Gratiot Community Hospital, Petitioner/cross-Respondent v. National Labor Relations Board, Respondent/cross-Petitioner

51 F.3d 1255, 149 L.R.R.M. (BNA) 2072, 1995 U.S. App. LEXIS 9073

• Court: Court of Appeals for the Sixth Circuit
• Decided: April 21, 1995
• Docket: 93-6533, 94-5023
• Status: Published

Opinions

BROWN, J., delivered the opinion of the court, in which MERRITT, C.J., joined. BATCHELDER, J. (pp. 1261-65), delivered a separate opinion dissenting in part and concurring in part.

BAILEY BROWN, Circuit Judge.

This case arose from various unfair labor charges filed against petitioner, Gratiot Community Hospital (the “Hospital”), by the Gra-tiot Community Hospital Registered Nurses Association, the labor organization representing the Hospital’s registered nurses. The National Labor Relations Board (the “Board”) issued a complaint against the Hospital alleging four violations of the National Labor Relations Act, 29 U.S.C. § 158 (the “Act”): (1) that the Hospital coerced an employee(s) to meet with members of management without the presence of a Union representative in order to discuss or attempt to resolve grievances; (2) that the Hospital unlawfully refused to bargain with the Union about the Hospital’s decision to cease supplying surgical scrubs to employees; (3) that the Hospital unlawfully terminated the 7/70 shift program;¹ and (4) that the Hospital unlawfully terminated the position of nursing supervisor. An Administrative Law Judge (“ALJ”) heard the matter and found against the Hospital on all four claims. The Board subsequently issued its decision and order, adopting the ALJ’s decision in full. The Hospital now petitions this court to review two of the Board’s four determinations: (1) that the Hospital unlawfully ceased to supply scrub uniforms to registered nurses, and (2) that the Hospital unlawfully terminated the 7/70 program by reducing the nursing staff teams to zero. The Board has filed a cross-petition seeking enforcement of its order. We order enforcement of the Board’s order on the issue of surgical scrubs; however, we deny enforcement of the order with respect to the termination of the 7/70 staffing program. We also order enforcement on the two remaining issues not contested by the Hospital.

I.

Gratiot Community Hospital is an acute health care facility located in Alma, Michigan. Since 1967, the Hospital’s registered nurses have been represented by the Gratiot Community Hospital Registered Nurses Association (the “Union”). The Hospital and Union had a collective bargaining agreement (“CBA”) covering all periods in question.

In the spring of 1991, the Hospital determined that it was sustaining severe financial losses. Deficits of several million dollars were reported for both 1990 and 1991, and a three million dollar loss was projected for 1992. Consequently, the Hospital initiated an intensive review of its operations in order to identify ways in which it could function more economically. The Hospital formed a “turnaround” task force to develop a recovery plan for the Hospital.

A series of meetings and communications took place during the summer of 1991. On June 26, management officials informed the Union Executive Committee and the Union’s bargaining agent, Jim Hayes, about the Hospital’s financial predicament, the existence of the turnaround team, and the fact that several cost-cutting steps would be necessary, including the likelihood of bargaining unit member layoffs. The parties met three more times on July 17, July 30, and August 5, discussing several issues and proposals.² The parties were unable, however, to accomplish anything substantial. In the meantime, the Hospital unilaterally initiated several cost-cutting measures germane to this appeal.

1.The Hospital abolished its scrub uniform policy.

For many years, the Hospital voluntarily purchased and laundered scrub uniforms- for most of the Hospital staff, including the registered nurses. It had become a longstanding practice. However, on July 22, 1991, the Hospital issued a report to all employees announcing that “the Hospital will no longer furnish surgical scrub suits” to employees in most departments. A memo distributed on July 23, the next day, restated and expanded the Hospital’s announcement, stating in pertinent part that:-

Effective September 1, ... the Hospital will no longer supply employees with surgical scrubs as a replacement for uniforms. The policy change affects all departments ....

Employees of departments who currently utilize scrubs will have the option of purchasing scrubs currently provided or purchase appropriate uniforms from outside vendors....

It will be the employees’ responsibility to launder their own scrubs effective September 1....

