## Facts

- Chicago Mathematics & Science Academy Charter School, Inc. (CMSA) operated a Chicago charter school under a charter agreement with the Chicago Board of Education pursuant to Illinois’s Charter Schools Law.
- CMSA was formed in 2003 as an Illinois not-for-profit corporation by private individuals and was governed by a self-perpetuating board of directors selected under corporate bylaws.
- CMSA received most of its funding (about 80%) from the Chicago Board of Education and was subject to extensive public oversight, including monitoring and potential charter revocation or nonrenewal for performance, fiscal, or legal noncompliance.
- A teachers’ union filed a representation petition with the Illinois Educational Labor Relations Board to represent CMSA teachers.
- CMSA filed a representation petition with the NLRB seeking an election under the NLRA.
- The Acting Regional Director dismissed CMSA’s NLRB petition for lack of jurisdiction, finding CMSA to be a “political subdivision” excluded from the NLRA’s definition of “employer.”
- The NLRB granted review to decide whether CMSA was exempt as a political subdivision.

## Issues

1. Whether CMSA qualified as a “political subdivision” of Illinois under NLRA § 2(2) such that the NLRB lacked jurisdiction over representation proceedings involving CMSA’s teachers.
2. Whether CMSA was (a) created directly by the State or (b) administered by individuals responsible to public officials or the general electorate under the Hawkins County test.

## Decision

- The NLRB reversed the Acting Regional Director and held CMSA was not a political subdivision under NLRA § 2(2).
- The Board found CMSA was not created directly by the State because it was incorporated by private individuals under general nonprofit corporation law rather than established as a governmental department or by special governmental act.
- The Board found CMSA was not administered by individuals responsible to public officials or the electorate because its directors were privately selected under bylaws and were not elected, appointed, or removable in a manner establishing political accountability.
- The Board asserted NLRA jurisdiction over CMSA and remanded for further processing of the representation case.

## Legal Principles

- The NLRA excludes from “employer” status “any State or political subdivision thereof,” and federal law controls the meaning of that exclusion.
- Under NLRB v. Natural Gas Utility District of Hawkins County, an entity is a political subdivision only if it is (1) created directly by the State as a governmental arm, or (2) administered by individuals responsible to public officials or the general electorate.
- Significant public funding, heavy regulation, and performance of a public function do not, without the required creation or governance attributes, establish political-subdivision status.
- Governmental oversight mechanisms (including charter approval, monitoring, and revocation/nonrenewal authority) do not by themselves make a private governing board “responsible to” public officials or the electorate for NLRA purposes.
- State statutory labels treating charter schools or their employees as “public” for state-law purposes are relevant but not controlling in applying the NLRA’s political-subdivision exclusion.

## Conclusion

The NLRB held that a charter-school operator organized as a private nonprofit corporation, governed by privately selected directors, and operating under a publicly funded and regulated charter arrangement is not a political subdivision under the Hawkins County test and therefore remains an NLRA-covered employer subject to Board jurisdiction over representation proceedings.


In re Chi. Mathematics & Sci. Acad. Charter Sch., Inc., 359 N.L.R.B. No. 41 (2012)