Midwest Division - MMC, LLC v. NLRB

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued January 18, 2017 Decided August 18, 2017
No. 15-1312
MIDWEST DIVISION - MMC, LLC, DOING BUSINESS AS
MENORAH MEDICAL CENTER,
PETITIONER
v.
NATIONAL LABOR RELATIONS BOARD,
RESPONDENT
NATIONAL NURSES ORGANIZING
COMMITTEE-KANSAS/NATIONAL NURSES UNITED,
INTERVENOR
Consolidated with 15-1359
On Petition for Review and Cross-Application
for Enforcement of an Order
of the National Labor Relations Board
Shay Dvoretzky argued the cause for petitioner. On the
briefs was Noel J. Francisco.
G. Roger King was on the brief for amicus curiae HR
Policy Association in support of petitioner.
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William E. Quirk was on the brief for amici curiae The
American Hospital Association, et al. in support of petitioner.
Kellie J. Isbell, Attorney, National Labor Relations
Board, argued the cause for respondent. On the brief were
Richard F. Griffin, Jr., General Counsel, John H. Ferguson,
Associate General Counsel, Linda Dreeben, Deputy Associate
General Counsel, Robert J. Englehart, Supervisory Attorney,
and Jeffrey W. Burritt, Attorney.
Nicole J. Daro argued the cause for intervenor. On the
brief was Brendan White.
Before: GARLAND, Chief Judge, and KAVANAUGH and
SRINIVASAN, Circuit Judges.
Opinion for the Court filed by Circuit Judge SRINIVASAN.
Opinion concurring in part and dissenting in part filed by
Circuit Judge KAVANAUGH.
SRINIVASAN, Circuit Judge: Kansas law calls for
hospitals to establish an internal peer-review program to
monitor the quality of care furnished by their medical
professionals. As required by state law, Menorah Medical
Center, a Kansas acute-care hospital, formed a peer-review
committee for the facility’s nursing staff. The committee
examines alleged violations of the applicable standard of care
by the hospital’s nurses and reports serious breaches to the
state licensing agency.
This case arises out of the peer-review committee’s
investigation of two nurses for substandard conduct.
Menorah denied the nurses’ requests to allow a union
representative to accompany them in their hearings before the
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committee. Menorah also refused the union’s request for a
variety of information about the committee’s operations.
Additionally, the hospital maintained a confidentiality rule
barring employees from discussing incidents within the
committee’s purview.
Those actions by Menorah led the union to file unfair-
labor-practice charges against the hospital. The National
Labor Relations Board ultimately found that Menorah had
violated the National Labor Relations Act in the various ways
alleged. Menorah now petitions for review of the Board’s
decision against it.
We set aside the Board’s determination that Menorah
improperly denied the nurses’ requests for union
representation in the peer-review-committee hearings: when,
as here, employees are not obligated to take part in an
investigatory hearing, there is no requirement that they be
permitted to bring a union representative if they elect to
participate. We sustain the Board’s decision in all other
respects, including the Board’s finding that Menorah
committed unfair labor practices in denying the union’s
request for information about the peer-review committee and
in maintaining a confidentiality rule barring workers from
discussing incidents subject to the committee’s oversight.
Accordingly, we grant Menorah’s petition for review in part
and enforce the Board’s order in part.
I.
A.
1. Section 7 of the National Labor Relations Act
establishes the right of employees “to bargain collectively
through representatives of their own choosing, and to engage
4
in other concerted activities for the purpose of collective
bargaining or other mutual aid or protection.” 29 U.S.C.
§ 157. Section 8 of the NLRA declares it to be “an unfair
labor practice for an employer . . . to interfere with, restrain,
or coerce employees in the exercise of the rights guaranteed in
[Section 7]” or “to refuse to bargain collectively with the
representatives of his employees.” Id. § 158(a)(1), (5).
As relevant here, Section 8 has been construed to impose
three obligations on employers. First, an employee must be
allowed to bring a union representative to any investigatory
interview she is required to attend if she reasonably believes
the interview might result in disciplinary action. See NLRB v.
J. Weingarten, Inc., 420 U.S. 251, 256 (1975). Second,
absent an overriding need for confidentiality, employers must
furnish to labor unions (upon request) information bearing on
the administration of a collective-bargaining agreement. See
Detroit Edison Co. v. NLRB, 440 U.S. 301, 303 (1979).
Third, employees presumptively must be permitted to
communicate with one another in service of their Section 7
rights. See Martin Luther Mem’l Home, Inc., 343 N.L.R.B.
646, 646 (2004).
2. Kansas state law aims to “protect the public’s general
health, safety and welfare” by establishing a peer-review
system to monitor the quality of care provided by medical
practitioners. Kan. Stat. Ann. § 65-4929(a). Under state law,
every hospital must maintain a risk-management program
designed to identify violations of the applicable standard of
care and to facilitate the reporting of breaches to the Kansas
State Board of Nursing (the Nursing Board). See id. §§ 65-
4922(a), 65-4923.
