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National Labor Relations Act

§ 8.23
Key Point 8-23. The National Labor Relations Act gives employees the legal right to form labor unions. Some religious organizations are exempt from the provisions of this law.

In 1935 Congress decided that disturbances in the area of labor relations led to undesirable burdens on and obstructions of interstate commerce, and it passed the National Labor Relations Act.[166] 29 U.S.C. §§ 151-168. The Act, building on the National Industrial Recovery Act (1933), gave employees a federally protected right to join labor organizations and bargain collectively through their chosen representatives on issues affecting their employment. Congress also created the National Labor Relations Board (NLRB) to supervise the collective bargaining process. The Board was empowered to investigate disputes about which union, if any, represented employees, and to certify the appropriate representatives as the designated collective bargaining agent. The employer was then required to bargain with these representatives, and the Board was authorized to make sure that such bargaining did in fact occur. In general, the Act stipulated that an employer's refusal to bargain was an unfair labor practice. Thus a general process was established that would ensure that employees as a group could express their opinions and exert their influence over the terms and conditions of their employment. The Board would act to see that the process worked. Congress enacted the Labor Management Relations Act in 1947 to adjust and minimize any differences in the rights granted to unions, employees, and employers.

Does the National Labor Relations Act apply to religious organizations? This question has caused considerable controversy. Initially, it should be noted that the stated purpose of the Act was to

eliminate the causes of certain substantial obstructions to the free flow of commerce and to mitigate and eliminate these obstructions when they have occurred by encouraging the practice and procedure of collective bargaining and by protecting the exercise by workers of full freedom of association, selforganization, and designation of representatives of their own choosing, for the purpose of negotiating the terms and conditions of their employment or other mutual aid or protection.[167] 29 U.S.C. § 151.

Clearly, then, the Act was designed to apply only to those employment relationships that affect commerce. The Act defines the term affecting commerce to mean "in commerce, or burdening or obstructing commerce or the free flow of commerce, or having led or tending to lead to a labor dispute burdening or obstructing commerce or the free flow of commerce."[168] 29 U.S.C. § 152(7). Further, the Act defines employer as

any person acting as an agent of an employer, directly or indirectly, but shall not include the United States or any wholly owned Government corporation, or any Federal Reserve Bank, or any state or political subdivision thereof, or any person subject to the Railway Labor Act, as amended from time to time, or any labor organization (other than when acting as an employer), or anyone acting in the capacity of officer or agent of such labor organization.[169] 29 U.S.C. § 152(2).

In summary, the Act covers any employer that is not covered by one of the eight exceptions mentioned in the preceding paragraph. Since religious organizations do not fit within any of the eight exempt categories, the National Labor Relations Board has held that such organizations are covered by the Act at least to the extent that they are engaged in some proprietary activity affecting commerce.[170] First Church of Christ, Scientist, 194 N.L.R.B. 1006 (1972). Although the NLRB has traditionally assumed jurisdiction over all religious organizations, it has, as a matter of discretion, refused to assert jurisdiction over religious organizations not engaged in commercial activities or religious organizations engaged in commercial activities that earn less than prescribed levels of income. This principle is referred to as the worthy cause doctrine. See generally Sherman & Black, The Labor Board and the Private Nonprofit Employer: A Critical Examination of the Board's Worthy Cause Exemption, 83 HARV. L. REV. 1323 (1970). See also Laycock, Towards a General Theory of the Religions Clauses: The Case of Church Labor Relations and the Right to Church Autonomy, 81 COLUM. L. REV. 1373 (1981) (arguing that NLRB assertions of jurisdiction over religious organizations may result in a violation of the First Amendment's guaranty of religious freedom). To illustrate, the NLRB has asserted jurisdiction over the Sunday School Board of the Southern Baptist Convention since it was engaged in the sale of literature on a nationwide basis and thus could be viewed as being involved in a proprietary activity affecting commerce. The NLRB observed:

The employer asserts that as it is a nonprofit organization which is engaged in purely religious activities, it is not engaged in commerce within the meaning of the Act. We find no merit in this contention. … As this Board and the courts have held, it is immaterial that the employer may be a nonprofit organization, or that its activities may be motivated by considerations other than those applicable to enterprises which are, in the generally accepted sense, commercial.[171] Sunday School Board of the Southern Baptist Convention, 92 N.L.R.B. 801, 802 (1950).

Similarly, the Board asserted jurisdiction over an evangelistic organization that was engaged in substantial commercial activities that were unrelated, except as a revenue source, to the organization's religious activities.[172] NLRB v. World Evangelism, Inc., 656 F.2d 1349 (9th Cir. 1981). See also Tressler Lutheran Home for Children v. NLRB, 677 F.2d 302 (3rd Cir. 1982) (NLRB jurisdiction over church-operated children's home upheld); Jacobo Marti & Sons, Inc. v. NLRB, 676 F.2d 975 (3rd Cir. 1982) (NLRB jurisdiction over cheese processing plant having a close connection with the Amish faith upheld).

