Coral Harbor Rehabilitation v. NLRB ( 2019 )

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
______________
No. 18-2220
CORAL HARBOR REHABILITATION AND
NURSING CENTER,
Petitioner
v.
NATIONAL LABOR RELATIONS BOARD,
Respondent
______________
No. 18-2619
NATIONAL LABOR RELATIONS BOARD,
Petitioner
v.
CORAL HARBOR REHABILITATION AND
NURSING CENTER,
Respondent
_______________
On Application for Enforcement and Cross-Petition for
Review of an Order of the National Labor Relations Board
(NLRB-1 No. 22-CA-167738)
______________
Submitted March 11, 2019
______________
Before: McKEE, PORTER, and ROTH, Circuit Judges.
(Filed: December 26, 2019)
Louis J. Capozzi, Jr.
Brandon S. Williams
Capozzi Adler
2933 North Front Street
Harrisburg, PA 17110
Counsels for Petitioner in No. 18-2220
Ruth E. Burdick
David Habenstreit
Saulo Santiago.
David A. Seid,
National Labor Relations Board
1015 Half Street, S.E.
Washington, DC 20570
Counsels for Petitioner in No. 18-2619
______________
OPINION OF THE COURT
______________
McKEE, Circuit Judge.
Coral Harbor Rehabilitation and Nursing Center (the
“Center”) asks us to review the National Labor Relations
Board’s determination that the Center violated Sections 8(a)(5)
and (1) of the National Labor Relations Act by (1) refusing to
bargain with 1199 Service Employees International Union
United Healthcare Workers East (the “Union”) as the
representative of the Center’s licensed practical nurses
(“LPNs”) and (2) unilaterally changing their wages and
benefits without notice to the Union or providing the Union an
opportunity to bargain.1 Because the Board’s decision is
consistent with precedent and supported by substantial
evidence, we will deny the Center’s petition for review and
grant the Board’s cross-application for enforcement.
1
29 U.S.C. § 158(a)(5) & (1).
2
I. BACKGROUND
The Center purchased a nursing home in which the
Union represented two separate units of employees – a unit of
LPNs and a unit of service employees that included certified
nursing assistants (“CNAs”).2 After the purchase, the Center
hired a majority of the LPNs who had worked for the former
employer, increased their wages, and changed their paid leave
and health benefits, without making any effort to bargain the
changes with the Union. Approximately 25 LPNs and 36
CNAs were ultimately employed by the Center.
After the Center changed the terms of the LPNs’
employment, the Union filed charges of unfair labor practices,
alleging that the Center had violated Sections 8(a)(5) and (1)
of the NLRA by refusing to bargain with the Union as the
representative of the LPNs, and by later making unilateral
changes to their wages and benefits without notice to the Union
or providing the Union an opportunity to bargain.
After an initial investigation, the Board’s General
Counsel filed a complaint of unfair labor practices against the
Center. The Center responded that it was a Burns successor
and therefore not under any obligation to recognize or bargain
with the Union over the changes in the terms of the LPNs’
employment because the LPNs had been converted into
supervisors and were therefore exempt from the protections of
the NLRA.
Thereafter, an administrative law judge conducted an
evidentiary hearing at which four of the Center’s LPNs, its
Director of Nursing (“DON”), and its Administer testified
about the activities and responsibilities of the LPNs.
According to that testimony, the LPNs did not attend morning
staff meetings with managers but did receive completed master
schedules and could add or subtract CNAs on the schedule with
permission from the DON. The LPNs were told that they
2
LPNs at the Center distribute medication, provide
treatments, and ensure that the needs of residents are met.
CNAs provide basic care to residents and assist with daily
living functions, such as feeding, grooming, dressing,
walking, hygiene, and bathing.
3
would play an active role in supervising CNAs, would have the
authority to exercise their independent judgment, were
expected to discipline employees, and complete employee
evaluations.
A section of the employee handbook entitled “Role of
Licensed Professional Nurses (LPNs) and Registered Nurses
(RNs)” stated: “RN and LPN Supervisors . . . have the
responsibility to issue discipline (oral and written warnings) to
nursing assistants when they believe warranted. Discipline can
be for matters relating to resident care or for violations of the
employee rules of conduct under Coral Harbor’s Progressive
Disciplinary System.”3 A Notice of Disciplinary Action
(“disciplinary notice”) is a form containing a narrative about
an employee’s infraction and the type of discipline issued, i.e.,
verbal warning or write-up.
