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Victories wiped away?
NLRB lacked quorum; dozens of rulings questioned

By Ashok Selvam
Posted: February 9, 2013 - 12:01 am ET

Hospitals and health systems in disputes with labor unions may increasingly duck the authority of the National Labor Relations Board by pointing to an appeals court's ruling that the board acted with no real quorum for the past year.

The U.S. Circuit Court of Appeals in Washington ruled last month that the Obama administration unconstitutionally used recess appointments to name two new NLRB members on Jan. 4, 2012, concluding Congress wasn't officially in recess. Since those members joined, the board has made more than 200 rulings, NLRB spokeswoman Nancy Cleeland said.

After the circuit court's decision, attorneys from 19-hospital Prime Healthcare Services, Ontario, Calif., informed union officials of its refusal to comply with two NLRB rulings made in 2012. Three other significant NLRB rulings in the healthcare sector could be challenged, said G. Roger King, a management labor attorney with Jones Day.

The firm represents an employer in Noel Canning v. NLRB, the case involving a Washington beverage bottler that led the D.C. court to rule that the NLRB appointments were unconstitutional. “We are getting calls from employers all over the country on this issue,” King said.

Legal observers think the case will head to the U.S. Supreme Court.

In the meantime, for-profit Prime is ignoring two December rulings. In one, involving Cleveland television station WKYC-TV, the NLRB reversed past decisions and required the collection of union dues despite the expiration of a labor contract. The second involved Piedmont Gardens, a continuing-care center in Oakland, Calif. In that decision, the board ruled that employers must furnish internal investigation documents to union officials.

Not complying with a ruling is a typical precursor to filing an appeal, Prime assistant general counsel Mary Schottmiller wrote in an e-mail. The unconstitutionality of the appointments gives Prime further reason to appeal a decision the company opposed.

“Here, the D.C. Circuit Court of Appeals has issued a very clear and detailed ruling that the NLRB has no authority to act,” Schottmiller wrote. “The decisions of the current NLRB were questionable even before that ruling, as the NLRB was serially overruling long-standing precedent—precedent that had for decades been accepted by both Democratic and Republican NLRB appointees.”

One healthcare case of interest involves Banner Health, the 22-hospital system headquartered in Phoenix. In an August ruling, the NLRB found Banner to be in violation of labor laws for discouraging workers at 214-bed Banner Estrella Medical Center in Phoenix from talking about internal investigations regarding employee misconduct. Banner officials argued that the policy makes it easier to provide confidentiality to the employee being investigated.

In a July decision, the NLRB ruled that the 220-bed Keck Hospital of USC in Los Angeles inappropriately prohibited off-duty employees from being on hospital premises. The policy allowed workers on the campus only if they were patients, were visiting a patient or conducting business tied to their jobs. The concern was that Keck was barring employee access to prevent union organizing. The NLRB struck down Keck's policy, ruling the access restrictions were too broad.

A third decision of note came in September and involved Finley Hospital, a 119-bed facility in Dubuque, Iowa. The board ruled that the hospital could not discontinue annual raises for nurses stipulated in a collective bargaining agreement after the contract's expiration.

Officials from Banner, Keck and Finley declined to comment when asked whether they planned to file appeals or to challenge the NLRB. However, documents from last year show attorneys in the Keck case have already raised the issue of the recess appointments in court.

Larger systems with deeper legal war chests are more likely to challenge the NLRB decisions they don't like, said Mark Nelson, a labor and management attorney with DrinkerBiddle. Systems and hospitals in California, always a hotbed of union activity, are also good candidates, he added.

Representatives from two hospital systems that are familiar with hostile union activity and fit Nelson's description of a system likely to challenge recent NLRB rulings—32-hospital Kaiser Permanente in Oakland, Calif., and 24-hospital Sutter Health in Sacramento, Calif.—said they have no plans to follow Prime's lead.

Union officials are bracing for the possibility of others following Prime and challenging their NLRB victories. “Screw all of you guys was the message they were sending,” SEIU-UHW attorney Bruce Harland said.

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