January 2, 2013; Source: JD Supra
In a case brought before the National Labor Relations Board (NLRB), the NLRB concluded that an effort by the Chicago Teachers Union to organize the staff at a Chicago charter school managed by a nonprofit corporation was subject to NLRB rules because the charter did not qualify as a governmental entity. It was a very interesting decision, not just because of the union organizing issue, but because of the categorization of a “public” charter school as something other than governmental.
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In this case, the Chicago Mathematics & Science Academy (CMSA) Charter School was established as a nonprofit corporation under Illinois state law. According to JD Supra, CMSA’s governance is totally under its control, with no public officials involved in the selection or removal of CMSA board members. The nonprofit has an agreement with the Chicago Public Schools to operate a charter school under the terms of a five-year operating agreement. Although 80 percent of CMSA’s budget is from the school system, the Chicago Public Schools has never rejected a CMSA proposed budget, does not advise CMSA on resource allocation, and allows CMSA, as a nonprofit corporation, to directly employ the teachers and most of the other school staff. Illinois’s Charter School Law mandates that charter schools must be operated by private nonprofit corporations.
The NLRB used the test outlined in NLRB v. Natural Gas Utility of Hawkins County to determine if CMSA qualified as a political subdivision exempt from NLRB coverage. CMSA would be deemed a governmental entity if it was either “(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.” CMSA didn’t meet either standard and therefore was found to be a private entity rather than a governmental unit. The fact that CMSA receives most of its funding from the city and operates based on a contract with the city didn’t alter the finding that it was a private entity.
Although the NLRB decision made clear that its ruling was specific to the facts of the CMSA case and could not be interpreted as a “bright-line rule” concerning NLRB jurisdiction over all charter schools, the decision certainly will be closely read by charter school operators and education advocates. The NLRB did not uphold the notion that charter schools are public entities, at least in the CMSA case. While it might have union organizing implications, this ruling strikes us as establishing a concept advanced by charter school critics: the idea that charter schools are part of the movement toward privatizing public education. We basically understood that, but the CMSA decision, even with the specific facts of the case at hand, underscores the private character of “public” charter schools.—Rick Cohen