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No. 92-1964


on writ of certiorari to the united states court of appeals for the sixth circuit

[May 23, 1994]

Justice Kennedy delivered the opinion of the Court.

Congress enacted the National Labor Relations Act in 1935. Act of July 5, 1935, ch. 372, 49 Stat. 449. In the early years of its operation, the Act did not exempt supervisory employees from its coverage; as a result, supervisory employees could organize as part of bargaining units and negotiate with the employer. Employers complained that this produced an imbalance between labor and management, but in 1947 this Court refused to carve out a supervisory employee exception from the Act's broad coverage. The Court stated that "it is for Congress, not for us, to create exceptions or qualifications at odds with [the Act's] plain terms." Packard Motor Car Co. v. NLRB, 330 U.S. 485, 490 (1947). Later that year, Congress did just that, amending the statute so that the term "`employee' . . . shall not include . . . any individual employed as a supervisor." 61 Stat. 137-138, codified at 29 U.S.C. § 152(3). Congress defined a supervisor as:

"Any individual having authority, in the interest of the employer, to hire, transfer, suspend, lay off, recall, promote, discharge, assign, reward, or discipline other employees, or responsibly to direct them, or to adjust their grievances, or effectively to recommend such action, if in connection with the foregoing the exercise of such authority is not of a merely routine or clerical nature, but requires the use of independent judgment." 61 Stat. 138, codified at 29 U.S.C. § 152(11).

As the Board has stated, the statute requires the resolution of three questions; and each must be answered in the affirmative if an employee is to be deemed a supervisor. First, does the employee have authority to engage in one of the 12 listed activities? Second, does the exercise of that authority require "the use of independent judgment"? Third, does the employee hold the authority "in the interest of the employer"? Northcrest Nursing Home, 1993 NLRB LEXIS 1284 *12 (1993). This case concerns only the third question, and our decision turns upon the proper interpretation of the statutory phrase "in the interest of the employer."

In cases involving nurses, the Board admits that it has interpreted the statutory phrase in a unique manner. Tr. of Oral Arg. 52 (Board: "[t]he Board has not applied a theory that's phrased in the same terms to other categories of professionals"). The Board has held that "a nurse's direction of less skilled employees, in the exercise of professional judgment incidental to thetreatment of patients, is not authority exercised `in the interest of the employer.' " Pet. for Cert. 15. As stated in reviewing its position on this issue in its recent decision in Northcrest Nursing Home, 1993 NLRB LEXIS 1284 *4-5 the Board believes that its special interpretation of "in the interest of the employer" in cases involving nurses is necessary because professional employees (including registered nurses) are not excluded from coverage under the Act. See 29 U.S.C. § 152(12). Respondent counters that "[t]here is simply no basis in the language of the statute to conclude that direction given to aides in the interest of nursing home residents, pursuant to professional norms, is not `in the interest of the employer.' " Brief for Respondent 30.

In this case, the Board's General Counsel issued a complaint alleging that respondent, the owner and operator of the Heartland Nursing Home in Urbana, Ohio, had committed unfair labor practices in disciplining four licensed practical nurses. At Heartland, the Director of Nursing has overall responsibility for the nursing department. There is also an Assistant Director of Nursing, 9 to 11 staff nurses (including both registered nurses and the four licensed practical nurses involved in this case), and 50 to 55 nurses' aides. The staff nurses are the senior ranking employees on duty after 5 p.m. during the week and at all times on weekends--approximately 75% of the time. The staff nurses have responsibility to ensure adequate staffing; to make daily work assignments; to monitor the aides' work to ensure proper performance; to counsel and discipline aides; to resolve aides' problems and grievances; to evaluate aides' performances; and to report to management. In light of these varied activities, respondent contended, among other things, that the four nurses involved in this case were supervisors, and so not protected under the Act. The administrative law judge (ALJ) disagreed, concluding that the nurses were notsupervisors. The ALJ stated that the nurses' supervisory work did not "equate to responsibly directing the aides in the interest of the employer," noting that "the nurses' focus is on the well being of the residents rather than of the employer." 306 N.L.R.B. 68, 70 (1992) (internal quotation marks omitted) (emphasis added). The Board stated only that the "[t]he judge found, and we agree, that the Respondent's staff nurses are employees within the meaning of the Act." 306 N.L.R.B. 63, 63, n. 1 (1992).

