Saturday, January 13, 2018

Shared Governance and the Managerial Character of Faculty in the Evolving University: Dueling Amicus Briefs From University of Southern California v. National Labor Relations Board, No. 17-1149 (D.C. Cir. 2017)

(Pix © Larry Catá Backer 2018)


University administrations have, quite correctly, sought to have it both ways.  On the one hand they continue to peddle the narrative of the idealized university of autonomous professionalized faculty deeply involved in the governance of the academic mission of the institution.  On the other hand they have increasingly moved to administer a very different reality where behind the slowly fading institutional veils of faculty involvement in governance has been created a factory environment in which the university serves increasingly as a means of preparing its tuition payers for insertion into increasingly well designated portions of the global wage labor markets.  For some elite universities the factory produces (and protects the status) of the highest level jobs at the pinnacles of the governmental and non governmental institutions of power. (For my discussion of this trend see, "The University in the Age of the Learning Factory: Dueling narratives in the culture war around higher education," here, and here)

To this end the character of utility of the faculty has changed dramatically.  And that transformation has especially evident for institutions that are been designated to serve the "lower" levels of the wage labor markets.  It has changed both the character of teaching, the connection between knowledge production and knowledge dissemination (in ways that will have long term impacts on both--the character of which has yet to be fully understood),  and has changed the way the university values faculty production. Tenured faculty are expensive--both in the allocation of their time,  and in the way that tend to be less flexible objects of production (in the sense that they cannot be easily moved from one form of production (e.g., German studies) to another (e.g. engineering) to suit value maximizing (to the university) change sin the demand for labor inputs (e.g. students). Contract faculty are eminently flexible in the sense that they might be kept forever if suitable but can also be shed when necessary.  Their time can be adjusted to suit the teaching research mix needs of the institution and while they can be easily disciplined if they annoy their managers (with the ultimate power to choose to not renew a contract).

These issues are not confined to the writings of an academic posting to a blog but has increasingly appeared at the center of litigation designed to acquire recognition in law for the vast changes in the realities of the relationship between emerging classes of faculty and university administrators. At issue is an effort for courts to reconsider the premise narrative of the university that lay at the foundation of the germinal cases (of a generation ago) which based a conclusion that faculty were managerial employees on an increasingly abandoned premise that the old shared governance system deeply and effectively embedded them within university governance.

A recent case worth noting is University of Southern California v. National Labor Relations Board, No. 17-1149 (D.C. Cir. 2017).  The case represents a challenge by the university to a decision of the National Labor Relations Board that determined that USC's contract faculty were not managerial employees.  This post includes the amicus brief of the American Association of University Professors in that case as well as the AAUP Press Release relating to the case which takes one side of the narrative argument (and points to the legal effects of the changes to the university since 1980).  It also includes the amicus brief of the American Council on Education, an industry group representing university administrations and their boards.

The most interesting parts of both arguments, produced by some of the finest advocates on both sides of the issue, is the way that the arguments highlight the extraordinary transformation of the both the notion of "shared governance" in the university and the context in which it can be exercised.  Both sides exclaims that the other "does not understand shared governance" (AAUP Brief pp. 11-28; ACE Brief pp. 18-27)--the reality is that both understand quite well--but the conclusions to be drawn are as highly contested as is the size of the conceptual divide between traditional and contemporary ways of understanding the university itself. Both sides seek to leverage that reality--the AAUP by suggesting that change has altered legal reality and the ACE by suggesting that the changes do not alter the underlying relationships among faculty and administration.

Yet the case, and the arguments, would have been incomprehensible when the original legal rule was pronounced in 1980.  And the reason has little to do with the understanding of shared governance (and its "mis-understanding;" though that is what all sides hope to keep centered in the judicial proceedings. Rather, and something both sides might downplay, is not that shared governance has changed but that the character of faculty have changed--and that change ought to produce legal consequences (but it also produces substantial challenges to faculty solidarity). And indeed, it might be possible to understand the nature of changes to shared governance not merely as a function of changes in university administration, but also as a function of changes in the composition of faculty.  Faculty who are not protected by tenure and whose contract may be terminated by administrators are in a fundamentally different position with respect to governance than tenured faculty.  The Industry association seeks to make the best case for the continued application of the rule which can apply equally to tenure and non tenured faculty (the difference in the character of the employment relationship would not change the underlying normative principle supporting it); the AAUP argues that the underlying normative principle, as well as context, has now changed so dramatically that the original premise framework just does not work for this new class of faculty. Whatever happens, this will not be the last case in which university stakeholders will seek to bend the law to their own views of the reality of the university in this age of great changes. 



University of Southern California v. National Labor Relations Board, No. 17-1149 (D.C. Cir. 2017)


The AAUP submitted an amicus brief December 28 to the US Court of Appeals for the DC Circuit urging the Court to uphold the NLRB’s determination that non-tenure-track faculty at USC are not managerial employees. The brief supports the legal framework established by the NLRB in Pacific Lutheran University and describes in detail the significant changes in university hierarchical and decision-making models since the US Supreme Court ruled in 1980 that faculty at Yeshiva University were managerial employees and thus ineligible to unionize under the National Labor Relations Act.

This case arose when SEIU filed a petition to represent non-tenure-track full-time and part-time faculty in two colleges within USC. USC objected to the petition arguing that the faculty were managers under Yeshiva. The Board applied the test established in Pacific Lutheran University, 361 NLRB 1404 (2014) (in which AAUP had also filed an amicus brief) and found that the faculty in the units were not managerial and therefore were eligible to unionize. After the union won the election in the Roski School of Art and Design, USC refused to bargain citing its objection, and the Board ordered USC to bargain. USC appealed to the US Court of Appeals for the DC Circuit arguing that the faculty had no right to unionize as they were managerial employees.

The AAUP amicus brief supports the Board’s position that Pacific Lutheran University creates an appropriate standard, which was properly applied in this case to find the faculty non-managerial. Specifically, the Board concluded that USC had not proven that non-tenure-track faculty actually exercise control or make effective recommendations about policies that affect the university as a whole. The AAUP brief focused on the fundamental structural and operational changes in universities during the more than three decades since NLRB v. Yeshiva University. Universities have adopted a corporate model of decision-making and employment relations that has reduced faculty authority in university policy-making and has created conflicts of interests between faculty and university administrations. Rather than relying on faculty expertise and recommendations, the growing ranks of university administrators have engaged increasingly in unilateral top-down decision-making, often influenced by considerations of external market forces and revenue generation. At the same time, universities have cut back on tenure-track/tenured positions and greatly expanded non-tenure-track faculty positions. Under these conditions, universities’ assertions that faculty are managerial are often based only on “paper authority” rather than actual authority or effective recommendations by faculty in university policy-making.

_________


USCA Case #17-1149 Document #1710769 Filed: 12/28/2017 Page 1 of 43
ORAL ARGUMENT NOT YET SCHEDULED
Nos. 17-1149 and 17-1171 IN THE
United States Court of Appeals for the District of Columbia Circuit

___________________________________________

UNIVERSITY OF SOUTHERN CALIFORNIA, Petitioner/Cross-Respondent,
v.
NATIONAL LABOR RELATIONS BOARD, Respondent/Cross-Petitioner,
and SERVICE EMPLOYEES INTERNATIONAL UNION, LOCAL 721, CTW, CLC,
Intervenor. ___________________________________________

On Petition for Review from the National Labor Relations Board
Case Nos. 31-CA-178831, 31-CA-192125 ___________________________________________



PETER MCDONOUGH
VICE PRESIDENT AND GENERAL COUNSEL AMERICAN COUNCIL ON EDUCATION
One Dupont Circle N.W.
Washington, D.C. 20036
(202) 939-9361
OGC@acenet.edu

Counsel for American Council on Education
JESSICA L. ELLSWORTH
STEPHANIE GOLD
JOEL BUCKMAN
REEDY C. SWANSON*
H
OGAN LOVELLS US LLP
555 Thirteenth Street, N.W. Washington, D.C. 20004
(202) 637-5600 jessica.ellsworth@hoganlovells.com

*Admitted only in Virginia, supervised by principals of the firm.
Counsel for Amici Curiae
_______________


CERTIFICATE AS TO PARTIES, RULINGS, AND RELATED CASES
Pursuant to Circuit Rule 28(a)(1), the American Association of University Professors (“AAUP”) certifies the following:
Parties and Amicus. Except for the above-listed amicus, all parties, intervenors, and amici appearing before the National Labor Relations Board and in this Court are listed in the brief of the Respondent/Cross-Petitioner (as a party herein “Respondent NLRB”). AAUP is not aware of any other amicus curiae briefs in support of Respondent NLRB. See D.C. Circuit Rule 29(d). AAUP is a professional association for purposes of D.C. Circuit Rule 26.1(b).
Rulings Under Review. The rulings under review are listed in Respondent NLRB’s brief.
Related Cases. Counsel is not aware of any related cases within the meaning of Circuit Rule 28(a)(1)(C).
/s/ Michael S. Wolly Michael S. Wolly
i
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TABLE OF CONTENTS
Page CERTIFICATE AS TO PARTIES, RULINGS, AND RELATED CASES ............. i TABLE OF AUTHORITIES ................................................................................... iv STATEMENT OF INTEREST OF AMICUS CURIAE.............................................1 SUMMARY OF ARGUMENT .................................................................................2 ARGUMENT .............................................................................................................5
  1. The NLRB’s decision in Pacific Lutheran is consistent with Yeshiva standards. ...........................................................................................................5
  2. In deciding Pacific Lutheran, the Board properly considered nationwide changes in university structures post-Yeshiva. ..................................................8
A. How universities have changed since Yeshiva. .......................................10
B.
1. Universities’ use of a corporate business model and the significant expansion of university administration have eroded faculty authority to control or make effective recommendations about university policy. ....11
  1. In the thirty-seven years since Yeshiva, the university model has evolved due to the expanded size and power of university administration. .....................................................................................11
  2. The expanded size and power of the university administration has decreased the ability of faculty to control or make effective recommendations about university policies. .......................................15
  3. Increased conflict between administration and faculty resulting from the new corporate model demonstrates that their interests are not aligned. ................................................................................................20
2. External market forces have supplanted faculty interests in university managerial decision-making....................................................................23
The NLRB correctly applied Pacific Lutheran to find that USC non- tenure track faculty are not managerial employees.................................28
ii
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TABLE OF CONTENTS--Continued
Page CONCLUSION ........................................................................................................31 CERTIFICATE OF COMPLIANCE.......................................................................32 CERTIFICATE OF SERVICE ................................................................................32
iii
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TABLE OF AUTHORITIES
Page
Cases
Bd. of Regents v. Roth,
408 U.S. 564 (1972).........................................................................................1

Brown University,
342 N.L.R.B. 483 (2004).................................................................................2
Columbia University,
364 N.L.R.B. No. 90 (2016) ............................................................................2

Cooper Union of Science & Art,
273 N.L.R.B. 1768 (1985).............................................................................16
Demers v. Austin,
746 F.3d 402 (9th Cir. 2014) ...........................................................................2

Grutter v. Bollinger,
539 U.S. 306 (2003).........................................................................................1

Keyishian v. Bd. of Regents,
385 U.S. 589 (1967).........................................................................................2

LeMoyne-Owen Coll. v. NLRB,
357 F.3d 55 (D.C. Cir. 2004).........................................................................28
Loretto Heights College v. NLRB,
742 F.2d 1245 (10th Cir. 1984) .............................................................. 15, 19

New York University,
332 N.L.R.B. 1205 (2000)...............................................................................2 iv
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TABLE OF AUTHORITIES-- Continued NLRB v. Cooper Union,
Page 783 F.2d 29 (2d Cir. 1986) ..................................................................... 20, 21
NLRB v. Yeshiva University,
444 U.S. 672 (1980).............. 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 16, 17, 19, 20, 29
Pacific Lutheran University,
361 N.L.R.B. 1404 (2014) .. 2, 3, 4, 5, 6, 7, 8, 9, 13, 14, 16, 19, 23, 27, 28, 29
Point Park University v. NLRB,
457 F.3d 42 (D.C. Cir. 2006)...........................................................................3

Puerto Rico Junior College,
265 N.L.R.B. 72 (1982).................................................................................16
Regents of Univ. of Michigan v. Ewing,
474 U.S. 214 (1985).........................................................................................1

St. Thomas University,
298 N.L.R.B. 280 (1990)...............................................................................16
Tilton v. Richardson,
403 U.S. 672 (1971).........................................................................................1

University of Great Falls,
325 N.L.R.B. 83 (1997).......................................................................... 15, 20

University of Southern California,
365 N.L.R.B. No. 11 (Dec. 30, 2016) .............................................. 28, 29, 30