A hospital’s risk-management personnel must refer any
qualifying incidents to a peer-review committee established
5
by the facility. Id. § 65-4923(a)(2). Menorah’s committee for
its nursing staff is called the Nursing Peer Review Committee.
The Committee must in turn “report to the appropriate state
licensing agency”—here, the Nursing Board—anytime it
finds that a nurse has “acted below the applicable standard of
care” in a way that “had a reasonable probability of causing
injury to a patient, or in a manner which may be grounds for
disciplinary action by the appropriate licensing agency.” Id.
If the Nursing Board elects to strip a nurse of his license, he
can no longer practice professional nursing in the state. Id.
§ 65-1114(a)(1).
The Nursing Peer Review Committee does not itself
impose that (or any other) form of state-administered
discipline. Rather, the Committee collects information and
refers reportable incidents to the Nursing Board so that “the
[Board] may take appropriate disciplinary measures.” Id.
§ 65-4923(a)(2). Under the Kansas statute, though, the
members of hospitals’ peer-review committees are deemed
“state officers engaged in a discretionary function.” Id. § 65-
4929(b).
Kansas law attaches a confidentiality privilege to certain
aspects of peer-review proceedings:
[T]he reports, statements, memoranda,
proceedings, findings and other records
submitted to or generated by peer review
committees or officers shall be privileged and
shall not be subject to discovery, subpoena or
other means of legal compulsion for their
release to any person or entity or be admissible
in evidence in any judicial or administrative
proceeding. Information contained in such
records shall not be discoverable or admissible
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at trial in the form of testimony by an
individual who participated in the peer review
process.
Id. § 65-4915(b).
Menorah sought to fortify confidentiality protections
through a provision of its Risk Management Plan. The
hospital’s Confidentiality Rule prohibits employees from
“disclos[ing] information concerning reportable incidents
except to their superiors, Hospital Administration, the Risk
Manager, the appropriate Hospital and Medical Staff
committees, legal counsel for the Hospital, or the applicable
licensing agencies,” without prior approval from the “Risk
Manager, Administration, or legal counsel.” D.A. 69.
Menorah and the union representing its nurses, the
National Nurses Organizing Committee, have entered into a
collective-bargaining agreement. Because the bargaining unit
is comprised of registered nurses, a nurse who loses her
license also relinquishes her union representation.
B.
In May 2012, Menorah nurses Sherry Centye and Brenda
Smith received letters from the hospital’s Risk Manager
alleging that they had “exhibited unprofessional conduct as
defined by the Kansas Nurse Practice Act.” Id. at 71, 73. The
letters informed both nurses that their “conduct has
preliminarily been determined to be a Standard of Care Level
4: grounds for disciplinary action.” Id. They were then
reminded that, “[a]s governed by Kansas Statute, a final
Standard of Care Level 4 determination must be reported to
the Kansas Board of Nursing.” Id.
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The letters afforded each nurse “an opportunity to
address the Peer Review Committee regarding any potentially
reportable incident prior to any final determination of a
Standard of Care by the Committee.” Id. But the letters
specified that an in-person exchange would take place only “if
you choose.” Id. Each nurse was also given the option to
“submit a written response to the Committee if you wish in
lieu of an appearance.” Id. Centye’s letter further stated that
“the Committee cannot fairly and accurately make a final
decision without more details that can only be provided by
you.” Id. at 71.
Both nurses asked the hospital’s Risk Manager to allow a
union representative to accompany them to their hearings
before the Peer Review Committee. Centye requested union
assistance before her interview began; Smith did so after her
interview had commenced. The Risk Manager denied both
requests, and the hearings proceeded with both nurses’
participation. After the hearings, the Committee reduced each
nurse’s standard-of-care violation to a level 2, meaning that it
would not be reported to the Nursing Board.
After the first hearing, a union representative, Sheilah
Garland, communicated with Menorah’s Human Resources
Department. She requested information pertaining to (i) the
structure and functions of Menorah’s Nursing Peer Review
Committee and its members; (ii) allegations against nurses
investigated by the Committee (and the sources of those
allegations); and (iii) any discipline issued by the Committee.
Garland also maintained that nurses appearing before the
Committee are entitled to bring a union representative.
Menorah provided Garland with a copy of the hospital’s
Risk Management Plan but otherwise declined to supply
information responsive to her requests. Menorah’s Director
8
of Labor Relations stated that the Committee cannot impose
discipline but merely investigates and reports to the Nursing
Board; that the requested information was privileged by
Kansas law; that the information in any case did not pertain to
administration of the collective-bargaining agreement; and
that the nurses had no entitlement to the presence of a union
representative at peer-review hearings.
The Union filed unfair-labor-practice charges against
Menorah with the Board. The Board’s General Counsel
issued a complaint alleging that Menorah had violated the
NLRA by (i) denying both nurses’ requests for a union
representative at their hearings before the Peer Review
Committee; (ii) refusing to furnish the information about
peer-review proceedings that had been sought by the Union;
and (iii) maintaining an unduly broad confidentiality rule that
operated to restrict discussion among employees about
incidents within the Committee’s ambit.
