is a classically economic working relationship with the employer

that is “typically industrial” and reflects “private sector working conditions.” See Goodwill

Indus. of Denver, 304 NLRB at 765-66; see also Balt. Goodwill Indus., Inc. v. NLRB, 134

F.3d 227, 229 (4th Cir. 1998).

The “typically industrial” versus “primarily rehabilitative” determination calls for a

case-by-case factual assessment, and “the party seeking . . . to exclude otherwise eligible

employees from the coverage of the Act” bears the burden of proving a “primarily

rehabilitative” employment relationship to the Board. See Goodwill Indus. of N. Ga., Inc.,

350 NLRB 32, 35 (2007). In conducting that analysis, the Board weighs the following,

non-exhaustive list of factors identified in its Brevard decision:

(1) The existence of employer-provided counseling, training, or rehabilitative services;

(2) The existence of any production standards;

(3) The existence and nature of disciplinary procedures;

(4) The applicable terms and conditions of employment (particularly in comparison to those of nondisabled individuals employed at the same facility); and

(5) The average tenure of employment, including the existence/absence of a job-placement program.

11 See Brevard, 342 NLRB at 984.

In concluding that VSP had failed to meet its burden of demonstrating a “primarily

rehabilitative” employment relationship, the Board resolved that the disabled janitors’

affiliation with VSP is more akin to that found in traditional private sector employment

settings, such that the Act’s leading purpose of restoring balance to bargaining power

disparities is served by classifying the janitors as statutory “employees.” See A.R. 839. To

be sure, the Board acknowledged that certain testimony received during its representation

hearings pointed toward a “primarily rehabilitative” relationship. But it ultimately ruled

that “[those] facts are insufficient to overcome the other facts supporting a traditionally

industrial relationship” and that each Brevard factor weighed against finding a principally

“rehabilitative” connection between VSP and its disabled janitors. Id. Our review of the

record fully supports the Board’s determination.

1.

The Board first found that the terms and conditions of employment for VSP’s

disabled and nondisabled janitors are “virtually indistinguishable,” thereby suggesting a

“typically industrial” relationship under Brevard. See A.R. 828. The Board relied on

evidence indicating that all janitors at the SSA facility — regardless of disability status —

are assigned to shifts of the same length; receive equivalent wages and benefits; have the

same job description; and are afforded equal amounts of break time. The Board also

observed that a 90-day probationary period applies to all newly hired janitors and that VSP

12 has demonstrated a “ready willingness” to discharge any janitor rendering unsatisfactory

performance during that probationary period. Id. at 839. Testimony further indicated that

all janitors are expected to complete their assigned tasks during their shift, and the Board

took that policy to indicate the implementation of production standards, following its

conclusion in Goodwill Industries of North Georgia that an identical requirement

evidenced the employer’s maintenance of productivity standards and weighed against a

finding of a “primarily rehabilitative” relationship with disabled janitorial workers. See

350 NLRB at 38.

VSP’s case manager, Veronica White, maintained that although all janitors have the

same job description, disabled janitors may have their assigned tasks modified if their

disabilities interfere with successful completion of those tasks. But the two janitors who

appeared at the Board’s representation hearings — Gregory Parker and Wilzona Tyler —

refuted White’s testimony, relating that they had not previously witnessed any task

modifications because of a colleague’s disability-related difficulties. The Board observed

that White does not work full-time at the SSA facility and is there only “one or two times

a week,” and also that VSP neglected to call any supervisors or other personnel working at

the SSA facility daily. See A.R. 829. Accordingly, the Board accorded “greater weight”

to Parker and Tyler’s testimony and found that, in any event, no testimony indicated that

VSP’s disabled janitors could “work at their own pace” as in the Board’s Brevard decision,

where disabled workers and their employer were held to possess a “primarily

rehabilitative” relationship. Id. at 827-28; Brevard, 342 NLRB at 983. Despite some

inconsistency regarding the lenience afforded to VSP’s disabled janitors, substantial

13 evidence supports the Board’s judgment that universally applied terms and conditions of

employment, as well as the general maintenance of productivity standards, disfavor finding

a “primarily rehabilitative” workplace relationship in this case.

2.

