On August 9, 2024, the NLRB denied Pardee RAND Graduate School’s (“RAND”) request for review of a regional director’s Decision and Direction of Election (DDE) finding that a petitioned-for unit of graduate policy researchers was an appropriate bargaining unit. The Board found that RAND’s request raised no substantial issue warranting review.

RAND argued that the regional director misapplied Columbia University, 364 NLRB 1080 (2016), by finding that RAND graduate students were employees under Section 2(3) of the National Labor Relations Act (NLRA). In Columbia, the Board held that students are employees of educational institutions under Section 2(3) of the NLRA if a common-law “employment relationship” exists. A common-law employment relationship is formed when a student performs work at the university’s direction and is compensated for this work. RAND argued that the Columbia decision did not apply because RAND does not receive a significant material benefit from graduate student work and does not necessarily direct the work of these students.

However, the Board found that RAND graduate students are employees because they are compensated with paid fellowships for work performed on RAND’s research projects. The Board noted that RAND’s student handbook states that the fellowship is “not a grant” and “comes with a work requirement.” The Board noted further that RAND graduate students receive compensation for the precise number of hours worked, and, if a graduate student fails to work the required hours, they owe RAND money; conversely, if graduate students work over the required hours, they retain the surplus compensation. Finally, the Board relied on the fact that RAND graduate students log their hours of work in the employer’s internal timekeeping system and must code their work log entries, a process similar to the one used by RAND’s research staff employees.

RAND also argued that the DDE conflicted with the Board’s July 2024 decision in Massachusetts Institute of Technology (MIT). RAND asserted that the facts in MIT were “strikingly similar” as both RAND and MIT graduate students receive grants from the government to fund research and principal investigators assign graduate students to perform the work under these grants. RAND outlined that its graduate students, like MIT’s graduate students, can choose any area or faculty members to work with. The Board rejected RAND’s MIT argument, however, explaining that the students in MIT were not employees because they “pursue[d] their educational goals at their own discretion, subject only to the general requirement that they make academic progress.” Unlike in MIT, the Board found that the RAND graduate students’ ability to freely choose their work via an internal labor market did not change the fact that they worked for RAND, were compensated by RAND, and were only compensated if the work was performed.

The Board found further that, even though RAND students receive course credit for their work and may conduct research for pedagogical purposes, such facts do not diminish the presence of a common-law employment relationship and the conclusion that these graduate students are statutory employees under the NLRA. The Board found that the work RAND graduate students perform advances a key business operation of RAND, and even if it did not, such a finding would not preclude a finding that the graduate students are employees. This is because the Board merely requires compensation in exchange for services, but without requiring any additional finding that the services are “valuable” or “important” to form a common-law employment relationship.

RAND argued in the alternative that, if the graduate students were employees for NLRA purposes, they shared an overwhelming community of interest with RAND’s research staff such that they couldn’t be in a stand-alone bargaining unit. The Board rejected this argument, however, finding that RAND’s graduate students are in a separate section, have different supervision, and have differing terms and conditions of employment, including hourly pay, benefit eligibility, and duration of annual employment. The Board noted that some comparable functions and skills and some overlapping work between the graduate students and research staff did not render a graduate students-only unit inappropriate, especially if the work is less skilled.

The Board closed by noting that the “relevant inquiry” is whether the graduate students perform work for RAND for which they are compensated – not whether the RAND graduate students perform similar work to other statutory employees, or whether the work is “business-oriented” or “pedagogical.”

Key Takeaways:

• Receiving academic credit for work performed does not preclude a finding that students are employees under the NLRA.

• Conducting research for pedagogical purposes does not preclude a finding that students are employees under the NLRA.

• Failure to advance a key business operation does not preclude a finding that students are employees.

• A common-law employment relationship merely requires compensation in exchange for services, not compensation for “valuable” or “important” services.