Testimony offered by the LPNs at the hearing regarding
specific instances of imposing discipline can be summarized as
follows: LPN 1 testified that she has not personally disciplined
anyone, but that she has signed and delivered disciplinary
notices for two employees that were completed by the DON.
The DON filled out the disciplinary notices and gave them to
her to issue. In fact, according to LPN 1, she was not present
when either employee committed their respective infractions.
LPN 2 testified that she twice imposed discipline
against the same CNA—a verbal warning and a written
discipline for re-education. However, like LPN 1, LPN 2 did
not witness the infraction and did not have access to the
personnel file of the CNA to know what “level” of discipline
to administer. She was, however, instructed by the
Administrator and DON on how to proceed in terms of
discipline. The severity and ultimate approval of the discipline
was left to the discretion of the DON.
LPN 3 testified that she would first have to get the
disciplinary notice from the DON and consult with the DON
3
JA-1224.
4
or a supervisor4 before disciplining anyone. When she wrote
the narrative on the disciplinary notice for an employee, the
verbal warning and approval of the discipline was determined
by the DON. LPN 3 further testified that on two separate
occasions she was asked to deliver a disciplinary notice to a
CNA, but the notice itself had been filled out by a supervisor.
On each of those occasions, her only role was the physical
delivery of the notice.
Lastly, LPN 4 testified that she issued three disciplinary
notices, without instruction or consultation and made formal
recommendations, but the subsequent discipline was handled
by the unit manager. However, LPN 4 also testified that for
three other disciplinary notices she was simply asked for her
signature on a notice that was already completed, or she was
instructed to write up the notice for an infraction she had not
observed.
The DON testified that if an LPN completed a
disciplinary notice for a CNA, she (the DON) would
investigate and review the personnel file, which the LPN did
not have access to, and then determine the appropriate severity
of the discipline. The DON confirmed that she or the staffing
coordinator determined CNA schedules. An LPN could not
perform independent scheduling or direct employees in their
assignment—only the DON could. The LPNs testified that
they were not involved in training of the CNAs; again, that was
the responsibility of the DON.
Based on the testimony, the ALJ found that the Center
was a Burns successor and that it had hired a majority of its
predecessor’s employees. The ALJ thus concluded that the
Center had an obligation to bargain with the union of its
predecessor. The ALJ also found that the LPNs were not
supervisors as defined by Section 2(11) of the NLRA but were
instead, statutory employees protected by the NLRA and
represented by the Union. Accordingly, the ALJ held that the
Center violated Sections 8(a)(5) and (1) of the NLRA by
refusing to recognize and bargain collectively with the Union,
4
LPN 3’s use of the term “supervisor” during her testimony
referred to either a unit manager or the assistant DON
(“ADON”), but never an LPN.
5
and by making unilateral changes to the wages and benefits of
the LPNs without notice to the Union or giving it an
opportunity to bargain over the changes.
The Center filed exceptions with the Board but limited
its challenge to the ALJ’s findings regarding the LPNs’ role in
discipline and adjusting grievances. The Board affirmed the
ALJ’s rulings and findings. The Board specifically concluded
that the Center failed to establish that the LPNs (1) have
supervisory authority to discipline or effectively recommended
discipline or (2) possess the supervisory authority to adjust
grievances.
Thereafter, the Center petitioned us to review the
Board’s decision, and the Board cross-petitioned for
enforcement of its order.5
II. STANDARD OF REVIEW
Our “review of orders of the Board is highly deferential.”6
“We accept the Board’s factual findings if they are supported
by substantial evidence . . . [and] exercise plenary review over
questions of law and the Board’s application of legal
precepts.”7 Substantial evidence “means relevant evidence
that a reasonable mind might accept as adequate to support a
conclusion.”8
III. DISCUSSION
A. NLRB v. Burns
In NLRB v. Burns Int’l Sec. Servs., Inc.,9 the Supreme
5
The Board possessed jurisdiction over the unfair-labor-
practice proceeding under Section 10(a) of the NLRA. 29
U.S.C. § 160(a). We have jurisdiction pursuant to Section
10(e) and (f) of the NLRA. 29 U.S.C. § 160(e), (f).
6
Trimm Assocs., Inc. v. NLRB, 351 F.3d 99, 102 (3d Cir.
2003).
7
Spectacor Mgmt. Grp. v. NLRB, 320 F.3d 385, 390 (3d Cir.
2003); see Adv. Disposal Servs. E., Inc. v. NLRB, 820 F.3d
592, 606 (3d Cir. 2016).
8
N.L.R.B. v. ImageFIRST Unif. Rental Serv., Inc., 910 F.3d 725,
732 (3d Cir. 2018).