The evidence presented to the Board made clear that VSP does provide certain

counseling and rehabilitative services to its disabled (and nondisabled) janitors, primarily

through White. As previously noted, White works at the SSA facility only one to two days

per week; she is otherwise “on call” while working at other VSP facilities. See A.R. 138-

39. White provides a range of services to all janitors at the SSA facility — including

assistance with budgeting, locating housing, scheduling medical appointments, and

drafting resumés — although janitors are not required to meet with White on any fixed

schedule. No evidence indicates that VSP employs any full-time job trainers, mental health

counselors, or other comparable personnel at the SSA facility. VSP thus stands apart from

the employer in the Board’s 1991 Goodwill Industries of Tidewater decision, where the

employer’s retention of a full-time job-placement counselor and assignment of a dedicated

skills trainer to each of its disabled janitorial employees informed the Board’s finding of a

“primarily rehabilitative” employment relationship. See 304 NLRB 767, 768-69 (1991).

The record shows that VSP’s disabled janitors do have access to “job coaches” that

visit the SSA facility and assist janitors in completing their work, but White testified that

those coaches “work in conjunction with [VSP]” and “are generally employed through

other agencies,” such as Baltimore nonprofit organizations. See A.R. 427-29.

Accordingly, the Board discounted the job coaches as not qualifying as an “employer-

14 provided” counseling service. Id. at 832. Other VSP managers testified as to VSP’s

employment of nine “job-retention” counselors of its own, but those counselors do not

work at the SSA facility, are part of VSP’s distinct vocational program (not its employment

program), and, as the Board observed, the two testifying janitors stated that “they had never

heard of these nine counselors prior to the hearing.” Id. at 37-39, 832.

The Board acknowledged that, especially in view of White’s services, “there are

some rehabilitative elements” to VSP’s relationship with its disabled janitors. See A.R.

831. The Board also observed, however, that White spends relatively little time at the SSA

facility, that she is “essentially [VSP’s] sole source of counseling, training, and

rehabilitation services,” and that her services “would be more significant” if they were

offered only to disabled janitors. Id. at 829, 831. Given that VSP appears to employ no

full-time counseling personnel at the SSA facility and that its maintenance of a

probationary period “is inherently contradictory to a rehabilitative relationship,” the Board

resolved that Brevard’s “counseling services” factor weighed against finding a “primarily

rehabilitative” relationship. Id. at 833. Although we recognize that the record confirms

VSP’s provision of at least some rehabilitative and counseling services to its disabled

janitors, we are satisfied that far more than “a scintilla of evidence” supports the Board’s

finding that VSP’s services are not sufficient to establish a rehabilitative relationship

standing alone. See Pac Tell Grp., Inc. v. NLRB, 817 F.3d 85, 90 (4th Cir. 2015).

3.

Among the Brevard factors, the Board appeared to find the one designated as “the

existence and nature of disciplinary procedures” as the most problematic for VSP in

15 demonstrating a “primarily rehabilitative” relationship. Indeed, the record reveals that VSP

applies a progressive discipline system to all of its janitors — once more irrespective of

their disability status — and an exhibit setting forth the terms of that system indicates that

supervisors are not directed to discipline disabled janitors less severely or otherwise

differently than nondisabled janitors. See A.R. 306-17. Testifying at the September 2019

representation hearing, a VSP project manager confirmed that she considered the same

criteria when applying corrective actions to disabled and nondisabled janitors. Id. at 516-

18. The Board reiterated its concern with VSP’s maintenance of a probationary period

applicable to the disabled janitors, and recognized that disabled janitors who exhaust their

available corrective discipline options will be discharged, ordinarily without eligibility for

rehiring. And the record confirms that disabled janitors have been fired for a variety of

infractions, including punctuality and attendance issues, inappropriate behavior, taking

unauthorized breaks, and failing to properly store supplies. In that sense, this matter stands

in stark contrast to the D.C. Circuit’s decision in Davis Memorial Goodwill Industries, Inc.

v. NLRB, where disabled workers in a “primarily rehabilitative” employment setting “could

not be discharged” at all, but were instead referred to a rehabilitation program when they

violated workplace rules. See 108 F.3d 406, 411 (D.C. Cir. 1997).

