2005-627, APPEAL OF PINKERTON ACADEMY

of the PELRB and remand with instructions to dismiss the complaint.

with the National Labor Relations Board (NLRB or Board), we vacate the order

Hampshire. Because exclusive jurisdiction over the complaint at issue lies

Pinkerton teachers, the Pinkerton Academy Teachers Association and NEA-New complaint against the Academy filed by the respondents, who are two Relations Board (PELRB) asserting jurisdiction over an unfair labor practice

Academy), appeals an order of the New Hampshire Public Employee Labor BRODERICK, C.J. The petitioner, Pinkerton Academy (Pinkerton or the

and NEA-New Hampshire. by brief and orally, for respondents Pinkerton Academy Teachers Association James F. Allmendinger, of Concord, staff attorney, NEA-New Hampshire,

petitioner. to press. Errors may be reported by E-mail at the following address: Johnson and Cathryn E. Vaughn on the brief, and Ms. Johnson orally), for the McLane, Graf, Raulerson & Middleton, P.A., of Manchester (Linda S.

page is: http://www.courts.state.nh.us/supreme.

(New Hampshire Public Employee Labor Relations Board)

editorial errors in order that corrections may be made before the opinion goes No. 2005-627 Hampshire, One Charles Doe Drive, Concord, New Hampshire 03301, of any Public Employee Labor Relations Board Readers are requested to notify the Reporter, Supreme Court of New ___________________________

a.m. on the morning of their release. The direct address of the court's home reporter@courts.state.nh.us. Opinions are available on the Internet by 9:00

well as formal revision before publication in the New Hampshire Reports. NOTICE: This opinion is subject to motions for rehearing under Rule 22 as received a construction inconsistent therewith. p. 2 with the corresponding provision of this subchapter or has the determination of such cases by such agency is inconsistent

unless the provision of the State or Territorial statute applicable to

outflow.”

though such cases may involve labor disputes affecting commerce, such agency jurisdiction over any cases in any industry . . . even exercised the full measure of its jurisdiction.” the NLRB. agreement with any agency of any State or Territory to cede to law, or otherwise: Provided, That the Board is empowered by extent of its power under the Commerce Clause.”

Id. at 3-4 (quotation omitted).

standards, largely in terms of yearly dollar amounts of interstate inflow and certain standards to govern the exercise of its jurisdiction, the Board published concluding that experience warrants the establishment and announcement of Board decided case-by-case whether to take jurisdiction.” Id. “In 1950,

ordered supplemental briefing on an issue not addressed below: whether the prevention that has been or may be established by agreement, Guss v. Utah Labor Board, subject to its jurisdiction. Pinkerton appealed. Following oral argument, we 29 U.S.C. § 160(a). “By this language . . . Congress meant to reach to the full

to students from the school districts of Derry, Chester and Hampstead. Pinkerton currently has long-term contracts to provide high school education

shall not be affected by any other means of adjustment or 2005, the PELRB determined that the Academy is a “quasi-public corporation” in any unfair labor practice . . . affecting commerce. This power [t]he Board is empowered . . . to prevent any person from engaging

The National Labor Relations Act (Act) provides that

Derry School District to provide high school education to students from Derry.

Pinkerton is a public employer subject to the PELRB’s jurisdiction. In May petition for declaratory judgment, asking the PELRB to decide whether against the Academy with the PELRB. NEA-New Hampshire also filed a In November 2004, the respondents filed an unfair labor practice charge

Beginning in 1949, Pinkerton entered into a contractual agreement with the The Academy operated as an independent day and boarding school until 1948. Pinkerton Academy was organized in 1814 as a nonprofit organization.

p. 3 disputes over which the Board declines, pursuant to paragraph (1) of this

courts of any State . . . from assuming and asserting jurisdiction over labor

actually one of those which the Board will decline to hear.”