In December 2013, an ALJ issued a decision and
recommended order finding that Menorah had violated the
NLRA as alleged. On August 27, 2015, the NLRB affirmed
the ALJ’s determinations that Menorah had violated the
NLRA in the three alleged respects. The Board also affirmed
the ALJ’s decision to admit testimony that shed light on the
Nursing Peer Review Committee’s proceedings.
Menorah now petitions for review of the Board’s order,
and the Board seeks cross-enforcement of its order. The
Union has intervened in support of the Board’s decision.
9
II.
A.
Menorah first maintains that the Board wrongly asserted
jurisdiction over this dispute. We find no error in the Board’s
exercise of jurisdiction.
Menorah’s jurisdictional argument arises from the
NLRA’s definition of “employers” subject to the Act’s
mandates. Section 8 of the NLRA enumerates practices that
an “employer” may not perform. 29 U.S.C. § 158(a). The
Act defines the term “employer” to exclude “any State or
political subdivision thereof.” Id. § 152(2). The Supreme
Court has upheld the Board’s construction of the term
“political subdivision” under that provision to mean an entity
“(1) created directly by the state, so as to constitute [a]
department[] or administrative arm[] of the government, or
(2) administered by individuals who are responsible to public
officials or to the general electorate.” NLRB v. Nat. Gas Util.
Dist. of Hawkins Cty., 402 U.S. 600, 604-05 (1971). An
entity satisfying either prong of that test falls outside the
Board’s jurisdiction because it is not a statutory “employer.”
Menorah argues that its Nursing Peer Review Committee
qualifies as a political subdivision under both prongs of the
Hawkins County test, and that the hospital therefore does not
function as a statutory employer when it acts through the
Committee to fulfill obligations imposed by state law.
According to Menorah, the Committee’s ostensible status as a
non-employer should be imputed to Menorah with regard to
all of the alleged unfair labor practices in this case.
As an initial matter, the Board exercised jurisdiction over
Menorah itself, not its Nursing Peer Review Committee.
10
Menorah was the sole respondent in the proceedings before
the agency, and, as the “aggrieved party,” 29 U.S.C. § 160(f),
is the only petitioner here. There is no dispute that Menorah
itself qualifies as a statutory employer capable of committing
unfair labor practices in violation of the NLRA. And both the
ALJ and the Board attributed the charged NLRA violations to
Menorah.
To the extent the status of the Committee (as opposed to
Menorah itself) as a statutory employer nonetheless bears on
the Board’s exercise of jurisdiction over the hospital, the
Board reasonably concluded that the Committee is not a
“political subdivision” of Kansas. The ALJ rejected
Menorah’s jurisdictional objection, explaining that, “[s]imply
because medical providers’ peer review committees must
conform to state requirements does not make them a political
subdivision that is exempt from the Act.” ALJ Decision, D.A.
391-92. The Board reasonably adopted the ALJ’s conclusion
in that respect.
With respect to Hawkins County’s first prong, the
Committee was not “created directly by the state, so as to
constitute [a] department[] or administrative arm[] of the
government.” Hawkins Cty., 402 U.S. at 604. It is true that
Kansas law envisions the existence of peer-review
committees within each medical facility in the state. See, e.g.,
Kan. Stat. Ann. § 65-4929. But the Kansas statute makes
each hospital responsible for “establish[ing] and
maintain[ing]” its own system of risk management, subject to
the requirements of state law. Id. § 65-4922(a). The very
statutory scheme that requires the existence of peer-review
committees thus specifies that they are created and
administered by hospitals, not the state. Another state statute
reinforces that understanding, permitting a documentary
privilege to be “claimed by the legal entity creating the peer
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review committee.” Id. § 65-4915(b). A hospital—not the
state—is entitled to claim that privilege as the “entity creating
the peer review committee.” See Adams v. St. Francis Reg’l
Med. Ctr., 264 Kan. 144, 158 (1998).
Moreover, we hesitate to conclude that a committee
whose members are “supervised, compensated, hired,
appointed, and evaluated by [Menorah] without input from
the state,” ALJ Decision, D.A. 391, nonetheless functions as a
department or administrative arm of the state. It is true that
committee members are deemed “state officers engaged in a
discretionary function” with regard to their participation in the
committee proceedings. Kan. Stat. Ann. § 65-4929(b). But
that is for the purpose of according them the “immunity of the
state . . . , including [immunity] from the federal and state
antitrust laws.” Id. The members’ state-conferred immunity
for those purposes does not transform a hospital’s peer-review
committee into a state agency or department. Indeed, the
same provision specifies that committee members are not
subject to “any other law relating to or regulating state
agencies, officers or employees.” Id. § 65-4929(c).