Urofsky v. Gilmore,
216 F.3d 401 (4th Cir. 2000) ...........................................................................2

v
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TABLE OF AUTHORITIES-- Continued
Page
Statutes
Bayh-Dole Act of 1980, 35 U.S.C. §§ 200212 ......................................................25 National Labor Relations Act, 29 U.S.C. § 151 et seq ..................................... 2, 3, 9 National Labor Relations Act, 29 U.S.C. § 152 (12)......................................9, 18 National Labor Relations Act, 29 U.S.C. § 157................................................9 Other Authorities
AAUP, 1915 Declaration of Principles on Academic Freedom and Tenure, AAUP Policy Documents and Reports (11th ed. 2015).....................................................8
AAUP, Recommended Principles to Guide Academic-Industry Relationships (2014)............................................................................................................. 26, 27
AAUP, 1940 Statement of Principles on Academic Freedom and Tenure with 1970 Interpretive Comments, AAUP Policy Documents and Reports ...........................8
AAUP, Statement on Collective Bargaining, AAUP Policy Documents and Reports (11th ed. 2015)........................................................................................................8
AAUP, Statement on Government of Colleges and Universities, AAUP Policy Documents and Reports (11th ed. 2015) ................................................................8
AAUP, The Annual Report on the Economic Status of the Profession, 2013-14.......................................................................................................... 11, 12
vi
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TABLE OF AUTHORITIES-- Continued
AAUP, The Inclusion in Governance of Faculty Members Holding Contingent
Page Appointments (January 2013) ...............................................................................14
AAUP, Visualizing Change: The Annual Report on the Economic Status of the Profession, 2016-17....................................................................................... 13, 14
AAUP, Academic Freedom and Tenure: National Louis University......................16
About USC, https://about.usc.edu/administration/ ..................................................12
Susan C. Aldridge, Strategy Matters More Than Budget in Student Recruiting, Chron. of Higher Education (Oct. 31, 2010) ........................................................23
Nota Bene, Board Overrides Faculty Recommendation on Curriculum at George Mason University, ACADEME, Vol. 86, No. 5 (Sep. - Oct., 2000) .......................17
Ernst Benjamin, The Eroding Foundations of Academic Freedom and Professional Integrity: Implications of the Diminishing Proportion of Tenured Faculty for Organizational Effectiveness in Higher Education, 1 AAUP JOURNAL OF ACADEMIC FREEDOM (2010).................................................................................13
David Blumenthal, Academic-Industrial Relationships in the Life Sciences, 349 NEW ENGLAND JOURNAL OF MEDICINE 2452 (2003)............................................26
Derek Bok, UNIVERSITIES IN THE MARKETPLACE: THE COMMERCIALIZATION OF HIGHER EDUCATION (2003). .................................................................................26
vii
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TABLE OF AUTHORITIES-- Continued
Page
Nancy D. Campbell and Jane F. Koretz, The Demise of Shared Governance at Rensselaer Polytechnic Institute, 1 AAUP JOURNAL OF ACADEMIC FREEDOM (2010)....................................................................................................................21
Mary Carmichael, New guiding hands at Suffolk: School set to add 12 trustees with business focus, The Boston Globe (Oct. 4, 2011) ................................................10
Coalition for the Academic Workforce, A Summary of Findings on Part-Time Faculty Respondents to the Coalition on the Academic Workforce Survey of Contingent Faculty Members and Instructors (2012) .........................................14
William K. Cummings and Martin Finkelstein, Global Trends in Academic Governance, ACADEME, Vol. 95, No. 6 (Nov.-Dec. 2009)..................................22
John W. Curtis & Monica F. Jacobe, Consequences: An Increasingly Contingent Faculty, AAUP CONTINGENT FACULTY INDEX 15 (2006) ....................................13
Digest of Education Statistics (2001) ............................................................... 11, 12 Digest of Education Statistics (2012)...............................................................12
Digest of Education Statistics (2016)...............................................................11 Sam Dillon, Share of College Budgets for Recreation is Rising, New York Times,
(July 10, 2010)......................................................................................................12
Leroy W. Dubeck, Beware Higher Ed’s Newest Budget Twist, THOUGHT & ACTION 81-91 (Spring 1997)..............................................................................................25
viii
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TABLE OF AUTHORITIES-- Continued
Page
Larry G. Gerber, College and University Government: Adelphi University (New York): A Special Report from Committee T, ACADEME, Vol. 83, No. 3 (May - Jun., 1997) ............................................................................................................17
Benjamin Ginsberg, THE FALL OF THE FACULTY: THE RISE OF THE ALL- ADMINISTRATIVE UNIVERSITY AND WHY IT MATTERS 33 (2011) (calculated from National Center for Education Statistics (NCES), Digest of Education Statistics, 2006, Table 346)............................................................................................ 12, 23
John D. Hummell, Financing Higher Education: Approaches to Funding at Four- Year Public Institutions, Working Paper Series: CHEWP.1.2012, Center for Higher Education (March 2012)...........................................................................25
Josephine Johnston, Health Related Academic Technology Transfer: Rethinking Patenting and Licensing Practices, 9 INTERNATIONAL J. BIOTECHNOLOGY 156 (2007)....................................................................................................................26
Adrianna Kezar & Daniel Maxey, THE CHANGING FACULTY AND STUDENT SUCCESS (2012) ....................................................................................................13
David L. Kirp, The Corporation of Learning: Nonprofit Higher Education
Takes Lessons from Business,
Research & Occasional Paper Series:
CSHE.5.03, Center for Studies in Higher Education
(May 2003).................24
Sheldon Krimsky, The Profit of Scientific Discovery and Its Normative Implications, 75 CHICAGO-KENT LAW REVIEW 15 (1999) ...................................26
Risa L. Lieberwitz, Confronting the Privatization and Commercialization of Academic Research: An Analysis of Social Implications at the Local, National, and Global Levels, 12 IND. J. GLOBAL LEG. STUD. 109 (2005)............................27
ix
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TABLE OF AUTHORITIES-- Continued
David M. Rabban, Distinguishing Excluded Managers from Covered Professionals
Page Under the NLRA, 89 Colum. L. Rev. 1775 (1989)........................................ 17, 18
Joan Wallach Scott, The Critical State of Shared Governance, ACADEME, Vol. 88, No. 4 (Jul.-Aug., 2002).................................................................................. 21, 24
Lloyd Thacker, Confronting the Commercialization of Admissions, Chron. of Higher Education, Vol. 51, Issue 25(Feb. 25, 2005)............................................23
Gaye Tuchman, WANNABE U: INSIDE THE CORPORATE UNIVERSITY (2009). ..........18
x
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STATEMENT OF INTEREST OF AMICUS CURIAE
The American Association of University Professors (“AAUP”), founded in 1915, is a non-profit organization of over 40,000 faculty, librarians, graduate students, and academic professionals, a significant number of whom are private sector employees. The mission of the AAUP is to advance academic freedom and shared governance; to define fundamental professional values and standards for higher education; to promote the economic security of faculty, academic professionals, graduate students, post-doctoral fellows, and all those engaged in teaching and research in higher education; to help the higher education community organize to make our goals a reality; and to ensure higher education's contribution to the common good. The AAUP’s policies have been recognized by the Supreme Court and are widely respected and followed in American colleges and universities. See, e.g., Bd. of Regents v. Roth, 408 U.S. 564, 579 n. 17 (1972); Tilton v. Richardson, 403 U.S. 672, 681-82 (1971). In cases that implicate AAUP policies, or otherwise raise legal issues important to higher education or faculty members, the AAUP frequently submits amicus briefs in the Supreme Court, the federal circuits, and the National Labor Relations Board (“NLRB” or “the Board”). See, e.g., Grutter v. Bollinger, 539 U.S. 306 (2003); Regents of Univ. of Michigan
v. Ewing, 474 U.S. 214 (1985); NLRB v. Yeshiva University, 444 U.S. 672 (1980); 1
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Keyishian v. Bd. of Regents, 385 U.S. 589 (1967); Demers v. Austin, 746 F.3d 402 (9th Cir. 2014); Urofsky v. Gilmore, 216 F.3d 401 (4th Cir. 2000); Columbia University, 364 N.L.R.B. No. 90 (2016); Pacific Lutheran University, 361 N.L.R.B. 1404 (2014); Brown University, 342 N.L.R.B. 483 (2004); and New York University, 332 N.L.R.B. 1205 (2000). By participating as an amicus in this case, the AAUP seeks to assist the Court in evaluating the legal definition of employee status in a manner that accurately reflects employment relationships in universities and colleges and that respects the rights of college and university employees to exercise their rights to organize and engage in collective bargaining1.
SUMMARY OF ARGUMENT
In NLRB v. Yeshiva University, 444 U.S. 672 (1980), the Supreme Court created a multi-factor test for determining whether university2 faculty are managerial employees under the National Labor Relations Act (NLRA). 29 U.S.C. § 151 et seq. At the same time, the Court recognized that analyzing faculty employment status is a dynamic process. The factors the Court relied on provide “a
1 Pursuant to F.R.A.P. 29(4)(E) and Circuit Rule 29(b), all parties have consented to AAUP’s filing of this brief. Further, no party’s counsel authored this brief in whole or in part; no party or party’s counsel contributed money intended to fund the brief’s preparation or submission; and no person other than amicus contributed money intended to fund the brief’s preparation or submission.
2 The term “university” is used in this brief to refer to colleges and universities. 2
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starting point only, and...other factors not present here may enter into the analysis in other contexts.” 444 U.S. at 690, n. 31. As this Court has explained, [C]ontext is everything.... The key inquiry is how a faculty is structured and operates.’” Point Park University v. NLRB, 457 F.3d 42, 48 (D.C. Cir. 2006), quoting, Yeshiva, 444 U.S. at 690, n. 31.
In the case at hand, the NLRB followed its 2014 legal framework in Pacific Lutheran University, which provides “a more workable, more predictable analytical framework to guide employers, unions, and employees alike,” 361 N.L.R.B. 1404, 1419 (2014), to find that non-tenure track faculty in a bargaining unit at the University of Southern California (USC) are not managerial employees under the NLRA. Consistent with, and explicitly referring to Yeshiva, the Board’s framework examines “both the breadth and depth of the faculty's authority at the university,” Id. at 1419, to determine whether faculty members “‘substantially and pervasively’ operated the university by exercising extensive control over decision- making and playing a ‘crucial role... in determining...central policies of the institution.’” Id., quoting, Yeshiva, 444 U.S. at 679. The Board, therefore, places the greatest weight on three factors where “faculty exercise actual or effective decision making authority over policies for the university as a whole,” as areas where faculty “interests begin to align with management, thereby creating the
3
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problem of divided loyalty that the managerial employee exception seeks to avoid.” 361 N.L.R.B. at 1419, citing, Yeshiva, 444 U.S. at 690.
The Pacific Lutheran factors are context-sensitive. The three primary and two secondary factors may be applied in the specific context of the university in a particular case. Further, the factors reflect the Board’s consideration of the context of the changing nature of higher education institutions in the almost four decades since Yeshiva was decided. As the NLRB explains, “Indeed, our experience applying Yeshiva has generally shown that colleges and universities are increasingly run by administrators, which has the effect of concentrating and centering authority away from the faculty in a way that was contemplated in Yeshiva, but found not to exist at Yeshiva University itself.” 361 N.L.R.B. at 1422. In this changing context, the Board appropriately emphasizes that the party asserting managerial status must prove that the breadth of faculty authority extends to policy making that affects the university as a whole and that the depth of faculty effective recommendations or control demonstrates “actual—rather than mere paper—authority.” Id. at 1421.
AAUP believes that the NLRB's approach in this case led to the correct result, including the Board's analysis of the relationship between administration and faculty in deciding whether USC non-tenure track faculty are managerial
4
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employees. This amicus brief addresses the structural and operational changes in universities that have altered administration-faculty relationships, resulting in reduced faculty authority in university policy making and a divergence in the interests of faculty and university administrations. These institutional changes are: increased top-down management of the university by the growing ranks of administrators; expansion of non-tenure track faculty positions and the corresponding reduction of tenure-track/tenured faculty positions; increased conflict between the university administration and faculty; and the influence of external market forces on university administrators’ decision making.
ARGUMENT
I. The NLRB’s decision in Pacific Lutheran is consistent with Yeshiva standards.
In Pacific Lutheran University, the NLRB was “guided by” the Yeshiva Court’s “overarching determination that the faculty in question ‘substantially and pervasively’ operated the university by exercising extensive control over decision- making and playing a ‘crucial role ... in determining . . . central policies of the institution.’” 361 N.L.R.B. at 1419, quoting, Yeshiva, 444 U.S. at 679. Consistent with this standard, the Board examines “both the breadth and depth of the faculty's LN.L.R.B. at 1419. The Board places the greatest weight on three areas where
“faculty exercise actual or effective decision making authority over policies for the 5
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university as a whole,” as areas where faculty “interests begin to align with management, thereby creating the problem of divided loyalty that the managerial employee exception seeks to avoid.” Id., citing, Yeshiva, 444 U.S. at 690. These three areas are: “academic programs,” including “the university's curricular, research, major, minor, and certificate offerings and the requirements to complete successfully those offerings”; “enrollment management,” including “the size, scope, and make-up of the university's student body”; and “finances,” which encompass “both income and expenditure,” including tuition rates. N.L.R.B. at 1420.
The NLRB’s framework places less weight on two secondary areas: “academic policy,” including “teaching/research methods, grading policy, academic integrity policy, syllabus policy, research policy, and course content policy”; and “personnel policy and decisions,” including “hiring, promotion, tenure, leave, and dismissal.” Id. Academic policy “does not demonstrate the same alignment with management interests as do the primary decision-making areas,” but are related more closely to faculty classroom and research activity than to institutional decisions about academic programs. Id. The Board notes that the Yeshiva Court considered faculty control of personnel policy and decisions, but did not rely primarily on this factor. The NLRB explains that this area “only indirectly
6
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implicates the product to be produced, the terms in which it is offered, and the customers sought.” Id.
In examining the depth of faculty authority, the NLRB emphasizes that “the party asserting managerial status must demonstrate that faculty actually exercise control or make effective recommendations.” Id. at 1421. There must be proof of “actualrather than mere paper—authority” which requires “specific evidence or testimony regarding the nature and number of faculty decisions or recommendations in a particular decision making area, and the subsequent review of those decisions or recommendations, if any, by the university administration prior to implementation....” Id. Recommendations are "effective" recommendations if they are “almost always...followed by the administration” and “if they routinely become operative without independent review by the administration.” Id.
The Board explains, further, that evaluating actual control or effective recommendations entails an “inquiry into both the structure of university decision- making and where the faculty at issue fit within that structure, including the nature of the employment relationship held by such faculty (e.g., tenured vs. tenure eligible vs. non-tenure eligible; regular vs. contingent).” Id. at 1421-22. This inquiry is consistent with the Yeshiva Court’s observation that "a rational line could be drawn between tenured and untenured faculty members, depending upon