9
406 U.S. 272 (1972).
6
Court held that a successor employer is ordinarily free to set
initial terms on which it will hire the employees of a
predecessor. It is therefore undisputed that as a successor-
employer, the Center had the right to set the initial terms of
employment for LPNs when it took over operations for the
nursing home. Accordingly, “[a] new employer has a duty
under §8(a)(5) [of the NLRA] to bargain with the incumbent
union that represented the predecessor’s employees when there
is a ‘substantial continuity’ between the predecessor and
successor enterprises.”10 As the Court explained in Burns:
Although a successor employer is ordinarily free
to set initial terms on which it will hire the
employees of a predecessor, there will be
instances in which it is perfectly clear that the
new employer plans to retain all of the
employees in the unit and in which it will be
appropriate to have him initially consult with the
employees’ bargaining representative before he
fixes terms.11
Thus, under Burns, “the new employer, succeeding to the
business of another, had an obligation to bargain with the union
representing the predecessor’s employees.”12
Section 7 of the NLRA guarantees employees “the right
to self-organization, to form, join, or assist labor organizations,
to bargain collectively through representatives of their own
choosing, and to engage in other concerted activities for the
purpose of collective bargaining or other mutual aid or
protection.”13
Section 8(a)(1) states: “[i]t shall be an unfair labor
practice for an employer . . . to interfere with, restrain, or
coerce employees in the exercise of” their Section 7 rights.14
Section 8(a)(5) states: “[i]t shall be an unfair labor practice for
10
Chester ex rel. NLRB v. Grane Healthcare Co., 666 F.3d
87, 100 (3d Cir. 2011) (citing Fall River Dyeing & Finishing
Corp. v. NLRB, 482 U.S. 27, 43 (1987)).
11
Burns, 406 U.S. at 294–95.
12
Fall River Dyeing, 482 U.S. at 29 (citing Burns, 406 U.S. at
278–79).
13
29 U.S.C. § 157.
14
29 U.S.C. § 158(a)(1).
7
an employer . . . to refuse to bargain collectively with the
representatives of [its] employees.”15
However, not all employees are included under the
protective umbrella of the NLRA and collective bargaining.
Employers are not required to afford collective bargaining
rights to supervisory employees.16 The Center concedes that it
refused to bargain with the Union on behalf of the LPNs and
that it unilaterally changed the LPNs’ wages and benefits
without notice to the Union and without providing the Union
an opportunity to bargain. Therefore, resolution of this dispute
turns on whether the LPNs were statutory supervisors under
Section 2(11) of the NLRA.
B. NLRB v. Kentucky River
“To be entitled to the [NLRA’s] protections and
includable in a bargaining unit, one must be an ‘employee’ as
defined by the [NLRA].”17 The NLRA states that the term
“employee” includes:
any employee, and shall not be limited to the
employees of a particular employer, unless this
subchapter explicitly states otherwise, and shall
include any individual whose work has ceased as
a consequence of, or in connection with, any
current labor dispute or because of any unfair
labor practice, and who has not obtained any
other regular and substantially equivalent
employment, but shall not include any
individual employed as an agricultural laborer,
or in the domestic service of any family or person
at his home, or any individual employed by his
parent or spouse, or any individual having the
status of an independent contractor, or any
individual employed as a supervisor, or any
individual employed by an employer subject to
the Railway Labor Act, as amended from time to
time, or by any other person who is not an
15
29 U.S.C. § 158(a)(5).
16
See 29 U.S.C. § 152(3).
17
Mars Home for Youth v. NLRB, 666 F.3d 850, 853 (3d Cir.
2011) (citing 29 U.S.C. § 152(3); NLRB v. Kentucky River
Cmty. Care, Inc., 532 U.S. 706, 711 (2001)).
8
employer as herein defined.18
Thus, the NLRA excludes supervisors from the definition of
“employee.” “Supervisor” is defined as:
any individual having authority, in the interest of
the employer, to hire, transfer, suspend, lay off,
recall, promote, discharge, assign, reward, or
discipline other employees, or responsibly to
direct them, or to adjust their grievances, or
effectively to recommend such action, if in
connection with the foregoing the exercise of
such authority is not of a merely routine or
clerical nature, but requires the use of
independent judgment.19
Supervisors are not protected under the NLRA provisions that
protect employees, and supervisors are not included in a
bargaining unit.20
“Whether someone is a supervisor is a question of fact,
and thus will be upheld if . . . supported by substantial
evidence.”21 In Kentucky River, the Supreme Court decided
“which party in an unfair-labor-practice proceeding bears the
burden of proving or disproving an employee’s supervisory
status; and whether judgment is not ‘independent judgment’ to
the extent that it is informed by professional or technical
training or experience.”22 The Court acknowledged that the
NLRA does not “expressly allocate the burden of proving or
disproving a challenged employee’s supervisory status.”23 The
Board “has filled the statutory gap with the consistent rule that
the burden is borne by the party claiming that the employee is
a supervisor.”24
As the party claiming supervisory status, the Center
18
29 U.S.C. § 152(3) (emphasis added).
19
29 U.S.C. § 152(11).
20
See 29 U.S.C. § 152(3).
