Quality Health Services of P.R., Inc. v. National Labor Relations Board
2017 U.S. App. LEXIS 20138
| 1st Cir. | 2017Background
- Hospital San Cristóbal (the Hospital) sought cost savings after declining patient volume and, during negotiations with the Union over a successor CBA, considered subcontracting its Respiratory Therapy Department.
- The Hospital notified the Union of an intent to subcontract on March 15, 2011; parties met several times about the decision and its effects between March and July 2011.
- The Hospital contracted with Respiratory Therapy Management (RTM) for per-diem coverage in late March/early April 2011 and later terminated the eight unit respiratory therapists on July 8, 2011, assigning shifts to RTM staff.
- The Union filed unfair labor practice charges; an ALJ found the Hospital unlawfully prohibited discussion of subcontracting, unilaterally subcontracted unit work, and unlawfully terminated employees without bargaining to impasse.
- The NLRB adopted the ALJ’s conclusions and ordered cessation of the unfair practices, bargaining, rescission of the rule forbidding discussion, reinstatement and back pay; the Hospital appealed and the Board cross-applied for enforcement.
- The Hospital attempted (for the first time on appeal) to invalidate the complaints by arguing the Acting General Counsel (Solomon) lacked authority under the Federal Vacancies Reform Act (FVRA) when he issued complaints after his nomination; the First Circuit declined to consider that forfeited argument.
Issues
| Issue | Hospital's Argument | Board's / Union's Argument | Held |
|---|---|---|---|
| Validity of complaints issued by Acting General Counsel under FVRA | Complaints are voidable because Solomon served in violation of FVRA after his nomination and the complaints were not ratified | Argument not preserved before the Board; even if meritorious, exhaustion rule bars new FVRA challenge | Forfeited; court lacks jurisdiction to consider FVRA challenge (10(e) exhaustion) |
| Duty to bargain before subcontracting unit work | No duty because per-diem/subcontracting was an established past practice and CBA allowed temporary substitutes | The Hospital’s use of per-diem subcontractors was intermittent and RTM staff were not "temporary" under the CBA; thus no past-practice safe harbor | Substantial evidence supports Board: Hospital violated 8(a)(1) and 8(a)(5) by subcontracting without bargaining |
| Termination of unit employees before bargaining to impasse | Hospital had reached impasse or faced delaying tactics/economic exigency permitting unilateral action | Parties continued to negotiate after terminations; no undue delay by Union; financial stress was foreseeable, not an unforeseen exigency | No impasse; exceptions (delaying tactics, exigency) do not apply; termination was unlawful (8(a)(1), 8(a)(5)) |
| Challenge to Board’s reinstatement/back-pay remedy | Enforcement would impose unaffordable financial burden on the Hospital | Challenge not raised before the Board; remedy is the Board’s normal relief for unlawful terminations | Forfeiture bars review of remedy challenge under section 10(e); court enforces Board’s Order |
Key Cases Cited
- SW Gen., Inc. v. NLRB, 796 F.3d 67 (D.C. Cir. 2015) (court held Acting General Counsel Solomon’s service violated FVRA and vacated NLRB order in that case)
- NLRB v. SW Gen., Inc., 137 S. Ct. 929 (2017) (Supreme Court affirmed the FVRA limitations on an acting official’s service)
- Noel Canning v. NLRB, 134 S. Ct. 2550 (2014) (recess-appointment infirmities can render Board action invalid in extraordinary circumstances)
- Fibreboard Paper Prods. Corp. v. NLRB, 379 U.S. 203 (1964) (employer must bargain before replacing unit employees with independent-contractor workers)
- Litton Fin. Printing Div. v. NLRB, 501 U.S. 190 (1991) (employer must bargain to impasse before making unilateral changes)