7
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how a faculty is structured and operates." 444 U.S. at 866, n. 31. Although the NLRB does not draw a bright line between tenure and untenured faculty, it recognizes that status differences may reflect different levels of authority. 361 N.L.R.B. at 1422, n. 40.
II. In deciding Pacific Lutheran, the Board properly considered nationwide changes in university structures post-Yeshiva.
Yeshiva contrasted the system of “‘shared authority’ in the typical ‘mature’ private university” with “the type of management-employee relations that prevail in the pyramidal hierarchies of private industry.” 444 U.S. at 680. The AAUP has long advocated for “shared governance” and collective bargaining as positive ways for faculty to participate in university policy making that affects the interests of the faculty.3 The existence of shared governance is not, however, equivalent to a legal finding of managerial status under the NLRA. Faculty often engage in shared
3 See, AAUP, 1915 Declaration of Principles on Academic Freedom and Tenure, AAUP Policy Documents and Reports (11th ed. 2015); AAUP, 1940 Statement of Principles on Academic Freedom and Tenure with 1970 Interpretive Comments, AAUP Policy Documents and Reports (11th ed. 2015), available at http://www.aaup.org/AAUP/pubsres/policydocs/contents/1940statement.htm ; AAUP, Statement on Government of Colleges and Universities, AAUP Policy Documents and Reports (11th ed. 2015), available at https://www.aaup.org/report/statement-government-colleges-and-universities ; AAUP, Statement on Collective Bargaining, AAUP Policy Documents and Reports (11th ed. 2015), available at https://www.aaup.org/report/statement-collective- bargaining .
8
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governance as part of their non-managerial responsibilities as professional employees under Section 2(12) of the NLRA. 29 U.S.C. § 152(12). Under Yeshiva, faculty are considered managerial employees only when they “exercise discretion within, or even independently of, established employer policy and [are] aligned with management...by taking or recommending discretionary actions that effectively control or implement employer policy.” 444 U.S. at 683.
In the thirty-seven years since Yeshiva was decided, there have been significant changes in the university structure and management model relevant to determining whether faculty are Section 2(12) professional employees with Section 7, 29 U.S.C. § 157, rights or whether they are managerial employees excluded from the protections of the NLRA. As the NLRB explains in Pacific Lutheran, major changes in the context of university administrative structures and employment practices have undermined the actual breadth and depth of faculty authority:
Over the 30-plus years since Yeshiva was decided, the university model of delivering higher education has evolved considerably.... Indeed, our experience applying Yeshiva has generally shown that colleges and universities are increasingly run by administrators, which has the effect of concentrating and centering authority away from the faculty in a way that was contemplated in Yeshiva, but found not to exist at Yeshiva University itself. Such considerations are relevant to our assessment of whether the faculty constitute managerial employees. 361 N.L.R.B. at 1422.
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A. How universities have changed since Yeshiva.
The following sections of this brief explain how the significant changes that
universities have undergone have affected the legal determination of “how a faculty is structured and operates.” Yeshiva, 444 U.S., at 690, n. 31. Rather than relying on faculty expertise and recommendations, the growing ranks of administrators increasingly make unilateral decisions on university policies and programs, often influenced by considerations of external market forces and revenue generation. Administrators have become more top-down in managing the university faculty, 70 percent of whom are now non-tenure track contingent faculty. These structural changes in the distribution and exercise of authority in the university have altered the relationship between the administration and the faculty to one in which their interests are not aligned. The divergence between administration and faculty is captured by a statement in 2011 by Andrew Meyer, the chairman of Suffolk University’s Board of Trustees: “Suffolk has gone through a transition. This is a new chapter in the history of the university. We need people who understand that running an institution of higher education today means running a business.”4
4 Mary Carmichael, New guiding hands at Suffolk: School set to add 12 trustees with business focus, The Boston Globe (Oct. 4, 2011), available at https://www.bostonglobe.com/metro/2011/10/04/new-guiding-hands-
suffolk/OGrCp7CsUdrbaskT811PVL/story.html . 10
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1. Universities’ use of a corporate business model and the significant expansion of university administration have eroded faculty authority to control or make effective recommendations about university policy.
a. In the thirty-seven years since Yeshiva, the university model has evolved due to the expanded size and power of university administration.
The influence of the corporate business model on universities has led to a major expansion of university administration, accompanied by greater top-down authority exercised by high-level administrators. Between the years of 1976 and 2015, the number of full-time executives and managers grew by 140 percent, while full-time faculty grew by 86 percent.5 These positions include a proliferation of executive-level administrators in university administration. In addition to the Provost, now Vice Provosts, Associate Provosts, and Vice Presidents control decisions related to academic affairs and other university policies. The expansion of administration has occurred not simply in public university systems featuring multiple campuses throughout the state, but also in private universities with a single campus location. For example, at USC, in addition to the President and
5 Source: Digest of Education Statistics 2001, table 224 and Digest of Education Statistics 2016, tables 314.20, 314.30, compiled by Joseph Roy, Senior Researcher, AAUP, Washington, D.C. (December, 2017). See also, AAUP, The Annual Report on the Economic Status of the Profession, 2013-14, available at
http://www.aaup.org/our-work/research/annual-report-economic-status-profession. 11
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Provost, there are seven Senior Vice Presidents and nineteen Deans.6 At the college level of universities, the administration has expanded through a proliferation of associate deans, assistant deans, and directors.
Along with the increased number of high-level administrators, the administrative apparatus has expanded. From 1976 to 2011, the number of full- time non-faculty professional positions increased by 366 percent overall, with growth of 558 percent in that category at private institutions.7 Between the years of 1947 to 1995, while overall university spending increased by 148 percent, administrative spending increased by 235 percent, as compared with instructional spending increases at 128 percent.8 A 2010 study reported that in the period 1998 to 2008, U.S. private colleges increased spending on administration and staff support by 36 percent, but increased spending on instruction by only 22 percent.9
6 About USC, https://about.usc.edu/administration/
7 Source: Digest of Education Statistics 2001, table 224 and Digest of Education Statistics 2012, table 286, compiled by John W. Curtis, Director of Research and Public Policy, AAUP, Washington, D.C. (March 13, 2014). See also, AAUP, The Annual Report on the Economic Status of the Profession, 2013-14, available at http://www.aaup.org/our-work/research/annual-report-economic-status-profession . 8 Benjamin Ginsberg, THE FALL OF THE FACULTY: THE RISE OF THE ALL- ADMINISTRATIVE UNIVERSITY AND WHY IT MATTERS 33 (2011) (calculated from National Center for Education Statistics (NCES), Digest of Education Statistics, 2006, Table 346).
9 Id. at 27, citing, Sam Dillon, Share of College Budgets for Recreation is Rising,
New York Times, July 10, 2010, A13 (describing the Delta Cost Project). 12
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As expenditure on instruction has gone down, the ranks of lower-wage non- tenure track faculty have increased dramatically to the current national rate of 70 percent of all faculty positions.10 This is nearly the reverse of the proportions in 1969, when 78 percent of faculty positions were tenured and tenure-track.11 As the NLRB noted in Pacific Lutheran, “‘[T]he increasing use of contingent faculty, to the point where the faculty itself can be described as contingent, clearly comprises a major component of a fundamental change in the nature of higher education institutions and their role in a democratic society.’”12 Between 1976 and 2015, part-time faculty positions grew by 224 percent overall, with the rate of growth in private colleges and universities at 264 percent.13 Currently, nearly 40 percent of full-time faculty positions and 70 percent of all faculty positions in post-secondary institutions are non-tenure track.14
10 See, note 14, infra.
11 Pacific Lutheran, 361 N.L.R.B. at 1422, n. 43, citing, Adrianna Kezar & Daniel Maxey, THE CHANGING FACULTY AND STUDENT SUCCESS 1 (2012).
12 Pacific Lutheran, 361 N.L.R.B. at 1422, n. 43, quoting, John W. Curtis & Monica F. Jacobe, Consequences: An Increasingly Contingent Faculty, AAUP CONTINGENT FACULTY INDEX 15 (2006).
13 See sources cited supra note 5.
14 Ernst Benjamin, The Eroding Foundations of Academic Freedom and Professional Integrity: Implications of the Diminishing Proportion of Tenured Faculty for Organizational Effectiveness in Higher Education, 1 AAUP JOURNAL OF ACADEMIC FREEDOM, at 4 (2010), available at http://www.aaup.org/reports- publications/journal-academic-freedom/volume-1 (citing data through 2007).
These proportions still held as of spring 2015. AAUP, Visualizing Change: The 13
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The shift to a predominately non-tenure track workforce dilutes faculty authority and control over policy making in the areas identified by the NLRB in Pacific Lutheran. The vast majority of non-tenure track faculty are not included as full participants in faculty governance bodies.15 Further, even where non-tenure track faculty participate in faculty governance, the precarity of their situations makes it difficult for them to act independently or to take positions contrary to the views of the administration. Pacific Lutheran, 361 N.L.R.B at 1423. The many contingent faculty in low-wage part-time positions face uncertain employment often from one semester to the next.16 Full-time non-tenure track faculty face the precarity of contract renewals, many on a yearly basis.
Annual Report on the Economic Status of the Profession, 2016-17, available at
https://www.aaup.org/sites/default/files/FCS_2016-17_nc.pdf .
15 AAUP, The Inclusion in Governance of Faculty Members Holding Contingent Appointments (January 2013), available at http://www.aaup.org/report/governance-inclusion; Coalition for the Academic Workforce, A Portrait of Part-Time Faculty Members: A Summary of Findings on Part-Time Faculty Respondents to the Coalition on the Academic Workforce Survey of Contingent Faculty Members and Instructors (2012), at 2, available at http://www.academicworkforce.org/survey.html.
16 See, AAUP, Visualizing Change, supra note 14, at 4 (average annual pay for part-time faculty at a single institution is $20,508, and average pay on per course basis is $7,066), available at https://www.aaup.org/sites/default/files/FCS_2016- 17_nc.pdf
14
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b. The expanded size and power of the university administration has decreased the ability of faculty to control or make effective recommendations about university policies.
These fundamental changes in the employment model have created an increasingly stratified employment structure in the university. The highest level administrators (e.g. president, provost, senior vice-provosts) sit at the top of the hierarchy, with the next level occupied by an expanding number of high-ranking administrators (e.g. associate provosts, vice-provosts). The faculty are at the lowest levels, with tenure-track/tenured faculty positions steadily replaced by the growing ranks of non-tenure track/contingent faculty at the very bottom. This stratified system funnels authority over policy making away from the faculty. As the NLRB has found, “the presence of a large administrative staff...create[s] an effective buffer between the top management and the lowest echelon, eliminating the need for the institution’s administration to rely on the faculty for advice, recommendations, and the establishment and implementation of policies.” University of Great Falls, 325 N.L.R.B. 83, 94 (1997), aff’d, 331 N.L.R.B. 1663 (2000), rev’d on other grounds, 278 F.3d 1335 (D.C. Cir. 2002); see also, Loretto Heights College v. NLRB, 742 F.2d 1245, 1254 (10th Cir. 1984). As a result, faculty authority over decisions about university policies and programs has
diminished, often placing faculty in the position of simply providing input to the 15
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administration or merely being notified of decisions unilaterally reached by the administration. Further, unilateral decisions about academic programs have a direct impact on faculty control over their courses and curriculum, as top-down administrative changes in academic programs force faculty to alter their course offerings to fit the new shape of academic programs.
In Pacific Lutheran, the NLRB cites post-Yeshiva cases that exemplify the loss of faculty authority due to increased administration control over decision- making that excludes faculty or overrides their recommendations. 361 N.L.R.B. at 1422, n. 42, citing, Puerto Rico Junior College, 265 N.L.R.B. 72 (1982); Cooper Union of Science & Art, 273 N.L.R.B. 1768 (1985); St. Thomas University, 298 N.L.R.B. 280 (1990). Amicus AAUP has documented similar effects of the increasing layers of university administrators that ignore or override faculty governance. A recent example was at National Louis University, where the administration, with almost no consultation with faculty representatives, discontinued nine degree programs and five non-degree certificate programs, closed four departments in the College of Arts and Sciences, and terminated the
16
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appointments of at least sixty-three full-time faculty members, sixteen with tenure.17
The stratified employment structure that has evolved in universities since 1980 is a far cry from the collegial shared governance model that the Yeshiva Court imagined. The proliferation of high-level administrators has solidified a class of career university administrators who could be called “managerial professionals,” in contrast to the rest of the faculty, who remain “practicing professionals.” David M. Rabban, Distinguishing Excluded Managers from Covered Professionals Under the NLRA, 89 Colum. L. Rev. 1775, 1834 (1989). The “managerial professionals” in the administration “have positions of bureaucratic power within [the university’s] formal hierarchy,” while the faculty as “practicing professionals” do
17 In June, 2013, the AAUP placed the administration of National Louis University on its list of censured administrations for its failure to adhere to generally recognized principles of academic freedom and tenure. AAUP, Academic Freedom and Tenure: National Louis University, available at http://aaup.org/report/academic-freedom-and-tenure-national-louis-university. See also, Nota Bene, Board Overrides Faculty Recommendation on Curriculum at George Mason University, ACADEME, Vol. 86, No. 5 (Sep. - Oct., 2000) at 8. (George Mason University Governing Board acted unilaterally in derogation of faculty handbook provision giving the faculty the “primary role” in “the university’s academic offerings”); Larry G. Gerber, College and University Government: Adelphi University (New York): A Special Report from Committee T, ACADEME, Vol. 83, No. 3 (May - Jun., 1997), pp. 69-71 (Adelphi University’s board of trustees unilaterally created a confidential academic plan, despite university governance documents that provide faculty with broad rights to participate in university matters).
17
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not. Id. Although many of the individuals holding bureaucratic managerial positions were originally in faculty positions, their entry into the central administration removes them from the normal professional faculty activities of teaching and research. They may be separated from the classroom and research for a period of years or even move permanently into the university administration and an upwardly mobile career path in administration at other universities.18
In this increased stratification, the growing number of “managerial professionals” in the administration possess enhanced authority and power over policies and programs in ways that erode control or effective recommendations by the “practicing professionals” in the faculty. While “managerial professionals” in the university administration would be excluded from the NLRA as managerial employees, faculty serving as “practicing professionals” should be protected professional employees under Section 2(12) of the NLRA. Further, “[e]xcluding [only the] managerial professionals would reflect the key concern about divided loyalties that generated the unwillingness to allow protected bargaining by managers and supervisors.” Rabban, supra, at 1855. As the Tenth Circuit explained, “The availability of this expertise within the ranks of the administration obviates the College’s need to rely extensively on the professional judgment of its
18 Gaye Tuchman, WANNABE U: INSIDE THE CORPORATE UNIVERSITY 69-82 (2009). 18