Board.”

provides that federal law shall not be deemed to preclude “any agency or the 3 warrant the exercise of its jurisdiction.” 29 U.S.C. § 164(c)(1). Paragraph (2) effect of such labor dispute on commerce is not sufficiently substantial to

jurisdiction, . . . there must be a proper determination of whether the case is

determinations be left in the first instance to the National Labor Relations such issues. It is essential to the administration of the Act that these state is governed by the Act, “courts are not primary tribunals to adjudicate

any class or category of employers, where, in the opinion of the Board, the Radio Union v.

which the National Labor Relations Board has, but declines to assert, “Although a state court may assume jurisdiction over labor disputes over

Id. at 244-45.

(1959). Even when it is not clear whether a particular activity regulated by a jurisdiction must yield.” San Diego Unions v. Garmon, 359 U.S. 236, 244 [the Act], . . . due regard for the federal enactment requires that state assumed that the activities which a State purports to regulate are protected by its discretion . . . decline to assert jurisdiction over any labor dispute involving federal preemption over labor disputes. “When it is clear or may fairly be The United States Supreme Court subsequently clarified the extent of

Congress to “change the situation.”

competence of the NLRB. agencies could not exercise jurisdiction over matters placed within the U.S.C. § 164(c). The statute provides in paragraph (1) that the NLRB may “in ceded jurisdiction [under the Act].” In 1959, Congress responded by passing section 14(c) of the Act. See 29 has declined or obviously would decline to exercise its jurisdiction but has not completely displaced state power to deal with such matters where the Board Id. at 10, 11. NLRB declined to exercise jurisdiction in its discretion, the Court invited land, subject to regulation by no agency or court,” in those cases in which the (quotation omitted). Recognizing that its decision created “a vast no-man’sas commerce within the meaning of the act is concerned.” Id. at 9-10 full well that its labor legislation preempts the field that the act covers insofar

NLRB declined to exercise jurisdiction in its discretion, State courts and

jurisdiction over labor relations matters affecting interstate commerce, has addressed the question “whether Congress, by vesting in the [NLRB] unquestioned state jurisdiction,” id. at p. 4 4, the United States Supreme Court labor disputes “in the ‘twilight zone’ between exercised federal jurisdiction and In 1957, noting that the Board’s standards left an unknown number of 4 affect commerce.”

to the Railway Labor Act, . . . or any labor organization. any State or political subdivision thereof, or any person subject

application of the national labor policy.” a substantial impact upon interstate commerce.”

statutory jurisdiction over nonprofit educational institutions whose operations

under sections 8, 9, and 10 of the Act involving any private nonprofit college or Regulations, the NLRB “will assert its jurisdiction in any proceeding arising institutions as a class.” Id. at 331. Pursuant to the Code of Federal determined that it would “no longer decline to assert jurisdiction over such owned Government corporation, or any Federal Reserve Bank, or

substantial effect on commerce to insure the orderly, effective, and uniform when to assert jurisdiction over nonprofit organizations whose operations had over those private colleges and universities whose operations have a (1951)). The Board was “convinced that assertion of jurisdiction is required

commerce by educational institutions, the NLRB held that “the Board has In 1970, pointing to what it saw as an increased involvement in

N.L.R.B. at 331. indirectly, but shall not include the United States or any wholly

the Board’s informed discretion in the future as it had in the past, whether and nonprofit organizations seems to indicate that Congress was content to leave to commerce.” proposals to specifically exempt from the Act “broad classes of charitable or 29 U.S.C. § 152(2). The Board has noted that Congress’ rejection in 19 p. 4 47 of

decline to hear. any person acting as an agent of an employer, directly or

“employer” as 1 p. 4 447-48 (10 Cir. 1990) (quotation omitted). Section 2(2) of the Act defines an th YMCA of the Pikes Peak Region, Inc. v. N.L.R.B., 914 F.2d 1442, employer has more than a de minimus impact on the flow of interstate “[T]he Board may exercise its broad statutory jurisdiction whenever an

us, therefore, is to determine whether the case at issue is one the Board would commerce.” Cornell University, 183 N.L.R.B. 329, 332 (1970). The task before finds that the operations of a class of employers exercise a substantial effect on does manifest a congressional policy favoring such assertion where the Board language of Section 1 p. 4 4(c) does not compel the Board to assert jurisdiction, it Broadcast Serv., 380 U.S. 255, 256 (1965) (citation omitted). “While the relationship to the State of Tennessee.” p. 5 “exists as an essentially private venture, with insufficient identity with or

citizens,” the Court held that the NLRB erred in holding that the employer 5

officials or to the general electorate’ within the Board’s test.” to all public officials, qualify as ‘individuals who are responsible to public

proceedings at the instance of the Governor, the county prosecutor, or private

general electorate.” Id. at 608.

