View PDF Version

No. 04-1603

In the Supreme Court of the United States

Shore Club Condominium Association, Inc., aka SC Condominium Association, Inc., petitioner

v.

National Labor Relations Board

ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT

BRIEF FOR THE NATIONAL LABOR RELATIONS
BOARD IN OPPOSITION

Paul D. Clement
Solicitor General
Counsel of Record
Department of Justice
Washington, D.C. 20530-0001
(202) 514-2217

Arthur F. Rosenfeld
Acting General Counsel
John E. Higgins, Jr..
Deputy General Counsel
John H. Ferguson
Associate General Counsel
Linda J. Dreeben
Assistant General Counsel
Anne Marie Lofaso
Attorney
National Labor Relations
Board
Washington, D.C. 20570

QUESTION PRESENTED

Whether the National Labor Relations Board reasonably found that individuals employed to perform maintenance work in the common areas of a con dominium complex were employees under Section 2(3) of the National Labor Relations Act, 29 U.S.C. 152(3), and not excluded from the Act's coverage as "employed * * * in the domestic service of any family or person at his home" under that section.

In the Supreme Court of the United States

No. 04-1603

Shore Club Condominium Association, Inc., aka
SC Condominium Association, Inc., petitioner

v.

National Labor Relations Board

ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT

BRIEF FOR THE NATIONAL LABOR RELATIONS
BOARD IN OPPOSITION

OPINIONS BELOW

The opinion of the court of appeals (Pet. App. 1a-8a) is reported at 400 F.3d 1336. The decision and order of the National Labor Relations Board (Pet. App. 9a-17a) is reported at 340 N.L.R.B. No. 82. The decision and direction of election of the Board's regional director for Region 12 (Pet. App. 18a-46a) is unreported.

JURISDICTION

The judgment of the court of appeals was entered on February 28, 2005. The petition for a writ of certiorari was filed on May 27, 2005. The jurisdiction of this Court is invoked under 28 U.S.C. 1254(1).

STATEMENT

1. Section 2(3) of the National Labor Relations Act (NLRA or Act) defines "employee" for purposes of the Act. That definition excludes "any individual employed * * * in the domestic service of any family or person at his home." 29 U.S.C. 152(3).

In determining whether an employee is "employed * * * in the domestic service of any family or person at his home" under Section 2(3), the National Labor Rela tions Board focuses "on the principals to whom the employer-employee relationship in fact runs and not merely on the * * * 'domestic' nature of * * * the services rendered." Ankh Servs., Inc., 243 N.L.R.B. 478, 480 (1979). The Board, with judicial approval, has held that workers performing maintenance and cleaning work at a condominium are not employed "in the domes tic service of any family or person at his home," where they perform those services "on behalf of and are clearly employed by" the incorporated condominium associa tion. See NLRB v. Imperial House Condominium, Inc., 831 F.2d 999, 1005 (11th Cir. 1987).

2. Petitioner is a nonprofit Florida corporation that provides maintenance and security services to condo minium owners at a condominium complex consisting of two high rise residential buildings, which have a total of 192 condominium units, and one recreational facility. Pet. App. 2a, 11a, 19a, 30a. Petitioner is controlled by a board of directors, which is elected by the owners of the condominium units. Id. at 22a. A resident manager su pervises petitioner's entire staff and reports directly to the board of directors. Ibid. He functions like a build ing superintendent in an apartment complex and is available 24 hours a day, seven days a week. Ibid.

Petitioner employs five maintenance employees, in cluding one lead maintenance worker, one painter, and three janitors, all of whom report to the resident man ager. Pet. App. 22a. They wear dark khaki uniforms, id. at 28a, and use radios to communicate with one another, id. at 26a. The lead maintenance employee is responsi ble for installing, repairing, and maintaining equipment, such as lighting and pool heaters, in the common areas of the building. Id. at 5a, 28a. Occasionally he enters residential units to perform work on behalf of petitioner, such as maintenance on air conditioning drain lines and condensation lines. Id. at 5a, 28a, 32a. The painter spends 90 to 95% of his time painting outside. On his own time, he may perform work inside residential units and receive payment directly from the individual resi dent. Id. at 29a. Each of the three janitors is assigned to one of the three buildings. The janitors spend their time carrying recycling materials and cleaning common areas, such as the elevators, lobbies, catwalk, and stair wells. Ibid.

3. On April 3, 2003, the International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, Local Union No. 390, AFL-CIO (Union), filed a petition with the Board seeking certification as the collective-bargaining representative of petitioner's five maintenance employees.1 Pet. App. 2a. Petitioner op posed the Union's election petition, claiming, inter alia, that the petitioned-for unit was inappropriate, because the maintenance employees were employed in the do mestic service of families or persons at their homes and therefore excluded by Section 2(3) of the Act. Ibid.

