National Labor Relations Board v. Annapolis Emergency Hospital Association, Inc., D/B/A Anne Arundel General Hospital

WINTER, Circuit Judge,

dissenting:

I would refuse enforcement of the Board’s order directing the employer to bargain because the Board’s certification of MNA as the employees’ collective bargaining representative was (a) improper as a matter of law, and (b) improper as a matter of fact since the Board’s findings that MNA would have no voice or control in actual collective bargaining lack substantial evi-dentiary support. The astonishing result which flows from the majority’s decision is that the Board may certify a collective bargaining representative on the condition that it not bargain for the employees it represents. I think this incorrect as a matter of law. In my view, the majority is also in error in concluding that there is substantial evidence to support the Board’s finding that MNA has divested itself of control over the bargaining process which the Board requires as a condition of MNA’s certification.

From these holdings, I respectfully dissent.

I.

The majority opinion adequately describes the three-tiered structure of MNA¹ —its statewide organization, its geographical districts within the state, and its professional chapters within each district. Annapolis Emergency Hospital Association, Inc., d/b/a Anne Arundel General Hospital (the employer), is located in District 3 and its employees are members of the chapter known as “The Registered Nurses of Anne Arundel General Hospital, Professional Chapter of the Maryland Nurses Association, Inc.” (hereafter AAC). Approximately one-third of MNA’s members are supervisors, and supervisors serve as officers, directors and professional council members of MNA. No supervisor hired by the employer, however, presently serves as a director or officer of MNA; and no supervisor hired by the employer may serve as a member of the Council on Professional Employment Activities because the Council is composed of the chief officers of the several chapters and AAC apparently does not admit supervisors to membership.² Some of the employer’s supervisors do serve, however, as District 3 officers.

There can be no doubt that the Board certified MNA on condition that AAC, and not MNA, would conduct bargaining. The Board’s order stated, “[njeither the ANA nor MNA or its councils, districts, or any of its other components, is authorized to assert control over the professional chapter [AAC] in collective bargaining, or over the results of such bargaining,” and then concluded:

[I]nasmuch as the Petitioner, through its Anne Arundel Professional Chapter, has delegated its collective-bargaining authority respecting the Employer’s employees to its Anne Arundel Hospital Professional Chapter, independent of ANA³ or other MNA influences, and as that chapter admits no supervisors to its membership, and has no employer supervisors as its officers or directors, we find, contrary to the Employer, that the Petitioner, in its collective-bargaining process is hot subject to the influence, domination, or control of supervisors as defined in the Act. Accordingly, and inasmuch as the Petitioner otherwise satisfies the requirements set forth in Section 2(5) of the Act, we find that it is a bona fide labor organization within the meaning of the Act. (Citation omitted.)

Any doubt that, to the Board, delegation of the bargaining function to AAC was the sine qua non to certification of MNA is dispelled by reference to contemporaneously decided cases, both involving the certification of other state affiliates of ANA as bargaining agents for nurses. See Sisters of Charity of Providence, St. Ignatius Province, d/b/a St. Patrick Hospital, 225 N.L. R.B. No. 110 (1976), and Sierra Vista Hospital, Inc., 225 N.L.R.B. No. 155 (1976). In both, the Board’s decision in the instant case was cited in support of the conclusion that since the state-wide nurses’ association had delegated its bargaining function to a local autonomous chapter of non-supervisory nurses, the state-wide association had cured any ineligibility to be certified. Moreover, in both cases, the Board, by telegraphic orders, had previously stated that if the state-wide association failed to delegate its bargaining function to a local chapter controlled by non-supervisory employees, “a motion to revoke the certification will be entertained.” Notwithstanding this obvious prerequisite, in the instant case, the Board’s actual order certified MNA and not AAC, and the Board’s bargaining order, based upon the employer’s conceded refusal to bargain, directed the employer to bargain with MNA and not AAC.