official for their appointment, and are subject to removal procedures applicable Court stated: “Plainly, commissioners who are beholden to an elected public

Board’s interpretation of the jurisdictional exemption for “political defined by the NLRB. In 1971, the United States Supreme Court approved the Commissioners appointed by an elected county judge, and subject to removal made “crystal clear” that the employer was “administered by a Board of Tennessee statute under which the employer utility district was organized

(2) administered by individuals who are responsible to public officials or to the so as to constitute departments or administrative arms of the government, or secondary school does not in itself preclude NLRB jurisdiction. subdivisions” are those “entities that are either (1) created directly by the state, meet its jurisdictional requirements.” Utility District, 402 U.S. 600 (1971). Under this standard, “political

“political subdivision” exempt from the Act’s coverage, as that term has been private nonprofit colleges and universities. The main legal issue before us is whether Pinkerton Academy is a out in 29 C.F.R. § 103.1, under which the Board asserted jurisdiction over

revenues of approximately $1,174,000 per year and annual purchases of more Minnesota corporation operating a secondary boarding school that had gross 440 U.S. 490, 497 (1979). Thus the Academy’s status as a private nonprofit

private, nonprofit, educational institutions with gross annual revenues that

is sufficiently similar to warrant assertion of jurisdiction under the same that “the Employer is a private nonprofit educational institution which, we find,

that the employer’s operations were not expressly covered by the standards set

N.L.R.B. 886 (1971). The NLRB asserted jurisdiction over a nonprofit that case to private nonprofit secondary schools. See Shattuck School, 189 One year after Cornell was decided, the NLRB extended its holding in

than $1 million.” 29 C.F.R. § 103.1 (2006). university which has a gross annual revenue from all sources . . . of not less has jurisdiction, rather than an exempt political subdivision.

p. 6 Pinkerton Academy is a nonprofit educational institution over which the NLRB

required to create the employer. from coverage under the Act. The first factor is whether special legislation was

schools and Pinkerton Academy. We conclude that, as a matter of law, directors’ decisions reveals material differences between the California charter jurisdiction over Pinkerton.” We do not agree. A close reading of these regional

determining whether an employer is a political subdivision and thereby exempt

(1989); Truman Medical Ctr., Inc. v. N.L.R.B., 641 F.2d 570, 572 (8 Cir. th N.L.R.B. 1404, 1404 (2000); University of Vermont, 297 N.L.R.B. 291, 295 subdivisions under the Act, “make it fair to say that the NLRB would not assert NY, 337 N.L.R.B. 965, 968 (2002); Hinds County Human Resource Agency, 331

There are three factors the NLRB has consistently relied upon in

done on a case-by-case basis.” standards.” and whether such employer meets the applicable monetary jurisdictional

charter schools established under California law qualified as exempt political and therefore not an ‘employer’ subject to the Act.” Change, No. 32-RM-801 (N.L.R.B. Region 32 May 9, 2006), which held that March 2, 2006), cert. denied, (N.L.R.B. May 17, 2006), and Education for cases, Los Angeles Leadership Academy, No. 31-RM-1281 (N.L.R.B. Region 31 The Pinkerton Academy Teacher’s Association argues that two recent 2(2) of the Act and meets the applicable monetary jurisdictional standards. 192 F.3d 1111, 1119 (8 Cir. 1999) (citation omitted). th N.L.R.B. v. Young Women’s Christian Ass’n, “[R]eview of the NLRB’s assertion of jurisdiction [is] fact-intensive and [must] be from the Act’s coverage as a political subdivision. Id. at 604 (citation omitted). the employer meets the definition of ‘employer’ under Section 2(2) of the Act, employer that the Board must look in deciding whether an entity is exempt U.S. at 602-03. “[I]t is to the actual operations and characteristics” of the

