April 1997

Workplace Labor Update - Disabled Yes -- Qualified No – April 1997

3 min

The federal appeals court for Maryland and Virginia recently held that severely disabled individuals in a custodial work service program are not "employees" within the meaning of the National Labor Relations Act. Baltimore Goodwill Industries v. NLRB, 1998 WL 7853 (4th Cir. 1998). Goodwill administers a commercial services program, through which it employs severely disabled individuals to perform work on certain government contracts. The AFL-CIO filed a petition with the National Labor Relations Board, seeking to represent a bargaining unit of custodial workers that included both non-disabled workers and a substantial number of severely disabled workers. At a hearing before the NLRB, Goodwill objected to the inclusion of the severely disabled individuals in the bargaining unit on the basis that they were not "employees" under the NLRA, inasmuch as their relationship with Goodwill was primarily rehabilitative in nature. Despite Goodwill’s objections, the NLRB certified the Union as the bargaining representative of the proposed unit of disabled and non-disabled individuals. When Goodwill thereafter refused to bargain with the Union, the NLRB found that Goodwill had committed an unfair labor practice in violation the NLRA. The NLRB issued an Order compelling Goodwill to bargain. On review of the NLRB’s Order, the federal appeals court noted that, under NLRB precedent, the determination of whether disabled workers in a custodial work service program are "employees" within the meaning of the NLRA turns on whether the characteristics of the program are typical of industry settings, in which case the workers will be considered "employees," or whether the characteristics are primarily rehabilitative in nature, in which case the workers will not fall within the definition of "employees." After examining the characteristics of Goodwill’s program in this case, the court concluded that the relationship between Goodwill and its severely disabled workers was primarily rehabilitative in nature. The particular factors relied upon by the court in reaching this conclusion were: (1) Goodwill disciplined disabled workers in a rehabilitative manner that differed from the way in which it disciplined non-disabled workers; (2) a substantial number of workers in the proposed bargaining unit worked at Goodwill for only a short period of time and then joined the competitive job market; (3) Goodwill transferred, rather than discharged, disabled workers who fell below certain productivity standards; and (4) Goodwill had two full-time employees to counsel disabled workers and monitor their progress. The court explained that the similarities in the terms and conditions of the disabled workers’ employment and the non-disabled workers’ employment (namely, that both categories of workers punched a time clock, worked a full work week, and received health insurance and paid sick leave) were not sufficient to overcome the rehabilitative nature of Goodwill’s program. Accordingly, the court concluded that the NLRB had erred in certifying the Union as the bargaining representative for a unit that included severely disabled workers, and reversed the NLRB’s Order.