San Miguel Hospital Corp. v. National Labor Relations Board

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued September 10, 2012 Decided November 2, 2012
No. 11-1198
SAN MIGUEL HOSPITAL CORPORATION,
PETITIONER
v.
NATIONAL LABOR RELATIONS BOARD,
RESPONDENT
Consolidated with 11-1209, 11-1319, 11-1349
On Petitions for Review and Cross-Applications for
Enforcement
of Orders of the National Labor Relations Board
Kaitlin Kaseta argued the cause for petitioner. On the briefs
were Don T. Carmody and Bryan T. Carmody.
Kellie Isbell, Attorney, National Labor Relations Board,
argued the cause for respondent. With her on the brief were
John H. Ferguson, Associate General Counsel, Linda Dreeben,
Deputy Associate General Counsel, and Julie B. Broido,
Supervisory Attorney.
Before: BROWN, Circuit Judge, EDWARDS and SILBERMAN,
Senior Circuit Judges.
2
Opinion for the Court filed by Senior Circuit Judge
SILBERMAN.
SILBERMAN, Senior Circuit Judge: Petitioner, San Miguel
Hospital Corp., essentially is challenging the Board’s
determination that a “wall to wall” bargaining unit of the
Hospital’s professional and non-professional employees is
appropriate. Although Petitioner unleashes a blizzard of
separate arguments, both substantive and procedural, only one
— relating to the burden of proof — even gives us pause. We
deny the petitions and grant the Board’s cross-applications for
enforcement.
I.
The Hospital is an acute-care facility in Las Vegas, New
Mexico. About five years ago the National Union of Hospital
and Healthcare Employees District 1199 NM petitioned for an
election in a unit combining all on-site professional and non-
professional employees (excluding, of course, guards).1 The
Hospital objected to the unit, contending that certain nurses were
statutory supervisors (no longer an issue) and, more importantly,
that the Board’s Health Care Rule, which sets forth the
appropriate units in the health care industry, was illegal because
it violated Section 9(c)(5) of the National Labor Relations Act.
This provision prohibits the Board from using “the extent to
which the employees have organized” as the “controlling” factor
in unit determination. 29 U.S.C. § 159(c)(5). The Health Care
Rule states:
1
The National Labor Relations Act precludes guards from being
represented in the same bargaining unit as other employees. 29 U.S.C.
§ 159(b)(3).
3
Except in extraordinary circumstances and in
circumstances in which there are existing non-
conforming units, the following shall be appropriate
units, and the only appropriate units, . . . except that, if
sought by labor organizations, various combinations of
units may also be appropriate:
(1) All registered nurses.
(2) All physicians.
(3) All professionals except for registered nurses and
physicians.
(4) All technical employees.
(5) All skilled maintenance employees.
(6) All business office clerical employees.
(7) All guards.
(8) All nonprofessional employees except for technical
employees, skilled maintenance employees, business
office clerical employees, and guards.
29 C.F.R. § 103.30(a).
Petitioner also claimed that the Board violated the Rule
itself by combining professionals and non-professionals together
in the absence of a showing of “extraordinary circumstances.”
Although the regional director was obliged to (and did) hold a
separate Sonotone election2 among the professionals to
determine whether they wished to be part of the wall-to-wall
2
“Sonotone election” refers to the kind of election that
determines whether professionals will be included in a collective-
bargaining unit with non-professionals pursuant to 29 U.S.C.
§ 159(b)(1). See generally Sonotone Corp., 90 N.L.R.B. 1236,
1240-42 (NLRB 1950).
4
unit, petitioner contended that was insufficient. The Board’s
Regional Director nevertheless found the proposed units
appropriate and directed a secret-ballot election to be conducted
in the two voting groups on whether they desired Union
representation. The Hospital requested Board review of the
Regional Director’s Decision and Direction of Election, but the
Board denied this request.
The Board’s Regional Office conducted the election in June
2007, and the Union prevailed. The professionals voted 48 to 19
to be included in the unit with the nonprofessionals, and the two
groups together voted 121 to 73 for union representation. The
Hospital filed 24 objections to the election, but the hearing
officer recommended that all the objections be overruled. A
two-member panel of the Board then adopted all of the hearing
officer’s findings and recommendations and certified the Union
as the exclusive collective-bargaining representative of the
Hospital’s employees.
The Hospital, however, refused to bargain with the Union.
The Board’s General Counsel accordingly issued a complaint
against the Hospital, alleging violations of Sections 8(a)(1) and
(5) of the Act. Petitioner’s defense was only that the Union was
improperly certified in light of the Hospital’s objections to the
election. The same two-member Board eventually issued an
order holding that the Hospital’s refusal to bargain violated the
Act. The Hospital petitioned for review in this Court, and the
Board cross-applied for enforcement.
