Beth Israel Hospital & Geriatric Center v. National Labor Relations Board

LOGAN, Circuit Judge.

Upon the petition of the National Labor Relations Board (NLRB), this Court granted en banc rehearing of these eases limited to reconsideration of the statements in the panel opinions that the NLRB’s use of presumptions violated the mandate of Federal Rule of Evidence 301. See Beth Israel Hospital and Geriatric Center v. NLRB, 677 F.2d 1343 (10th Cir. 1981); St. Anthony Hospital Systems v. NLRB, 655 F.2d 1028 (10th Cir. 1981). Since the language the NLRB objects to originated in an opinion entered earlier, Presbyterian/St. Luke’s Medical Center v. NLRB, 653 F.2d 450 (10th Cir. 1981), what is said here necessarily affects the authority of that decision. The en banc court now reaffirms the dispositions in the prior panel opinions, but modifies them by eliminating their reliance upon Federal Rule of Evidence 301.

The Beth Israel and St. Anthony panel opinions hold that the NLRB cannot employ a presumption of appropriateness when certifying a bargaining unit in health care institutions — -reasoning that to do so would contravene Congress’ admonition to avoid undue proliferation of health care bargaining units. Instead, the NLRB must determine whether a unit is appropriate without resorting to a presumption that shifts to the employer the burden of showing the proffered unit is inappropriate, and the NLRB must state why the unit it chooses complies with Congress’ admonition. This is not intended to be an onerous burden. The NLRB’s certification of bargaining units consisting solely of registered nurses may be entirely proper and within its discretion, but only if the NLRB states why establishing these units will not lead to undue proliferation at those health care facilities. See, e.g., Bay Medical Center, Inc. v. NLRB, 588 F.2d 1174 (6th Cir. 1978). The NLRB cannot rely solely on the employer’s failure to show that the units are inappropriate.

Our need to alter the two opinions arises only because they repeat a justification given in our prior decision, Presbyterian/St. Luke’s Medical Center v. NLRB, 653 F.2d 450 (10th Cir. 1981), finding impermissible the NLRB’s use of a presumption of appropriateness when certifying a health care bargaining unit. That decision not only relies on the NLRB’s need to comply with Congress’ admonition, but declares that by relying ón a presumption the NLRB violated the statutory requirement of following the Federal Rules of Evidence at unfair labor practice proceedings so far as practicable. See 29 U.S.C. § 160(b). The panel in Presbyterian/St. Luke’s reasoned that because Federal Rule of Evidence 301 forbids the use of a presumption that shifts the burden of persuasion, the NLRB violates Rule 301 when at the representation proceeding it invokes the presumption and shifts to the employer the burden of showing the proposed unit is inappropriate, and then at the unfair labor practice hearing refuses to relitigate the issue of the appropriate bargaining unit.

Because Presbyterian/St. Luke’s, which is not before us in this en banc hearing, indicates that the NLRB, when certifying bargaining units in the health care or any other field, cannot employ a presumption that shifts the burden of persuasion to the employer, we cannot simply delete references to Rule 301 in the two subsequent opinions and leave the issue to be decided another day. That would not eliminate the statements in Presbyterian/St. Luke’s and would confuse whether its reasoning would be binding on future panels of this Court. Therefore, we decide the issue to eliminate the confusion.

Turning to the merits, we observe that Congress limited its directive that the NLRB follow the Federal Rules of Evidence to unfair labor practice proceedings; its discussion of representation proceedings says nothing about following the Federal Rules of Evidence. See 29 U.S.C. §§ 159(c)(1), 160(b). There is good reason for this. A representation proceeding is intended to be informal and nonadversarial.

“Obviously great latitude concerning procedural details is contemplated. Requirements of formality and rigidity are altogether lacking. The notice must be ‘due,’ the hearing ‘appropriate.’ These requirements are related to the character of the proceeding of which the hearing is only a part. That proceeding is not technical. It is an ‘investigation,’ essentially informal, not adversary. The investigation is not required to take any particular form or confined to the hearing.”

Inland Empire District Council, Lumber & Sawmill Workers Union v. Millis, 325 U.S. 697, 706, 65 S.Ct. 1316, 1321, 89 L.Ed. 1877 (1945). The NLRB’s Regional Director may even consider information that is outside the record. NLRB v. Seven-Up Bottling Co., 344 U.S. 344, 348-49, 73 S.Ct. 287, 289-90, 97 L.Ed. 377 (1953); Foreman & Clark, Inc. v. NLRB, 215 F.2d 396, 408 (9th Cir.), cert. denied, 348 U.S. 887, 75 S.Ct. 207, 99 L.Ed. 697 (1954).

On the question of which unit is appropriate for bargaining purposes, the NLRB has no burden of persuasion that might be shifted by use of a presumption. Rather, the NLRB relies on its expertise and experience in a particular industry or organizational structure to decide the composition of a bargaining unit.