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faculty in determining and implementing academic policy. Under these circumstances while significant faculty input undoubtedly remains beneficial to the College, it is not necessary that the faculty be ‘aligned with management’... [and] presents no problem of divided loyalty equivalent to that found in Yeshiva.Loretto Heights College v. NLRB, 742 F.2d 1245, 1254 (10th Cir. 1984).
The expanded scope and authority of bureaucratic “managerial professionals” in university administrations has reduced faculty participation from “effective recommendation” to an advisory capacity in many instances. In Pacific Lutheran, the NLRB concluded that the faculty at issue were not managerial, based in part on the “purely advisory” nature of university committee recommendations to the president’s council on issues such as long-range planning, budgets, and strategic enrollment management. 361 N.L.R.B. at 1424.
A conclusion that faculty are non-managerial does not depend on evidence of the most extreme loss of faculty authority over academic and other policy matters. In enforcing the Board’s decision finding Loretto Heights College faculty to be non-managerial, the court noted that the faculty did “play a substantial role in College governance, participating in decision making and implementation in a wide range of areas,” but “their role does not...rise to the level of ‘effective recommendation or control’ contemplated in Yeshiva.” 742 F.2d at 1252. The
19
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faculty did not, therefore, “in effect, substantially and pervasively operat[e] the enterprise.” Id. at 1255, quoting, Yeshiva, 444 U.S. at 679.
Managerial status should be assessed within the context of the current reality of the structure and operation of the university. This is why the Board’s emphasis on actual control and effective recommendations is so crucial. As university restructuring shifts power and authority upward to the administration, the legal principles of employee status, as defined in Yeshiva, must be applied to evidence of “authority in practice.” University of Great Falls, 325 N.L.R.B. at 93.
c. Increased conflict between administration and faculty resulting from the new corporate model demonstrates that their interests are not aligned.
The corporate business model of top-down management and the corresponding erosion of faculty authority has led to increased conflict between university administrations and faculty. Faculty governance bodies, including committees, senates, and councils, have protested administrative failures to consult with them or administrative decisions overriding faculty governance recommendations. In NLRB v. The Cooper Union for the Advancement of Science and Art,783 F.2d 29, 32 (2d Cir. 1986), the Second Circuit considered “faculty- administration conflict arising out of the [administration’s] unilateral changes” in concluding that the faculty were not managerial. The court stated: “[W]e would
20
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have to ignore the extensive evidence of conflict and of broad administrative authority to implement changes over faculty opposition in core academic areas such as curriculum to find that the Cooper Union faculty is ‘aligned with management.’” Id.
Amicus AAUP has documented conflicts resulting from administrators’ failure to respect faculty governance. For example, at Bennington College, the Bennington Academic Freedom Committee and the AAUP protested the administration’s unilateral actions in 1994 to abolish its “presumptive tenure” system.19 At Rensselaer Polytechnic Institute, in 2006, the Provost unilaterally suspended the Faculty Senate for failing to comply with the Board of Trusteesorder to revoke its amendment to expand Senate membership to include clinical faculty. The administration also took control of the election process for faculty committees (including the curriculum committee) and for the responsibility over the contents of the Faculty Handbook.20
19 Joan Wallach Scott, The Critical State of Shared Governance, ACADEME, Vol. 88, No. 4 (Jul.-Aug., 2002), 41, 46-48.
20 Nancy D. Campbell and Jane F. Koretz, The Demise of Shared Governance at Rensselaer Polytechnic Institute, 1 AAUP JOURNAL OF ACADEMIC FREEDOM, at 5-8 (2010), available at https://www.aaup.org/JAF1/demise-shared-governance-
rensselaer-polytechnic-institute#.WjbHhqJWJLR . 21
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Faculty perceptions reflect the conflict resulting from the increased use of a corporate business model. The results from a 2007 international survey reveal that most U.S. faculty perceive that they have little influence over key academic policies at the level of their college and in the central university administration. Seventy-three percent of faculty responded that they are very or somewhat influential in helping to shape key academic policies at their departmental level.21 That percentage drops at the school/college-level to 37 percent and even further at the university level, where 21 percent responded that they are very or somewhat influential in shaping key academic policies.22 Sixty-four percent of faculty agreed that “there is a top-down management style” in their university, while only 31 percent agreed that “there is collegiality in decision-making processes” and only 30 percent agreed that “there is good communication between management and academics.23 These data support a conclusion that the shifts toward top-down management contribute to faculty perceptions that faculty and administrative interests are not aligned.
21 William K. Cummings and Martin Finkelstein, Global Trends in Academic Governance, ACADEME, Vol. 95, No. 6 (Nov.-Dec. 2009) 31, 32 (Table 3), available at http://www.aaup.org/AAUP/pubsres/academe/2009/ND/Feat/Cumm.htm.
22 Id.
23 Id. at 33, Table 4.
22
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2. External market forces have supplanted faculty interests in university managerial decision-making.
In applying the corporate business model, university administrators have relied increasingly on external market forces to make decisions based on revenue- generating potential of academic programs. This has eroded shared governance and faculty authority by shifting control and influence over academic policy and programs from the faculty to the administration. In the competition for market position, university administrators have turned to public relations firms to develop the university’s “brand” in a way that will appeal to students as “customers” purchasing education as a product.24 This commercial image of education has been one of the bases for expanding the administration, with a multiplicity of new supposedly nonacademic” units to address administrative areas such as finance, student affairs, and housing.25 Yet these nonacademicunits are closely related to academic programs, including setting budgetary priorities. The interrelated nature of budgetary policies and academic programs demonstrates that the NLRB, in Pacific Lutheran, appropriately included “finances” in the primary areas
24 See, Susan C. Aldridge, Strategy Matters More Than Budget in Student Recruiting, Chron. of Higher Education (Oct. 31, 2010), available at https://www.chronicle.com/article/Strategy-Matters-More-Than/125113 ; Lloyd Thacker, Confronting the Commercialization of Admissions, Chron. of Higher Education, Vol. 51, Issue 25: B26 (Feb. 25, 2005).
25 See, Ginsberg, supra note 8, at 27-36. 23
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considered in determining managerial status. As universities face continuing financial pressures, administrators control decisions about finances and the budget, with a marked reduction of faculty participation in setting budget policies that affect academic matters.26
The erosion of faculty governance over academic programs has occurred, in part, through changes in budget models that universities have adopted. The traditional model was incremental budgeting where only new revenue is allocated. However, more and more universities are moving to models like Responsibility Center Management, which “exemplifies the attempt to introduce business principles into higher education” by making each college within the university a profit center.27 The central administration maintains control by imposing a tax on the colleges to carry out “strategic initiatives.” At the same time, colleges receive most of the revenue but also have all expenses, including space, police and administrative costs, allocated to them. Each college receives revenues based on student credit hours and research funding. Colleges receive higher revenue for their
26 Scott, supra note 19, at 44.
27 David L. Kirp, The Corporation of Learning: Nonprofit Higher Education Takes Lessons from Business, Research & Occasional Paper Series: CSHE.5.03, Center for Studies in Higher Education, at 4-5 (May 2003), available at https://cshe.berkeley.edu/publications/corporation-learning-nonprofit-higher- education-takes-lessons-business
24
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own majors, giving them an incentive to offer as many courses as they can within their own colleges. Thus, engineering schools have an incentive to teach English and mathematics as well as engineering; business schools have incentives to teach writing, philosophy, mathematics and statistics. This budgetary model encourages deans to make unilateral decisions to create, develop, or eliminate programs based on their revenue generating potential regardless of the faculty’s academic concerns. This budgetary model also changes the communal academic culture of the university by discouraging collaboration between faculty across colleges for research and in formulating interdisciplinary programs.28
Other budgetary decisions by university administrations have also invaded faculty control over academic programs. The market potential in the sciences has led to budgetary priorities favoring expansion of the science disciplines as compared to the humanities. Since the enactment of the Bayh-Dole Act of 1980, 35 U.S.C. §§ 200212, which encourages commercialization of federally funded research, there has been an expansion of university technology transfer offices,
28 See, John D. Hummell, Financing Higher Education: Approaches to Funding at Four-Year Public Institutions, Working Paper Series: CHEWP.1.2012, Center for Higher Education, at 2-4, 9-13 (March 2012), available at https://www.ohio.edu/education/centers-and-partnerships/centers/center-for- higher-education/news.cfm#2012 ; Leroy W. Dubeck, Beware Higher Ed’s Newest Budget Twist, THOUGHT & ACTION 81-91 (Spring 1997), available at
http://www.nea.org/assets/img/PubThoughtAndAction/TAA_97Spr_07.pdf 25
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directed and operated by non-faculty administrators to provide the infrastructure and personnel to “scour [university] labs”29 for commercially profitable discoveries.30 Between 1998 and 2003, U.S. patents awarded to universities quadrupled, from about 800 to more than 3,200 per year.31 From 1991 to 2000, licenses granted by universities increased by 158 percent.32
Faculty control has been reduced, as well, by the growth of university agreements giving corporate donors unprecedented access to university departments in exchange for large-scale corporate funding. Such access includes corporate representatives on panels making decisions about whether to fund faculty research proposals, a function which had traditionally been reserved for faculty peer review.33 Corporate donors also influence the dissemination of research results through arrangements for non-exclusive or exclusive licensing of patented
29 DEREK BOK, UNIVERSITIES IN THE MARKETPLACE: THE COMMERCIALIZATION OF HIGHER EDUCATION 141 (2003).
30 See, AAUP, RECOMMENDED PRINCIPLES TO GUIDE ACADEMIC-INDUSTRY RELATIONSHIPS 61 (2014); Blumenthal, Academic-Industrial Relationships in the Life Sciences, 349 NEW ENGLAND JOURNAL OF MEDICINE 2452, 2454-55 (2003); Sheldon Krimsky, The Profit of Scientific Discovery and Its Normative Implications, 75 CHICAGO-KENT LAW REVIEW 15, 22 (1999).
31 Josephine Johnston, Health Related Academic Technology Transfer: Rethinking Patenting and Licensing Practices, 9 INTERNATIONAL J. BIOTECHNOLOGY 156, 162 (2007).
32 David Blumenthal, supra note 30, at 2455 (2003).
33 AAUP, RECOMMENDED PRINCIPLES, supra note 30, at 194-200. 26
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academic research results. Examples include the 1994 MIT-Amgen agreement for $30 million of corporate funding to the Department of Biology and the Department of Brain and Cognitive Sciences over a ten-year period in exchange for resulting patents to be owned jointly by MIT and Amgen;34 and a 2008 Harvard- GlaxoSmithKline five-year $25 million agreement for stem cell research, including joint projects, Glaxo first rights to non-exclusive licensing, and a research consortium to be “overseen by a steering committee made up of equal numbers of Harvard and GSK personnel.”35
The university’s growing identity as a business and market actor has altered the unique academic culture of the university. The extent to which the administration makes academic decisions based on market potential or an external industry partner’s interests reduces faculty authority to make “effective recommendations” about university market ventures, including university-industry agreements.
34 Risa L. Lieberwitz, Confronting the Privatization and Commercialization of Academic Research: An Analysis of Social Implications at the Local, National, and Global Levels, 12 IND. J. GLOBAL LEG. STUD. 109, 123-124 (2005).
35 AAUP, RECOMMENDED PRINCIPLES, supra note 30, at 196. 27
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B. The NLRB correctly applied Pacific Lutheran to find that USC non- tenure track faculty are not managerial employees.
The NLRB’s finding that USC non-tenure track faculty are not managerial demonstrates that the legal framework in Pacific Lutheran is a “workable” standard, 361 N.L.R.B. at 1419, that can be applied with “predictability and intelligibility.” LeMoyne-Owen Coll. v. NLRB, 357 F.3d 55, 61 (D.C. Cir. 2004). The Pacific Lutheran requirement of a close factual inquiry ensures that the evidence demonstrates both the breadth and depth of managerial authority. The Board’s decision that the non-tenure track faculty are non-managerial carefully considered the evidence in the primary and secondary areas of decision-making within the context of how a faculty is structured and operates. In the primary area of “academic programs” the evidence showed that much of the University Committee on Curriculum entailed non-substantive reviews of curriculum and programs. In the area of “enrollment management” the evidence did not demonstrate a pattern of effective decision-making by the newly created Committee on Finance and Enrollment; and in the area of “finances” the evidence showed that several of their recommendations were approved by the administration. University of Southern California, 365 N.L.R.B. No. 11, slip op. at 15-18 (Dec. 30, 2016). For these and other committees, however the university did not provide evidence of the nature of the administration’s review or investigation
28
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prior to approval. Id. Such evidence is essential to ensure that the faculty bodies have a depth of authority that goes beyond making advisory recommendations that the administration simply considers as part of its own independent investigation of the matter. Further evidence showed that the Roski School of Art and Design administration made unilateral structural or programmatic changes that ignored or overruled the faculty. Id. at 15-17.
The Board considered secondary areas of decision-making, as well, finding that the evidence did not demonstrate managerial authority by non-tenure track faculty. Further, without evidence proving managerial authority in one of the primary areas, evidence of managerial authority in a secondary area does not establish managerial status. Id. at 17-18.
USC, therefore, did not meet its burden of proving that its faculty governance bodies exercise managerial authority. Although this evidence applies to all types of faculty at USC, only non-tenure track faculty employment status is at issue in the instant case. Here, the “inquiry into... where the faculty at issue fit within [the university decision-making] structure, including the nature of the employment relationship held by such faculty," Pacific Lutheran, 361 N.L.R.B. at 1421-22, reinforces the finding that the USC non-tenure track faculty are not managerial. This inquiry shows how much context matters, reflecting the impact of
29
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the structural changes created by the use of the corporate model since Yeshiva was decided.
Non-tenure track faculty make up 76 percent of the USC faculty (5,000 of the 6,600 faculty). USC, 365 N.L.R.B. No. 11, slip op. at 7. More than half of the non-tenure track faculty are part-time. Id. In the Roski School and the Dornsife College of Letters, Arts and Sciences, most part-time non-tenure track faculty have semester-long contracts. Forty percent of full-time non-tenure track faculty in those schools have one-year contracts, with the remainder on renewable multi-year contracts. Id. Part-time non-tenure track faculty are excluded from the Faculty Assembly and are almost absent from faculty committees. Id. at 8, 18. Full-time non-tenure track faculty are "consistently in the minority" of faculty governance committees. Id. at 18. This evidence demonstrates a reality that flies in the face of the administration’s assertion that non-tenure track faculty participate meaningfully in faculty governance. As the Board concluded, the fact that the non- tenure track faculty constitute an overwhelming majority of the faculty but only a minority on faculty committees, together with their job insecurity, supports the conclusion that they are not managerial employees. Id.
30
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CONCLUSION
For the foregoing reasons, and those in the brief of the Respondent NLRB, the USC’s petition for review should be denied, and the Respondent NLRB’s cross-application for enforcement granted.
December 28, 2017
Counsel of Record:
Michael S. Wolly
Zwerdling, Paul, Kahn & Wolly, P.C. 1025 Connecticut Avenue N.W., Suite 712 Washington, D.C. 20036
(202) 857-5000
mwolly@zwerdling.com

