Community Hospitals v. National Labor Relations BoardCommunity Hospitals v. National Labor Relations Board
A union representing nurses charged the new owner of a hospital with an unfair labor practice when it refused to recognize and to bargain with the union. The National Labor Relations Board held the new owner was a successor employer, the nurses at the hospital constituted an appropriate bargaining unit, and the employer, in declining to deal with the union, did not rely upon a good-faith reasonable doubt about the union’s majority status. The Board also held certain provisions of the employer’s handbook for employees likely to chill protected activity and therefore unlawful. We uphold the decision of the Board and grant its application for enforcement with respect to all matters except the employee handbook, as to which we grant the employer’s petition for review.
I. Background
For some years Community Hospitals of Central California (Community), a private non-profit company, operated two hospitals in the Fresno, California area, while the County of Fresno operated Valley Medical Center (VMC) and other medical facilities in the County. Nurses working at VMC were the majority of bargaining Unit 7, which included nurses at other facilities operated by the County. Unit 7 was represented by the California Nurses Association (CNA'or the Union) for more than 20 years.
In October 1996 Community acquired VMC and renamed it University Medical Center (UMC). In connection with the acquisition, Community instituted various changes at UMC. In brief, Community
In August 1996, when it was becoming apparent that Community might acquire VMC, the Union demanded that Community recognize and bargain with it. Community acknowledged receipt of the demand, but refused to recognize or to bargain with the Union. The Union filed an unfair labor practice charge and the General Counsel issued a complaint alleging that Community had violated § 8(a)(5) of the National Labor Relations Act, 29 U.S.C. § 158(a)(5). The Regional Director on his own initiative added an allegation that the maintenance of certain provisions in Community’s employee handbook was an unfair labor practice in violation of § 8(a)(1) of the Act.
An Administrative Law Judge held (1) Community was a successor employer to the County, contrary to Community’s argument that there was not “substantial continuity” between VMC and UMC; (2) the Unit 7 nurses at UMC constituted an appropriate bargaining unit, notwithstanding Community’s argument that the Unit 7 nurses at UMC shared a community of interest with the nurses at its other hospitals; and (3) in failing to recognize the Union, Community did not have or rety upon a good-faith reasonable doubt regarding the Union’s majority status. Cmty. Hosps. of Cent. Cal., 335 N.L.R.B. No. 87, at 15-24,
II. Analysis
“A [1] successor employer is required to recognize and negotiate with the bargaining agent of the predecessor’s employees if [2] the bargaining unit remains appropriate and [3] the successor does not have a good faith doubt of the union’s continuing majority support.” Trident Seafoods, Inc. v. NLRB,
We must affirm the Board’s order unless “the Board’s [factual] findings are not supported by substantial evidence, or ... the Board acted arbitrarily or otherwise erred in applying established law to
A. Successorship
A new employer is a successor to a former employer “if there is substantial continuity between the enterprises” of the two, Pa. Transformer Tech., Inc. v. NLRB,
whether the business of both employers is essentially the same; whether the employees of the new company are doing the same jobs in the same working conditions under the same supervisors; and whether the new entity has the same production process, produces the same products, and basically has the same body of customers.
The Board assesses these factors, no single one of which is dispositive, from the perspective of the employees involved. Id. In this case the Board found Community “operates an acute care health facility, in the same location, using essentially the same equipment [as had the County]. The general pool of patients remains the same and they are treated in the same [treatment units].” Order at 15. Furthermore, there was no hiatus between the closing of VMC and the opening of UMC, id., and the two organizations employed many of the same supervisors. Id. at 16.
In arguing it was not a successor employer, Community does not deny the factual predicate upon which the Board based its decision. Instead it identifies a number of facts it claims cut against the Board’s finding of substantial continuity: the change from public to private management; the new supervisory and management structure; changes in the duties, compensation, and benefits of the nurses at the hospital; changes in the nurses’ shift schedules and in the organization of support functions; and the adoption of a “partner model” of patient care.
The Board’s decision is nonetheless supported by substantial evidence. See Universal Camera Corp. v. NLRB,
The change from public to private ownership of the hospital does not undermine the Board’s finding that Community was a successor. For the contrary proposition, Community invokes Lincoln Park Zoological Society v. NLRB,
Nor do the changes in hours, wages, benefits, and management to which Community points cast doubt upon the Board’s finding of substantial continuity. See Harter Tomato Prods. Co. v. NLRB,
Community contends the change it made in the patient care model used at the hospital instituted a new “production process” within the meaning of the Fall River Dyeing test. We disagree. The critical point, as the Board notes in its brief, is that the hospital “continued to function as a full-service, acute-care hospital where registered nurses used the same skills and equipment to provide care for the same general patient population.” In sum, the nurses are doing substantially the same work; only their reporting and supervisory structure has changed. We do not think that amounts to a change in the “production process.”
