United States Court of Appeals, District of Columbia Circuit
Prime Healthcare Services - Encino LLC, d/b/a Encino Hospital Medical Center Petitioner
National Labor Relations Board, Respondent SEIU Local 121RN, Intervenor
February 6, 2018
Petition for Review and Cross-Application for Enforcement of
an Order of the National Labor Relations Board
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
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.
Edwards, Senior Circuit Judge
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).
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.
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.
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
Negotiations Over New Collective Bargaining Agreements
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
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.
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.
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.
Anniversary Step Increases
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 ...