Before we had a chance to resolve this dispute, the Supreme
Court decided New Process Steel, L.P. v. NLRB, 130 S. Ct.
2635, 2638 (2010), which held that a delegee group of at least
three Board members was necessary to exercise the delegated
authority of the Board; in other words, two-member Board
5
decisions were invalid. Accordingly, we vacated the Board’s
two-member decisions and remanded for reconsideration. The
Board, now with three members, responded with two subsequent
decisions. The first certified the election results, once again
overruling all of petitioner’s objections, and issued a notice to
show cause on the refusal-to-bargain issue (the “Certification
Order”). The second, decided several months later, granted the
General Counsel’s motion for summary judgment and found that
the Hospital had unlawfully refused to bargain with the Union
(the “Refusal-to-Bargain Order”).
The Hospital timely petitioned for review of the Board’s
Refusal-to-Bargain Order, and the Board has cross-applied for
enforcement.3
II.
Despite all of petitioner’s legal maneuvering, the only real
question before us is the validity of the Board’s certification of
the Union. The Hospital does not deny that it has never
bargained with the Union, so if the certification was valid, it
follows apodictically that the Hospital’s refusal to bargain
violated Sections 8(a)(1) and (5) of the Act.
3
Also before us is a separate Board decision finding that
petitioner committed various unfair labor practices related to a
unilateral change in policy and failure to provide information to the
Union. The parties have taken to calling the Refusal-to-Bargain Order
mentioned above “San Miguel I” and this separate unfair-labor-
practice proceeding “San Miguel II.” Both parties agree, however,
that San Miguel II turns entirely on whether the Union was the
properly certified bargaining representative for the Hospital’s
employees. Because we find that it was, we grant the Board’s cross-
application for enforcement in both cases.
6
A. The Health Care Rule
The Board rarely uses its rulemaking authority, but the
Health Care Rule is a welcome deviation from this trend. Its
promulgation in 1989 was a notable event in which the Board
responded to differing positions taken by the Board and courts
of appeals. See generally St. Margaret Mem’l Hosp. v. NLRB,
991 F.2d 1146, 1148 (3d Cir. 1993). As we noted above, the
Board announced eight possible appropriate units, but indicated
that combinations might be appropriate if sought by a labor
organization. That occurred here. The union successfully
sought to combine six of the groups, excluding only guards and
physicians.
The Health Care Rule was upheld by the Supreme Court in
American Hospital Ass’n v. NLRB, 499 U.S. 606 (1991), against
various challenges. But petitioner brings a somewhat different
challenge which (perhaps understandably) was not thought of
before — that the Rule violates Section 9(c)(5) of the Act
because it endorses the extent of a union’s organization as the
controlling factor in unit determination. It is not immediately
apparent to us why the validity of the Rule is a necessary pre-
condition to the Board’s determination in this case. There is no
reason to think that a broad unit, in the absence of the Rule,
would somehow be inappropriate. See Vanderbilt Univ., 218
N.L.R.B. 1076, 1078 (NLRB 1975) (noting the “strong
congressional sentiment favoring broad unit determinations in
the health care industry”); see also Cleveland Constr., Inc. v.
NLRB, 44 F.3d 1010, 1013 (D.C. Cir. 1995) (“The Board need
only select an appropriate unit, not the most appropriate unit.”
(emphasis added)).
But assuming arguendo the Rule’s validity is necessarily at
issue, we see zero merit to petitioner’s argument. All the
7
Hospital points to are a few passages from the Rule’s
administrative record indicating that unions had routinely
requested or organized these units. Yet the administrative
record of the rulemaking also makes quite clear that the factors
the Board considered in deciding upon the eight listed units
included “uniqueness of function; training, education and
licensing; wages, hours and working conditions; supervision;
employee interaction; and factors relating to collective
bargaining.” Second Notice of Proposed Rulemaking for
Collective-Bargaining Units in the Health Care Industry, 53 Fed.
Reg. 33,900, 33,905-06 (Sept. 1, 1988) (“Second Notice”).
Indeed, even if the Board did consider past and present
union organization in formulating the Health Care Rule, nothing
in the National Labor Relations Act precludes such
consideration entirely. Section 9(c)(5) requires only that the
extent of organization not be the controlling factor;
consideration of that factor among others is entirely lawful.
NLRB v. Metro. Life Ins. Co., 380 U.S. 438, 441-42 (1965);
Country Ford Trucks, Inc. v. NLRB, 229 F.3d 1184, 1191 (D.C.
Cir. 2000).
To be sure, if a union petitions for an election in one of the
eight acceptable units, it will likely be granted, but that hardly
suggests that extent of organization is a controlling factor
because the Board has indicated that other considerations
support the appropriateness of any of these eight units.