The Board was not explicit in articulating its reasons why MNA would not have been certified without having delegated the bargaining function to AAC. Its decision, however, seems designed to answer two arguments: first, that MNA was not a labor organization within the meaning of § 2(5) because of its supervisory members and its divers interests; and, second, that there are inherent dangers in certifying any labor organization containing a large number of an employer’s supervisors because of dangers to the bargaining process and unfairness to the employees. In regard to the first argument, it is true that MNA exists “in part” for the purpose of dealing with employers concerning conditions of work. While delegation of the bargaining function might solve the problem of MNA’s having supervisory members, it would not solve the problem of MNA’s other interests. Therefore, it must be concerns relating to the second argument that required delegation. This conclusion is reinforced by the references to employer domination throughout the Board’s decision in this case, as well as in Sisters of Charity of Providence and Sierra Vista Hospital.

Board decisions reflect that it is fundamental Board policy that a labor organization controlled by supervisors is not qualified to serve as a collective bargaining representative. See Brunswick Pulp & Paper Co., 152 N.L.R.B. 973 (1965); New York City Omnibus Corp., 104 N.L.R.B. 579 (1953); Alaska Salmon Industry, Inc., 78 N.L.R.B. 185 (1948). While Congress, in enacting the Taft-Hartley Act, partially overruled Packard Motor Car Co. v. NLRB, 330 U.S. 485, 67 S.Ct. 789, 91 L.Ed. 1040 (1947),⁴ the Board’s policy not to permit supervisor-dominated unions from representing employees is in full accord with congressional policy and intent. See I Legislative History of the Labor Management Relations Act of 1947, 409-11 (1948). It is also a necessary consequence of § 8(a)(2) of the Act (incorporating § 8(2) of the Wagner Act verbatim) making it an unfair labor practice for an employer “to dominate or interfere with the formation or administration of any labor organization” since supervisory employees are treated as representatives of the employer. See Note, The Role of Supervisors in Employee Unions, 40 Chi. L.Rev. 185, 200-04 (1972). In sum, in accord with cases like Local 636, United Association of Journeymen v. NLRB, 109 U.S. App.D.C. 315, 287 F.2d 354 (1961), the Board correctly concluded that MNA was a labor organization subject to interference from supervisors, and thus not an appropriate bargaining agent. Cf. David Buttrick Co., 66 L.R.R.M. 1057, 1058 n. 10 (1967) (distinction drawn between designation of international and local in conflict-of-interest case), enforced, 399 F.2d 505 (1 Cir. 1968).⁵

The Board’s decision to require delegation was clearly designed to alleviate this problem. See State v. Professional Ass'n of N.J. Dept. of Ed., 64 N.J. 231, 315 A.2d 1, 4 (1974); Bowman v. Hackensack Hospital Assoc., 116 N.J.Super. 260, 282 A.2d 48 (1971) (designation of employees’ Economic Security Organization connected to New Jersey State Nurses’ Association instead of the Association to alleviate similar problem). First, the Board noted MNA has delegated its collective bargaining obligations to AAC. Second, the Board noted that AAC contains no supervisors as members or officers. In essence, the Board was not only requiring the bargaining unit to contain no supervisors, but was requiring the “union” or labor organization to contain no supervisors. The inescapable inference was that there can be no domination or interference problem with regard to AAC because it, unlike MNA, contains no supervisors.

Although not articulated as such, another reason which probably motivated the Board is that certification of MNA without requiring delegation of its bargaining authority would have raised the difficult problem of whether an employer can be forced to bargain with a labor organization which allows the employer’s supervisors to be members.⁶ I am inclined to think that the Board purposefully sought to avoid this issue by requiring the employer to bargain with AAC.

Board cases do hold that labor organizations which have an employer’s supervisors as members may be certified as bargaining agents, see, e. g., Oak Ridge Hospital of the United Methodist Church, 192 N.L.R.B. 512 (1971); Carle Clinic Assoc., 192 N.L.R.B. 512 (1971); Pacific Far East Lines, Inc., 174 N.L.R.B. 1168 (1969); International Paper Co., 172 N.L.R.B. 933 (1968), but this is not equivalent to requiring the employer to bargain. No courts have addressed the issue so far as I am aware. I do not undertake its resolution, but I submit that it is not an issue without difficulties, see Beasley v. Food Fair of North Carolina, 416 U.S. 653, 659, 94 S.Ct. 2023, 2027, 40 L.Ed.2d 443 (1974) (“Employers were not to be obliged to recognize and bargain with unions including or composed of supervisors.”)⁷

The issue becomes whether the Board may within its discretion certify MNA on condition it does not bargain to alleviate these difficulties and still have it constitute a labor organization within the National Labor Relations Act. The reality of the Board’s order in the instant case is a holding that MNA will be certified as the bargaining agent; but because it is, in the Board’s view, incompetent to act as the bargaining agent, the certification is conditioned upon MNA’s having no voice or control in the bargaining process; rather, bargaining must be carried on exclusively by a different labor organization as defined by 29 U.S.C. § 152(5). I think that such an order is illogical and illegal.