21
Mars Home, 666 F.3d at 853.
22
532 U.S. at 708.
23
Id. at 710.
24
Id. at 710–11.
9
bears the burden of establishing it here.25 Whether an
individual is a statutory supervisor is a question of fact
particularly suited to the Board’s expertise and therefore
subject to limited judicial review.26 We must uphold the
Board’s supervisory-status conclusion as long as it is supported
by substantial evidence, “even if we would have made a
contrary determination had the matter been before us de
novo.”27
In Kentucky River, the Court established the following
three-part test for determining whether an individual is a
supervisor:
Employees are statutory supervisors if (1) they
hold the authority to engage in any 1 of the 12
listed supervisory functions [in Section 2(11)],
(2) their exercise of such authority is not of a
merely routine or clerical nature, but requires the
use of independent judgment, and (3) their
authority is held in the interest of the employer.28
The Center alleges that the LPNs were supervisors under the
NLRA because they had authority to discipline or effectively
recommend discipline of CNAs. We disagree.
It is clear under Kentucky River that our inquiry here
must focus on whether the LPNs have “use of independent
judgment” to impose discipline.29 A person exercises
independent judgment if she “act[s], or effectively
recommend[s] action, free of the control of others and form[s]
an opinion or evaluation by discerning and comparing data.”30
Judgment is not independent if it is “dictated or controlled by
detailed instructions, whether set forth in company policies or
rules, the verbal instructions of a higher authority, or in the
25
Mars Home, 666 F.3d at 854.
26
Id. at 853.
27
Citizens Publ’g & Printing Co. v. NLRB, 263 F.3d 224, 232
(3d Cir. 2001).
28
532 U.S. at 713 (internal quotation marks and citations
omitted).
29
Id.
30
In re Oakwood Healthcare, Inc., 348 N.L.R.B. 686, 693
(2006).
10
provisions of a collective bargaining agreement.”31 Moreover,
in order for judgment to be independent, it “must involve a
degree of discretion that rises above the ‘routine or clerical.’”32
This standard seeks to distinguish “between straw bosses,
leadmen, set-up men, and other minor supervisory employees,”
who are included within the NLRA’s protections, “and the
supervisor vested with such genuine management prerogatives
as” those established under Section 2(11).33
This record supports the Board’s conclusion that the
Center’s LPNs lacked independent judgment as required under
Section 2(11). The Board agreed with the ALJ’s findings that
“[a]ll discipline must be cleared with the DON or manager and
the DON or manager must approve all recommendations of
discipline of employees.”34 While the four LPNs who testified
stated that they issued disciplinary notices to CNAs, they all
also testified that they did not fill out the level or type of
discipline on the disciplinary notices. Instead, that section of
the notice was left open to be “signed off” and imposed by the
DON.
Moreover, the LPNs did not have access to employee
personnel files and therefore could not know what level of
discipline was appropriate in any given case. Rather, it was the
DON who filled out disciplinary notices herself or received
notices from an LPN, investigated the matter, talked to the
CNA, and determined the appropriate level of discipline.
Accordingly, it can hardly be said that the LPNs were
responsible for administering discipline to the extent required
for supervisory status under the NLRA.
Furthermore, it is unclear whether there are established
policies that control whether a verbal warning will be issued
for a given infraction as opposed to a written one or whether
there is some form of incremental discipline. “Under its
written disciplinary policy, [the Center] retains discretion to
31
Id.
32
Id.
33
N.L.R.B. v. Bell Aerospace Co. Div. of Textron, Inc., 416 U.S.
267, 280–81 (1974) (citing S. Rep. No. 105, 80th Cong., 1st
Sess., 4 (1947).
34
JA-22.
11
impose whatever level of discipline it determines is
appropriate, and the disciplinary notices in the record do not
follow any defined progression.”35 However, it is clear that
LPNs cannot exercise independent discretion to decide the
level of discipline that will be imposed.
