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Hospitality Law Alert: Employers win! Unions fret. New law on who is a “supervisor” can even the playing field for employers a bit.

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5 October 2006
If you have any interest regarding unionization of your hotel, a landmark decision has just been issued by NLRB. To understand the significance of this development, I have turned to my partner, Marta Fernandez, a hospitality lawyer who is a senior member of our Global Hospitality Group and the Labor & Employment Group of Jeffer, Mangels, Butler & Marmaro LLP.

Marta is tremendous resource for all of our hospitality clients. If you missed earlier postings concerning the ongoing battles with the unions–particularly Unite Here–and the practical implications, then you should take a look at them.

The Oakwood Healthcare, Inc. decision. . .

Marta Fernandez says, “On September 29, 2006, the NLRB issued a landmark decision which may significantly limit the types of employees that will be permitted by law to join unions. Supervisors have always been excluded from union bargaining units, but this decision significantly expands the classification.”

Oakwood decision applies to all industries and employers!

The NLRB decision actually involved Oakwood Healthcare, Inc. and two companion decisions. But as noted in the Advisory below, the decision has general application to all industries and employers. And it is important.
In these decisions, the NLRB found that “charge nurses” were “supervisors” for classification purposes. Charge nurses are below actual supervisors but above hospital staff.

How could this affect your hotel?

What could this mean in a hotel. One example that Marta gives is in the Food & Beverage department, where the department manger has always been regarded as a “supervisor.” But now, captains and other personnel with decision making roles may qualify as supervisors.

What should you do now in light of Oakwood?

Marta’s advice? “This is a good time for each employer to reevaluate its workforce job descriptions. If you have a union contract, you may need to consider filing a ‘Unit Clarification Petition’ with the NLRBB. If you are facing union negotiations, this may be an important bargaining issue.”

See the full text of the Firm’s Client Advisor on Oakwood Healthcare, Inc. below Marta’s biographical information.

Marta Fernandez is a senior member of the Global Hospitality Group® and a partner in the Firm’s Labor & Employment Group. A management labor lawyer with more than 20 years’ experience, Marta specializes in representing hospitality industry clients in all aspects of labor and employment, including labor-management relations such as union prevention, collective bargaining for single as well as multi-employer bargaining units, neutrality agreements and defense of unfair labor practice charges before the NLRB; implementation of preventative management strategies, such as executive training, arbitration enforcement and policies and procedures; defense of administrative and litigation claims, such as employee claims of sexual harassment and discrimination. For more information please contact Marta Fernandez at 310.201.3534 or

JMBM Client Advisory
NLRB’s Decision in Oakwood Healthcare, Inc. Clarifies the Definition of Supervisor Under Section 2(11)

Decided on September 29, 2006
The NLRB issued a broad and long-awaited decision on September 29, 2006 which affects the definition of “supervisor” under the National Labor Relations Act (the “Act”). Oakwood Healthcare, Inc., 348 NLRB NO. 37, and two other companion cases, impact all industries and could undermine the power of labor unions as millions of employees could potentially be re-classified as “supervisors.” As “supervisors,” these employees would be precluded from joining unions and would no longer be covered by collective bargaining agreements. Not surprisingly, labor unions are in an uproar over the Oakwood Healthcare, Inc. decisions. They have called them “outrageous” and are threatening strikes against employers who re-classify employees under the new decisions.

Section 2(11) of the Act defines a supervisor as an employee who has the authority to perform any of 12 tasks in the interest of the employer while using independent judgment. In 2001, the U.S. Supreme Court provided general guidance on the definition of “supervisor” under Section 2(11) in NLRB v. Kentucky River Community Care, 532 U.S. 706 (2001). Using Kentucky River’s guiding principles, the NLRB clarified the definition of “supervisor” under Section 2(11). In a well-written and thorough decision, the NLRB defines previously ambiguous terms such as “assign,” “responsibly to direct,” and “independent judgment” as used in Section 2(11).

Using these new definitions, the NLRB found that 12 permanent charge nurses were supervisors under the meaning of Section 2(11) and, therefore, not included within the protection of the Act and properly excluded from the bargaining unit. The NLRB arrived at its conclusion through a fact-specific analysis of the charge nurses’ day to day duties and responsibilities.

Oakwood Healthcare, Inc. has broad implications for the healthcare industry. Nationwide, there are an estimated 400,000 nurses represented under collective bargaining agreements. If some of these nurses qualify as “supervisors” under Oakwood Healthcare, Inc., they could potentially be excluded from joining unions, from collective bargaining agreements, and from the protections of the Act.

These decisions affect not just the healthcare industry. Oakwood Healthcare, Inc.’s clarification of the “supervisor” definition under the Act will affect virtually all industries. Unions may no longer argue that certain employees are automatically included in bargaining units. Rather, under Oakwood Healthcare, Inc., a fact-specific inquiry is now required, providing employers with additional bargaining power during labor negotiations. The impact and breadth of Oakwood Healthcare, Inc. clearly signifies that it is one of the most important NLRB decisions of this decade.

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The Labor & Employment Department of Jeffer, Mangels, Butler & Marmaro LLP has built a solid reputation over the years by defending employers in age and other discrimination claims. We also assist our clients in taking a proactive approach to ensure compliance with rapidly changing state and federal laws.

Our Perspective. We represent developers, owners and lenders. We have helped our clients as business and legal advisors on more than $50 billion of hotel transactions, involving more than 1,000 properties all over the world. For more information, please contact Jim Butler at or 310.201.3526.

Jim Butler is one of the top hotel lawyers in the world. GOOGLE “hotel lawyer” or “hotel mixed-use” or “condo hotel lawyer” and you will see why.

Jim devotes 100% of his practice to hospitality, representing hotel owners, developers and lenders. Jim leads JMBM’s Global Hospitality Group® – a team of 50 seasoned professionals with more than $50 billion of hotel transactional experience, involving more than 1,000 properties located around the globe.

Jim and his team are more than “just” great hotel lawyers. They are also hospitality consultants and business advisors. They are deal makers. They can help find the right operator or capital provider. They know who to call and how to reach them. They are a major gateway of hotel finance, facilitating the flow of capital with their legal skill, hospitality industry knowledge and ability to find the right “fit” for all parts of the capital stack. Because they are part of the very fabric of the hotel industry, they are able to help clients identify key business goals, assemble the right team, strategize the approach to optimize value and then get the deal done.

Jim is frequently quoted as an expert on hotel issues by national and industry publications such as The New York Times, The Wall Street Journal, Los Angeles Times, Forbes, BusinessWeek, and Hotel Business. A frequent author and speaker, Jim’s books, articles and many expert panel presentations cover topics reflecting his practice, including hotel and hotel-mixed use investment and development, negotiating, re-negotiating or terminating hotel management agreements, acquisition and sale of hospitality properties, hotel finance, complex joint venture and entity structure matters, workouts, as well as many operating and strategic issues.

Jim Butler is a Founding Partner of Jeffer, Mangels, Butler & Marmaro LLP and he is Chairman of the firm’s Global Hospitality Group®. If you would like to discuss any hospitality or condo hotel matters, Jim would like to hear from you. Contact him at or 310.201.3526. For his views on current industry issues, visit