B. Bargaining Unit
In reviewing the Board’s selection of a bargaining unit, we are mindful that “the Board need only select an appropriate unit, not the most appropriate unit.” Serramonte Oldsmobile, Inc. v. NLRB,
Community argues first that the presumptions do not apply in this case because there never was a bargaining unit consisting only of Unit 7 nurses at the hospital; Unit 7 comprised nurses both at VMC and at other County-operated facilities. Second, Community claims a bargaining unit consisting only of the Unit 7 nurses located at UMC is not appropriate, and any presumption to the contrary is rebutted, because it has “fully integrated” UMC into its other operations. In support of the latter point, the employer relies upon (1) the geographic proximity of UMC to Community’s other facilities; (2) the “great deal of employee interchange among [its] facilities”; (3) its “integrated management structure” with “system-wide managerial responsibilities” and centralized administrative support; and (4) the elimination of certain service functions at UMC, which according to Community, means that a work stoppage at one of its facilities could “have a significant adverse impact upon the continuity of patient care” at the other facilities.
Community’s first argument would have us distinguish between a previously recognized bargaining unit and a subset of such a bargaining unit, limiting the presumption of appropriateness to the former. Community provides no authority for this distinction and, as the Board points out in its brief, it is inconsistent with our precedent. See Int’l Union of Elec., Radio & Mach. Workers, AFL-CIO-CLC v. NLRB,
That takes us to the question whether the evidence that Community had fully integrated UMC’s operations with those of its other facilities is sufficient to rebut the twin presumptions. We readily conclude it is not because we find persuasive Board precedent precisely on point. In Children’s Hospital of San Francisco two hospitals had merged. The nurses at Children’s Hospital had long been represented by the CNA as part of a multi-employer unit.
Children’s Hospital had a single facility employing registered nurses, and it dealt continuously with the Union as the representative of those nurses in that facility. That long term relationshipwas reasonably relied on by the [ALJ] in finding that — where the proffered unit choices are a unit consisting of the facility in which the bargaining relationship had existed and a unit encompassing that facility and another which lacked a similar bargaining history — the single facility is an appropriate unit.
Id. at 920. The same is true in this case.
C. Good-Faith Reasonable Doubt
Community raised as an affirmative defense that its refusal to bargain with the Union was based upon its good-faith reasonable doubt about the Union’s majority status. A good-faith doubt is “a genuine, reasonable uncertainty about whether [the Union] enjoy[s] the continuing support of a majority of unit employees.” Allentown Mack Sales & Serv., Inc. v. NLRB,
The ALJ, relying heavily upon Community’s failure to respond to the General Counsel’s subpoena calling for documents relating to its claim of a good-faith reasonable doubt, Order at 23, 18, found that (1) Community did not act in good faith; (2) any doubt it had was not well-founded and was unreasonable; and in any event (3) Community did not rely upon such a doubt in refusing to recognize the Union. Id. at 21-24. Community claims each of these findings was erroneous.
We think the Board reasonably concluded Community failed to demonstrate that, when it refused to bargain with the Union, it relied upon such doubt as it may have had about the Union’s majority status. That is reason enough to hold the employer committed an unfair labor practice; we need not concern ourselves with Community’s first two claims of error.
Community disputes the ALJ’s finding that “the record fails to demonstrate who made the decision [not to recognize and bargain with the Union] and why it was made.” Order at 23. According to the employer, “the undisputed recox’d evidence demonstrates that [its] Boax'd of Dix*ectors ... decided not to x’ecognize and bax'gain with CNA after x’eceiving input from [a committee formed to study the issue] and outside counsel.” Community points to a host of evidence it claims demonstrates that its decision was based upon its doubts about the Union’s majoxity status. Although a gx’eat deal of that evidence ax’guably supports its contention that a good-faith doubt would have been reasonable in the circumstances, none of it shows that its decision in fact was based upon such a doubt. For example, the testimony of nux’ses working at UMC that they and many of their co-workers wex'e dissatisfied with the Union, while x’elevant to whether those nux’ses may have doubted the Union’s majority status, is not relevant to the inquix’y whether the employer made its decision based upon any such doubt.