Under the statutory scheme set forth in 29 U.S.C. § 159, the Board is authorized to certify “representatives” for collective bargaining designated or selected by a majority of the employees in an appropriate unit. The term “representatives” is defined by 29 U.S.C. § 152(4) to mean “any individual or labor organization.” In order for MNA to be a “representative,” it must satisfy the definition of “labor organization” contained in 29 U.S.C. § 152(5). That subsection provides:

The term “labor organization” means any organization of any kind, or any agency or employee representation committee or plan, in which employees participate and which exists for the purpose, in whole or in part, of dealing with employers concerning grievances, labor disputes, wages, rates of pay, hours of employment, or conditions of work.

It is obvious that a principal function — indeed, the most important function — of a “labor organization” is to carry on collective bargaining, and logically it would seem that the employees’ certified representative would perform that function. Yet the Board’s order certifying MNA effectively prohibits MNA from that activity.⁸ The logical inconsistency of the result is manifest. In my view, the result also violates the Act. For purposes of the present case, i. e., an unfair labor practice proceeding for refusal to bargain in viola-

tion of § 8(a)(5), I read §§ 159, 152(4) and 152(5) to require that the certified labor organization be willing and able to bargain and to prohibit the Board from certifying MNA to bargain on condition that it not bargain. It is true that the Board has discretion to place appropriate limitations on the choice of bargaining representatives to carry out statutory policies, see NLRB v. Jones & Laughlin Steel Corp., 331 U.S. 416, 422, 67 S.Ct. 1274, 91 L.Ed. 1575 (1947), but the existence of that discretion implies a duty to comply with the congressional directive. See Jones & Laughlin, 331 U.S. at 422-23, 67 S.Ct. 1274.

Moreover, under 29 U.S.C. § 159(c)(1) and 29 C.F.R. §§ 101.17, 102.60 (1976), a petition for certification must be filed by employees, an individual or a labor organization in order for the labor organization or individual to be certified. The Board, by utilizing the procedure it has, has circumvented the question of whether the labor organization on the ballot is an appropriate representative and, by effectively certifying a different labor organization than that petitioning, it has not exercised its judgment or its procedures properly. See NLRB v. Jones & Laughlin Steel Corp., 331 U.S. 422-23, 67 S.Ct. 1278 (1947) (“A proper determination as to any of these matters, of course, necessarily implies that the Board has given due consideration to all the relevant factors and that it has correlated the policies of the Act with whatever public or private interests may allegedly or actually be in conflict.”)

In conclusion, I think that by certifying MNA and directing it not to do what it should do, the Board has failed in carrying out its duties.

II.

If it is assumed, nonetheless, that, consistent with the Act, the Board may certify a bargaining agent on condition that it not bargain, I am persuaded that there is not substantial evidence to support the Board’s findings that MNA has delegated its bargaining function to AAC, and that AAC is “independent of ANA or other MNA influence . . . .” The evidence, as I appraise it, shows continuing and ultimate control by MNA over AAC. It follows, in my view, that the defects in the collective bargaining process which the Board avowedly seeks to avoid have not been obviated. In accord with Board policy, MNA should not have been certified.

Of course, MNA’s bylaws purport to delegate, inter alia, to AAC the authority to effectuate MNA’s policies at the employment level and to make rules and establish procedures for the1 conduct of AAC’s business. The associate executive director of MNA testified that the purpose of the bylaws was to delegate the entire authority for collective bargaining to the professional chapters.⁹ The duties of the Council on Professional Employment Activities include the development and implementation of MNA’s policy on professional chapters (including AAC) and employment-level matters, and the promotion and establishment of employment conditions for appropriate groups within each of the clinical divisions. There was evidence that neither MNA nor the Council is authorized to assert any control over AAC in collective bargaining or over the results of such bargaining other than the perfunctory duty of ratifying and executing any contract which AAC negotiates; AAC has its own negotiating committee, selected by its members; and, in order for it to be binding, the members of AAC must ratify any collective bargaining agreement negotiated with the employer.