The United States Court of Appeals for the Sixth Circuit reversed. 987 F. 2d 1256 (1993). The Court of Appeals had decided in earlier cases that the Board's test for determining the supervisory status of nurses was inconsistent with the statute. See Beverly California Corp. v. NLRB, 970 F. 2d 1548 (1992); NLRB v. Beacon Light Christian Nursing Home, 825 F. 2d 1076 (1987). In Beverly, for example, the court had stated that "the notion that direction given to subordinate personnel to ensure that the employer's nursing home customers receive `quality care' somehow fails to qualify as direction given `in the interest of the employer' makes very little sense to us." Beverly, 970 F. 2d, at 1552. Addressing the instant case, the court followed Beverly and again held the Board's interpretation inconsistent with the statute. 987 F. 2d, at 1260. The court further stated that "it is up to Congress to carve out an exception for the health care field, including nurses, should Congress not wish for such nurses to be considered supervisors." Id., at 1261. The court "remind[ed] the Board that it is the courts, and not the Board, who bear the final responsibility for interpreting the law." Id., at 1260. After concluding that the Board's test was inconsistent with the statute, the court found that the four licensed practical nurses involved in this case were supervisors. Id., at 1260-1261.

We granted certiorari, 510 U. S. ___ (1993), to resolve the conflict in the Courts of Appeals over the validity of the Board's rule. See, e.g., Waverly Cedar Falls Health Care Center, Inc. v. NLRB, 933 F. 2d 626 (CA8 1991); NLRB v. Res Care, Inc., 705 F. 2d 1461 (CA7 1983); Misericordia Hospital Medical Center v. NLRB, 623 F. 2d 808 (CA2 1980).

We must decide whether the Board's test for determining if nurses are supervisors is rational and consistent with the Act. See Fall River Dyeing & Finishing Corp. v. NLRB, 482 U.S. 27, 42 (1987). We agree with the Court of Appeals that it is not.

The Board's interpretation, that a nurse's supervisory activity is not exercised in the interest of the employer if it is incidental to the treatment of patients, is similar to an approach the Board took, and we rejected, in NLRB v. Yeshiva Univ., 444 U.S. 672 (1980). There, we had to determine whether faculty members at Yeshiva were "managerial employees." Managerial employees are those who "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). Like supervisory employees, managerial employees are excluded from the Act's coverage. Id., at 283 ("so clearly outside the Act that no specific exclusionary provision was thought necessary"). The Board in Yeshiva argued that the faculty members were not managerial, contending that faculty authority was "exercised in the faculty's own interest rather than in the interest of the university." 444 U. S., at 685. To support its position, the Board placed much reliance on the faculty's independent professional role in designing the curriculum and in discharging their professionalobligations to the students. We found the Board's reasoning unpersuasive:

"In arguing that a faculty member exercising independent judgment acts primarily in his own interest and therefore does not represent the interest of his employer, the Board assumes that the professional interests of the faculty and the interests of the institution are distinct, separable entities with which a faculty member could not simultaneously be aligned. The Court of Appeals found no justification for this distinction, and we perceive none. In fact, the faculty's professional interests--as applied to governance at a university like Yeshiva--cannot be separated from those of the institution. . . . The "business" of a university is education." Id., at 688.

The Board's reasoning fares no better here than it did in Yeshiva. As in Yeshiva, the Board has created a false dichotomy--in this case, a dichotomy between acts taken in connection with patient care and acts taken in the interest of the employer. That dichotomy makes no sense. Patient care is the business of a nursing home, and it follows that attending to the needs of the nursing home patients, who are the employer's customers, is in the interest of the employer. See Beverly California, supra, at 1553. We thus see no basis for the Board's blanket assertion that supervisory authority exercised in connection with patient care is somehow not in the interest of the employer.

Our conclusion is supported by the case that gave impetus to the statutory provision now before us. In Packard Motor, we considered the phrase "in the interest of an employer" contained in the definition of "employer" in the original 1935 Act. We stated that "[e]very employee, from the very fact of employment in the master's business, is required to act in his interest." 330 U. S., at 488. We rejected the argument of thedissenters who, like the Board in this case, advanced the proposition that the phrase covered only "those who acted for management . . . in formulating [and] executing its labor policies." Id., at 496 (Douglas, J., dissenting); cf. Reply Brief for NLRB 4 (filed July 23, 1993) (nurses are supervisors when "in addition to performing their professional duties and responsibilities, they also possess the authority to affect the job status or pay of employees working under them"). Consistent with the ordinary meaning of the phrase, the Court in Packard Motor determined that acts within the scope of employment or on the authorized business of the employer are "in the interest of the employer." 330 U. S., at 488-489. There is no indication that Congress intended any different meaning when it included the phrase in the statutory definition of supervisor later in 1947. To be sure, Congress altered the result of Packard Motor, but it did not change the meaning of the phrase "in the interest of the employer" when doing so. And we of course have rejected the argument that a statute altering the result reached by a judicial decision necessarily changes the meaning of the language interpreted in that decision. See Public Employees Retirement System v. Betts, 492 U.S. 158, 168 (1989).