Menorah cites no Board or judicial decision holding that
an entity established and maintained by a private company
pursuant to state law qualifies as a political subdivision of the
state. That is not surprising, given that the exemption exists
to prevent the Board from interfering with “the employment
relationships between state and local governments . . . and
their employees.” NLRB v. Princeton Mem’l Hosp., 939 F.2d
174, 178 (4th Cir. 1991). Menorah’s Nursing Peer Review
Committee thus differs from entities previously held to be
political subdivisions. To take the example on which
Menorah chiefly relies, the State Bar of New Mexico was
established by the New Mexico Supreme Court—
unquestionably a state actor—and serves as “an
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administrative arm of the judicial branch of government.”
State Bar of New Mexico, 346 N.L.R.B. 674, 676 (2006). The
same cannot be said of Menorah’s own Nursing Peer Review
Committee.
With regard to the second prong of the Hawkins County
test, the Committee is not “administered by individuals who
are responsible to public officials or to the general electorate.”
402 U.S. at 604-05. As the Board has explained, the pertinent
question is “whether a majority of the individuals who
administer the entity . . . are appointed by and subject to
removal by public officials.” Pilsen Wellness Ctr., 359
N.L.R.B. 626, 628 (2013). Menorah cites no evidence that
Committee members are either appointed or removable by
public officials (as opposed to by Menorah’s own personnel).
For those reasons, the Board reasonably concluded that
Menorah’s Nursing Peer Review Committee does not qualify
as a political subdivision of Kansas under either prong of the
Hawkins County test.
B.
On the merits of the Board’s findings of unfair labor
practices, we first consider whether Menorah violated the
NLRA by denying the nurses’ requests for union
representation in connection with their peer-review hearings
before the Committee. In NLRB v. J. Weingarten, Inc., the
Supreme Court sustained the Board’s understanding that the
NLRA “creates a statutory right in an employee to refuse to
submit without union representation to an interview which he
reasonably fears may result in his discipline.” 420 U.S. at
256. Here, neither Centye nor Smith was permitted to bring a
union representative when appearing before the Committee.
The Board held that Menorah thereby violated the nurses’
Weingarten right. The Board’s ruling cannot be sustained.
13
Weingarten affirmed the Board’s conclusion that it would
be a “serious violation of the employee’s individual right to
engage in concerted activity by seeking the assistance of his
statutory representative if the employer denies the employee’s
request and compels the employee to appear unassisted at an
interview which may put his job security in jeopardy.” Id. at
257 (emphasis added) (internal quotation marks omitted). An
employee’s Weingarten right is infringed, that is, when an
employer compels him to appear at such an interview but
denies him union representation. Conversely, absent
compulsory attendance, the right to union representation
recognized in Weingarten does not arise: the Court expressly
grounded its decision on an understanding that an “employer
is free to carry on his inquiry without interviewing the
employee, and thus leave to the employee the choice between
having an interview unaccompanied by his representative, or
having no interview.” Id. at 258.
Here, Centye and Smith were given precisely that choice.
The letters advising them of the charges against them
expressly “afforded an opportunity” to appear before the
Committee “if you choose.” D.A. 71, 73 (emphases added).
Moreover, they were invited to “submit a written response . . .
if you wish in lieu of an appearance.” Id. In those
circumstances, neither nurse was compelled to attend a
Committee hearing so as to trigger a right to union
representation under Weingarten.
None of this is to deny that Centye and Smith might well
have felt it would be decidedly in their interests to participate
in a Committee hearing. After all, the letters they received
contained no information about the underlying factual
allegations against them. They understandably could have
regarded the hearing as affording them a singular opportunity
to learn about—and potentially dispel—the allegations about
14
their ostensible misconduct. That would have been especially
true for Centye: her letter stated that “the Committee cannot
fairly and accurately make a final decision without more
details that can only be provided by you.” Id. at 71. So we
accept that both nurses could have believed that attending the
hearings would inure substantially to their benefit.
Even so, the Supreme Court in Weingarten explicitly
contemplated—and accepted—that an employee might have a
strong incentive to attend a hearing for those sorts of reasons.
In explaining that an employer retained the “prerogative[]” to
give an employee a “choice” between attending an interview
without a union representative and “having no interview” at
all, the Court understood that a person who elected to have no
interview would “forgo[] any benefits that might be derived
from one.” 420 U.S. at 258. Put another way, by
“refrain[ing] from participating in the interview,” an
employee would “protect[] his right to representation, but at
the same time relinquish[] any benefit which might be derived
from the interview.” Id. at 259 (internal quotation marks
omitted). In that event, the employer would “be free to act on
the basis of whatever information he had and without such
additional facts as might have been gleaned through the
interview.” Id. (internal quotation marks omitted).
Here, Centye and Smith, having been given the option to
forgo attendance at the Committee hearing, presumably
weighed the benefits and drawbacks of doing so and elected
to participate. The Board nonetheless concluded that their
Weingarten right had been infringed. The Board reasoned
that, when Menorah denied the nurses’ request for union
representation at the hearing, “it was obligated, at that point,
to give the employees the opportunity to cease their
participation in the meetings,” Midwest Div.-MMC, LLC d/b/a
Menorah Med. Ctr., 362 N.L.R.B. No. 193, 2015 WL
15
5113235, at *3 (2015)—even though they had already been
told in their letters that their participation was optional (and
also that they could instead submit information in writing).