The "Catholic Bishop" Test

A number of religious organizations have challenged the constitutionality of NLRB determinations that they are covered by the Act. In a leading case, the United States Supreme Court was faced with the issue of whether lay teachers in church-operated schools were under the jurisdiction of the NLRB. The Court found that neither the language nor the legislative history of the National Labor Relations Act disclosed "an affirmative intention … clearly expressed" that the NLRB have such jurisdiction. Therefore, the Court declined to construe the Act in a manner that would require the resolution of "difficult and sensitive questions arising out of the guarantees of the First Amendment Religion Clauses."[173] NLRB v. Catholic Bishop of Chicago, 440 U.S. 490, 507 (1979). See also NLRB v. Bishop Ford Catholic High School, 623 F. 2d 818 (2nd Cir. 1980), cert. denied, 450 U.S. 996 (1980).

The Court's test for determining the validity of an exercise of jurisdiction by the NLRB over a religious organization may be summarized as follows:

Step #1. Determine if the exercise of jurisdiction by the NLRB over a religious organization would give rise to serious constitutional questions under the First Amendment (which guarantees the free exercise of religion).
Step #2. If a serious constitutional question would arise, then the NLRB may not exercise jurisdiction over the religious organization without a showing of an "affirmative intention of the Congress clearly expressed" to confer such jurisdiction.
Step #3. If serious constitutional questions are not an exercise of jurisdiction by the NLRB over a religious organization, then no inquiry is necessary as to whether Congress clearly expressed an intention to confer jurisdiction.[174] In Dole v. Shenandoah Baptist Church, 899 F.2d 1389 (4th Cir. 1990), a federal appeals court suggested that the Supreme Court may have altered the Catholic Bishop test in a 1985 decision. In 1985, the Supreme Court ruled that "because we perceive no 'significant risk' of an infringement on First Amendment rights, we do not require any clearer expression of congressional intent to regulate these activities." Tony & Susan Alamo Foundation v. Secretary of Labor, 471 U.S. 290, 298 n.18 (1985). The federal appeals court observed that the Supreme Court may have intended to replace the Catholic Bishop test. If so, this objective is not clear, and has not been clarified in later decisions.

In applying this test, one court has upheld an exercise of jurisdiction by the NLRB over a Christian evangelistic organization engaged in substantial commercial activities. The court noted that no serious First Amendment questions were raised since NLRB jurisdiction resulted in only a "minimal infringement" on the organization's constitutional rights.[175] NLRB v. World Evangelism, Inc., 656 F.2d 1349 (9th Cir. 1981). Serious constitutional questions are raised by an NLRB assertion of jurisdiction over church school teachers, concluded the court, but this is not true of an exercise of jurisdiction over lay employees engaged in the commercial activities of a religious organization.

NLRB assertions of jurisdiction similarly have been upheld over church affiliated hospitals[176] St. Elizabeth Community Hospital v. NLRB, 708 F.2d 1436 (9th Cir. 1983); Bon Secours Hospital, Inc., 248 N.L.R.B. 743 (1980) (Catholic social service agency whose purpose was the provision of social services on a nondenominational basis and that hired employees without regard to religious beliefs held to be subject to NLRB jurisdiction). and nursing homes [177] Mid American Health Services, Inc., 247 N.L.R.B. 752 (1980). that (1) receive a substantial percentage of their income from governmental sources; (2) hire employees without regard to religious beliefs; and (3) engage in no specific religious indoctrination of patients or employees. A number of courts have concluded that Congress has "clearly expressed an intention to confer [NLRB] jurisdiction" over church-affiliated hospitals, since in 1974 it removed the pre-existing exemption of all nonprofit hospitals under section 2 of the National Labor Relations Act, and rejected an amendment that would have retained the exemption for church-affiliated hospitals.
Another court reached the same conclusion with respect to employees of a church-operated home for neglected children.[178] NLRB v. St. Louis Christian Home, 663 F.2d 60 (8th Cir. 1981); See also *Tressler Lutheran Home for Children v. NLRB, 677 F.2d 302 (3rd Cir. 1982). The court agreed with the Supreme Court that an exercise of jurisdiction by the NLRB over church-operated schools raised serious constitutional questions since such schools actively propagate religious faith. However, the court did not believe that serious constitutional questions were raised by an assertion of jurisdiction by the NLRB over church-operated homes for neglected children since such institutions are not devoted to the propagation of religion. Since no serious constitutional question was raised, the court concluded that an "affirmative intention of Congress clearly expressed" to confer jurisdiction over church-operated homes for neglected children was not necessary.