Moreover, a protesting employer may always seek to show
“extraordinary circumstances,” requiring a departure from the
Rule’s advance determination of appropriate units.4
4
Petitioner also claims that the Rule was undercut by a
subsequent Board decision, Specialty Healthcare & Rehabilitation
8
B. Appropriateness of the Unit
Assuming the validity of the Rule, the Hospital maintains
that the Board violated it in this proceeding because the Union
was required to show and the Board was required to find
extraordinary circumstances to join together a number of the
Rule’s designated units, particularly the professionals with the
non-professionals. According to petitioner, even if the
professionals voted to be part of the overall unit, that by itself
did not excuse the Board’s failure to find extraordinary
circumstances. This argument is based on an obvious misreading
of the Rule. Recall it states, “Except in extraordinary
circumstances and in circumstances in which there are existing
non-conforming units, the following shall be appropriate units,
and the only appropriate units, . . . except that, if sought by labor
organizations, various combinations of units may also be
appropriate.” 29 C.F.R. § 103.30(a) (emphasis added). It is
quite clear then that combinations and extraordinary
circumstances are different exceptions, and that a combination
of the designated units can be deemed appropriate without a
showing of extraordinary circumstances.
The Hospital’s fall-back argument — which did, at first
reading, seem more troublesome — is that even if the units
“may” be combined under the Rule, that does not mean they
shall be combined without the normal showing of a shared
community of interest. See NLRB v. Action Auto., Inc., 469 U.S.
490, 494 (1985); see also United Operations, Inc., 338 N.L.R.B.
Center of Mobile, 357 N.L.R.B. No. 83 (NLRB 2011), but that opinion
dealt with non-acute care facilities like nursing homes, which are not
governed by the Health Care Rule. Nothing in Specialty Healthcare
affects the analysis for acute-care facilities.
9
123, 123 (NLRB 2002) (listing the factors considered in a
standard community-of-interest analysis). The Hospital points
out that the Board’s commentary on the final proposed Rule
indicated that it was abandoning a position expressed in the
initial notice of proposed rulemaking — that all combinations
shall be appropriate. See Second Notice, 53 Fed. Reg. at 33,932
(“[W]e believe that we have insufficient evidence at this time to
say that, per se, all combinations will be found appropriate. We
believe this is a matter we will have to decide in the course of
individual cases, by adjudication.”). That indicates, according
to petitioner, that the Board recognized that combined units
could well be objectionable if they transgressed the reigning
community-of-interest standard. That seems correct to us. We
further recognize that community of interest is a factual question
which the Board bears the burden of establishing on appeal.5
But the flaw in this argument is that the Hospital never put
the issue in play; it never challenged the combined unit’s
community of interest at the initial representation hearing. The
Hospital disputed the status of several nurses and presented its
arguments relating to the legality and interpretation of the Rule,
but despite invitation by both the hearing officer and the Union’s
counsel, it never questioned community of interest (probably
because the argument was an obvious loser). A number of
5
The APA states that “[e]xcept as otherwise provided by statute,
the proponent of a rule or order has the burden of proof,” 5 U.S.C.
§ 556(d), and the Supreme Court has clarified that “burden of proof”
here means burden of persuasion, not just burden of production. Dir.,
Office of Workers’ Comp. Programs, Dep’t of Labor v. Greenwich
Collieries, 512 U.S. 267, 276 (1994). Of course, even if the Board has
the burden before us as the proponent of its own order, our review of
its unit determination is highly deferential. Country Ford Trucks, Inc.
v. NLRB, 229 F.3d 1184, 1189 (D.C. Cir. 2000).
10
subordinate questions are often litigated in representation cases
— such as personnel practices, supervision, common tasks,
working interrelationship, etc. — that together point to a
community of interest or the lack thereof. But it is hardly to be
expected that a hearing officer would engage in a self-directed
inquiry into the myriad of such questions in the absence of an
employer’s claim that a proposed unit lacked a community of
interest.
Interestingly, there is no Board (or court) decision cited by
the Board’s counsel, nor one that we could find, that addresses
this precise point. Theoretically, we suppose under SEC v.
Chenery Corp., 332 U.S. 194 (1947), we could remand to the
Board to explicitly address this issue. But in this unusual
instance we will not, because we think the proposition — that
the employer must challenge a proposed unit on community-of-
interest grounds before the Board is required to rule on the issue
— is so painfully obvious that a remand is unnecessary. We
therefore conclude that the Hospital waived any subsequent
challenge based on the supposed lack of community interest by
not raising it before the hearing officer.
C. Procedural Challenges to the Certification
Petitioner raises three procedural objections to the Board’s
underlying proceedings, but all are marked more by imagination
than substance. First, the Hospital makes the extraordinary
claim that the Board’s Certification Order was unlawful because
it was issued only four business days after our order vacating
and remanding in light of New Process Steel. It is argued that,
given the complexity of the case, the Board must have either de
facto reopened the case prior to remand or else given only
superficial consideration to the Hospital’s arguments.
