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Fifth Circuit Court to New Orleans Charter School: Recognize Your Employees’ Choice to Collectively Bargain

October 1, 2018

On September 21, 2018, the Fifth Circuit Court of Appeals denied the appeal of Louisiana-based charter school, International High School of New Orleans (operated by Voices for International Business and Education, Inc.) to declare itself a “political subdivision” of the state, thereby enabling the charter school to ignore employees’ vote to be represented by the union, United Teachers of New Orleans.

The suit itself is between Voices for International Business and Education, Inc. (“Voices”) and the National Labor Relations Board (NLRB).

Fifth-Circuit judges, Hons. Gregg Costa, Jennifer Walker Elrod, and James Ho, voted unanimously that the charter school was not a political subdivision because by its very nature, the charter school “lacks political accountability… by design.”

The result of all of that charter school “political freedom” is that the privately-controlled, charter school must recognize the right of its employees to choose to collectively bargain:

That lack of political influence over Louisiana charters was a choice the legislature made in its enabling legislation. Private control was not a bug of that law; it was a reason for it. Because Louisiana chose to insulate its charters from the political process, Voices like most other privately controlled employers is subject to the National Labor Relations Act.

The suit offers some interesting back story, including Voices’ attempt to declare itself a political entity since in New Orleans, charter schools have almost wholly replaced traditional public schools, and, as such, are now the “public” entity.

And now, for some select excerpts of the judgment:

Nowhere in the country has the charter school movement garnered a greater foothold than New Orleans. More than 90% of public-school students in Orleans Parish now attend charters. The reconstruction of the city after Hurricane Katrina was the impetus for the meteoric growth of charter schools. …

But the Louisiana law allowing charter schools predates that disaster. Enacted in 1995, the Louisiana Charter School Demonstration Programs law “authoriz[es] the creation of innovative kinds of independent public schools for pupils.” … It allows various groups and entities, such as “ten or more citizens” or a “business or corporate entity registered to do business in Louisiana” to form a nonprofit corporation for the purpose of forming a charter school. A local school board may enter into a charter with such a corporation if the board finds that the charter is “valid, complete, financially well-structured, and educationally sound.”  … The state board of education may also approve charters. … A charter school’s governing board, not the state, employs faculty and staff, and the nonprofit operator shall have “exclusive authority over all employment decisions at the charter schools.” …

A group of citizens incorporated Voices for International Business and Education as a nonprofit in 2009. That same year Voices began operating the International High School of New Orleans under a … charter with the Louisiana Board of Elementary and Secondary Education. The charter provides that Voices will not participate in the Teachers’ Retirement System of Louisiana or the Louisiana School Employees’ Retirement System; that Voices shall be the “final authority” in all matters affecting the school; and that Voices is “not acting as the agent of, or under the direction and control of” the state education board, except as specifically required by law or the charter.

Voices’ corporate bylaws vest its powers in a board of directors. The articles of incorporation name the original directors. The original board has to approve any new directors, officers, and committee chairs. Any board member may be removed with or without cause by a three-fourths vote of the remaining members. The state can remove a board member only if the member violates state ethics rules. …

A labor union, the United Teachers of New Orleans, filed a petition with the National Labor Relations Board seeking to represent Voices employees. Voices objected on the ground that the Board lacked jurisdiction because Voices is a political subdivision of Louisiana. A hearing officer rejected that argument. Over a dissent, the NLRB agreed that Voices is not a political subdivision because it “was neither created directly by the state of Louisiana so as to constitute a department or administrative arm of the government nor administered by individuals who are responsible to public officials or the general electorate.” …

In the election that followed, the employees voted in favor of union representation. Voices refused to recognize or negotiate with the union, maintaining the view that it is exempt from NLRB jurisdiction. The union then filed a charge against Voices for refusal to bargain. The NLRB found that Voices had committed an unfair labor practice and ordered it to recognize and bargain with the union. This petition for review, which presents only the “political subdivision” question, followed.