Weingarten, however, contains no suggestion that the NLRA
requires an employer to renew advice to an employee that her
attendance at a hearing is optional. And the Board cited no
judicial or agency precedent establishing such a requirement.
Rather, the decisions on which the Board relies involved
circumstances in which the employer compelled the
employee’s attendance in a proceeding. E.g., U.S. Postal
Serv., 241 N.L.R.B. 141 (1979). In that situation, if an
employee requests union representation, the Board’s decisions
require the employer to discontinue the interview unless (i)
“the employee voluntarily agrees to remain unrepresented
after having been presented by the employer with the
choice[]” to “continu[e] the interview unaccompanied by a
union representative or hav[e] no interview at all,” or (ii) “the
employee is otherwise aware of those choices.” Id. at 141.
Here, the nurses, from the outset, were “otherwise aware” that
they could choose to forgo attending a hearing. Id. The
Board does not contend otherwise. In those circumstances,
there was no violation of the nurses’ Weingarten right.
That conclusion is unaffected by our decision in
American Federation of Government Employees, Local 1941
v. Federal Labor Relations Authority, 837 F.2d 495, 499
(D.C. Cir. 1988). That case involved a provision of the
Federal Service Labor-Management Relations Statute that
grants union representation to federal employees in
connection with investigations that can result in disciplinary
action. 5 U.S.C. § 7114(a)(2)(B). We noted that the
provision aimed “to make the Weingarten right applicable to
federal employees” but that “Congress anticipated that the
statutory right to representation in examinations may evolve
16
differently in the federal sector.” 837 F.2d at 499 (internal
quotation marks omitted). We construed the provision to
extend a right to union representation even if a federal
employee is not compelled to attend an investigatory
interview. But in doing so, we observed that “Congress
sought to appropriate the general principles of Weingarten
and allow those principles to evolve in the unique and varying
circumstances of federal employment, not to hold those
principles to the factual and procedural context of
Weingarten.” Id. at 500.
This case does not involve “the unique and varying
circumstances of federal employment” addressed in the
FSLMRS. Rather, it involves the NLRA. And the NLRA,
under the interpretation affirmed by the Supreme Court in
Weingarten, does not recognize a right to union representation
when an employee has a choice to forgo participating in an
investigatory hearing but elects to attend in any event.
C.
Menorah next challenges the Board’s ruling that it
violated the NLRA by failing to furnish information requested
by the Union about the peer-review program. The Board
concluded that the withheld information is relevant to the
Union’s mission and that Menorah’s asserted confidentiality
interests do not outweigh the Union’s need for the materials.
We see no basis to set aside the Board’s conclusion.
An employer’s statutory obligation to engage in
collective bargaining “includes a duty 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). The relevance of the requested information for
17
that purpose is measured under a “liberal, discovery-type”
standard. DaimlerChrysler Corp. v. NLRB, 288 F.3d 434, 440
(D.C. Cir. 2002). When a union demonstrates the relevance
of the information it seeks, the Board “balance[s] a union’s
need for the information against any legitimate and substantial
confidentiality interests established by the employer.” Pa.
Power Co., 301 N.L.R.B. 1104, 1105 (1991) (internal
quotation marks omitted). The employer must furnish the
requested information if “the union’s need for the information
outweigh[s] the general policy regarding confidentiality.”
Kaleida Health, Inc., 356 N.L.R.B. 1373, 1379 (2011). State-
law privileges present a valid basis for claiming
confidentiality. Id. at 1378.
Here, after Centye and Smith received the letters
apprising them of the allegation that they had engaged in
unprofessional conduct, a representative of the Union, Sheilah
Garland, requested information from Menorah about the
operation of its Nursing Peer Review Committee. Garland’s
requests on behalf of the Union fell into three categories.
First, she sought information describing the Committee,
including the Committee’s structure, purpose, and functions,
along with the names of committee members and those
present for the hearings. Second, she requested information
about allegations investigated by the Committee, including
the names of nurses notified that they were under
investigation, the nature of the allegations against them, and
copies of investigatory information used by the hospital.
Third, she sought disciplinary documents issued by the
Committee.
The Board deemed all of the requested information to be
relevant to the Union’s enforcement of the collective-
bargaining agreement, explaining that “the Committee’s work
can lead to [Menorah’s] suspension or discharge of an
18
employee.” Menorah, 2015 WL 5113235, at *7. The Board
further found any countervailing confidentiality interests to be
modest, given that the requested information “did not trench
on the Committee’s internal deliberative processes.” Id. at *6.
The Board thus found that Menorah violated Section 8 of the
NLRA by failing to comply with the Union’s informational
request.