If the evidence set forth in the preceding paragraph was all the evidence, the Board’s factual determination would have substantial support. But other evidence shows that MNA has means to control AAC and, in fact, exercises substantial control over bargaining activities. MNA’s principal instrument of control is the power of the purse. AAC collects no dues and has no authority to assess its members. All dues are paid to ANA which remits a portion to MNA and the districts. AAC must make budget requests to the Council and if it approves, AAC’s budget is subject to further approval by MNA’s board of directors. If AAC incurs unforeseen expenses, it may obtain reimbursement only if the Council requests and the board of directors approves additional funds. Certainly MNA dominates AAC’s bargaining and grievance procedures through fiscal control. Cf. Quad City Builders Association v. Tri City Bricklayers Local 7, 431 F.2d 999 (8 Cir. 1970) (for the purpose of 29 U.S.C. § 186, jointly administered labor-management industrial funds must be free of union control); Mechanical Contractors Association of Philadelphia v. Local Union 420, 265 F.2d 607 (3 Cir. 1959) (same); Pacific Electricord Co., 153 N.L. R.B. 521 (1965), enf’d, 361 F.2d 310 (9 Cir. 1966) (employee domination through financial assistance).

MNA participates directly in the bargaining process. It furnishes the local chapters, such as AAC, advice and guidance on collective bargaining; it holds seminars and gives lectures on bargaining goals and strategies; it supplies economic data on nurses’ salary scales for use in bargaining negotiations. The associate executive director of MNA admitted that his primary function was to participate in every bargaining session between an employer and health care employees from 1970 to January, 1975. He also advised and formulated goals and objectives for collective bargaining negotiations for chapters, as well as participated in the bargaining sessions to achieve them. MNA’s board of directors has established no-strike and no-union-security agreement rules which are binding on the chapters. The associate executive director can be expected to carry out these policies together with whatever other attitudes, policies, goals and restrictions MNA may adopt in the future.

Moreover, District 3 retains all power to discipline nurses, including the authority to suspend or expel nurses from membership for such things as violating the no-strike provision. Such power can easily be utilized to influence bargaining decisions and bring about results thought to be appropriate by MNA.

Under the evidence I have recited — and I can find in the record no substantial contradiction of it — I think that the independence of AAC and the lack of domination by MNA in the bargaining process is more illusory than real. On this ground also, I would vacate the Board’s finding that MNA has delegated its bargaining function and decline to enforce its order.

III.

I am constrained to add a specific comment about the majority opinion. I do not view the ease as one in which the issue of delegation is saved until the last and then brushed aside on principles of the law of agency. Delegation is the principal issue, because without delegation MNA would not have been certified. I believe that I have shown that it was illegal, as a matter of law, and that the actual finding that it had occurred lacks substantial evidentiary support. I would vacate the Board’s findings and refuse enforcement of its order.

1 . MNA is one of eighteen state affiliates of The American Nurses Association, Inc., a nationwide association of nurses.

2 . The evidence on this point, while probably sufficient to support a finding that AAC does not admit supervisory personnel to membership, is far from conclusive even though the fact should have been readily capable of exact proof. AAC’s bylaws, containing no limitation on membership, were in evidence. On January 9, 1975, a representative of MNA testified that the bylaws had been amended prior to October 1, 1974, to limit membership to non-supervisory nurses. No document reflecting the change was produced. On October 21, 1974, the same representative testified that “everyone up to the nursing director” was eligible to join AAC.

3 . American Nurses Association, Inc., the national organization.

4 . Packard Motor held that the Wagner Act was applicable to supervisory employees. As a consequence, the Court held that the Board could permit supervisory employees to be union members, to bargain, and to invoke the protections afforded by the Act.