Not only is the Board's test inconsistent with Yeshiva, Packard Motor, and the ordinary meaning of the phrase "in the interest of the employer," it also renders portions of the statutory definition in §2(11) meaningless. Under §2(11), an employee who in the course of employment uses independent judgment to engage in one of the 12 listed activities, including responsible direction of other employees, is a supervisor. Under the Board's test, however, a nurse who in the course of employment uses independent judgment to engage in responsible direction of other employees is not a supervisor. Only a nurse who in the course of employment uses independent judgment to engage in one of the activities related toanother employee's job status or pay can qualify as a supervisor under the Board's test. See Reply Brief for NLRB 4 (filed July 23, 1993) (nurses are supervisors when they affect "job status or pay of employees working under them"). The Board provides no plausible justification, however, for reading the responsible direction portion of §2(11) out of the statute in nurse cases, and we can perceive none.

The Board defends its test by arguing that phrases in §2(11) such as "independent judgment" and "responsibly to direct" are ambiguous, so the Board needs to be given ample room to apply them to different categories of employees. That is no doubt true, but it is irrelevant in this particular case because interpretation of those phrases is not the underpinning of the Board's test. The Board instead has placed exclusive reliance on the "in the interest of the employer" language in §2(11). With respect to that particular phrase, we find no ambiguity supporting the Board's position. It should go without saying, moreover, that ambiguity in one portion of a statute does not give the Board license to distort other provisions of the statute. Yet that is what the Board seeks us to sanction in this case.

The interpretation of the "in the interest of the employer" language mandated by our precedents and by the ordinary meaning of the phrase does not render the phrase meaningless in the statutory definition. The language ensures, for example, that union stewards who adjust grievances are not considered supervisory employees and deprived of the Act's protections. But the language cannot support the Board's argument that supervision of the care of patients is not in the interest of the employer. The welfare of the patient, after all, is no less the object and concern of the employer than it is of the nurses. And the statutory dichotomy the Board has created is no more justified in the health care field than it would be in any other business where supervisory duties are a necessary incident to the production of goods or the provision of services.

Because the Board's test is inconsistent with both the statutory language and this Court's precedents, the Board seeks to shift ground, putting forth a series of non statutory arguments. None of them persuades us that we can ignore the statutory language and our case law.

The Board first contends that we should defer to its test because, according to the Board, granting organizational rights to nurses whose supervisory authority concerns patient care does not threaten the conflicting loyalties that the supervisor exception was designed to avoid. Brief for Petitioner 25. We rejected the same argument in Yeshiva where the Board contended that there was "no danger of divided loyalty and no need for the managerial exclusion" for the Yeshiva faculty members. 444 U. S., at 684. And we must reject that reasoning again here. The Act is to be enforced according to its own terms, not by creating legal categories inconsistent with its meaning, as the Board has done in nurse cases. Whether the Board proceeds through adjudication or rulemaking, the statute must control the Board's decision, not the other way around. See Florida Power & Light Co. v. Electrical Workers, 417 U.S. 790, 811 (1974); cf. Packard Motor, supra, at 493 (rejecting resort to policy and legislative history in interpreting meaning of the phrase "in the interest of the employer"). Even on the assumption, moreover, that the statute permits consideration of the potential for divided loyalties so that a unique interpretation is permitted in the health care field, we do not share the Board's confidence that there is no danger of divided loyalty here. Nursing home owners may want to implement policies to ensure that patients receive the best possible caredespite potential adverse reaction from employees working under the nurses' direction. If so, the statute gives nursing home owners the ability to insist on the undivided loyalty of its nurses notwithstanding the Board's impression that there is no danger of divided loyalty.

The Board also argues that "[t]he statutory criterion of having authority `in the interest of the employer' . . . must not be read so broadly that it overrides Congress's intention to accord the protections of the Act to professional employees." Brief for Petitioner 26; see 29 U.S.C. § 152(12). The Act does not distinguish professional employees from other employees for purposes of the definition of supervisor in §2(11). The supervisor exclusion applies to "any individual" meeting the statutory requirements, not to "any non professional employee." In addition, the Board relied on the same argument in Yeshiva, but to no avail. The Board argued that "the managerial exclusion cannot be applied in a straightforward fashion to professional employees because those employees often appear to be exercising managerial authority when they are merely performing routine job duties." 444 U. S., at 683-684. Holding to the contrary, we said that the Board could not support a statutory distinction between the university's interest and the managerial interest being exercised on its behalf. There is no reason for a different result here. To be sure, as recognized in Yeshiva, there may be "some tension between the Act's exclusion of [supervisory and] managerial employees and its inclusion of professionals," but we find no authority for "suggesting that that tension can be resolved" by distorting the statutory language in the manner proposed by the Board. Id., at 686.