We conclude that substantial evidence supports the
Board’s determination. See Wallaesa v. Fed. Aviation
Admin., 824 F.3d 1071, 1084 (D.C. Cir. 2016). As an initial
matter, we perceive no basis for rejecting the Board’s
conclusion that the requested information about the peer-
review program and investigations is relevant to the Union’s
ability to enforce the collective-bargaining agreement. The
agreement enables Menorah to “suspend, discharge or
otherwise discipline bargaining unit members for just cause.”
D.A. 115. In that regard, Menorah’s Risk Management Plan
articulates two pertinent expectations concerning “[u]se of
[r]isk [m]anagement [d]ata.” Id. at 68. First, “[w]hen the
investigation of a reported incident [i.e., by the Peer Review
Committee] results in an adverse finding, the event will be
considered at the time of . . . employee performance
evaluations.” Id. Second, “[i]nternal institutional actions
may be taken as the result of investigation.” Id.
Those disciplinary objectives are reinforced by Kansas
law, which provides that a peer-review committee may
“report to and discuss its activities, information and findings”
with a hospital’s “administrative officer” without waiving the
statutory privilege concerning peer-review proceedings. Kan.
Stat. Ann. § 65-4915(e). The Risk Management Plan also
envisions a linkage between the Nursing Peer Review
Committee and Menorah’s evaluation of its employees’
performance: one of the Plan’s stated objectives is to
19
“[e]stablish communication between risk management, peer
review, . . . and performance improvement functions in the
Hospital.” D.A. 54.
With regard to Menorah’s confidentiality interests in the
information requested by the Union, Menorah describes its
interests solely by reference to the state-law provision
privileging “the reports, statements, memoranda, proceedings,
findings and other records submitted to or generated by peer
review committees.” Kan. Stat. Ann. § 65-4915(b). The
Kansas Supreme Court, however, has not construed that
privilege to encompass any document that may incidentally
come into committees’ possession. See Adams, 264 Kan. at
171. Rather, the privilege attaches to documents created to
satisfy the peer-review requirements of state law, including
eventual consideration by the applicable peer-review
committee. See id. at 165 (holding that the privilege covered
hospital disciplinary forms found to be “part of the peer
review process as envisioned by the legislature”).
The Board reasonably determined that, for all three
categories of information sought by the Union, the Union’s
interests in the information prevail over Menorah’s
confidentiality interests. As to the first category—
information pertaining to the Committee’s structure,
functions, and membership—Menorah did provide the Union
a copy of its Risk Management Plan, which broadly outlines
the Committee’s purpose and scope, as well as the Kansas
statutes outlining the Committee’s functions. But Menorah
did not furnish any other information within the scope of the
request, and the Risk Management Plan does not comment on
the Committee’s membership or the identities of members
who attended the relevant meetings. As long as the Plan
continues to enable the Committee to function as an adjunct to
the hospital’s internal disciplinary process, the Union will
20
retain an interest in obtaining information about the
Committee’s structure, functions, and makeup. And as the
Board concluded, that information would seem generally to
fall outside—or at least outside the core of—the statutory
privilege.
As to the second category of requested information—that
related to allegations investigated by the Committee—the
information could have substantial relevance to the Union’s
representation of affected employees. The Board found
“nothing in the record to suggest that this information was
prepared exclusively for use by the Committee outside of the
Hospital’s regular course of business.” Menorah, 2015 WL
5113235, at *5 n.15. Menorah did not challenge that finding
in its briefs, so it has given us little reason to question the
Board’s conclusion that the Union’s interests in obtaining the
information outweigh Menorah’s confidentiality interests as
defined by the statutory privilege.
As to the third category—copies of disciplinary
records—Menorah, in declining to supply responsive
information, observed that “[t]he committee does not offer,
impose or suggest discipline to RNs[;] it investigates
reportable incidents and provides to the State its findings as
per the Kansas Statutes.” D.A. 80. But as the Board
observed, “the Committee’s disciplinary letters state that the
employee’s conduct has been preliminarily determined to be
grounds for disciplinary action,” and “the Committee’s work
can lead to [Menorah’s] suspension or discharge of an
employee.” Menorah, 2015 WL 5113235, at *7. The
requested information, moreover, would enable the Union “to
compare incidents that cause nurses to become targets of
investigations that can result in the revocation of a license and
ultimately termination from employment,” and “to properly
determine whether to file a grievance on behalf of those who
21
have been targeted for investigation by the Committee.” Id.
While the disciplinary records may implicate the state law
privilege, we find no basis to overturn the Board’s reasonable
conclusion that the Union’s significant interests in obtaining
the information outweigh Menorah’s confidentiality concerns.
D.
Menorah’s Risk Management Plan includes a
Confidentiality Rule prohibiting employees from
“disclos[ing] information concerning reportable incidents
except to their superiors” and certain other parties without
prior approval from the “Risk Manager, Administration, or
legal counsel.” D.A. 69. The Board invalidated that
provision as an excessive restriction on employees’ Section 7
rights. We sustain the Board’s ruling and conclude that it is
supported by substantial evidence.