The Board credited testimony that disabled janitors who have committed infractions

are often counseled by White instead of facing formal disciplinary measures, and the record

confirms that disabled janitors are disciplined less frequently than their nondisabled

colleagues. White testified, however, that nondisabled janitors are also given an

opportunity to meet with her when disciplinary actions are under consideration, and the

16 Board opined that, despite the evidence of leniency, “[VSP] will issue discipline to janitors

at the [SSA facility] for misconduct related to their disabilities.” See A.R. 835. As the

Board observed, that practice departs from the standards of the “primarily rehabilitative”

employer in the Brevard decision, where disabled janitors were fully “exempt from

discipline for any conduct related to their disabilities.” See 342 NLRB at 983, 986. That

practice also renders this case distinct from the Board’s decision in Goodwill Industries of

Denver, where the employer disciplined its disabled workers “only in extreme cases” and

the Board found the workers not to be statutory “employees.” See 304 NLRB at 765-66.

Put simply, the evidence demonstrates that VSP disciplines and discharges its disabled

janitors with some regularity, thereby supporting the Board’s determination that VSP’s

relationship with the janitors is less “rehabilitative” and more typical of ordinary private

sector employment.

4.

The Board lastly compared VSP’s employment program to instances where

“rehabilitative” employers maintain robust job-placement programs and where their

disabled employees “routinely make the transition to competitive employment.” See A.R.

837. Although case manager White does provide some job-placement services to VSP’s

disabled janitors — including assistance with resumé drafting and conducting mock

interviews — VSP does not employ a full-time job-placement coordinator and lacks a

formal program designed to aid janitors in securing competitive employment outside the

SSA facility. Nor are any time limits placed on janitors’ tenure at the facility. The record

suggests that, on average, janitors stay with VSP for about 13 years. Id. at 54. And in the

17 five years preceding the Board’s 2019 representation hearings, only seven disabled janitors

left VSP for outside employment — two of whom reported receiving assistance from White

— while VSP discharged 19 disabled janitors during that same period.

Accordingly, the Board resolved that “it is significantly more likely that [VSP] will

discharge one of its disabled workers at the [SSA facility] than help transition that worker

to private competitive employment.” See A.R. 838. Once again, the record evidence

pertaining to employee tenure and the lack of a noteworthy job-placement program lends

strong support to the Board’s ultimate employee-status determination.

Based on the record as a whole, and in consideration of the deference that we must

afford the Board’s factual findings, substantial evidence supports the Board’s

determination in its Decision and Direction of Election that VSP failed to demonstrate a

“primarily rehabilitative” employment relationship and that its disabled janitors are

“employees” within the meaning of the Act. The Board therefore possessed jurisdiction to

certify the Union as the bargaining representative of the VSP janitors. Because VSP

admitted its refusal to bargain with the Union in contravention of § 8(a)(1) and (5) of the

Act, there is no error in the Bargaining Order, and we grant its enforcement.

IV.

Pursuant to the foregoing, we deny VSP’s petition for review and grant the Board’s

cross-application for enforcement of the Bargaining Order.

18 PETITION FOR REVIEW DENIED; CROSS-APPLICATION FOR ENFORCEMENT GRANTED

19 NIEMEYER, Circuit Judge, concurring:

I have substantial doubt that categorically the disabled janitors employed by

Vocational Services Program (VSP) at the Social Security Administration (SSA) site in

Baltimore are entitled to collective bargaining rights under the National Labor Relations

Act (NLRA). The NLRA’s collective bargaining guarantees are intended to balance

bargaining power disparities between employers and employees engaged in a traditional

economic employment relationship. In recognition of this statutory intent, the National

Labor Relations Board (NLRB) has held that workers engaged in rehabilitative — rather

than economic or “typically industrial” — relationships with their employer are not

“employees” entitled to collective bargaining rights under the NLRA. See, e.g., Brevard

Achievement Ctr., Inc., 342 N.L.R.B. 982, 983–86 (2004). VSP, however, hired disabled

janitors to provide services to the SSA pursuant to the AbilityOne Program authorized by

the Javits-Wagner-O’Day Act, 41 U.S.C. §§ 8501–8506. This Act creates a statutory and

regulatory framework aimed at “increas[ing] employment and training opportunities for

[disabled] persons” by promoting the federal government’s procurement of goods and

services from nonprofit agencies that employ disabled individuals. 41 C.F.R. § 51–1.1.