whether an entity created under state law is a ‘political subdivision’ of the State exercised effective control of the primary terms of employment. “Federal, rather than state, law governs the determination, under § 2(2),

showing that the entity both meets the definition of “employer” under section therefore, the jurisdiction of the NLRB is established simply by the minimal

Id. at 1358. Under the “bright-line” rule of Management Training,

governmental control test. Rather, it would thereafter “only consider whether 1355, 1357 (1995), the Board declared it would no longer apply the Res-Care Inc., 280 N.L.R.B. 670 (1986). In Management Training Corp., 317 N.L.R.B.

providing services for exempt governmental entities where the exempt entity Board extended the “political subdivision” exemption to private employers contracts with a governmental entity exempt from the Act. Prior to 1995, the to determine whether it will assert jurisdiction over a private company that Over the past two decades, the NLRB has changed the standard it uses which staff will be covered by the public employee retirement system. p. 7 relations or delegate those to the chartering authority; and the manner in

abolish charter schools altogether. approach, the Legislature can refine it and expand, reduce or

discipline policies; whether the charter school will handle its own labor

aspects of their existence. Having created the charter school

governance structure of the charter school itself; the student suspension and

accountability and evaluation – the Legislature has plotted all teach, to how they are governed and structured, to funding,

Accordingly, in Los Angeles Leadership Academy, because the charter school Wilson v. State Bd. of Educ., 89 Cal. Rptr. 3d 745, 751 (Ct. App. 1999).

commit to achieving and how that academic success will be measured; the educational program; the educational outcomes that the charter operators

charter schools come into being, to who attends and who can [C]harter schools are strictly creatures of statute. From how

personnel and pupils.”

establishment. elements encompass such factors as: a description of the proposed elements required by the authorizing legislation. Id. at 6. These sixteen Id. at 5-6. To be approved, a charter school petition must address sixteen education; or (3) the school district in which the charter school will be located. chartering authorities: (1) the State Board of Education; (2) a county office of school, its developers must submit a petition for approval to one of three schools are prohibited from obtaining a charter. Id. at 4. To operate a charter school system as defined in the state constitution. Id. Pre-existing private governmental oversight and declares that charter schools are part of the public system.

“establishes the rights and obligations of [the charter schools’] operators,

L.A. Leadership Academy, slip op. at 4-5. The state statute

created pursuant to California legislation enacted in 1992 authorizing their As explained in Los Angeles Leadership Academy, charter schools may be and whether the board includes government officials as members. common theme throughout many of the Board’s decisions. factors which may be taken into consideration, these three factors present a 1387 (1982). While each case is unique and there are numerous additional N.L.R.B. at 1405; Jervis Public Library Association, Inc., 262 N.L.R.B. 1386,

See Shelby County, 2004 WL 2461368, at *26; Hinds County, 331

factor is whether the employees may participate in a state-sponsored pension N.L.R.B. 1173, 1175 (1984); Truman Medical Ctr., 641 F.2d at 573. The third University of Vermont, 297 N.L.R.B. at 294; Rosenberg Library Assn., 269 *24-*25; Enrichment Services Program, Inc., 325 N.L.R.B. 818, 819 (1998); County Health Care Corp., 343 N.L.R.B. No. 48 (2004), 2004 WL 2461368, at

trustees are appointed by, or are subject to removal by, government officials, 1981). The second factor is whether individuals on the employer’s board of mean that the district takes over the operation of the private academy, but

p. 8 be deemed a high school maintained by the district.” This language does not

the ambit of the Section 2(2) exemption.” without any state enabling action or intent, clearly leaves the Employer outside contract is approved by the state board the school with which it is made shall state, and raise and appropriate money to carry the contract into effect. If the may make a contract with an academy . . . located in this or . . . in another

creation of the Employer by private individuals as a private corporation,

of a local school district. Pursuant to RSA 194:22 (1999): “Any school district

entities acting as contractors for the government.”

term contracts with the Towns of Derry, Chester and Hampstead. “The corporation”).