Sections 7 and 8 of the NLRA protect an employee’s
“right to discuss the terms and conditions of her employment
with other employees.” Cintas Corp. v. NLRB, 482 F.3d 463,
466 (D.C. Cir. 2007). An employer presumptively violates
the Act “when it maintains a work rule that . . . tends to chill
employees in the exercise of their Section 7 rights.” Martin
Luther, 343 N.L.R.B. at 646. That situation occurs when
“employees would reasonably construe the language [of a
work rule] to prohibit Section 7 activity.” Id. at 647. We
construe any ambiguity in such a rule against the employer.
Banner Health Sys. v. NLRB, 851 F.3d 35, 40 (D.C. Cir.
2017) (citing Cintas Corp., 482 F.3d at 468 n.2).
Maintaining a rule reasonably likely to chill employees’
Section 7 activity amounts to an unfair labor practice unless
the employer “present[s] a legitimate and substantial business
justification for the rule” that “outweigh[s] the adverse effect
22
on the interests of employees.” Hyundai Am. Shipping
Agency, Inc. v. NLRB, 805 F.3d 309, 314 (D.C. Cir. 2015).
Here, the Confidentiality Rule, subject to certain exceptions,
bars employees from disclosing “information concerning
reportable incidents.” Menorah contends that employees
would read the provision to refer solely to information
submitted to (or generated by) the Committee, such that the
Rule’s reach would be coextensive with the scope of the
Kansas statutory privilege earlier described, Kan. Stat. Ann.
§ 65-4915(b). But the Board found that “employees would
reasonably understand the . . . prohibition on disclosure of
‘reportable incidents’” to reach considerably more broadly, so
as to encompass “discussions about the events underlying the
peer review investigations.” Menorah, 2015 WL 5113235, at
*1 n.3 (emphasis added). That is, the Rule would bar
employees from discussing the underlying facts of incidents
investigated by the Committee. So understood, the Rule
would plainly chill the exercise of Section 7 rights.
The Board’s interpretation of the Rule is reasonable.
Menorah’s Risk Management Plan defines “reportable
incident” as “an act or practice by a ‘health care provider’”
that must be reported to the applicable licensing agency—
here, the Nursing Board. D.A. 55. And a prohibition on
disclosing information “concerning reportable incidents”
could readily be understood to encompass any discussions
about the underlying “act or practice.” Menorah does not
suggest any legitimate and substantial justification for
curtailing discussion of incidents that give rise to peer-review
proceedings. Those events may also give rise to internal
disciplinary processes, which of course can be the subject of
grievances under the collective-bargaining agreement. See
Banner Health, 851 F.3d at 41 (explaining that restrictions on
employees’ communications cannot sweep “so broadly as to
include working conditions”) (quoting Double Eagle Hotel &
23
Casino v. NLRB, 414 F.3d 1249, 1260 (10th Cir. 2005)). We
therefore affirm the Board’s conclusion that the present
Confidentiality Rule is unduly broad in violation of
employees’ Section 7 rights.
E.
Finally, Menorah challenges the Board’s affirmance of
the ALJ’s decision to admit testimony about the Committee’s
proceedings and to revoke a protective order initially covering
that testimony. Specifically, in the hearing before the ALJ,
participants in the peer-review process testified about what
they and others had said during the peer-review committee
proceedings. We review the ALJ’s admission of that
testimony for abuse of discretion, Veritas Health Servs., Inc.
v. NLRB, 671 F.3d 1267, 1273 (D.C. Cir. 2012), and we find
no abuse here.
The Board explained that the testimony was “critical” to
understanding and resolving the alleged unfair labor practices,
including, in particular, the charge that Menorah had “violated
Sec. 8(a)(1) by denying employees their right to a union
representative during their appearance before the Committee.”
Menorah, 2015 WL 5113235, at *1 n.2. Although we have
concluded, as explained, that the employees ultimately had no
Weingarten right to union representation, their testimony
about their interactions with the Committee could be highly
germane to understanding the factual context surrounding the
resolution of the Weingarten charge. The ALJ reasonably
admitted the testimony to enable an informed consideration of
the issue.
Menorah, citing the Kansas statutory privilege, contends
that the testimony about the proceedings before the
Committee should not have been admitted (or should have
24
remained subject to a protective order). A state-law privilege
is not necessarily binding in a federal proceeding. See Fed. R.
Evid. 501. At any rate, the Kansas statutory privilege—
assuming its applicability to the testimony at issue here—is
not absolute even as a matter of state law. See Adams, 264
Kan. at 166, 171-74. Rather, a court must consider “the
interest of the party in obtaining the information,” such that
“the substantive interest in preserving the confidentiality of
the information” may “give way to assure all the facts will be
available for a fair determination of the issues.” Id. at 171-72
(citation omitted).
Here, in light of the significant federal interest in
enabling an informed resolution of the unfair-labor-practice
charges, we cannot conclude that the ALJ abused her
discretion in admitting the testimony by the participants in the
Committee’s proceedings.