Significantly, the court emphasized that (1) governmental funding comprised over half of the home's income; (2) the home hired employees without regard to their religious affiliation; (3) the home accepted only abused children and kept them an average of six weeks during which time they remained wards of the state; (4) all children were referrals from a state agency; and (5) children could not attend religious services contrary to the beliefs of their parents without parental consent. The court concluded that under these facts the home was indistinguishable from a nonreligious institution, and, accordingly, no serious First Amendment questions were implicated.

A federal appeals court ruled that a child care center operated by the Salvation Army was subject to NLRB jurisdiction.[179] NLRB v. Salvation Army, 763 F.2d 1 (1st Cir. 1985). The court emphasized that serious constitutional questions were not created by NLRB jurisdiction over the facility, since

[t]he program's function is primarily to provide care for the children, not education. It involves no religious instruction, indoctrination, or extracurricular activities. Neither the teachers, children, nor parents are chosen for their religious affiliation. Nor do they receive any religious training. The director, who oversees the workplace, need not be, and is not presently, a clergyman. … [T]here is not evidence that the [facility] serves anything other than a secular function with respect to the children, parents, and teachers.[180] Id. at 6.

The court emphasized that

if the [facility] provided not just day care for children but also religious instruction and religiously oriented extracurricular activities, a different result might be required. Instead, we have an institution whose primary business is the provision of care and whose operation is indistinguishable from that of secular day care centers. The risk of serious constitutional questions being raised in these circumstances is simply too insignificant and speculative. … [W]ere we not to find jurisdiction, we might inadvertently be offering all private day care centers and other private providers of care a formalistic means of circumventing federal labor laws. By articulating some religious affiliation and mission, no matter how little effect it might have on the social programs' functions or operations, providers of care could easily avoid the Board's jurisdiction. …[181] Id. at 6-7.

Many children's homes affiliated with churches are not subject to NLRB jurisdiction because their activities are inherently religious. The New Testament itself states: "Pure religion and undefiled before God and the Father is this, to visit the fatherless and widows in their affliction. …"[182] JAMES 1:27 (KJV). Children's homes that are affiliated with and controlled by bona fide churches, that receive all or most of their income from nongovernmental sources, that actively propagate the church's religious tenets to their children, and that require employees to be members of the church, undoubtedly are exempt from NLRB jurisdiction under the Supreme Court's three part test. However, church-affiliated children's homes that lack most of these characteristics may be subject to NLRB jurisdiction.

Conclusion

It is likely that the NLRB will continue to exercise jurisdiction over religious organizations engaged in substantial commercial activities, and that the courts will uphold such exercises of jurisdiction. As one court has observed, when a religious or nonprofit organization operates in the same way as a secular institution, the NLRB may treat such an organization like a secular institution.[183] NLRB v. St. Louis Christian Home, 663 F.2d 60 (8th Cir. 1981). But NLRB assertions of jurisdiction over religious organizations probably will not be upheld in any of the following situations:

  1. The organization is not involved in substantial commercial activities.[184] The NLRB claims to possess jurisdiction over all religious organizations, but it declines to assert jurisdiction over re-ligious organizations not engaged in substantial commercial activities. An assertion of jurisdiction over a religious or-ganization not engaged in substantial commercial activities might violate the First Amendment. NLRB v. Catholic Bishop of Chicago, 440 U.S. 490 (1979).
  2. The organization is not engaged in a business or activity affecting commerce. Commerce is defined by the National Labor Relations Act as trade, traffic, commerce, transportation, or communication among the several states.[185] 29 U.S.C. § 152(6). A religious organization that purchases all of its supplies from local vendors and sells no product or service to persons residing in other states may not be engaged in any activity affecting commerce. Note, however, that the Act defines commerce to include "communication" among the several states. This would include radio or television broadcasts, and may include the operation of a "web page" on the Internet. The purchase of electricity and natural gas from a utility company engaged in interstate commerce also may constitute commerce.[186] See generally NLRB v. St. Louis Christian Home, 663 F.2d 60 (8th Cir. 1981). The expansive interpretation of the term commerce has not gone without objection. One judge has commented that “it is virtually unthinkable that the Founding Fathers could have foreseen the extent to which an increasingly expansive interpretation of the Commerce Clause could so infringe local authority.” Godwin v. Occupational Safety and Health Review Commission, 540 F.2d 1013, 1017 (9th Cir. 1976) (Ely, J., concurring). In general, the discussion in section 8-05 regarding the meaning of "commerce" in the context of federal civil rights laws is relevant here as well.
  3. An assertion of NLRB jurisdiction inhibits a religious organization's ability to propagate its beliefs.[187] NLRB v. Catholic Bishop of Chicago, 440 U.S. 490 (1979).
  4. An assertion of NLRB jurisdiction raises serious constitutional questions under the First Amendment and no "affirmative intention of Congress clearly expressed" confers jurisdiction.[188] Id.
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