Counsel for Amicus Curiae:
Aaron Nisenson
Senior Counsel
American Association of University Professors 1133 19
th Street N.W., Suite 200
Washington, D.C. 20036
(202) 737-5900
legal.dept@aaup.org
Respectfully submitted, /s/ Michael S. Wolly
Counsel for Amicus Curiae:
Risa L. Lieberwitz General Counsel American Association of University Professors Professor of Labor and Employment Law School of Industrial and Labor Relations
Cornell University 361 Ives Hall Ithaca, NY 14853 (607) 255-3289
31
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CERTIFICATE OF COMPLIANCE
Pursuant to Fed R. App. P. 32(g)(1) and Circuit Rule 32(e), I hereby certify that the foregoing brief was produced using the Times New Roman 14-point typeface and contains 6,447 words.
/s/ Michael S. Wolly Michael S. Wolly
CERTIFICATE OF SERVICE
I certify that on December 28, 2017, the foregoing was electronically filed through this Court’s CM/ECF system, which will send a notice of filing to all registered users.
/s/ Michael S. Wolly Michael S. Wolly


_______________




ORAL ARGUMENT NOT YET SCHEDULED
Nos. 17-1149 and 17-1171 IN THE
United States Court of Appeals for the District of Columbia Circuit _______________


UNIVERSITY OF SOUTHERN CALIFORNIA, Petitioner/Cross-Respondent,
v.
NATIONAL LABOR RELATIONS BOARD, Respondent/Cross-Petitioner,
AND
SERVICE EMPLOYEES INTERNATIONAL UNION, LOCAL 721, CTW, CLC,

Intervenor. _______________

On Petition for Review from the National Labor Relations Board

Case Nos. 31-CA-178831, 31-CA-192125 _______________

BRIEF AMICUS CURIAE OF THE AMERICAN COUNCIL ON EDUCATION AND SEVEN OTHER EDUCATION ASSOCIATIONS IN SUPPORT OF

PETITIONER/CROSS-RESPONDENT



PETER MCDONOUGH
VICE PRESIDENT AND GENERAL COUNSEL AMERICAN COUNCIL ON EDUCATION
One Dupont Circle N.W.
Washington, D.C. 20036
(202) 939-9361
OGC@acenet.edu

Counsel for American Council on Education


JESSICA L. ELLSWORTH
STEPHANIE GOLD
JOEL BUCKMAN
REEDY C. SWANSON*
HOGAN LOVELLS US LLP
555 Thirteenth Street, N.W. Washington, D.C. 20004
(202) 637-5600 jessica.ellsworth@hoganlovells.com

*Admitted only in Virginia, supervised by principals of the firm.

Counsel for Amici Curiae

_______________



CERTIFICATE AS TO PARTIES, RULINGS, AND RELATED CASES
Pursuant to Circuit Rule 28(a)(1), the American Council on Education, the Association of American Universities, the Association of Catholic Colleges and Universities, the Association of Governing Boards of Colleges and Universities, the Association of Jesuit Colleges and Universities, the College and University Professional Association for Human Resources, the Council of Independent Colleges, and the National Association of Independent Colleges and Universities certify the following:
Parties and Amici. Except for the above-listed amici, all parties, intervenors, and amici appearing before the National Labor Relations Board and in this Court are listed in Petitioner’s brief. All the above-listed amici are “trade associations” for purposes of D.C. Circuit Rule 26.1(b).
Rulings Under Review. The rulings under review are listed in Petitioner’s brief.
Related Cases. Counsel is not aware of any related cases within the meaning of Circuit Rule 28(a)(1)(C).
/s/ Jessica L. Ellsworth Jessica L. Ellsworth
i
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TABLE OF CONTENTS
Page
CERTIFICATE AS TO PARTIES, RULINGS, AND
RELATED CASES...........................................................................................i

TABLE OF AUTHORITIES ................................................................................... iii STATEMENT OF INTEREST OF AMICI CURIAE...............................................1 SUMMARY OF ARGUMENT .................................................................................4 ARGUMENT .............................................................................................................7
  1. SHARED GOVERNANCE PLAYS A VITAL ROLE IN
    HIGHER EDUCATION..................................................................................7

    1. Shared Governance Has Been A Part Of American
      Higher Education For Centuries............................................................7
    2. The Supreme Court Recognized The Importance
      Of Shared Governance In Yeshiva ........................................................9
    3. Shared Governance Is Still Dominant Today......................................12
  2. THE PLU TEST AS APPLIED HERE MISUNDERSTANDS SHARED GOVERNANCE .....................................18
    1. The Board’s Decision In This Case Adds Several
      Onerous Elements To The Already-Burdensome
      PLU Framework ..................................................................................18
    2. The Board’s Approach Misunderstands Shared Governance..........................................................................................22
    3. The Board’s Approach Is Inconsistent With Yeshiva.................................................................................................27
CONCLUSION ........................................................................................................31 CERTIFICATE OF COMPLIANCE
CERTIFICATE OF SERVICE
ii
USCA Case #17-1149 Document #1702340 Filed: 10/31/2017 Page 4 of 39
TABLE OF AUTHORITIES
Page
CASES:
Adelphi Univ.,
195 N.L.R.B. 639 (1972) ....................................................................................10

John Swann Holding Corp. v. Simmons,
62 F. Supp. 3d 304 (S.D.N.Y. 2014) ..................................................................26

LeMoyne-Owen Coll. v. NLRB,
357 F.3d 55 (D.C. Cir. 2004) (Roberts, J.) .........................................................18

Macy’s Inc. v. NLRB,
844 F.3d 188 (5th Cir. 2016) (per curiam) .........................................................27

National Labor Relations Board v. Yeshiva University,
444 U.S. 672 (1980)...........................................2, 4-7, 9-12, 18-20, 22-25, 27-30

NLRB v. Bell Aerospace Co.,
416 U.S. 267 (1974)........................................................................................9, 24

Pacific Lutheran University,
361 N.L.R.B. No. 157 (Dec. 16, 2014)................................ 4-6, 18-23, 25, 27-30

Point Park Univ. v. NLRB,
457 F.3d 42 (2006)..................................................................................12, 15, 25

Specialty Healthcare & Rehab. Ctr. of Mobile,
357 N.L.R.B. 934 (2011) ....................................................................................27

Syracuse Univ.,
204 N.L.R.B. 641 (1973) ....................................................................................10

Univ. of S. Cal.,
365 N.L.R.B. No. 11 (Dec. 30, 2016)............................................... 21, 24, 26-29

OTHER AUTHORITIES:
1966 Joint Statement............................................................................8, 9, 22, 23, 26 AAUP, Faculty Communication with Governing Boards:
Best Practices (Feb. 2014)..................................................................................26 iii
USCA Case #17-1149 Document #1702340 Filed: 10/31/2017 Page 5 of 39
TABLE OF AUTHORITIESContinued
Page
AGB, AGB Board of Directors’ Statement on Shared Governance
(2017) ..................................................................................................................16
AGB, Shared Governance: Changing with the Times (Mar. 2017) ..............4, 12, 25
AGB, Shared Governance: Is OK Good Enough? (2016) ..................................4, 15
Judith Areen, Government as Educator: A New Understanding of
First Amendment Protection of Academic Freedom and
Governance
, 97 Geo. L.J. 945 (2009) ....................................................7, 8, 9, 13
Steven C. Bahls, Shared Governance in Times of Change: A Practical
Guide for Universities and Colleges (2014) .................................................16, 22

Jill Derby & Joseph Burke, The Import and Export of American
Higher Ed
and Its Governance, Trusteeship, Sept.-Oct. 2015 ........................17
Higher Learning Comm’n, HLC Policy: Criteria for Accreditation.......................16
Willis A. Jones, Faculty Involvement in Institutional
Governance: A Literature Review
,
6 J. Professoriate 117 (2011) ............................................... 7, 8, 9, 15, 22, 23, 25

Gabriel E. Kaplan, How Academic Ships Actually Navigate, in
Governing Academia ..................................................................13, 14, 22, 23, 30
Adrianna J. Kezar & Elizabeth M. Holcombe, Shared Leadership
in Higher Education: Important Lessons from Research and
Practice
(2017) ...................................................................................................17
Richard Legon, The Effective Board, Change, Jan.-Feb. 2013................................17 Susanne Lohmann, Darwinian Medicine for the University, in
Governing Academia (Ronald G. Ehrenberg ed., 2004) ......................................7
Moody’s Inv’rs Serv., Virginia Dispute Highlights Governance Stress
and Economic Threats Facing US Higher Education
(July 2, 2012) ......................................................................................................18
iv
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TABLE OF AUTHORITIESContinued
Page
Kenneth P. Mortimer & Colleen O’Brien Sathre, The Art and Politics
of Academic Governance: Relations among Boards, Presidents,
and Faculty (2007) ..............................................................................................13