Pinkerton Academy is not governed by a local school board nor is it part

18, Id. (quotation omitted). Languages as the Trustees hereinafter provided shall direct.” Laws 1814, ch. or wholly owned government corporations from its coverage – not private and for the Education of Youth in such of the liberal Arts and Sciences or at 968. “The plain language of Section 2(2) exempts only government entities

school education to students in Derry. Pinkerton is currently engaged in long- such sums as it deems necessary for the support and maintenance of said into a contractual agreement with the Derry School District to provide high independent day and boarding school until 1948. In 1949, Pinkerton entered 1811-1820 298 (Evans Printing Co. 1920). Pinkerton Academy operated as an reprinted in Laws of New Hampshire, Vol. 8, Second Constitutional Period,

under the control of the State of New Hampshire. the special act indicates that Pinkerton Academy was intended to operate and land to establish the school “for the purpose of promoting piety and virtue Vermont General Assembly it constitutes a political subdivision). Nothing in Pinkerton Academy was created by private individuals who gave money

academy in New Hampshire in the 1800s. legislature, that act was simply the mechanism of incorporating a private the state for providing higher education” and the legislature shall “appropriate at 291-92 (University “shall be recognized and utilized as an instrumentality of arm of City University of New York), with University of Vermont, 297 N.L.R.B. that employer was intended to operate under control of or as administrative Foundation, 337 N.L.R.B. at 968 (nothing in corporation’s charter indicated

N.L.R.B. at 295 (holding that because University was created by special act of

corporation. Although the Academy was established by a special act of the In contrast, Pinkerton Academy was organized in 1814 as a nonprofit

employer is a “political subdivision.” L.A. Leadership Academy, slip op. at 15. government, thereby satisfying the first common factor in determining if an created directly by the State so as to constitute an administrative arm of the could not exist but for the State’s enabling legislation, it was found to be senate and the speaker of the house of representatives. Likewise, in

p. 9 government official, employer was not political subdivision).

exclusive control of officers of the public school system.”

Philadelphia, the superintendent of public education, the president of the affairs of the University,” included the Governor of Pennsylvania, the mayor of government officials or provision for removal of board members by any manage, control, and conduct the instructional, administrative, and financial interpreted by the NLRB and the courts. constitute an administrative arm of the government as that standard has been exercised control over the University’s board of trustees.

3d at 754. While the California charter schools have a board of directors, the

schools are “under the jurisdiction of” the public school system and “under the not transform it into a political subdivision. The California enabling legislation provides that the state’s charter Academy. Its contractual relations with political subdivisions of the State do districts, not pursuant to any statutory duty imposed upon Pinkerton

employer’s board of directors be government officials or appointed by because, among other things, “the board of trustees, [which] was established to Ramsey Medical Center, 291 N.L.R.B. 755, 758 (1988) (absent requirement that Pinkerton Academy was not created by the State of New Hampshire so as to See also St. Paul gubernatorial appointment, thereby establishing that the State clearly twenty-one trustees were selected by the State, whether by legislation or by the Board’s jurisdiction as a political subdivision in part because twelve of the subject to, removal by public officials.” of Vermont, 297 N.L.R.B. at 291, the NLRB found the employer exempt from looks to whether individuals on the board of trustees are “appointed by, and University

so pursuant to a series of contracts between the Academy and the sending

1160, 1160 (1972), the Board declined to assert jurisdiction over the University Enrichment Services, 325 N.L.R.B. at 819. In Temple University, 194 N.L.R.B. that the government intends to retain control over them, we conclude that general electorate, those individuals must constitute a majority of the board.” deemed ‘administered by’ individuals responsible to public officials or to the U.S. at 605; Research Foundation, 337 N.L.R.B. at 969. “For an entity to be

is administered by individuals who are responsible to public officials, the NLRB Concerning the second major factor, in determining whether an employer

school education for the Towns of Derry, Chester and Hampstead, it has done

Unlike charter schools in California, where legislation expressly states

F.2d at 572.