5 . The Board, as the majority discusses, may have also been attempting to avoid a conflict of interest problem which would have led to an infection of the bargaining process. See, e. g., Medical Foundation of Bellaire, 193 N.L.R.B. 62, 64 (1971); Welfare and Pension Funds, 178 N.L.R.B. 14 (1969); Teamsters Local 249, 139 N.L.R.B. 605, 607 (1962); Bausch & Lomb Optical Co., 108 N.L.R.B. 1555, 1559 (1954). See also Schmerier Ford, Inc. v. NLRB, 424 F.2d 1335, 1339 n. 2 (7 Cir. 1970), cert. denied, 400 U.S. 823, 91 S.Ct. 45, 27 L.Ed.2d 52 (1970).

6 . The majority opinion blithely asserts that MNA should have been certified even if there had' been no delegation to AAC (majority opinion n. 5), thereby failing to recognize the problem. I do not think the matter quite so easy of decision.

7 . It should be noted that a labor organization is an organization "in which employees participate," see 29 U.S.C. § 152(5), not an organization in which supervisors participate, An “employee” within the meaning of the Act excludes supervisors. As the majority recognizes, an employer may fire a supervisor for participating in a union. See Florida Power & Light Co. v. IBEW, 417 U.S. 790, 94 S.Ct. 2737, 41 L.Ed.2d 477 (1974). This remedy does, however, place the burden upon the employer to enforce his rights by exercising his right of discharge. The unanswered question is whether the employer may utilize the alternative, less drastic remedy of refusal to bargain with a union containing his supervisors. Cf. Typographical Local 38 v. NLRB, 278 F.2d 6 (1 Cir. 1960) (violation of § 8(b)(2) and § 8(b)(3) for union to insist that supervisor be a member of the union), affd by an equally divided court, 365 U.S. 705, 81 S.Ct. 855, 6 L.Ed.2d 36 (1961). Therefore, cases holding a union that contains supervisors may be a labor organization for purposes of § 8(b), see, e. g., Masters, Mates & Pilots Union v. NLRB, 159 U.S.App.D.C. 11, 486 F.2d 1271 (1973), cert. denied, 416 U.S. 956, 94 S.Ct. 1970, 40 L.Ed.2d 306 (1974); Marriott Corp. v. NLRB, 491 F.2d 367 (9 Cir.), cert. denied, 419 U.S. 881, 95 S.Ct. 146, 42 L.Ed.2d 578 (1974), or for purposes of LMRA § 301, see Pharmacists Employees Local 330 v. Lake Hills Drug Co., 255 F.Supp, 910 (D.Wash.1964), are not determinative. Cf. Report and Recommendations on Labor-Management Relations in the Federal Service, GERR Ref. File 21:1018 (1973) (supervisors should not participate in the management of labor organization within Executive Order 11491); Executive Order 11491 §§ 2(c), 10(b)(1), 21(b), 24(2).

8 . On that ground, the instant case is to be distinguished sharply from those cases in which a certified labor organization chooses an official of a local or other group to conduct its labor negotiations. See, e. g., General Electric Co. v. NLRB, 412 F.2d 512, 517 (2 Cir. 1969), and cases cited therein. The rationale of those cases is that the employees or the union may choose to have someone else bargain for them. The cases thus rest on notions of free choice and recallable delegation of authority. In the instant case, a non-revokable delegation of authority was the sine qua non to certification. Therefore, the principal can no longer veto the decisions of its negotiator as in General Elec-trie. Moreover, while the delegation purportedly occurred before the election in the instant case, unlike the other cases where delegation was not required prior to election, the record fails to show that the employees eligible to vote in the election were ever advised about the delegation, let alone consented to it. See M. A. Norden Co., Inc., 159 N.L.R.B. 1730, 1732 (1966); Standard Oil Co., 92 N.L.R.B. 227 (1950), vacated on other grounds, 196 F.2d 892 (6 Cir. 1952). Therefore, the majority by permitting the certification is not acceding to employee free choice as it claims, but is directly frustrating free choice.

9 . This was the same witness whose testimony is discussed in n. 2. With respect to delegation, this witness testified earlier that MNA did deal with employers concerning wages, hours and conditions of employment. Indeed, he claimed to handle personally all of MNA’s collective bargaining negotiations. He then described the local chapters, including AAC, as only quasi or semi-autonomous. He never undertook to explain the conflicts in his testimony.