Following a hearing, the Board's regional director issued a decision, finding, in relevant part, that peti tioner's maintenance employees were covered by the Act and directing an election in a unit of "[a]ll full-time and regular part-time maintenance employees * * * em ployed by [petitioner] at its facility in Ft. Lauderdale, Florida." Pet. App. 3a, 12a, 43a. In finding that the five maintenance workers were not individuals "employed * * * in the domestic service of any family or person at his home," the regional director "focus[ed] * * * on the principals to whom the employer-employee relation ship in fact runs." Pet. App. 33a (quoting Ankh Servs., Inc., 243 N.L.R.B. 478, 480 (1979), and citing Imperial House Condominium, 279 N.L.R.B. 1225 (1968), aff'd, 831 F.2d 999 (11th Cir. 1987)). The regional director observed that "[t]he employees perform the vast major ity of their work in common areas of the complex," Pet. App. 31a, and that when they enter individual units on rare occasions to perform maintenance on air condition ing lines, they perform work on behalf of petitioner, and not as employees of individual unit owners. Id. at 29a, 32a. The regional director concluded that the five main tenance employees "work for the entire condominium association, rather than for any individual unit owner." Id. at 31a.

The regional director rejected petitioner's contention that applying the Act to its maintenance employees would violate principles of state sovereignty and federal ism because the State recognizes the use of the condo minium legal structure and permits condominium own ers to claim a homestead exemption on their state tax returns. Pet. App. 33a. The regional director explained that application of the Act would neither prevent the organization of condominium associations nor preclude individual condominium owners from claiming a home stead exemption under the Florida state constitution. Ibid. The regional director further explained that "Florida's sovereignty is not jeopardized by the Federal Government exercising jurisdiction over employees who are employed by an entity (a condominium), which is a creature of state law." Ibid. The regional director noted that corporations, like condominiums, are "crea tures of the state which incorporate[s] them, but this does not preclude the assertion of federal jurisdiction over a corporation's employees and its labor relations." Ibid. Rejecting petitioner's remaining constitutional claims, based on the Fourth and Fifth Amendments, the regional director found that the Board's recognition of the rights of employees would not itself result in any of the consequences-such as a taking of the owners' prop erty or the imposition by the government of "cruel and unusual punishment"-that petitioner claimed would violate its constitutional rights. Id. at 34a. The Board subsequently denied petitioner's request for review of the regional director's decision and direction of election. Id. at 3a.

On June 11, 2003, the regional director conducted a secret-ballot election in the specified unit. Pet. App. 3a. By a 5-0 vote, the Union won the election. Ibid. The regional director then certified the Union as the exclu sive collective-bargaining representative of petitioner's maintenance employees. Id. at 3a, 12a, 43a.

When petitioner subsequently refused to bargain, the Union filed an unfair labor practice charge. Pet. App. 3a, 12a. The Board's General Counsel issued a com plaint, alleging that petitioner's refusal to bargain vio lated Section 8(a)(5) and (1) of the Act, 29 U.S.C. 158(a)(5) and (1). Pet. App. 3a. Finding that all issues relevant to the unfair labor practice charge were, or could have been, litigated in the representation proceed ing, the Board granted summary judgment, decreeing that petitioner had violated Section 8(a)(5) and (1) of the Act, and ordered petitioner to bargain on request with the Union. Id. at 10a-13a.

4. Petitioner filed a petition for review in the court of appeals, and the Board filed a cross-application for enforcement of its order. The court of appeals denied the petition for review and enforced the Board's bar gaining order. Pet. App. 1a-8a.

The court of appeals upheld the Board's determina tion that petitioner's maintenance workers did not fall within the "domestic service" exemption of Section 2(3), relying on its prior decision in NLRB v. Imperial House Condominium, Inc., 831 F.2d 999, 1001, 1005 (11th Cir. 1987). In that case, the court had held that employees involved in housekeeping activities at a condominium were not exempt as "domestic" employees, because they were not employed by owners of condominium units to whom the housekeepers rendered services, but per formed their services "on behalf of and are clearly em ployed by the Condominium, a Florida corporation." Ibid. Noting the evidence that the five maintenance workers employed by petitioner similarly work almost exclusively in the common areas, the court held that sub stantial evidence supported the Board's finding "that the employees at issue in this case are employed by the As sociation, rather than the individual unit owners," and that therefore the Board "was warranted in holding that these employees are not exempt from the Act because they are not domestic employees within the meaning of Section 2(3)." Pet. App. 7a.

The court summarily rejected petitioner's contention that this Court's decision in NLRB v. Kentucky River Community Care, Inc., 532 U.S. 706 (2001), required a different result. Pet. App. 7a. The court also summarily rejected petitioner's constitutional arguments. Id. at 7a- 9a.