Pinkerton Academy has assumed the statutory responsibility of providing high Johnson v. Pinkerton Academy, 861 F.2d 335, 338 (1 Cir. 1988). Although st tuition of students who chose to attend schools lacking town contracts.” rather has “the limited purpose . . . of relieving the towns from paying the government. Although a state determination that the employer is not

p. 10 perform services that are traditionally within the exclusive prerogative of the

control or supervision of any governmental authority; and Pinkerton does not the Academy. government; Pinkerton enjoys financial autonomy and is not subject to the operate real and personal property, and transact all business necessary to run general electorate; Pinkerton is not a department or administrative arm of the

Hampshire. The trustees have the power to elect future trustees, own and administered by individuals who are responsible to public officials or to the

municipality, school district, or group of taxpayers, citizens or voters in New System based that conclusion upon the fact that: Pinkerton is not subdivision, agency or instrumentality.” The New Hampshire Retirement determined that the Academy is not a “governmental entity, political

general public required to support a claim of exemption under § 2(2).”

making authority of the Academy is not under the direct control of any no trustee is elected or appointed by any governmental body. The decisioncertain number of the trustees are from each of the sending districts; however, removed from the New Hampshire Retirement System in 1991 because it was general public as that requirement has been interpreted by the NLRB. Act. See Hinds County, 331 N.L.R.B. at 1405. Pinkerton Academy was the third significant indicator of statutory exemption under section 2(2) of the Employee participation in a state-sponsored or created pension system is

Medical Ctr., 641 F.2d at 573 (emphasis added).

and is not the sort of direct personal accountability to public officials or to the the contractual relations between [Pinkerton] and these political subdivisions, Any responsibility of Pinkerton’s trustees to the sending districts “derives from Hinds County, 331 N.L.R.B. at 1404; Truman Medical Ctr., 641 F.2d at 572. a private board of trustees. Pursuant to the sending district contracts, a See administered by individuals who are responsible to public officials or the Also unlike the California charter schools, Pinkerton Academy is not to public officials or to the general electorate.”

Unlike the California charter schools, Pinkerton Academy is governed by

California charter schools are “administered by individuals who are responsible Id. at 13. Based upon these facts, the regional director concluded that the and the school district retain the ultimate power to revoke the school’s charter. the curriculum and student progress. Id. at 13-15. Furthermore, the state The statute has audit, budget and financial oversight provisions, and controls voting space is reserved for a representative of the school district. Id. at 14. board of directors. Id. Parents must be represented on the board and a nonmembers are selected by a nominating committee and elected by the sitting Academy, slip op. at 13. The board meetings are noticed and open; the board board must comply with all laws relating to public agencies. L.A. Leadership decision of the PELRB, and remand with instructions to dismiss. p. 11 educational institution within the jurisdiction of the NLRB, we vacate the in excess of $26 million. Because Pinkerton Academy qualifies as a nonprofit 11

standard as the record indicates that Pinkerton receives gross annual revenue

section 2(2) of the Act. Pinkerton likewise meets the monetary jurisdictional Consequently, we hold that Pinkerton Academy is an employer as defined in employees participate in the New Hampshire Retirement System.

DALIANIS, DUGGAN, GALWAY and HICKS, JJ., concurred. administered by individuals who are responsible to public officials, nor do its

New Hampshire so as to constitute an administrative arm of the State, nor is it In summary, Pinkerton Academy was not created directly by the State of

County, 331 N.L.R.B. at 1404. to constitute a department or administrative arm of government.” Hinds determining the more specific issue of whether the Employer was created so as found the state’s characterization of an entity to be an important factor in “careful consideration.” Gas Utility District, 402 U.S. at 602. “[T]he Board has considered to be a political subdivision is not controlling, it is to be given