905 F.3d 770
5th Cir.2018Background
- Voices for International Business and Education is a privately incorporated nonprofit that operates the International High School of New Orleans under a Louisiana Type 2 charter.
- Louisiana charter law authorizes privately formed nonprofit operators to run charter schools and vests exclusive employment authority in those operators rather than in elected public officials.
- The United Teachers of New Orleans sought NLRB representation of Voices' employees; the NLRB found Voices not to be a "political subdivision" and supervised a successful union election.
- Voices refused to bargain; the NLRB found an unfair labor practice and ordered bargaining; Voices petitioned for review in the Fifth Circuit, challenging only the "political subdivision" exemption under the NLRA.
- The central statutory question: whether the NLRA’s exemption for "any State or political subdivision thereof" excludes a privately governed Louisiana charter school whose board is privately selected and self-perpetuating.
Issues
| Issue | Plaintiff's Argument (Voices) | Defendant's Argument (NLRB / Union) | Held |
|---|---|---|---|
| Whether Voices is a "political subdivision" under 29 U.S.C. § 152(2) | Voices: public character shown by public funding, statutory integration into public system, and some state oversight; thus exempt from NLRA | NLRB: "political subdivision" test focuses on (1) creation by state or (2) administration by officials responsible to public officials/electorate; Voices’ board is privately selected and self-perpetuating, so not exempt | Voices is not a political subdivision; NLRA applies |
| Proper test for "political subdivision" status | Voices: broader Hawkins County factors (tax status, open-records, public funding) should weigh in | NLRB: appointment/removal control is decisive; additional factors are secondary | Appointment/removal/public control over policymakers is the dominant test; other factors cannot override lack of public control |
| Relevance of New Orleans’ charter prevalence | Voices: near-total charterization makes charters functionally the public school system, implying political character | NLRB: prevalence does not alter ordinary meaning of political subdivision; public accountability is dispositive | Prevalence of charters does not convert privately controlled charters into political subdivisions |
| Whether courts must defer to NLRB’s interpretation (Chevron) | NLRB sought deference for its application of the statutory exemption | Voices/concurring judge: statutory meaning is plain for privately run charters; deference cannot grant agency power to alter unambiguous statutory limits | Court did not rest decision on Chevron; concurrence warns against overbroad agency deference in clearly decided statutory questions |
Key Cases Cited
- N.L.R.B. v. Nat. Gas Util. Dist. of Hawkins Cty., 402 U.S. 600 (Sup. Ct.) (articulated NLRB two-part political-subdivision test)
- Natchez Trace Elec. Power Ass'n v. N.L.R.B., 476 F.2d 1042 (5th Cir. 1973) (applied Board’s two-part test; absence of public selection/control dispositive)
- StarTran, Inc. v. Occupational Safety & Health Review Comm'n, 608 F.3d 312 (5th Cir. 2010) (confirmed board-selection control rule: majority of board subject to public appointment/removal is decisive)
- Highview, Inc. v. N.L.R.B., 590 F.2d 174 (5th Cir.) (nonprofit with privately named directors not a public department or arm)
- Jefferson Cty. Cmty. Ctr. for Dev. Disabilities v. N.L.R.B., 732 F.2d 122 (10th Cir. 1984) (majority of board not appointed/removed by public officials defeats political-subdivision claim)
- Truman Med. Ctr., Inc. v. N.L.R.B., 641 F.2d 570 (8th Cir. 1981) (hospital not exempt where majority of board is neither appointed nor removable by public officials)
- Midwest Div.-MMC, LLC v. N.L.R.B., 867 F.3d 1288 (D.C. Cir. 2017) (reiterated focus on whether majority of administrators are appointed by and removable by public officials)