11
To dispose of this rather silly argument, it is hardly
necessary to rely on the presumption of regularity that agency
proceedings enjoy. See Hercules, Inc. v. EPA, 598 F.2d 91, 123
(D.C. Cir. 1978). Suffice it to say that nothing prevented the
Board from merely thinking about cases affected by the
Supreme Court’s decision in New Process Steel before actual
remand orders were issued. See NLRB v. KSM Indus., Inc., 682
F.3d 537, 544 (7th Cir. 2012) (finding unproblematic even a
one-day turnround for a Board decision because “[t]he pendency
of New Process Steel was hardly a secret, and for all we know
the Board was already busy taking another look at the cases that
were potentially affected by it”).
Second — and this one is also a doozy — petitioner claims
that the Certification Order was improper because three
Representation-Management (“RM”) Petitions were pending at
the time it was issued. But the RM petitions were obviously a
gimmick that the Board could properly ignore in determining
whether to certify the election. RM petitions (election petitions
filed by an employer) are permitted only when an employer
claims a union no longer has majority support, or in response to
a union’s demand for recognition. See 29 U.S.C. § 159(c);
NLRB Casehandling Manual, Part Two, Representation
Proceedings, Sec. 11002.1(a), 11002.2(b).6 But a post-election
assertion that a union has lost majority support has no bearing
on the validity of an election that has already occurred. See,
6
For a one-year period after a union’s election victory is
certified, the union is presumed to enjoy majority support, and an
employer may not challenge this status by refusing to bargain. See
Brooks v. NLRB, 348 U.S. 96, 98-104 (1954). But the RM petitions
here were filed three days before the Board’s pending Certification
Order, obviously to circumvent this one-year safe-harbor period.
12
e.g., Sunbeam Corp., 89 N.L.R.B. 469, 473 (NLRB 1950). The
only issue before the Board in the Certification Order was
whether to certify the Union’s victory in the original election, so
the pending RM petitions did nothing to render this order
unlawful.7
7
The Board suggests that we should not even consider these first
two procedural arguments because the Hospital failed to timely raise
them before the agency. Ordinarily, of course, we lack jurisdiction to
hear arguments not raised before the Board in the first instance. 29
U.S.C. § 160(e); N.Y. & Presbyterian Hosp. v. NLRB, 649 F.3d 723,
733 (D.C. Cir. 2011). But there is no dispute here that the Hospital
did make these arguments in the refusal-to-bargain proceedings —
indeed, the Board specifically considered and rejected both of them in
the Refusal-to-Bargain Order directly before us. The only question is
whether the Hospital needed to raise them earlier.
Both of petitioner’s first two challenges pertain to the timing of
the Certification Order — the Hospital says it was issued too quickly,
and improperly issued in light of the pending RM petitions. So
petitioner could not plausibly have raised these concerns until after the
Certification Order was handed down. The Board counters that the
Hospital could have filed a motion for reconsideration pursuant to 29
C.F.R. § 102.48(d) — thereby challenging the Certification Order
immediately — and that foregoing this option and waiting until the
refusal-to-bargain proceedings waived the arguments. But the Board
ignores Rule 102.48(d)(3), which expressly states that “[a] motion for
reconsideration or for rehearing need not be filed to exhaust
administrative remedies.” See also Roundy’s Inc. v. NLRB, 674 F.3d
638, 646 n.2 (7th Cir. 2012) (noting that the Rule 102.48(d)
procedures are not mandatory); NLRB v. Mercy Hosps. of Sacramento,
Inc., 589 F.2d 968, 973-74 (9th Cir. 1978) (same). We therefore
decide these arguments on the merits, however spurious they may be.
13
Lastly, petitioner claims that the Board abused its discretion
by permitting the General Counsel to amend the complaint — to
allege that petitioner had again refused the Union’s bargaining
demand — after the “deadline” for such amendments announced
in the Certification Order had passed. What this argument has
to do with “the price of tea” is not apparent. Petitioner has never
denied its refusal to bargain with the Union, so the amendment
to the complaint was of no real significance, and certainly no
prejudice to the Hospital. At the very least, it surely was not an
abuse of discretion for the Board to allow a late amendment that
did no more than reflect the undisputed facts at the time.
* * *
As we noted at the outset, the Hospital unleashed a blizzard
of arguments to challenge the Board’s unfair-labor-practice
orders. It might be appropriate to suggest that in appellate
argument, the proverbial rifle is preferable to a machine gun —
but that would assume petitioner had at least a few good
arguments; it did not. In truth, it appears to us that all the
Hospital sought was the inevitable delay that review of Board
orders affords. This is regrettable.
Accordingly, the petitions for review are denied, and the
Board’s cross-applications for enforcement are granted.
So ordered.