The Act and its implementing regulations mandate a rehabilitative — not economic —

relationship between the employer nonprofit agencies and their disabled employees,

requiring that the agencies, for example, deliver the majority of their services through

disabled persons unable to participate in “normal competitive employment”; that they

maintain job placement programs to transition those workers to competitive employment;

and that they adhere to other parameters foreign to traditional economic employment

20 relationships. See id. §§ 51–1.3, 51–4.3. The parties do not dispute that VSP is in

compliance with the requirements of the Javits-Wagner-O’Day Act and its regulations.

Because of this, I would approach this case — and any case involving disabled workers

employed pursuant to the Javits-Wagner-O’Day Act — with a strong presumption that the

employees are engaged in a rehabilitative employment relationship with their employer

and are therefore not entitled to the NLRA’s collective bargaining guarantees.

Collective bargaining is afforded by the NLRA to “restor[e] equality of bargaining

power between employers and employees.” 29 U.S.C. § 151. The Act contemplates an

“arms-length economic relationship[]” between employers and employees, under which

the two sides jockey for advantage “through a contest of economic strength.” Brevard,

342 N.L.R.B. at 985; see also NLRB v. Burns Int'l Sec. Servs., Inc., 406 U.S. 272, 288

(1972) (stating that “[t]he congressional policy manifest in the [NLRA] is to enable the

parties to negotiate for any protection either deems appropriate, but to allow the balance of

bargaining advantage to be set by economic power realities”). In this traditional economic

relationship, employers are generally incentivized to minimize the wages and benefits that

they provide to their employees in order to increase profits, whereas employees are

incentivized to maximize those wage-and-benefit outlays. While the ability of any

individual employee to negotiate successfully for higher wages or benefits is negligible,

collective bargaining allows employees to “pool[] their economic strength” and thereby

enhance their bargaining power. NLRB v. Allis-Chalmers Mfg. Co., 388 U.S. 175, 180

(1967). And with that enhanced bargaining power, employees can negotiate with their

employers on a more-level playing field. See Phelps Dodge Corp. v. NLRB, 313 U.S. 177,

21 183 (1941) (asserting that the NLRA “leaves the adjustment of industrial relations to the

free play of economic forces but seeks to assure that the play of those forces be truly free”).

At bottom, then, the employees contemplated by the NLRA are best understood as

individuals who can benefit economically from collective bargaining with their employers.

The employees in this case, however, do not fit that profile. Here, the relevant

workers are disabled janitors working for a government-determined wage under a program

designed to rehabilitate their vocational skills and transition them to competitive economic

employment. Thus, their relationship with their employer was not created for profit but

rather for rehabilitative purposes, in accordance with the design of the Javits-Wagner-

O’Day Act.

The fundamental purpose of the Javits-Wagner-O’Day Act is directed specifically

at the rehabilitation of severely disabled persons in respect to employment. See 41 C.F.R.

§ 51–1.1. The House Committee on Government Operations, for example, in a report

issued shortly before the Act’s passage, framed the Act as “an important rung in the ladder

toward expanding a successful self-help rehabilitation program through work.” H.R. Rep.

No. 92-228, at 6 (1971). And the Senate Committee on Labor and Public Welfare similarly

highlighted how the Act would transition disabled workers from “dependency” to “self-

sufficiency.” S. Rep. No. 92-41, at 2 (1971). For implementation, the Act tasked the

Committee for Purchase From People Who Are Blind or Severely Disabled (now known

as the “AbilityOne Commission”) with maintaining a federal procurement list of products

and services offered by “qualified nonprofit agenc[ies]” that employ the blind and severely

disabled. See 41 U.S.C. § 8503(a). To obtain federal contracts through this procurement

22 list, qualified nonprofits — like VSP — must ensure that at least 75% of the “work-hours

of direct labor required to furnish [their] . . . services” are provided by “persons with severe

disabilities,” defined as those who have “a severe physical or mental impairment . . . which

so limits [their] functional capabilities . . . that [they are] unable to engage in normal

competitive employment over an extended period of time.” 41 C.F.R. § 51–1.3; see also

41 U.S.C. § 8501(6), (8). Nor is it sufficient for these qualified nonprofits simply to employ

disabled individuals. Rather, regulations impose a range of requirements on qualified

nonprofits to ensure that they are complying with the Act’s rehabilitative aims. For

example, these regulations require, inter alia, that qualified nonprofits maintain job

placement programs to assist their workers in transitioning to “normal competitive

employment”; that they maintain written documentation detailing each disabled worker’s

disability and ability to participate in competitive employment; and that they complete

annual compliance certifications and comply with ad hoc records requests from AbilityOne

