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Prime Healthcare Services - Encino LLC v. National Labor Relations Board

United States Court of Appeals, District of Columbia Circuit

May 18, 2018

Prime Healthcare Services - Encino LLC, d/b/a Encino Hospital Medical Center Petitioner
v.
National Labor Relations Board, Respondent SEIU Local 121RN, Intervenor

          Argued February 6, 2018

          On Petition for Review and Cross-Application for Enforcement of an Order of the National Labor Relations Board

          Jamie M. Konn argued the cause for petitioner. With him on the brief were Joseph A. Turzi and Jonathan S. Batten.

          Gregoire Sauter, Attorney, National Labor Relations Board, argued the cause for respondent. With him on the brief were Richard F. Griffin, Jr., General Counsel, John H. Ferguson, Associate General Counsel, Linda Dreeben, Deputy Associate General Counsel, and Kira Dellinger Vol, Supervisory Attorney.

          Lisa C. Demidovich argued the cause for intervenor SEIU Local 121RN. With her on the brief was Ira L. Gottlieb.

          Before: Griffith and Pillard, Circuit Judges, and Edwards, Senior Circuit Judge.

          OPINION

          Edwards, Senior Circuit Judge

         The National Labor Relations Act ("Act" or "NLRA") imposes on employers a general duty to bargain in good faith with their employees' representatives over "wages, hours, and other terms and conditions of employment." 29 U.S.C. § 158(a)(5), (d). Pursuant to this duty to bargain, "an employer commits an unfair labor practice if, without bargaining to impasse, it effects a unilateral change of an existing term or condition of employment." Litton Fin. Printing Div. v. NLRB, 501 U.S. 190, 198 (1991) (citing NLRB v. Katz, 369 U.S. 736 (1962)). This "[unilateral change] doctrine has been extended as well to cases where . . . an existing agreement has expired and negotiations on a new one have yet to be completed." Id. The duty to bargain also requires an employer "to provide relevant information needed by a labor union for the proper performance of its duties as the employees' bargaining representative." Detroit Edison Co. v. NLRB, 440 U.S. 301, 303 (1979). A failure to comply with either obligation is a violation of Section 8(a)(5) and (1) of the Act. 29 U.S.C. § 158(a)(5), (1).

         In this case, the National Labor Relations Board ("Board") found that the Petitioner, Prime Healthcare Services and its subsidiary hospitals (together "Prime"), violated both the unilateral change doctrine and the duty to provide relevant information during negotiations with its employees' bargaining representatives, Service Employees International Union ("SEIU") Local 121RN ("121RN") and SEIU United Healthcare Workers-West ("UHW") (collectively, "the Unions"). Prime Healthcare Servs., 364 NLRB No. 128, slip op. at 1-3 (Oct. 17, 2016). The Board concluded that Prime unilaterally discontinued anniversary step increases due to unit employees after its collective bargaining agreements with 121RN and UHW had expired. Id. at 10. The Board also determined that Prime wrongfully refused to provide information about employee health care programs in response to requests from 121RN and UHW. Id. at 13, 16. The Board ordered Prime to, inter alia, resume granting step increases to eligible employees; make whole eligible employees for any loss of earnings resulting from the employer's failure to grant anniversary step increases; and furnish 121RN and UHW the requested information. Id. at 2-3.

         After the parties filed their opening briefs, the complaints relating to UHW's unfair labor practice charges were settled. The only matters that are still in issue here are those relating to the unfair labor practice charges filed by 121RN. Prime has raised a number of challenges to the Board's disposition of the 121RN charges. We find no merit in these challenges, however. Accordingly, we deny the petition for review and grant the Board's cross-application for enforcement of its order.

         I. Background

         Prime Healthcare Services, Inc., and its affiliate Prime Healthcare Foundation, Inc., own and operate numerous hospitals in various states. In June 2008, Prime acquired two hospitals in California-Encino Hospital Medical Center ("Encino") and Garden Grove Hospital & Medical Center ("Garden Grove"). It adopted three collective bargaining agreements then in force between the hospitals' prior owner and their employees. The first agreement was with 121RN, a union representing a unit of registered nurses at Encino. The second and third agreements were with UHW, a union representing two units of service and technical employees at Encino and Garden Grove. All three agreements were effective from January 1, 2007, through March 31, 2011.

         A. Negotiations Over New Collective Bargaining Agreements

         In late 2010 and early 2011, Prime commenced negotiations with 121RN and UHW over new collective bargaining agreements. Although the Unions represented different bargaining units, both are affiliated with the Service Employees International Union. Mary Schottmiller was the hospitals' principal representative in the negotiations with 121RN and UHW. The existing contracts covering all three units expired on March 31, 2011, without the parties having reached any new agreements.

         In addition to serving as the bargaining agent for employees at Prime, UHW also represented employees at hospitals owned by Kaiser and was a member of the National Coalition of Kaiser-Permanente Unions. Kaiser and the union coalition had reached an arrangement in 1997 pursuant to which the unions agreed to assist Kaiser in maintaining and improving its position in the marketplace. Part of the agreement required the unions to "focus . . . on real external threats" to Kaiser, including "competition." Prime Healthcare Servs., 364 NLRB No. 128, slip op. at 6. Prime is among Kaiser's competitors. During the course of the negotiations between Prime and UHW, officials at Prime expressed concerns that bargaining between Prime and UHW had been compromised because of the Union's relationship with Kaiser.

         In 2010, UHW conducted a "corporate accountability campaign" against Prime. Id. at 7. It publicized labor disputes with a Prime facility and criticized the company for reducing wages and benefits, and limiting access to medical care. It also published several reports questioning the quality of care provided at Prime hospitals, including allegations of unusually high rates of septicemia among Medicare patients.

         UHW's corporate accountability campaign caused officials at Prime to suspect that the Union might be working with Kaiser to exclude Prime from the California health care market. Nonetheless, Prime continued to pursue collective bargaining negotiations with both UHW and 121RN throughout 2011.

         B. Anniversary Step Increases

         The UHW and 121RN collective bargaining agreements in force at the time when Prime acquired the hospitals contained identical provisions covering wage increases for unit employees. One provision granted annual increases on specific dates each year when the contract was in effect, from 2007 to 2010. Another provision granted step increases on the anniversary of an employee's hiring date. The contracts further capped unit ...


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