New England Ass’n of Schs. & Colls., Comm’n on Insts. of Higher
Ed., Standards for Accreditation ........................................................................16
Nw. Comm’n on Colls. & Univs., Standards for Accreditation .............................16
Susan Resneck Pierce, Governance Reconsidered: How Boards,
Presidents, Administrators, and Faculty Can Help Their Colleges
Thrive (2014) ................................................................................................12, 18

Joan Wallach Scott, The Critical State of Shared Governance,
Academe, July-Aug. 2002 ..................................................................................12

Hans-Joerg Tiede, Faculty Communication with Governing Boards,
Academe, May-June 2013 ............................................................................25, 26

William G. Tierney & James T. Minor, Ctr. for Higher Ed. Policy
Analysis,
Challenges for Governance: a National Report
(Apr. 2003)..............................................................................................14, 15, 30
W. Ass’n of Schs. & Colls. Senior Coll. & Univ. Comm’n, Handbook
of Accreditation 2013 Revised
............................................................................15
v
USCA Case #17-1149 Document #1702340 Filed: 10/31/2017 Page 7 of 39
IN THE
United States Court of Appeals for the District of Columbia Circuit
                          _______________
UNIVERSITY OF SOUTHERN CALIFORNIA, Petitioner/Cross-Respondent,
v.
NATIONAL LABOR RELATIONS BOARD, Respondent/Cross-Petitioner
AND
SERVICE EMPLOYEES INTERNATIONAL UNION, LOCAL 721, CTW, CLC,
Intervenor, _______________
On Petition for Review from the National Labor Relations Board
Case Nos. 31-CA-178831, 31-CA-192125 _______________
BRIEF AMICUS CURIAE OF THE AMERICAN COUNCIL ON EDUCATION AND SEVEN OTHER EDUCATION ASSOCIATIONS IN
SUPPORT OF PETITIONER/CROSS-RESPONDENT
_______________
STATEMENT OF INTEREST OF AMICI CURIAE
This case will determine the framework the National Labor Relations Board (NLRB or Board) uses to determine the managerial status of university faculty, which in turn determines their eligibility or ineligibility to form a collective bargaining unit. Amici are higher education associations whose member institutions put into practice every day the uniquely American tenet of shared governance. Amici seek to ensure that the NLRB’s framework adheres to the
1
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shared governance values that the Supreme Court recognized in National Labor Relations Board v. Yeshiva University, 444 U.S. 672 (1980).1
The American Council on Education (ACE) represents all higher education sectors. Its approximately 1,700 members reflect the extraordinary breadth and contributions of degree-granting colleges and universities in the United States. Founded in 1918, ACE seeks to foster high standards in higher education, believing a strong higher education system is the cornerstone of a democratic society. ACE regularly contributes amicus briefs on issues important to the education sector.
The Association of American Universities (AAU) is a non-profit organization, founded in 1900 to advance the international standing of United States research universities. AAU’s mission is to shape policy for higher education, science, and innovation; promote best practices in undergraduate and graduate education; and strengthen the contributions of research universities to society. Its members include 62 public and private research universities.
The Association of Catholic Colleges and Universities (ACCU) serves as the collective voice of U.S. Catholic higher education. Through programs and
1 All parties have consented to the filing of this brief. No party’s counsel authored this brief in whole or in part; no party or party’s counsel contributed money intended to fund the brief’s preparation or submission; and no person other than amici contributed money intended to fund the brief’s preparation or submission.
2
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services, ACCU strengthens and promotes the Catholic identity and mission of its member institutions so that all associated with Catholic higher education can contribute to the greater good of the world and the Church.
The Association of Governing Boards of Universities and Colleges (AGB) is the only national association that serves the interests and needs of academic governing boards, boards of institutionally-related foundations, and campus CEOs and other senior-level campus administrators on issues related to higher education governance and leadership.
The Association of Jesuit Colleges and Universities (AJCU) represents all 28 Jesuit institutions in the U.S. and is affiliated with over 100 Jesuit institutions worldwide.
The College and University Professional Association for Human Resources (CUPA-HR), the voice of human resources in higher education, represents more than 23,000 human resources professionals at over 2,000 colleges and universities. Its membership includes 93 percent of all United States doctoral institutions, 78 percent of all master’s institutions, 53 percent of all bachelor’s institutions, and nearly 600 two-year and specialized institutions.
The Council of Independent Colleges (CIC) represents 684 private, nonprofit liberal arts colleges and universities and 83 state councils and other higher education organizations.
3
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The National Association of Independent Colleges and Universities (NAICU) serves as the unified national voice of private, non-profit higher education in the United States. It has more than 1,000 members nationwide.
SUMMARY OF ARGUMENT
The new test announced by the NLRB in Pacific Lutheran University (PLU), 361 N.L.R.B. No. 157 (Dec. 16, 2014), to determine whether faculty members are “managerial” and therefore ineligible to form a collective bargaining unit under the National Labor Relations Act (NLRA), misunderstands shared governance in American higher education. This case presents the first opportunity for a federal court of appeals to evaluate that test and correct the Board’s error.
In the university context, “[s]hared governance is the process by which various constituents (traditionally governing boards, senior administration, and faculty . . .) contribute to decision making related to college or university policy and procedure,”2 and “is a basic tenet in higher education.”3 The Supreme Court recognized this special role of shared governance in National Labor Relations Board v. Yeshiva University, 444 U.S. 672 (1980), acknowledging that faculty could not be analyzed through the lens of the typical, industrial American
2 AGB, Shared Governance: Changing with the Times 3 (Mar. 2017) (hereinafter “AGB White Paper”).
3 AGB, Shared Governance: Is OK Good Enough? 1 (2016). 4
USCA Case #17-1149 Document #1702340 Filed: 10/31/2017 Page 11 of 39
workplace to determine if they were managerial and thus ineligible to form a collective bargaining unit. The heart of shared governance is the same today as it was in 1980 when the Supreme Court decided Yeshiva: shared managerial authority accomplished through collegial interchange.
After this Court repeatedly pointed out that the Board’s efforts to apply Yeshiva resulted in inconsistent and unpredictable decisions, the Board purported to adopt a comprehensive analytical framework in 2014 to evaluate faculty requests to form a bargaining unit. The PLU test, however, fundamentally misunderstands shared governance as its application in this case demonstrates.
First, the test misapprehends that governing boards, administrators, and faculty have comparatively greater voices and ownership in their areas of comparative expertise. For faculty, that means having a more important voice in academic affairs. Yet the PLU test affords academic policy less weight than other factors outside the faculty’s bailiwick. This is exactly backwards.
Second, PLU’s test for “effective control” is divorced from reality. By equating Yeshiva’s “effective recommendation or control,” 444 U.S. at 683 n.17, with whether a recommendation is “almost always” adopted or, worse, adopted “without thought,” the NLRB has imagined a caricature of shared governance where the faculty has no effective recommendation or control unless administrators and the board of trustees blindly rubber stamp faculty suggestions. That standard
5
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would not even pass in a corporate boardroom, where a board member’s fiduciary duties would prevent her from adhering to the recommendations of a CEO without thought or analysis.
Third, the PLU test is designed to stack the deck against a finding of managerial authority. The Regional Director below wrongly rejected evidence of a “back and forth” with administrators as an indicator of a managerial function. But in a shared governance model, this sort of dialectic is a core part of how faculty exercise effective control. The Regional Director also erred in requiring the faculty group in question to constitute a majority of any committee or governing body for committee service to count as managerial. Taken to its logical conclusion, that rule would eviscerate Yeshiva by allowing any sufficiently small group of faculty to form a bargaining unit.
Finally, the PLU test should also flunk this Court’s review because it is inconsistent with Yeshiva. This Court should set the NLRB back on course with a test that is consistent with Yeshiva and the defining principles of shared governance.
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ARGUMENT
I. SHARED GOVERNANCE PLAYS A VITAL ROLE IN HIGHER EDUCATION.
A. Shared Governance Has Been A Part Of American Higher Education For Centuries.
The concept of shared governance “evolved from the medieval model of collegial decisionmaking in which guilds of scholars were responsible only to themselves.” Yeshiva, 444 U.S. at 680; see also Susanne Lohmann, Darwinian Medicine for the University, in Governing Academia, 71, 74 (Ronald G. Ehrenberg ed., 2004). Harvard College led the way in importing this model to America, with an important change: “Because there were not enough scholars in Massachusetts Bay Colony . . . , the colonists established a lay (in the sense of nonfaculty) governing board.” Judith Areen, Government as Educator: A New Understanding of First Amendment Protection of Academic Freedom and Governance, 97 Geo. L.J. 945, 951 (2009). This uniquely American form of shared governance “was adopted, in turn, by the other colonial colleges.” Id. As time passed, “[t]he development of the research university in the late 19th century, the increased professionalism of faculty . . . , rapid enrollment growth, the changing composition of the student body, and the volatile political climate . . . all helped to increase faculty voice in various areas of institutional governance.” Willis A. Jones,
7
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Faculty Involvement in Institutional Governance: A Literature Review, 6 J. Professoriate 117, 119 (2011).
This process culminated in the most widely recognized articulation of the principles of shared governance: a 1966 statement jointly formulated by ACE, AGB, and the American Association of University Professors (AAUP) (the “1966 Statement”).4 See Areen, supra, at 962-963. The 1966 Statement recognized that “[t]he variety and complexity of the tasks performed by institutions of higher education produce an inescapable interdependence among governing board, administration, faculty, students, and others.” 1966 Statement (emphasis added). One of the 1966 Statement’s “general conclusions” was that “differences in the weight of each voice, from one point to the next, should be determined by reference to the responsibility of each component for the particular matter at hand.” Id. For example, the faculty should have “primary responsibility for such fundamental areas as curriculum, subject matter and methods of instruction, research, faculty status, and those aspects of student life which relate to the educational process.” Id.
The 1966 Statement recognized that this authority could be exercised in a variety of ways, including “meetings of all faculty members of a department,
4 Available at https://www.aaup.org/report/statement-government-colleges-and- universities.
8
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school, college, division, or university system, or may take the form of faculty- elected executive committees in departments and schools and a faculty-elected senate or council.” Id. In areas where faculty were to be given primary responsibility, the 1966 Statement cautioned that “the power of review or final decision lodged in the governing board or delegated by it to the president should be exercised adversely only in exceptional circumstances, and for reasons communicated to the faculty.” Id. The 1966 Statement thus never envisioned that faculty would have the primary voice over all areas of managerial authority or that faculty decisions would be adopted “without thought.”
B. The Supreme Court Recognized The Importance Of Shared Governance In Yeshiva.
Such was the backdrop when the Supreme Court took up Yeshiva in 1980. The Court began its analysis of whether faculty were managerial employees by looking to its general test: whether employees “formulate and effectuate management policies by expressing and making operative the decisions of their employer.” NLRB v. Bell Aerospace Co., 416 U.S. 267, 288 (1974) (internal quotation marks omitted). Employees who satisfy this test are barred from forming a collective bargaining unit “[t]o ensure that employees who exercise discretionary authority on behalf the employer will not divide their loyalty between employer and union.” Yeshiva, 444 U.S. at 687-688.
9
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In Yeshiva, however, the Supreme Court recognized that it needed to provide more specific guidance in the higher education context because “the authority structure of a university does not fit neatly within the statutory scheme” of the NLRA and its amendments, which “was designed to cope [with] the typical organizations of the commercial world.” Yeshiva, 444 U.S. at 680 (quoting Adelphi Univ., 195 N.L.R.B. 639, 648 (1972)). Instead of the traditional “pyramidal hierarchies of private industry,” the Court observed that authority in “‘mature’ private universit[ies] is divided between a central administration and one or more collegial bodies.” Id. As a result, “principles developed for use in the industrial setting cannot be ‘imposed blindly on the academic world.’” Id. at 681 (quoting Syracuse Univ., 204 N.L.R.B. 641, 643 (1973)).
The facts in Yeshiva nicely illustrated many of the 1966 Statement’s principles in action. The central administration formulated university-wide policies with approval by the board of trustees. Yeshiva, 444 U.S. at 675. “The faculty participate[d] in University-wide governance through their representatives on an elected student-faculty advisory council” and on a “Faculty Review Committee,” which negotiated grievances and made advisory recommendations to the administration. Id. at 675-676. Most of the schools within the university had their own faculty committees, which “effectively determine[d] [the school’s] curriculum, grading system, admission, and matriculation standards, academic
10
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calendars, and course schedules.” Id. at 676. In these “academic matters,” the authority of the faculty was “absolute.” Id. at 686. The Court also observed that “[faculty] views have determined the size of the student body, the tuition to be charged, and the location of a school,” but only “[o]n [o]ccasion.” Id. The faculty had a very limited role in budgets. Id. at 675. The faculty also had the power to make recommendations regarding “faculty hiring, tenure, sabbaticals, termination, and promotion.” Id. at 677. Although final authority on these issues rested with the central administration, “the overwhelming majority of faculty recommendations [we]re implemented.” Id.
