NYU Langone takes on the state's largest healthcare union

NYU Langone Medical Center has pitted itself against the state's largest healthcare union, 1199 SEIU, four of its chief hospital competitors and a collective-bargaining unit that represents 109 not-for-profit hospitals and nursing homes.

In a lawsuit filed Wednesday in U.S. District Court in Manhattan, NYU Langone alleges that 1199 SEIU and the League of Voluntary Hospitals and Homes of New York have forced it to make about $25 million in additional payments to the 1199 Benefit Fund for Health and Human Service Employees since it withdrew from the League on March 28, 2016. The payments cover medical, dental and disability benefits.

Other defendants in the lawsuit are Montefiore Medical Center, Mount Sinai Hospital, New York-Presbyterian Hospital and Northwell Health's Long Island Jewish Medical Center.

"We want to be able to negotiate directly on behalf of the workers and our patients," Joseph Lhota, NYU Langone senior vice president and vice dean, said in an interview. "You're limited in doing that when you're part of a collective of all these other hospitals."

The medical center said in the lawsuit that the league's actions violated federal antitrust law. After the withdrawal, the league no longer represented NYU Langone in negotiations with the union, but the health system was still bound by a 2014 agreement concerning wages and benefits and required to pay dues, according to the complaint.

In August 2016, 1199 recalculated the rate NYU Langone was required to contribute to the benefit fund, using the methodology for non-league members, which were typically nursing homes and other non-hospital healthcare providers. The contribution rate for these employers was lower but had no cap, which resulted in much higher contributions for an employer with higher-paid employees such as NYU Langone.

Lhota said he disagrees with the idea that NYU Langone would pay a non-league rate, as it is still a dues-paying member.

"This penalty they're making us pay has no basis whatsoever. It's punitive," he said.

The lawsuit argues that the penalties harm competition in the New York City hospital market. NYU Langone is paying $25 million in extra benefit contributions it could otherwise spend on technology and new facilities that help it attract patients and spur its competitors to make investments, according to the complaint.

In a statement, 1199 SEIU President George Gresham fired back at NYU Langone with his own claim of impropriety.

"Apparently the lawsuit arises from NYU Hospitals' unlawful withdrawal from the 1199/league multi-employer bargaining unit," he said. "This unlawful act is currently the subject of a charge before the National Labor Relations Board."

NYU Langone violated the National Labor Relations Act by withdrawing from the League of Voluntary Hospitals before its existing contract expired, said Daniel Ratner, a lawyer representing 1199 SEIU. The union has previously mobilized its workers to protest the withdrawal outside NYU Langone's flagship hospital.

"We have a legal and practical right to know that when we bargain with the league, we're speaking for all approximately 65 hospitals and 85,000 members," Ratner said. NYU Langone "can't unilaterally decide they are no longer part of it during the life of this contract."

Bruce McIver, president of the League of Voluntary Hospitals, declined to comment. Hospitals named as defendants said they were first learning of the lawsuit Wednesday.

"There are obviously many complex issues involved here so we're in the process of analyzing those now," said a Northwell Health spokesman. "We're trying to wrap our heads around it."

Montefiore and Mount Sinai said they were reviewing the lawsuit. New York-Presbyterian did not immediately respond to a request for comment.

"NYU Langone takes on the state's largest healthcare union" originally appeared in Crain's New York Business.