ARGUMENT

The decision of the court of appeals is correct and does not conflict with any decision of this Court or any other court of appeals. Further review is therefore unwarranted. 1. As this Court has recognized, the Board's inter pretation of the term "employee" in Section 2(3) of the Act is entitled to deference if it is based on a reasonable construction of the statute. Holly Farms Corp. v. NLRB, 517 U.S. 392, 398-399, 409 (1996) ("appropriate weight * * * must be given to the judgment of the agency whose special duty is to apply th[e] broad statu tory language to varying fact patterns") (citing Bayside Enters., Inc. v. NLRB, 429 U.S. 298, 304 (1977)); see Chevron U.S.A. Inc. v. NRDC, 467 U.S. 437, 843 (1984). As this Court has further recognized, the Board and reviewing courts "must take care to assure that exemp tions from NLRA coverage are not so expansively inter preted as to deny protection to workers the Act was de signed to reach." Holly Farms Corp., 517 U.S. at 399. Consistent with those principles, the court of appeals correctly affirmed the Board's determination that the maintenance employees employed by the condominium association are "employee[s]" and are not "employed * * * in the domestic service of any family or person at his home" under Section 2(3) of the Act.

a. The Board, in its few decisions construing the do mestic employee exemption of Section 2(3), has consis tently focused on the employment relationship by exam ining the "principals to whom the employer-employee relationship in fact runs," or, in other words, who em ploys the workers. Ankh Servs., 243 N.L.R.B. at 480. The Eleventh Circuit, the only court of appeals to review a decision involving the domestic employee exemption, previously affirmed a Board determination that the do mestic service exemption does not cover employees who were not employed by individual condominium unit own ers but were instead employed by the condominium as sociation, a corporate entity. NLRB v. Imperial House Condominium, Inc., 831 F.2d at 1005. The court ob served that the Board's focus accurately characterized "the true economic relationship existing between the employers and employees." Ibid.2 The court of appeals' conclusion here (Pet. App. 7a) is fully consistent with that precedent.

b. Contrary to petitioner's claim (Pet. 9-11, 18), the Board's overruled decision in Point East Condominium Owners Ass'n, 193 N.L.R.B. 6 (1971), does not support its argument that the Board erred in finding the domes tic employee exemption inapplicable to petitioner's em ployees. In Point East, the Board declined to exercise discretionary jurisdiction over a condominium associa tion because the Board determined that none of its exist ing jurisdictional standards applied. In particular, the Board found that its standard for asserting jurisdiction over retail establishments was inappropriate for condo miniums because the employer association provided no services to persons other than the owners, and therefore was not clearly engaged in the sale of a service. Id. at 6. See Leisure Village Ass'n, 236 N.L.R.B. 102, 102 n.3 (1978) (clarifying Point East as holding that the Board had not yet "established a standard governing exercise of its jurisdiction over enterprises engaged in managing and maintaining condominiums").

When subsequently presented with "an exhaustive collection of data and analysis" prepared by the Depart ment of Housing and Urban Development showing the accelerated growth of condominiums and their promi nent role as a housing resource, however, the Board con cluded that condominiums "are engaged in the business of concerted home management and maintenance." 30 Sutton Place, 240 N.L.R.B. 752, 752-753 (1979). The Board further found that "this business had a substan tial impact on interstate commerce, warranting our as sertion of jurisdiction," so that employees of condomini ums and the entities themselves "when acting as em ployers, may invoke the rights and privileges of the Act." Id. at 753 (overruling Point East to the extent it was inconsistent with 30 Sutton Place).

In reaching that conclusion, the Board reasonably determined that the domestic employee exemption did not preclude its assertion of jurisdiction, because there was a substantial difference between employment by a single homeowner, where an individual and personal relationship is created, and employment by a condomin ium entity, which is similar to employment at an apart ment house. 240 N.L.R.B at 753 n.6. The Eleventh Cir cuit in Imperial House Condominium endorsed the Board's reasoning in the specific context of a condomin ium association incorporated under Florida law. 831 F.2d at 1004-1005.3

2. The court of appeals correctly rejected peti tioner's suggestion (Pet. 17-18) that the decision in this case conflicts with this Court's decision in NLRB v. Ken tucky River Community Care, Inc., 532 U.S. 706 (2001). Kentucky River addressed Section 2(11) of the NLRA, 29 U.S.C. 152(11), which defines the term "supervisor," another category that Section 2(3) excludes from the definition of employee.4 The Court held that the Board's interpretation of the term "independent judgment," which Section 2(11) uses to define who is a "supervisor," to exclude a particular kind of judgment-namely, pro fessional or technical judgment in directing less skilled employees-inserted a "startling categorical exclusion into statutory text that does not suggest its existence." 532 U.S. at 713-714. The Court also held that the Board's application of its definition only when such judg ment was used "in directing" less skilled employees was directly contrary to the statutory text, which ties the use of independent judgment to twelve distinct functions, such as hiring, transferring, suspending, laying off, etc. Id. at 715-716.