On these facts, the Court found that the Yeshiva faculty were managerial employees. Id. at 690 & n.31. Central to this holding was the idea that “[t]he ‘business’ of a university is education, and its vitality ultimately must depend on academic policies that largely are formulated and generally are implemented by faculty governance decisions.” Id. at 688. The Court rejected the union’s argument that faculty lacked “final authority” over any particular issue, see id.
at 683 n.17, finding that “infrequent administrative reversals in no way detract[ed] from the institution’s primary concern with the academic responsibilities entrusted to the faculty,” id. at 688 n.27. Instead, “the relevant consideration is effective recommendation or control.” Id. at 683 n.17.
11
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As a model for future cases, Yeshiva imposed significant demands upon the” NLRB, requiring it to “perform an exacting analysis of the particular institution and faculty at issue.” Point Park Univ. v. NLRB, 457 F.3d 42, 48 (2006). “That analysis must look beyond self-serving descriptions of the role of faculty or the administration of a university” to “how a faculty is structured and operates.” Id. (quoting Yeshiva, 444 U.S. at 690 n.31.).
C. Shared Governance Is Still Dominant Today.
It is no secret that, since Yeshiva, colleges and universities have become larger and more complex operations, and the challenges that they face have become increasingly multifaceted as well. See AGB White Paper, supra note 1,
at 6 (including among these challenges
“financial sustainability, student demographics, enrollment challenges, strategic planning, campus climate, [and] Title IX”). This growing complexity has caused some concern over whether shared governance remains as vital today as it was when Yeshiva was decided in 1980. See, e.g., Susan Resneck Pierce, Governance Reconsidered: How Boards, Presidents, Administrators, and Faculty Can Help Their Colleges Thrive 1 (2014); Joan Wallach Scott, The Critical State of Shared Governance, Academe, July-Aug. 2002, at 41-48.
Little empirical evidence supports this concern. Quite to the contrary, as former Georgetown University Law Center Dean Judith Areen has observed,
12
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shared governance “remains the most common form of university and college governance in the United States.” Areen, supra, at 951; accord Kenneth P. Mortimer & Colleen O’Brien Sathre, The Art and Politics of Academic Governance: Relations among Boards, Presidents, and Faculty 24 (2007) (“The prevailing culture of academic governance is that the faculty’s voice in matters of academic affairs should be primary.”).
Numerous studies in recent years have confirmed the continued primacy of shared governance. In one comprehensive study from 2001, the researchers surveyed administrators and faculty at “every four-year institution accredited to grant bachelor’s degrees in the liberal arts” and “verif[ied] that the response population matched the sample population in various ways.” Gabriel E. Kaplan, How Academic Ships Actually Navigate, in Governing Academia, supra, at 165, 172. The survey found that shared governance is “neither as cumbersome and unloved as some critics seem to believe, nor as threatened and supplanted as some advocates seem to fear.” Id. at 204. Rather, it found that “[f]aculty seem to have a significant role in governance at many institutions, and their participation appears to be valued.” Id. In particular, the survey revealed “that faculty have significant authority in the decision areas where they claim the greatest expertise and tend to demand that their voice be preeminent: the curriculum, degree requirements, appointments and promotions, and determining the arrangements of shared
13
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governance.” Id. at 204-05. And just as in Yeshiva, “[b]udget making, strategy, and construction planning seem to remain the realm of administrators and boards.” Id. at 205.
The 2001 survey included a number of questions from a 1970 survey conducted by the AAUP “in order to see how governance has evolved and, in particular, to see whether shared governance had deteriorated in the face of a more challenging economic environment.” Id. at 199. These questions probed faculty control in fifteen areas of decisionmaking, ranging from faculty status to academic planning and policy to financial affairs. Id. at 200. The answers led to the study’s “most striking finding”: “that the mean level of faculty participation in all fifteen decision categories has increased” since 1970.5 Id. at 201.
A 2003 study, involving 763 institutions, corroborated the findings of the 2001 survey. See William G. Tierney & James T. Minor, Ctr. for Higher Ed. Policy Analysis, Challenges for Governance: a National Report 11 (Apr. 2003). The Tierney and Minor survey determined that “[t]he notion of shared governance has wide support at” baccalaureate, master’s, and doctoral institutions. Id. at 9. It found that well over 80% of the surveyed institutions had “governance bodies”
5 The survey also addressed contrary perceptions, recognizing that “all groups ascribe to others more influence than those groups ascribe to themselves. No one seems to think they have enough influence, and everyone seems to feel other groups possess more influence than they may actually have.” Kaplan, supra,
at 205.
14
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such as “‘faculty senates’ (also known as faculty councils or academic senates).” Id. at 5. This survey reinforced the notion that “the faculty have authority over the undergraduate curriculum, promotion and tenure guidelines, and standards for evaluating teaching.” Id. at 11.
An even more recent survey of over 2,500 university presidents and board members found that this belief remains strong, with substantial majorities of respondents agreeing that “boards recognize the faculty’s authority for academic programs and that faculty members recognize board authority in overseeing the entire institution or system.” AGB, Shared Governance: Is OK Good Enough?, supra note 2, at ii, 6-7; accord Jones, supra, at 129 (“Contrary to what is generally believed . . . , research indicates faculty believe there is sufficient levels of trust and communication between faculty and administration with regard to faculty governance.”).6
Many of the leading regional accrediting organizations reflect the continued relevance of shared governance by including it in their criteria of accreditation.
See W. Ass’n of Schs. & Colls. Senior Coll. & Univ. Comm’n, Handbook of Accreditation 2013 Revised 19 (Standard 3.10) (“The institution’s faculty exercises
6 The extent to which any particular subgroup of faculty, including, for example, non-tenure-track faculty, participates in shared governance varies by institution. As this Court observed in Point Park, “[e]very academic institution is different, and . . . the Board must perform an exacting analysis of the particular institution and faculty at issue.” 457 F.3d at 48.
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effective academic leadership and acts consistently to ensure that both academic quality and the institution’s educational purposes and character are sustained.”) 7; see also Higher Learning Comm’n, HLC Policy: Criteria for Accreditation (Criterion 5.B.3)8; New England Ass’n of Schs. & Colls., Comm’n on Insts. of Higher Ed., Standards for Accreditation (Standard 3.2)9; Nw. Comm’n on Colls. & Univs., Standards for Accreditation (Standard 2.A.1)10.
There is also widespread agreement about the value that shared governance has added, and continues to add, to America’s colleges and universities. See, e.g., Steven C. Bahls, Shared Governance in Times of Change: A Practical Guide for Universities and Colleges 39 (2014) (observing that ACE, AGB, and AAUP have all endorsed shared governance); AGB, AGB Board of Directors’ Statement on Shared Governance (2017).11 This is not surprising, given the many valuable benefits that redound to organizations employing shared governance. Research has shown that it is associated with “positive team performance or increased
7 Available at https://www.wscuc.org/content/2013-handbook-accreditation. 8 Available at https://www.hlcommission.org/Policies/criteria-and-core-
components.html.
9 Available at https://cihe.neasc.org/standards-policies/standards-accreditation/ standards-effective-july-1-2016.
10 Available at http://www.nwccu.org/Pubs%20Forms%20and%20Updates/ Publications/Standards%20for%20Accreditation.pdf.
11 Available at https://www.agb.org/sites/default/files/u27335/2017_statement _sharedgovernance.pdf.
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effectiveness” and “increased satisfaction among team members.” Adrianna J. Kezar & Elizabeth M. Holcombe, Shared Leadership in Higher Education: Important Lessons from Research and Practice 7-8 (2017) (emphasis omitted).12 It has also been connected with “increased social integration, problem-solving quality . . . , organizational citizenship behavior . . . , and a more constructive interaction style.” Id. (internal citations omitted). Studies have shown that “shared leadership is especially beneficial in complex environments that require frequent adaptations,” id. at 8, a description that surely characterizes the field of higher education. And shared governance remains one of the most widely admired features of America’s higher education system in the global community. See Richard Legon, The Effective Board, Change, Jan.-Feb. 2013, at 24, 24; Jill Derby & Joseph Burke, The Import and Export of American Higher Edand Its Governance, Trusteeship, Sept.-Oct. 2015.13
The academy witnessed firsthand the danger of failing to take shared governance seriously during a recent governance crisis at the University of Virginia. In 2012, the university’s rector (that is, the chair of its board) and a handful of board members “orchestrated [the] forced resignation” of the
12 Available at http://www.acenet.edu/news-room/Pages/Shared-Leadership-in- Higher-Education-Important-Lessons-from-Research-and-Practice.aspx.
13 Available at https://www.agb.org/trusteeship/2015/septemberoctober/the-import- and-export-of-american-higher-ed-and-its-governance.
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university’s newly-appointed president. Moody’s Inv’rs Serv., Virginia Dispute Highlights Governance Stress and Economic Threats Facing US Higher Education 1 (July 2, 2012).14 The process left the faculty out of the loop and sparked protests across campus. Id.; Pierce, supra, at 159. Reacting to the news, “two faculty groups took votes opposing the board’s actions” and “[s]ome faculty members contemplated a faculty ‘walkout.’” Pierce, supra, at 160. After sixteen days, “the board voted unanimously to reinstate” the president and the vice-rector had to resign from the board. Id. at 159. This incident illustrates how “dramatically different” the university environment is from “top-down corporate governance models.” Moody’s, supra, at 1.
II. THE PLU TEST AS APPLIED HERE MISUNDERSTANDS SHARED GOVERNANCE.
A. The Board’s Decision In This Case Adds Several Onerous Elements To The Already-Burdensome PLU Framework.
After this Court repeatedly criticized the Board’s inconsistent approach to Yeshiva, see, e.g., LeMoyne-Owen Coll. v. NLRB, 357 F.3d 55, 60 (D.C. Cir. 2004) (Roberts, J.), the Board “undert[ook] to develop a more workable, more predictable analytical framework to guide employers, unions, and employees alike.” PLU, 361 N.L.R.B. No. 157, slip op. at 16. The Board’s PLU test resulted. Id.
14 Available at http://www.chronicle.com/blogs/ticker/files/2012/07/UVA.pdf. 18
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The test has three basic steps. First, the Board examines the faculty’s authority over five areas of decisionmakingthree of which it designated “[p]rimary areas” and two of which it termed “[s]econdary areas.” Id. at 17. The three “primary” categories are: (1) “[a]cademic [p]rograms,” which includes “topics such as the university’s curricular, research, major, minor, and certificate offerings and the requirements to successfully complete” a degree; (2) “[e]nrollment management,” which refers to “the size, scope, and make-up of the university’s student body;” and (3) “[f]inances,” regarding “both income and expenditure.Id. The “secondary” areas are, continuing the numbering from the primary group: (4) “[a]cademic [p]olicy,” including “teaching/research methods, grading policy, academic integrity policy, syllabus policy, research policy, and course content policy;” and (5) “[p]ersonnel [p]olicy and [d]ecisions,” which includes “hiring, promotion, tenure, leave, and dismissal.” Id. at 17-18. According to the Board, the primary areas are assigned more weight because they “affect the University as a whole,” while the secondary areas reflect the latitude that faculty have “within their individual classrooms or research projects.” Id. at 17.
Second, the Board looks at whether the faculty exercise “[a]ctual control or effective recommendation” in these five areas. Id. at 18. Although that language comes from Yeshiva, the Board concluded that “to be ‘effective,’ recommendations must almost always be followed by the administration.” Id. (emphasis added).
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The Board then added that it would consider recommendations to be “‘effective’ if they routinely become operative without independent review by the administration.” Id. (emphasis added).
Third, the PLU test requires the Board to consider all this information in light of the “nature of the faculty’s employment relationship with the university,” including whether the faculty in question are tenured or tenure-track. Id. at 20.
Member Johnson dissented. Regarding the weighting of the five factors, he expressed his “concern that, if applied too inflexibly, the new division of areas of decisionmaking into ‘primary’ and ‘secondary[’] importance could fail to give adequate weight to certain instances in which faculty members are effectively making decisions in areas affectingto paraphrase Yeshivathe university’s overall product.” Id. at 39 (Johnson, M., dissenting). He singled out “academic policy” as an area “that, in fact, can significantly affect the university as a whole.” Id. And he “disagree[d] strongly with the majority’s imposition of th[e] new, overly onerous standard” that recommendations must “almost always” be followed to be effective. Id. at 40. He went on to challenge the “false dichotomy” between “recommendations that are subject to ‘independent review’” and those that were not. Id. In Member Johnson’s view, it was “evident that a recommendation that is implemented, even after independent review, can still be considered ‘effective,’ and reflective of managerial authority.” Id. at 40-41.
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This case is one of the first to apply the PLU framework. But in applying it, the Regional Director usedand the Board endorsedan even more stringent approach to the concept of effective recommendation or control. See Univ. of S. Cal. (USC), 365 N.L.R.B. No. 11, slip op. at 1 n.1, 15-17 (Dec. 30, 2016). First, as part of his inquiry into whether administrators conducted an independent review, the Regional Director concluded that evidence of a “back and forth” was sufficient to call into question the faculty’s recommendation even when it was adopted. Id. at 15. Similarly, the Regional Director refused to consider evidence that a faculty recommendation was accepted because he was unconvinced that the board of trustees would have “sign[ed] off without second thought.” Id. at 17. Then, the Regional Director concluded that even if the faculty generally exercised control over an area through membership on two relevant committees, the particular group of faculty at issue did not exercise the necessary degree of control because “they do not constitute a majority of either committee.” Id. at 16.
