One day before Caritas Christi Health Care received final regulatory approval for its sale to a private equity firm, members of the union representing 1,700 nurses at the Roman Catholic system last week accepted a new five-year labor agreement with raises and a new pension guarantee.
Judge OKs Caritas sale
Nurses union agrees to new labor agreement
A spokesman for Boston-based Caritas Christi said private equity group Cerberus Capital Management, set to pay at least $830 million for the six-hospital system, did not have input in negotiating the deal struck with the Massachusetts Nurses Association.
The new labor contract guarantees regular wage increases and the establishment of a new defined-benefit, multi-employer pension plan, said to be a first-of-its-kind for Bay State nurses. The deal applies at four Caritas hospitals: Carney Hospital in Dorchester, Good Samaritan Medical Center in Brockton, Norwood (Mass.) Hospital and St. Elizabeth’s Medical Center in Brighton.
Caritas spokesman Chris Murphy said the contract will remain in force along with any other existing labor agreements under the new ownership.
“A five-year contract is pretty long, and it gives us a lot of stability. We know what our nursing workforce expenses will be for the next five years,” Murphy said.
A spokesman for Cerberus declined to comment on the labor deal, which gives 2% bonuses in 2011 and raises of 2% for 2012 and 2013 with an option to reopen salary negotiations in 2014, along with enriching the union salary scale for each year of clinical experience at their respective facilities.
One day after the union vote, a judge provided the final regulatory clearance for the sale. Supreme Judicial Court Judge Francis Spina ruled Oct. 29 the proposed transaction had met all due diligence requirements. Cerberus in March agreed to spend at least $430 million to fund pre-existing worker pensions, retire system debt and provide working capital, along with an additional $400 million to fund capital improvements in order to acquire the system from the archdiocese.
A review of the deal by Massachusetts Attorney General Martha Coakley added a provision under which Cerberus agreed not to sell any of the hospitals for three years, and to engage in a lengthy public review process in order to close any of the hospitals, which could be done only after two consecutive years of operating losses.
Although the system is legally owned by an independent not-for-profit organization, both the Archdiocese of Boston and the Vatican had to sign off on the deal, which they have done, Murphy said.
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