Judicial review of the NLRB’s choice of a bargaining unit is restricted to whether it was arbitrary and without substantial support. E.g., Daylight Grocery Co. v. NLRB, 678 F.2d 905, 908 (11th Cir. 1982); NLRB v. Gold Spot Dairy, Inc., 432 F.2d 125, 127 (10th Cir. 1970). Unless Congress has given the NLRB a specific directive, as it has in the health care industry, the courts should defer to the NLRB’s exercise of expertise and discretion — including decisions it bases on presumptions drawn from past experience — so long as when challenged the NLRB provides substantial support for its decision and shows it was not arbitrary. If the certified unit is an appropriate one the NLRB has not abused its discretion, even if the employer shows another unit was more appropriate. Daylight Grocery Co., 678. F.2d at 908; NLRB v. Fuelgas Co., 674 F.2d 529 (6th Cir. 1982); NLRB v. Pan American Petroleum Corp., 444 F.2d 328, 331 (10th Cir.), cert. denied sub nom. Amoco Production Co. v. NLRB, 404 U.S. 941, 92 S.Ct. 287, 30 L.Ed.2d 255 (1971). Outside the health care area, not allowing the NLRB to presume, based on its past experience, that a particular unit is appropriate would depart from the holdings of the other circuits that have considered the issue. See NLRB v. J. W. Mays, Inc., 675 F.2d 442, 444 (2d Cir. 1982); Alaska Statebank v. NLRB, 653 F.2d 1285, 1287 (9th Cir. 1981); Big Y Foods, Inc. v. NLRB, 651 F.2d 40, 45-46 (1st Cir. 1981); NLRB v. New Enterprise Stone & Lime Co., 413 F.2d 117, 118 n.5 (3d Cir. 1969); cf. Magic Pan, Inc. v. NLRB, 627 F.2d 105, 107 (7th Cir. 1980) (mentioning NLRB’s use of presumption and not disapproving); Prudential Insurance Co. v. NLRB, 529 F.2d 66, 68 (6th Cir.), cert. denied, 425 U.S. 975, 96 S.Ct. 2176, 48 L.Ed.2d 799 (1976) (mentioning NLRB’s use of presumption and not disapproving).

Thus, in the face of congressional silence, we do not infer that Congress intended the NLRB to follow the Federal Rules of Evidence at the informal, nonadversarial representation proceedings. See Catholic Medical Center of Brooklyn and Queens, Inc. v. NLRB, 589 F.2d 1166, 1170 n.4 (2d Cir. 1978) (NLRB “probably” need not follow rules of evidence at representation proceedings); Riverside Press, Inc. v. NLRB, 415 F.2d 281, 283 (5th Cir. 1969), cert. denied, 397 U.S. 912, 90 S.Ct. 915, 25 L.Ed.2d 94 (1970) (rules of evidence “not controlling” at representation proceeding). It would be particularly inappropriate to impose on the NLRB a burden of proof to be met every time it wants to certify a bargaining unit. To do so would conflict with the deference we give the NLRB and would make labor organizational efforts more difficult than Congress intended.

The instant case differs from other bargaining unit determinations only because it involves unions in health care institutions. As we noted in Presbyterian/St. Luke's, 653 F.2d at 453, Congress directed the NLRB to justify more rigorously its bargaining unit determinations in the health care field because it feared frequent strikes that would close hospitals and increases in the cost of medical care through wage “leapfrogging” and “whipsawing” if hospital employees were represented by many different unions. See Bay Medical Center, Inc. v. NLRB, 588 F.2d 1174, 1176 (6th Cir. 1978). Thus, in the instant cases, when the NLRB applied its traditional presumption approach and certified the nurses’ unit without stating how its determination complied with Congress’ admonition, it abused its discretion. Accord Mary Thompson Hospital, Inc. v. NLRB, 621 F.2d 858 (7th Cir. 1980) (stationary engineers unit); NLRB v. Mercy Hospital Association, 606 F.2d 22 (2d Cir. 1979) (maintenance employees unit), cert. denied, 445 U.S. 971, 100 S.Ct. 1665, 64 L.Ed.2d 248 (1980); NLRB v. St. Francis Hospital, 601 F.2d 404 (9th Cir. 1979) (nurses unit); NLRB v. West Suburban Hospital, 570 F.2d 213 (7th Cir. 1978) (maintenance employees unit); St. Vincent’s Hospital v. NLRB, 567 F.2d 588 (3d Cir. 1977) (boiler room employees unit); see also Bay Medical Center, 588 F.2d 1174 (approving unit of “technical employees” when NLRB expressly considered Congress’ admonition).

If the employees vote for union representation, but the employer refuses to bargain with the certified unit, the employer may be charged with an unfair labor practice. At that proceeding, the NLRB’s general counsel need not prove that the unit chosen at the representation hearing was appropriate by a preponderance of the evidence. The Supreme Court has held that the NLRB need not reconsider at the unfair labor practice proceeding any issue it previously decided at the representation hearing. Magnesium Casting Co. v. NLRB, 401 U.S. 137, 141-42, 91 S.Ct. 599, 601-02, 27 L.Ed.2d 735 (1971). If the NLRB declines to redetermine whether an appropriate unit was selected, then that issue is not addressed at the unfair labor practice proceeding; thus Federal Rule of Evidence 301 would not apply and the employer could challenge the unit selection only through judicial review in the circuit court. Whether redetermined or not, unit selection remains a matter of agency discretion and expertise, unlike factual questions that must be resolved at the unfair labor practice proceeding, on which the circuits presently are split as to whether the NLRB’s prima facie case shifts the burden of persuasion to the employer. See Bed Ball Motor Freight, Inc. v. NLRB, (1982), -U.S.-, 102 S.Ct. 2282, 73 L.Ed.2d 1293 (White, J., dissenting from denial of certiorari, setting forth conflict between circuits). The question at issue in Red Ball is not before us.

Since this modification does not alter the disposition on the merits in the cases before us, the remand to the NLRB ordered in the panel opinions is reaffirmed. It is so ordered.