USC sought review by the Board, which concluded that the “Regional Director’s decision properly applied” PLU. Id. at 1 n.1. Then-Member (now Chairman) Miscimarra, who originally concurred in PLU, now issued a full- throated dissent. See id. at 1-5. He rejected the premise “that faculty members cannot be considered ‘managerial’ under [the NLRA] unless they have unreviewable authority” and instead asserted that “[f]aculty authority is managerial
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regardless of whether it is exercised hierarchically or collegially, and it does not require evidence that faculty recommendations are approved ‘without a second thought.’” Id. at 2-3. Member Miscimarra also pointed out that the Regional Director’s majority-of-the-committee rule “cannot be reconciled with the Court’s holding in Yeshiva.” Id. at 3-4.
B. The Board’s Approach Misunderstands Shared Governance.
The Board’s approach in PLU and this case fundamentally misunderstands shared governance in a number of ways. For one thing, it is a fundamental tenet of shared governance that participants have the greatest authority over the areas where they have the greatest expertise. See 1966 Statement. For faculty, as the Yeshiva Court recognized, this means “academic matters.” Yeshiva, 444 U.S. at 686; see also 1966 Statement; Jones, supra, at 124. By contrast, faculty have not historically had much direct authority over finances and the budget. See Yeshiva, 444 U.S. at 675 (noting that “[t]he budget for each school is drafted by its Dean or Director, subject to approval by the President after consultation with a committee of administrators”); Kaplan, supra, at 200 (fewer than twenty percent of survey respondents reported faculty control over financial planning and policy in 1970 and 2001); Bahls, supra, at 22 (“Board members . . . tend to place a much greater emphasis on budget matters than faculty members do.”).
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The PLU weighting system gets this arrangement exactly backwards. It artificially divides academic policymaking into two different categoriesacademic programs and academic policyand assigns less weight to the latter. PLU, 361 N.L.R.B. No. 157, at 17. Although this was nominally because the latter group dealt more with “individual classrooms or research projects,” id., this distinction makes no sense. Academic policies may impact the classroom experience, to be sure, but they are still university-wide policies that govern “the terms upon which” the academic product is offered. See Yeshiva, 444 U.S. at 686; 1966 Statement (listing “curriculum, subject matter and methods of instruction, research, faculty status, and those aspects of the student life which relate to the educational process” as being within the “primary responsibility” of the faculty (emphasis added)). Worse still, the PLU Board includes financial matters as one of its “primary categories” of authority, even though this has never been a significant area of expertise or concern for the faculty. See 1966 Statement; Kaplan, supra, at 200; Jones, supra, at 124.
As a result, the PLU weighting system bears little relationship to the principles of comparative advantage on which shared governance rests. It also seems to assume that faculty must have managerial authority over all or most of those five areas, when managerial authority over a single one would be enough to support a conclusion of managerial status in almost any other context. A chief
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operating officer may only exercise managerial authority of operations, and leave budgeting decisions for the chief financial officer, but both employees are readily recognizable as part of a company’s management. Cf. Bell Aerospace, 416 U.S. at 286 (finding that procurement officers wielded managerial authority). Similarly, a university is entitled to the undivided loyalty of its faculty when the faculty is responsible for making managerial judgments about, say, which academic programs to add or eliminate, even if the faculty has limited managerial authority in another supposedly “primary” area. See Yeshiva, 444 U.S. at 688.
The Regional Director’s decision below, which the Board concluded “properly applied” PLU, reflects this misunderstanding. USC presented evidence that its faculty has decisionmaking authority over “academic policies, such as the academic integrity policy, the grading policy, and the research and mentoring policies,” USC, 365 N.L.R.B. No. 11, at 17, and that their faculty handbook recommendations “are approved by the University president 100 percent of the time.” Id. (emphasis added). But despite this significant policymaking authority, the Regional Director concluded that “such authority in a secondary area of consideration alone does not support a conclusion” that the relevant faculty are managerial. Id. Except for referencing the PLU categories, the Regional Director gave no reason for summarily discounting this significant area of faculty authority. See id.
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This omission is telling. It betrays the thin foundation of the PLU test, which relegates professorial authority over the educational “product” of a university to second-class status. See Yeshiva, 444 U.S. at 686. Any test for the managerial authority of faculty should recognize that the faculty’s authority over “academic matters” is “the template for Board analysis of whether faculty are managerial employees.” Point Park, 457 F.3d at 49.
The PLU test also misunderstands the role of deliberation and exchange of ideas in shared governance. College and university governance “works best when communication among the governing board, the administration, and the faculty . . . is regular, open, and honest.” Hans-Joerg Tiede, Faculty Communication with Governing Boards, Academe, May-June 2013, at 8-12; Jones, supra, at 122. This dialogue is crucial to ensuring that stakeholders “have a sense of ownership, responsibility, and accountability for the institution’s health, vitality, and relevance.” AGB White Paper, supra, at 6. As a result, shared governance often operates through committees and other task forces “composed of those with the experience and expertise to best explore the issue and options, and make recommendations to the board and the administrative leadership.” Id.
These principles cannot be squared with PLU’s requirement that faculty recommendations be “almost always” adopted “without independent review,” PLU, 361 N.L.R.B. No. 157, at 18, much less with the Regional Director’s even
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more stringent demands that the authorities sign off “without second thought” or without exchanging in a “back and forth” with the administration on the subject. USC, 365 N.L.R.B. No. 11, at 15-17. Many aspects of shared governance depend on precisely the sort of back and forth that the Regional Director wrote off. See 1966 Statement; Hans-Joerg Tiede et al., AAUP, Faculty Communication with Governing Boards: Best Practices 3 (Feb. 2014). Indeed, the sort of blind acceptance described by the Regional Director would be alien to a corporate boardroom, much less the more collegial environment of a university. See USC, 365 N.L.R.B. No. 11, at 2-3 (Miscimarra, M., dissenting) (“Our cases do not limit managerial status to the single person in an organizationfor example, the president or chief executive officer (CEO)who reports to nobody else.”); cf. John Swann Holding Corp. v. Simmons, 62 F. Supp. 3d 304, 310-311 (S.D.N.Y. 2014) (noting that directors’ fiduciary duties include a duty of “oversight” (internal quotation marks omitted)).
The Regional Director’s insistence that the relevant faculty group form a majority on the pertinent committees exacerbates the problem. See USC, 365 N.L.R.B. No. 11, at 16. Line-drawing of this sort fails to recognize that shared governance will often require compromise; no one professor or group of professors will always have things exactly their way. Moreover, a faculty can be divided along countless linesby title, by seniority, by department, and the list goes on.
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Asking whether any particular group commands a majority on the relevant committee is therefore a slippery slopeany group of faculty can be sub-divided until it no longer commands a majority. See id. at 4 (Miscimarra, M., dissenting). This danger is particularly acute in light of the Board’s recent practice of recognizing so-called “micro-units,” or small bargaining units with a narrowly defined “community of interests.” See, e.g., Macy’s Inc. v. NLRB, 844 F.3d 188, 191 (5th Cir. 2016) (per curiam); Specialty Healthcare & Rehab. Ctr. of Mobile, 357 N.L.R.B. 934, 943 (2011) (“Nor is a unit inappropriate simply because it is small.”). Taken to its logical conclusion, the Regional Director’s approach would eviscerate the managerial exception by permitting any sufficiently small group of faculty to form a bargaining unitregardless of how much authority it exercises in tandem with the rest of the faculty.
C. The Board’s Approach Is Inconsistent With Yeshiva.
Not only are the PLU and USC tests inconsistent with the empirical reality of shared governance, they cannot be squared with Yeshiva. Regarding the categories of authority, Yeshiva made no distinction among different types of academic authority. Rather, it observed that the faculty’s “authority in academic matters [was] absolute,” listing “grading policies” and “teaching methods”—which would fall in PLU’s “secondary” categoryright alongside “matriculation standards”—which would fall in PLU’s “primary” category. Compare Yeshiva,
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444 U.S. at 686, with PLU, 361 N.L.R.B. No. 157, at 17. And Yeshiva did not rely heavily on financial recommendations. The Court merely observed that the Yeshiva faculty did not directly participate in budgeting and only determined tuition “[o]n [o]ccasion.” Yeshiva, 444 U.S. at 675, 686.
On the issue of the necessary degree of authority, the Yeshiva Court articulated the standard as whether the faculty exercised “effective recommendation or control,” not whether the faculty’s recommendations are “almost always” adopted, much less without a second thought or any other independent review. See generally id. at 675, 683 n.17, 686. Further, the Court approved the exercise of the faculty’s managerial authority through committees, without ever discussing whether the faculty were always, or even usually, unanimousan unlikely proposition, given that the Court was considering the entire Yeshiva faculty. See id. at 678 n.7. In short, the framework announced in PLU and as applied by the Regional Director here goes well beyond the principles set by the Supreme Court in Yeshiva.
In application, it is easy to see that the very faculty at issue in Yeshiva would likely be found non-managerial under PLU and USC. The Supreme Court did not find that the Yeshiva faculty had any significant involvement in two out of the three “primary areas of decision making” in PLU: enrollment management or finances. See Yeshiva, 444 U.S. at 686. It is unclear whether regular authority
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over a single primary area would be sufficient to satisfy the PLU test. See PLU, 361 N.L.R.B. No. 157, at 39 (Johnson, M., dissenting) (“[T]he majority does not really give guidance concerning how our regional directors and future Boards will decide the ultimate outcome based on the factors.”). The Court also frankly acknowledged that, even in those areas where the faculty had regular authority, “administrative concerns with scarce resources and University-wide balance have led to occasional vetoes.” Yeshiva, 444 U.S. at 688 n.27. It is unlikely that review thorough enough to produce “occasional vetoes” would survive the PLU Board’s “almost always” test, and it would certainly fail the Regional Director’s demand that recommendations be adopted without a second thought.
In PLU, the Board appeared to tacitly acknowledge that its test was more stringent than Yeshiva when it explained that its reasoning rested in part on its “experience applying Yeshiva,” which the majority felt “ha[d] generally shown that colleges and universities are increasingly run by administrators, which has the effect of concentrating authority away from the faculty in a way that was contemplated in Yeshiva, but found not to exist at Yeshiva University itself.” PLU, 361 N.L.R.B. No. 157, at 19. This reasoning makes too much of too little. Even a cursory read of Justice Brennan’s dissent in Yeshiva reveals that many of those same concerns were aired, and rejected, in Yeshiva itself. Justice Brennan lambasted the “rose-colored lens” through which the Court “view[ed] the
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governance structure of the modern-day university.” 444 U.S. at 702 (Brennan, J., dissenting). In his view, education had “become ‘big business,’ and the task of operating the university enterprise ha[d] been transferred from the faculty to an autonomous administration.” Id. at 702-703. The majority of the Court was unpersuaded, explaining that this shift was “neither universal nor complete.” Id. at 689 n.29. Time and additional research have proven that the majority had the better of this argument then, and that the voice of the faculty in governance has gotten stronger since. See Kaplan, supra, at 200; Tierney & Minor, supra, at 11.
***
The
Board’s aim to improve the analytical rigor and predictability of its
approach to questions of university governance is laudable. But its articulation of a framework in PLU misses the mark and cannot be sustained. The test fundamentally misunderstands the role of faculty in shared governance, assigning the least weight to some of the most important spheres of faculty authority. The decision of the Regional Director below demonstrates the dangers that inhere in the PLU test. By focusing too much on final authority and unanimity of decisionmaking, the Regional Director viewed university governance through the lens of “the pyramidal hierarchies of private industry.” Yeshiva, 444 U.S. at 680. That approach neglects the reality of shared governance and abandons the careful course set by the Supreme Court in Yeshiva. It falls to this Court to bring the
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NLRB back on track.
CONCLUSION
For the foregoing reasons and those in the brief of the University of Southern California, the Court should grant the University of Southern California’s petition for review and deny the Board’s cross-application for enforcement.
PETER MCDONOUGH
VICE PRESIDENT AND GENERAL
COUNSEL
AMERICAN COUNCIL ON EDUCATION One Dupont Circle N.W. Washington, D.C. 20036
(202) 939-9361
OGC@acenet.edu

Counsel for American Council on Education
October 31, 2017
Respectfully submitted,
/s/ Jessica L. Ellsworth
JESSICA L. ELLSWORTH
STEPHANIE GOLD
JOEL BUCKMAN
REEDY C. SWANSON*
H
OGAN LOVELLS US LLP
555 Thirteenth Street, N.W. Washington, D.C. 20004
(202) 637-5491 jessica.ellsworth@hoganlovells.com

*Admitted only in Virginia, supervised by principals of the firm.
Counsel for Amici Curiae
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CERTIFICATE OF COMPLIANCE
Pursuant to Fed R. App. P. 32(g)(1) and Circuit Rule 32(e), I hereby certify that the foregoing brief was produced using the Times New Roman 14-point typeface and contains 6,453 words.
/s/ Jessica L. Ellsworth Jessica L. Ellsworth

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