* * * * *
For the foregoing reasons, we grant in part Menorah’s
petition for review and enforce the Board’s order in all other
respects.
So ordered.
KAVANAUGH, Circuit Judge, concurring in part and
dissenting in part: I join all except Part II.C of the majority
opinion. I write separately to elaborate on the Weingarten issue
addressed in Part II.B and to disagree on the information-
request issue addressed in Part II.C.
First, the Board concluded that the hospital violated the
Weingarten rights of nurses Centye and Smith. (Under
Weingarten, union members have a right to be accompanied by
a union representative during certain investigative interviews
conducted by employers. See NLRB v. J. Weingarten, Inc., 420
U.S. 251, 256 (1975).) The majority opinion rejects the
Board’s conclusion. I agree with the majority opinion. In
rejecting the Board’s conclusion, however, the majority
opinion does not address the threshold question of whether
Weingarten rights apply in the first place in peer review
committee interviews. Instead, the majority opinion concludes
that, even assuming arguendo that Weingarten rights apply,
Weingarten was not violated in this case. The majority
opinion’s silence on the threshold question of course should not
be interpreted as an implicit conclusion that Weingarten rights
apply in peer review committee interviews. See, e.g., BRYAN
A. GARNER ET AL., THE LAW OF JUDICIAL PRECEDENT 84
(2016); United States v. Shabani, 513 U.S. 10, 16 (1994).
Rather, that threshold question remains open in this Circuit for
a future panel to address and decide.
If we were to reach the threshold question, I would hold
that Weingarten rights do not apply in peer review committee
interviews. Weingarten rights apply primarily in the
disciplinary context when an employer conducts an
investigative interview of the employee. Those rights help
“redress the perceived imbalance of economic power between
labor and management.” Weingarten, 420 U.S. at 262. When
an interview is not part of the employer’s disciplinary process
but is instead, for example, part of a state licensing process
mandated by statute, Weingarten rights do not apply. Cf. Mt.
2
Vernon Tanker Co. v. NLRB, 549 F.2d 571, 575 (9th Cir. 1977).
Because the peer review committee at issue here is not part of
the hospital’s disciplinary process and is instead part of the
state licensing process, employees do not have Weingarten
rights in interviews conducted by the peer review committee.
Second, the Board concluded that the hospital violated the
National Labor Relations Act when the hospital did not comply
with the Union’s requests for information about the inner
workings of the peer review committee. The majority opinion
sustains the Board’s decision. Even taking into account our
deferential standard of review, I cannot uphold the Board’s
decision on this issue. I instead would rule in accord with
Member Johnson’s dissent from the Board’s decision.
To assess a union’s information request, the Board
balances the employer’s confidentiality interest in the
information against the union’s need for the information. See
Howard Industries, Inc., 360 NLRB No. 111, at 2 (2014).
Here, as exemplified by Kansas’s peer review statute, the
hospital possesses a strong interest in protecting the
confidentiality of the peer review process. Kan. Stat. Ann.
§ 65-4915(b). Maintaining confidentiality helps ensure the
frank participation of medical professionals in peer review
committee deliberations. As the American Hospital
Association explains: “Without strict confidentiality, peer
review’s effectiveness would collapse.” American Hospital
Association Br. 11. Confidentiality is therefore essential to an
effective peer review process, and the peer review process in
turn is critical to improving the quality and safety of health
care. For that reason, almost every State – including Kansas –
has rules protecting the confidentiality of peer review
proceedings.
3
While the hospital’s confidentiality interest in the
requested information is weighty, the Union’s need for that
information is minimal at best. That is because the peer review
committee does not itself threaten “direct adverse employment
action” against the Union’s members. Midwest Division –
MMC, LLC, 362 NLRB No. 193, at 10 (2015) (Johnson,
dissenting). As Member Johnson explained, peer review
committees are instead “part of the State’s regulatory apparatus
for overseeing its licensed healthcare professionals and the
overall adequacy of healthcare in the State of Kansas. . . .
Because the committees do not represent the [hospital] and
because their findings are submitted to the State as part of the
regulatory scheme, the Union’s interest in information about
the committee’s internal deliberations is limited. Peer review
does not directly implicate the [hospital’s] disciplinary process
nor either party’s obligations under the collective-bargaining
agreement.” Id.
After considering the hospital’s confidentiality interest
and the Union’s need for the information, the Board here
should have rejected most of the Union’s information request,
as Member Johnson explained in his dissent. Instead, the
Board granted the Union’s request. In doing so, the Board gave
very short shrift to the hospital’s confidentiality interest in the
requested information and significantly exaggerated the
Union’s need for the information. See id. at 7-11. I would
vacate the Board’s order to the extent it ruled that the Union
was entitled to all of the peer review information it requested.
I would remand to the Board to properly re-balance the
hospital’s confidentiality interest against the Union’s asserted
need for the information, in the manner suggested by Member
Johnson.
With those observations, I respectfully concur in part and
dissent in part.