Finally, as a reason for us to defer to its conclusion, the Board cites legislative history of the 1974 amendments to other sections of the Act. Those amendmentsdid not alter the test for supervisory status in the health care field, yet the Board points to a statement in a Committee Report expressing apparent approval of the Board's then current application of its supervisory employee test to nurses. S. Rep. No. 93-766, p. 6 (1974); see Yeshiva, supra, at 690, n. 30. As an initial matter, it is far from clear that the Board in fact had a consistent test for nurses before 1974. Compare Avon Convalescent Center, 200 N.L.R.B. 702 (1972) with Doctors' Hospital of Modesto, Inc., 183 N.L.R.B. 950 (1970). In any event, the isolated statement in the 1974 Committee Report does not represent an authoritative interpretation of the phrase "in the interest of the employer," which was enacted by Congress in 1947. "[I]t is the function of the courts and not the Legislature, much less a Committee of one House of the Legislature, to say what an enacted statute means." Pierce v. Underwood, 487 U.S. 552, 566 (1988). Indeed, in American Hospital Assn. v. NLRB, 499 U.S. 606 (1991), the petitioner pointed to isolated statements from the same 1974 Senate Report cited here and argued that they revealed Congress' intent with respect to a provision of the original 1935 Act. We dismissed the argument, stating that such statements do not have "the force of law, for the Constitution is quite explicit about the procedure that Congress must follow in legislating." Id., at 616; see also Betts, 492 U. S., at 168. In this case as well, we must reject the Board's reliance on the 1974 Committee Report. If the Congress wishes to enact the policies of the Board, it can do so without indirection. See generally Central Bank of Denver v. First Interstate Bank, ___ U. S. ___ (1994) (slip op., at 21-23).

An examination of the professional's duties (or in this case the duties of the four non professional nurses) to determine whether one or more of the 12 listed activitiesis performed in a manner that makes the employee a supervisor is, of course, part of the Board's routine and proper adjudicative function. In cases involving nurses, that inquiry no doubt could lead the Board in some cases to conclude that supervisory status has not been demonstrated. The Board has not sought to sustain its decision on that basis here, however. It has chosen instead to rely on an industry wide interpretation of the phrase "in the interest of the employer" that contravenes precedents of this Court and has no relation to the ordinary meaning of that language.

To be sure, in applying §2(11) in other industries, the Board on occasion reaches results reflecting a distinction between authority arising from professional knowledge and authority encompassing front line management prerogatives. It is important to emphasize, however, that in almost all of those cases (unlike in cases involving nurses) the Board's decisions did not result from manipulation of the statutory phrase "in the interest of the employer," but instead from a finding that the employee in question had not met the other requirements for supervisory status under the Act, such as the requirement that the employee exercise one of the listed activities in a non routine manner. See supra, at 2 (listing other requirements for supervisory status). That may explain why the Board did not cite in its submissions to this Court a single case outside the health care field approving the interpretation of "in the interest of the employer" the Board uses in nurse cases. That the Board sometimes finds a professional employee not to be a supervisor when applying other elements of the statutory definition of §2(11) cannot be shoehorned into the conclusion that the Board can rely on its strained interpretation of the phrase "in the interest of the employer" in all nurse cases. If we accepted the Board's position in this case, moreover, nothing would preventthe Board from applying this interpretation of "in the interest of the employer" to all professional employees.

We note further that our decision casts no doubt on Board or court decisions interpreting parts of §2(11) other than the specific phrase "in the interest of the employer." Because the Board's interpretation of "in the interest of the employer" is for the most part confined to nurse cases, our decision will have almost no effect outside that context. Any parade of horribles about the meaning of this decision for employees in other industries is thus quite misplaced; indeed, the Board does not make that argument.

In sum, the Board's test for determining the supervisory status of nurses is inconsistent with the statute and our precedents. The Board did not petition this Court to uphold its order in this case under any other theory. See Brief for Respondent 21, n. 25. If the case presented the question whether these nurses were supervisors under the proper test, we would have given a lengthy exposition and analysis of the facts in the record. But as we have indicated, the Board made and defended its decision by relying on the particular test it has applied to nurses. Our conclusion that the Court of Appeals was correct to find the Board's test inconsistent with the statute therefore suffices to resolve the case. The judgment of the Court of Appeals is