Those determinations about the Section 2(11) phrase "independent judgment" have no bearing on Section 2(3)'s exclusion of individuals "employed * * * in the do mestic service of any family or person at his home." Unlike in Kentucky River, there is no conflict between the language of Section 2(3) excluding individuals em ployed in domestic service and the Board's conclusion, affirmed by the court of appeals, that the exclusion does not apply to petitioner's employees.

3. The court of appeals also correctly rejected peti tioner's constitutional arguments. See Pet. App. 7a-8a. Petitioner argues (Pet. 18) that applying the NLRA to its employees would "violate[] State sovereignty." As the regional director explained in rejecting that conten tion, however, the finding that petitioner's employees are covered by the Act does not prevent the organization of condominium associations or preclude individual con dominium owners from claiming the State's homestead exemption. Pet. App. 33a.5

Petitioner's contention (Pet. 21-22) that applying the Act to its employees would violate various constitutional provisions is also mistaken. For example, petitioner contends (Pet. 21) that a union might go on strike, and that such a strike would amount to a "taking" under the Just Compensation Clause or a "denial of due process, in violation of the Fifth Amendment (insofar as the NLRB would be authorizing such a result)." Pet. 22. None of the hypothetical situations petitioner posits (Pet. 21-22) appear to raise any constitutional issue. They do not involve state action and, for the most part, would not in any event constitute the kind of conduct forbidden by the Constitution. In addition, any now- hypothetical constitutional claims petitioner may have could be asserted if and when the strike or other union activity posited by petitioner in fact materialized. At present, all that is at issue is the recognition of the Un ion as the exclusive representative of petitioner's em ployees. There is nothing in that recognition that pres ents any constitutional issue.

CONCLUSION

The petition for a writ of certiorari should be denied.

Respectfully submitted.

Paul D. Clement
Solicitor General

Arthur F. Rosenfeld
Acting General Counsel
John E. Higgins, Jr..
Deputy General Counsel
John H. Ferguson
Associate General Counsel
Linda J. Dreeben
Assistant General Counsel
Anne Marie Lofaso
Attorney
National Labor Relations
Board

AUGUST 2005

 

1 The Union's petition sought to include petitioner's security em ployees in the bargaining unit. The Board's regional director concluded that those security employees were guards, who, under Section 9(b)(3) of the NLRA, 29 U.S.C. 159(b)(3), could not be represented in a unit that included nonguards. Pet. App. 35a-40a. The Union did not contest that ruling. The status of petitioner's security employees was therefore not before the court of appeals and is not before this Court.

2 The very limited legislative history of the exemption supports the approach taken by the Board and approved by the Eleventh Circuit. In Ankh Services, the Board noted that Congress stated that it meant only to exclude "domestic servants" from the NLRA. 243 N.L.R.B. at 480 & n.17 (quoting S. Rep. No. 1184, 73d Cong., 2d sess. 1, 3 (1934)). The Board further observed that "Congress did not * * * elaborate on the term 'domestic servant' nor did it define the scope of any particular employment relationship it may have intended to exempt from the operation of the Act." Ibid. Nor did Congress indicate an intent to ex clude from coverage "any other than those individuals whose employ ment falls within the commonly accepted meaning of the term 'domestic servant.'" Id. at 480.

3 Petitioner relies (Pet. 13-15) on the dissenting opinion of two Board members in the Board's Imperial House decision, which ad vocated a return to Point East. See 279 N.L.R.B. at 1228. Even the dissent in Imperial House, however, recognized that nothing in the NLRA precluded the Board's assertion of jurisdiction over condo- miniums and disclaimed any argument that condominium employees are "domestic employees." Id. at 1228-1229.

4 Section 2(3) provides that the term employee "shall not include * * * any individual employed as a supervisor." Section 2(11) states that "[t]he term 'supervisor' means any individual having authority, in the interest of the employer, to hire, transfer, suspend, lay off, recall, promote, discharge, assign, reward, or discipline other employees, or responsibly to direct them, or to adjust their grievances, or effectively to recommend such action, if in connection with the foregoing the exercise of such authority is not of a merely routine or clerical nature, but requires the use of independent judgment."

5 Petitioner is mistaken (Pet. 19-20) in contending that Federal Maritime Commission v. South Carolina State Ports Authority, 535 U.S. 743 (2002), has anything to do with this case. In Federal Maritime Commission, this Court held that state sovereign immunity barred the Federal Maritime Commission from adjudicating a private party's complaint against a state port authority that the state-run port violated the Shipping Act of 1984. Petitioner is a private employer and not an arm of the State of Florida. Petitioner is therefore not entitled to state sovereign immunity.