The Board agreed with the ALJ’s conclusion that: (1)
LPNs do not have the authority to assign or the responsibility
to direct CNAs with use of independent judgment; (2) LPNs
do not have authority to discipline CNAs and others; (3) the
evaluations of CNAs are not determinative of LPN supervisory
status; and (4) LPNs do not have accountability nor authority
to responsibly direct.36
C. NLRB v. Vista Nursing
The Center further argues that under our decision in
NLRB v. New Vista Nursing and Rehabilitation, the NLRA
does not preclude an LPN from having supervisory authority
merely because her recommendation is subject to a superior’s
investigation.37 In New Vista, we identified two considerations
which do not negate supervisory status: “(1) whether a nurse’s
supervisor undertakes an independent investigation; and (2)
whether the employees exercise their supervisory authority
only a few times (or even just one time).”38 We also recognized
that three factors – considered in the aggregate – may establish
that an individual is a statutory supervisor: “(1) the [individual]
has the discretion to take different actions, including verbally
counseling the misbehaving employee or taking more formal
action; (2) the [individual’s] actions ‘initiate’ the disciplinary
process; and (3) the [individual’s] action functions like
discipline because it increases severity of the consequences of
35
Coral Harbor Rehab. & Nursing Ctr. & 1199 SEIU United
Healthcare Workers E., 366 NLRB No. 75, *1 n.6 (May 2,
2008).
36
Under the third prong of our Kentucky River inquiry we
determine whether the authority of the alleged supervisors is
held in the interest of the employer; however, since we
conclude that the Board correctly ruled that the Center’s
LPNs are not statutory supervisors under prongs one or two,
we need not reach prong three. See 532 U.S. at 713.
37
870 F.3d 113, 132–33 (3d Cir. 2017).
38
Id. (internal quotation marks and citations omitted).
12
a future rule violation.”39
Here, after the Board decided that the ALJ’s conclusion
was consistent with Kentucky River, it specifically cited to our
decision in New Vista, explaining that “the same result would
obtain under the standards employed by the United States
Court of Appeals for the Third Circuit [in New Vista
Nursing].”40 We agree.
Notwithstanding the Center’s reliance on New Vista, it
is clear that the LPNs here lacked discretion to impose
discipline. The Board found, “[i]n every instance where an
LPN-witness was questioned about a specific disciplinary
notice, the witness testified, without contradiction, that a
manager had instructed the LPN to fill out and sign the
disciplinary notice, had actually filled out the disciplinary
notice and simply instructed the LPN to sign it, or had brought
a CNA’s infraction to the LPN’s attention and suggested that a
disciplinary notice was warranted.”41 It is clear that the
Center’s LPNs do not have “discretion to take different
actions,”42 unless instructed by a manager.
The Center has failed to carry its burden and did not
establish that the LPNs “initiate a progressive disciplinary
process”43 or that such a process even exists. Nowhere in the
Center’s brief does it offer an explanation of how any of its
disciplinary actions follow a progressive disciplinary policy
“and the disciplinary notices in the record do not follow any
defined progression.”44 And because the LPNs lacked access
to CNA personnel files, they could not determine appropriate
levels of discipline. The LPNs’ inability to determine which
level of discipline was appropriate demonstrates that there was
a clear lack of “supervisor” training for LPNs and their actions
did not “initiate a progressive disciplinary process.”45
39
Id. at 132.
40
366 NLRB at *1 n.6.
41
Id.
42
New Vista, 870 F.3d at 132.
43
Id. at 136.
44
Coral Harbor, 366 NLRB at *1 n.6.
45
New Vista, 870 F.3d at 132.
13
Lastly, the Center has not established that an LPN’s
involvement with disciplinary notices “increases severity of
the consequences of a future rule violation.”46 As we have
explained, unit managers, the ADON, or the DON impose the
level of discipline they deem to be appropriate at any given
time. There is also evidence of individual CNAs receiving the
same level of discipline for multiple infractions. Nowhere
does the record establish that a subsequent infraction increased
the severity of discipline after an LPN was involved in issuing
a prior disciplinary notice.
IV.
For the reasons set forth above, we conclude that
substantial evidence supports the Board’s determination that
the LPNs were not statutory supervisors and they were
therefore not excluded from the NLRA’s protections.
Accordingly, the Center had an obligation to inform the Union
of the changes it made in the LPNs’ duties and to refrain from
making those changes in the absence of bargaining with the
Union. We will therefore deny the Center’s petition for review
and grant the Board’s cross-application for enforcement.
46
Id. at 136.
14