The National Labor Relations Act applies to most private employers. But its jurisdiction does not extend to the federal government or “any State or political subdivision thereof.” … The NLRB has long defined [“political subdivision”] to include two situations: when an entity is “(1) created directly by the state, so as to constitute departments or administrative arms of the government, or (2) administered by individuals who are responsible to public officials or to the general electorate.” … The Supreme Court has said that this agency definition is “entitled to great respect.” … The Board’s definition is consistent with the common meaning of “political subdivision” of a state. The Board’s first category—entities created by and operated as part of state or local government—fits easily within that ordinary meaning. So does an entity that is controlled by public officials or the polity more generally. The key is that for both of the Board’s definitions of political subdivision, ultimate authority over policymaking remains with the public.  …

Voices lacks that political accountability. That is by design. One of the perceived virtues, if not the virtue, of charter schools is that a lack of political oversight gives them freedom to experiment. … Successful innovations, the idea is, will not just benefit the school that tests them but will set an example for reform that even traditional public schools might later adopt. …

Louisiana charter school operators like Voices enjoy that greater freedom to innovate because they are not controlled by political actors. The corporation selected the inaugural board of directors. Those privately selected board members are the only ones who can nominate and select additional or replacement members. The self-perpetuating board can also remove a member with or without cause. Unlike traditional public schools, which are typically governed by elected school boards, there is thus no public mechanism for changing the policies in schools Voices operates. Privately selected citizens set those policies and get to decide whether they are altered. …

There is no way for the public to select the board members who set policy for Voices. We thus agree with the Board that Voices is “not administered by individuals who are responsible to public officials or to the general electorate. …

Voices did not just have a majority of its board members selected without
public input; private actors selected all of them. …

Voices contends that a different result is warranted because of the “unique factual context” in which roughly 90% of public school students in New Orleans attend charters. Charters essentially are the public school system in New Orleans, it argues. We do not disagree, but the prevalence of charters does not transform them into politically accountable entities. It would make little sense if a charter located in northern Louisiana but otherwise identical to Voices were subject to federal labor law but Voices were exempt solely because it is in a city with a lot of other charters. Or imagine a scenario in which a legislature decided to privatize an entire state function, prisons for example. If those prisons were not subject to public control, we do not see why they would become political subdivisions just because they held all prisoners in the state. …

We recognize that charters like Voices are “independent public school[s]” under Louisiana law and are treated as part of the public school system for some purposes. … But that is not the same thing as saying they are political subdivisions of the state. The Louisiana Attorney General has recognized this distinction, concluding that “a charter school is not a political subdivision of the state.” … Indeed, the “independent” part of the state law label reflects their lack of political accountability.

That lack of political influence over Louisiana charters was a choice the legislature made in its enabling legislation. Private control was not a bug of that law; it was a reason for it. Because Louisiana chose to insulate its charters from the political process, Voices like most other privately controlled employers is subject to the National Labor Relations Act.

* * *

Voices’ petition for review is DENIED. The Board’s cross-petition for
enforcement is GRANTED.

There it is.

Louisiana charter schools:

Privately-controlled and therefore subject to the National Labor Relations Act.

scales of justice 2


Want to read about the history of charter schools and vouchers?

School Choice: The End of Public Education? 

school choice cover  (Click image to enlarge)

Schneider is a southern Louisiana native, career teacher, trained researcher, and author of two other books: A Chronicle of Echoes: Who’s Who In the Implosion of American Public Education and Common Core Dilemma: Who Owns Our Schools?. You should buy these books. They’re great. No, really.

both books

Don’t care to buy from Amazon? Purchase my books from Powell’s City of Books instead.

  1. We Know permalink

    Alright Teachers…way to SLAM those EDU-CA-TORS!

  2. Leo Laventhal permalink

    It’s a pleasure hear good news from time to time. May the teachers and students of the International High School thrive under a fair collective bargaining contract. And may Mercedes Schneider herself continue with her useful work..

  3. Laura H. Chapman permalink

    Really fascinating legal case, with your summary and astute bottom line. The charter land double speak about being “public schools ” is disclosed as a marketing ploy.

  4. Mary K. Bellisario permalink

    It does beg the question as to why charter schools can be termed “private” and still get state MFP funding. I have never agreed that charters are “public” schools, despite what Gov. Jindal, legislature and BESE repeatedly said.

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