Although Commmiity contends that the decision not to recognize the Union was made by its board of directors, there is no direct evidence in the record indicating when, how, or even whether the directors made such a decision, or indeed ever considei'ed the matter. In the absence of any such evidence, which is peculiarly within Community’s control - and which the Gen-ex’al Counsel had subpoenaed - the ALJ was justified in infex'xing that if produced, the evidence would have beexx unfavorable to the employer. Of. United States v. Young,
Community objects that by demanding information about its decision the Board was seeking to pry into the internal deliberations of its directors and to require it to disclose assertedly privileged documents. We find this argument singularly unpersuasive. Initially we note that a party holding privileged information that could establish a claim or defense as to which it has the burden of proof always faces the difficult choice whether to produce that information. Moreover, Community’s problem in this case is entirely of its own making; the only reason the proceedings of its board of directors are at issue is that it never responded to the CNA’s request to bargain by explaining that it doubted the Union’s majority status.
Instead of providing direct evidence of a decision by its board of directors, Community points to testimony by members of an ad hoc committee it formed to determine whether to recognize the Union, and claims the full board decided not to recognize the Union upon the recommendation of this committee. In addition to being circumstantial, the testimony - primarily that of Michael McGinnis, Community’s Chief Financial Officer, and of Eileen McCloskey, its human resources manager - is not particularly helpful to the employer. Although Ms. McCloskey did state her understanding that the committee’s recommendation was based in part upon the Union’s alleged minority status, Mr. McGinnis clearly suggested that any fear the CNA would be a minority union was based upon the UMC nurses being a minority of the full complement of nurses (“whole work force”) at Community’s three hospitals. As we have seen, however, the Unit 7 nurses at UMC were by themselves an appropriate bargaining unit. The possible minority status of the Union within a larger unit has no bearing upon whether Community was required to recognize and bargain with the Union; and a decision of the board of directors based upon the recommendation of the committee would be founded not upon a good-faith reasonable doubt but upon a misconception.
D. The Employee Handbook
The Board found that Community violated § 8(a)(1) of the Act by maintaining Rules 1 and 8 in its Employee Handbook. Those rules respectively prohibit “[i]nsubordination, refusing to follow directions, obey legitimate requests or orders, or other disrespectful conduct towards
Community raises the threshold objection that the Board should not have passed upon this allegation because it was not “factually related to” any of the allegations in the unfair labor practice charge with which the Union initiated this proceeding, see Lotus Suites, Inc. v. NLRB,
We therefore turn to Community’s objection to the merits of the Board’s decision. The Board holds that the “mere maintenance” of a rule “likely to have a chilling effect” upon employees’ rights to engage in activity protected by § 7 of the Act is an unfair labor practice. Lafayette Park Hotel,
Here the Board held Rule 1 was likely to discourage “concerted employee protest of supervisory activity” and “vigorous proselytizing for or against a union.” Order at 4. Community maintains that, like the rule in Adtranz prohibiting “abusive or threatening language,”
We agree. The Board objected chiefly to the Rule’s prohibition of “other disrespectful conduct.” When read in context, however, that prohibition clearly does not apply to union organizing activity - including “vigorous proselytizing”; it applies to incivility and outright insubordination, in whatever context it occurs. Although Community’s employees are perhaps unlikely to know the term ejusdem generis, they no doubt grasp as well as anyone the concept it encapsulates: The “other disrespectful conduct” to which Rule 1 refers is clearly conduct of a piece with “insubordination” or “refusing to follow directions [or to] obey legitimate requests or orders.” The Board’s suggestion that employees would consider “vigorous proselytizing for or against a union,” or other protected activity, “insubordinate” within the condemnation
The Board’s concern with respect to Rule 8 was that employees might understand the “[r]elease or disclosure of confidential information” to include the revelation of “information concerning terms and conditions of employment, including wages,” Order at 5, the sharing of which is useful, indeed perhaps essential, to successful self-organizing. Community again argues the rule must in reason be read more narrowly to prevent disclosure only of “sensitive patient and business information,” and not to prohibit discussion with other employees or with union organizers of information about the terms of one’s own employment.
Again we agree. The Board’s objection to this provision appears to rest chiefly upon the possibility that an employee might believe the rule prohibits him from revealing information, such as wages or a disciplinary record, concerning himself. Unlike the provision at issue in Brockton Hospital v. NLRB,
III. Conclusion
For the foregoing reasons, Community’s petition for review is granted and the Board’s application for enforcement denied insofar as each concerns the Board’s holding that Rules 1 and 8 of Community’s employee handbook violated the Act. In all other respects the petition is denied and the application for enforcement granted.
So ordered.
Notes
The Board held Community was required by the “successor bar rule" of Si. Elizabeth Man- or, Inc.,
Al oral argument the court raised the question whether an employer's erroneous belief that a union does not represent a majority of employees in the bargaining unit is a "good-faith reasonable doubt” when that belief is based upon a mistake of law about the size of the bargaining unit. Because Community did not argue the point before the Board and on brief before us, however, we need not decide it.