Program authorities. See 41 C.F.R. § 51–4.3. Thus, the employment relationship

mandated by the Act’s requirements is inherently rehabilitative, rather than economic. The

parties in this case do not dispute that VSP was properly functioning in accordance with

those requirements. Indeed, the record in this case shows how VSP’s relationship with its

disabled employees at the SSA site aligns with the rehabilitative aims of the Javits-Wagner-

The record in this case shows that VSP is a distinct department of Sinai Hospital of

Baltimore that exists to provide employment opportunities to individuals with disabilities

with the goal of helping those individuals to “lift themselves up to find [job] placement”

23 elsewhere. Many of the individuals coming to VSP are referred to it by the Maryland

Division of Rehabilitation Services, the Department of Veterans Affairs, and other

community rehabilitation providers such as The ARC Baltimore or Chimes. Of the 44

janitors VSP employed to work at the SSA site, 35 were severely disabled. VSP does not

make any profit from the employees’ work at the SSA and the wages that it pays are “solely

funded” by its contract with SSA at rates “controlled by” Department of Labor wage

determinations. In short, VSP functions to benefit disabled workers by rehabilitation, not

to make a profit, and the relationship it has with its employees is thus fundamentally unlike

the traditional economic employment relationships the NLRA is designed to regulate.

Importantly, the NLRB has recognized the distinction between economic and

rehabilitative employment relationships, concluding that rehabilitative employees are not

statutory employees under the NLRA. See Brevard, 342 N.L.R.B. at 984–85; see also Balt.

Goodwill Indus., Inc. v. NLRB, 134 F.3d 227, 229–31 (4th Cir. 1998) (per curiam). As the

Board has explained, a rehabilitative employer’s objective in hiring an individual is not to

maximize its own profits or otherwise secure its own economic advantage, but rather to

“rehabilitat[e] [the individual] and prepar[e] them for work in private competitive

industry.” Goodwill Indus. of S. Cal., 231 N.L.R.B. 536, 537 (1977), overruled on other

grounds by Goodwill Indus. of Denver, 304 N.L.R.B. 764 (1991). Thus, “[t]he conflicting

interests present in traditional, primarily economic employment relationships are absent”

in the rehabilitative context. Brevard, 342 N.L.R.B. at 985–86; see also Goodwill Indus.

of S. Cal., 231 N.L.R.B. at 537 (describing how a rehabilitative employer’s “primary

objectives are the converse of a normal employer's objectives”). And because of this, the

24 Board has recognized that the injection of collective bargaining into rehabilitative

employment contexts might actually undermine the rehabilitative purpose of such

arrangements. See Brevard, 342 N.L.R.B. at 988 (reasoning that “[t]he imposition of

collective bargaining at the rehabilitative stage could interfere with the rehabilitation

process itself”). As the Board in Brevard summarized:

The imposition of collective bargaining on relationships that are not primarily economic does not further the policies of the [NLRA]. The Act is premised on the view that in arms-length economic relationships, there can be areas of conflict between employers and employees that, if the parties cannot reach agreement, can be resolved through a contest of economic strength in the collective-bargaining process if the employees choose to bargain collectively. This premise is not well suited to a setting that is not primarily economic but primarily rehabilitative.

Id. at 985; see also Balt. Goodwill Indus., 134 F.3d at 229; Davis Mem’l Goodwill Indus.,

Inc. v. NLRB, 108 F.3d 406, 410 (D.C. Cir. 1997).

In sum, while the NLRA protects employees in an economic relationship with their

employers, disabled workers employed in compliance with the Javits-Wagner-O’Day Act

are necessarily in a rehabilitative relationship with their employers. Accordingly, I would

approach this case with a strong presumption that disabled employees hired under a Javits-

Wagner-O’Day Act program, such as the one conducted by VSP, are not, as a class,

“employees” within the ambit of the NLRA and therefore are not entitled to the collective

bargaining rights afforded by the Act. See 29 U.S.C. § 157.

Had VSP argued for such a categorical presumption before us, I would have

welcomed the discussion and engaged both parties on that point. Instead, however, VSP

focused its briefing on whether substantial evidence supported specific factual findings

25 made by the Board. Because the record includes substantial evidence to support those

findings, albeit narrow in scope, I concur in the opinion of Judge King, which ably

demonstrates this.