Employment Law Advisory Bulletin
Recent 9th Circuit Decision May Embolden Unions to Organize Health Care Workers
By Sara S. Bowen
[May 2006]
Healthcare Employees Union v. National Labor Relations Board, 03-72029 (9th Cir. 2006) (filed
March 17, 2006). The 9th Circuit recently reversed an employer-friendly decision by the NLRB, potentially emboldening unions to organize at health care facilities.
Procedural History
The Healthcare Employees Union petitioned the Ninth Circuit to review a final order of the National Labor Relations Board (“NLRB” or “Board”) in which the Board dismissed the Union’s unfair labor practice charge against St. Vincent Medical Center for subcontracting out its Respiratory Care ("RC") work just days before those employees were scheduled to vote on union representation. The NLRB had concluded that there was insufficient evidence of discriminatory intent by St. Vincent, but the Ninth Circuit reversed the Board in a 2-1 decision.
Facts
The RC department at St. Vincent was responsible for administering intubations, ventilators, and life-support systems, and had a history of staffing problems, poor performance and complaints by other medical staff. Management frequently discussed these problems in an effort to remedy the situation.
In July 1999, the Healthcare Employees Union started campaigning to organize the technical staff at St. Vincent. Management was aware of the organizing; in fact, human resources made a “studied effort” to monitor the union’s activities. It was clear to management that RC employees, who represented a strong percentage of the workforce, were supportive of the union.
Around the same time, hospital management began discussing the possibility of subcontracting out the RC work as a way of fixing the department’s longstanding problems. The hospital had outsourced the work of other departments with success, and it was optimistic that subcontracting would be effective with the RC group.
By November 1999, it was obvious the union was gaining support; it announced that soon it would file a representation petition with the NLRB. In December 1999, management received instructions to proceed with finding a subcontractor for the RC work.
After the union filed its petition for a representation election in January 2000, the parties agreed that the Board-conducted election would take place on Feb. 18, 2000. However, on January 26, St. Vincent received and accepted a subcontracting proposal for the RC work. On January 31, St. Vincent announced that RC technicians would become employees of the subcontractor, and those employees were transferred to the subcontractor’s payroll five days later. The hospital maintained that its decision was motivated purely by business considerations and its desire to correct longstanding problems in the department. Not surprisingly, the union filed an unfair labor practice charge with the NLRB alleging that St. Vincent’s decision was designed to thwart the desires of the employees for union representation.
The NLRB’s Decision
The administrative law judge for the NLRB applied a Wright Line analysis, requiring the General Counsel to make “a prima facie showing sufficient to support the inference that protected conduct was a ‘motivating factor’ in the employer’s decision,” and upon such a showing, requiring the employer to demonstrate that “the same action would have taken place even in the absence of the protected conduct.” The ALJ observed that employers generally are free to make business judgments about how to run their businesses, regardless of whether a union is in the picture or not. Here, although the ALJ found the timing of the outsourcing to be suspicious, he concluded that the General Counsel had not proven that the decision was motivated by animus. He relied, in part, on the fact that the subcontracting had successfully resolved the problems in the RC department.
The union and General Counsel for the NLRB appealed the ALJ’s ruling to the full Board. The Board affirmed the ALJ’s findings and conclusions, and also found that even if the decision was motivated partly by discrimination, St. Vincent’s had established that it would have taken the same action anyway. The union then appealed to the Ninth Circuit.
The Ninth Circuit Decision
The Ninth Circuit also applied a Wright Line analysis but viewed the evidence differently, concluding that the record supported a finding that St. Vincent was motivated by anti-union animus in deciding to subcontract out the RC department. The Ninth Circuit specifically pointed to the following facts: (1) St. Vincent knew about the union activity; (2) human resources directed hospital managers to monitor all union activity; (3) RC managers asked union organizers if they could see the union fliers; and (4) hospital managers were aware of the upcoming union election when they made the decision to subcontract out the RC department. Although such actions were not in themselves illegal, the Ninth Circuit found this evidence to be “background evidence” of union animus.
The Ninth Circuit stated that the “inference of anti-union animus raised by the timing of St. Vincent’s decision to subcontract is stunningly obvious,” because St. Vincent subcontracted out its entire RC department less than two weeks before the union election. And even though St. Vincent’s decision ultimately was good for patient care and the hospital generally, the Ninth Circuit found “post-subcontracting evidence” to be irrelevant to the question of union animus. Rather, the hospital seemed to “hurry up” in accepting a subcontracting proposal and transferring the RC employees off its payroll before the union election. Thus, the court reversed the NLRB’s decision.
What This Decision Means For Employers
There are two significant aspects to this decision. First, the Ninth Circuit is supposed to show deference to the factual findings of the NLRB and to uphold the NLRB’s decisions when based on “substantial evidence.” Here, the Ninth Circuit engaged in a complete review of the evidence to make its own factual findings. This may suggest that at least some Ninth Circuit judges have less respect for the current composition of the NLRB.
Second, the decision highlights the traps for an employer attempting to make substantial business changes during an organizing campaign. While an employer has the right (and duty) to act as if the organizing is not occurring, any business decisions it makes will be subject to extra scrutiny. It becomes vitally important for employers to document when they begin contemplating a decision, when they actually make the decision, and what their reasons are for the timing of the decision. Decisions that have been “on hold” for a period of time should not be accelerated because a union has appeared on the scene. We recommend employers implement strategies to remain union free well in advance of unionizing efforts and consult with labor counsel when facing significant decisions in the midst of union organizing.
For more information, please contact:
This Advisory is a publication of the Employer Services Department of Davis Wright Tremaine LLP. Our purpose in publishing this Advisory is to inform our clients and friends of recent developments in employment law. It is not intended, nor should it be used, as a substitute for specific legal advice as legal counsel may be given only in response to inquiries regarding particular situations.
Copyright © 2006, Davis Wright Tremaine LLP.
return to Advisory Bulletins main page
|