Union President, Glenn King, testified that he never received formal notice from the Hospital of its decision to terminate the scrub policy prior to the above memo being posted on a Hospital bulletin board. Moreover, King alleged that management told the Union that the decision with respect to the scrub policy was non-negotiable. Members of management deny having taken that position.

2. The Hospital reduced the number of 7/70 staff teams to zero.

As stated, the 7/70 staffing program was negotiated by the Hospital and Union to attract registered nurses to the night-shift. The program began with just one team of nurses, and although there had been some fluctuation, the number of teams increased steadily. Prior to the adoption of the Hospital’s financial recovery plan, there were thirteen teams.

Article 46 of the CBA states that “[t]he Director of Nursing will decide the number of assignments and the work areas that will be under the Seventy Hour Shift.”³ Relying on this language, the “turnaround” task force obtained the Board of Director’s approval to reduce the number of 7/70 teams to zero. This inevitably led to some nurses being laid off or bumped to part-time positions thereby losing their health benefits. The hospital later determined that it needed to reinstate the 7/70 program, and. invited bidding for placements in two teams.

3. The Board’s Conclusions and Order.

The Board, in adopting the ALJ’s rulings, held that the Hospital violated § 8(a)(5) arid (1) of the Act by refusing to bargain with the Union over ceasing to supply scrub uniforms to all registered nurses, and by, without bargaining, terminating the 7/70 program by reducing the number of staff teams to zero. The Board ordered the Hospital to cease and desist from refusing to bargain with the Union about the scrub uniform and 7/70 matters, make any affected employees whole, and post a notice to all employees with respect to the matter. The Hospital contends that the Board’s/ALJ’s findings and conclusions with respect to these two issues are erroneous and not supported by the evidence in the record. The Board, on cross-appeal, seeks enforcement of its order.

II.

According to the Act, “findings of the Board with respect to questions of fact if supported by substantial evidence on the record as a whole shall in like manner be conclusive.” 29 U.S.C. § 160(e). Likewise, where substantial evidence supports the Board’s conclusions, süch conclusions may not be disturbed on appeal. Kux Mfg. Co. v. NLRB, 890 F.2d 804, 808 (6th Cir.1989). In fact, we are not permitted to displace the Board’s choice between two conflicting views, even if we could justifiably reach a different conclusion reviewing the matter de novo. YHA, Inc. v. NLRB, 2 F.3d 168, 172 (6th Cir.1993); Highland Superstores, Inc. v. NLRB, 927 F.2d 918, 923 (6th Cir.1991). Evidence is considered substantial if it is adequate to a reasonable mind to uphold the decision. Id.

Section 8(a)(5) of the Act makes it an unfair labor practice for an employer “to refuse to bargain collectively with the representatives of his employees.” 29 U.S.C. § 158(a)(5); NLRB v. Centra, Inc., 954 F.2d 366 (6th Cir.1992), cert. denied, — U.S. -, 115 S.Ct. 462, 130 L.Ed.2d 370 (1994). The duty to bargain collectively requires an employer and the union representing the employees to “meet at reasonable times and confer in good faith with respect to wages, hours, and other terms and conditions of employment....” 29 U.S.C. § 158(d). Thus, an employer violates § 8(a)(5) by unilaterally changing any term or condition of employment subject to mandatory bargaining. There is no such violation, however, if the union has waived its right to bargain. YHA Inc. v. NLRB, 2 F.3d 168, 172 (6th Cir.1993).

1. Whether the Hospital violated the Act by ceasing to supply surgical scrubs.

As stated, the Board/ALJ held that the Hospital violated the Act by refusing to bargain with the Union over ceasing to supply scrub uniforms to registered nurses. The ALJ first found, and the Hospital does not contest, that providing laundered scrubs to its employees became a condition or benefit of employment through longstanding past practice. Any change in this condition, therefore, was a mandatory subject of bargaining. Thus, the Hospital was required to give the Union notice of its intent to rescind the scrub uniform policy and a good-faith opportunity to bargain about it.

A Notice

In the Sixth Circuit, actual notice is sufficient to satisfy an employer’s duty to notify union representatives of a change in conditions or terms of employment. YHA, Inc., 2 F.3d at 173. Accordingly, •

while “formal and full” notice may be prudent, if only to preclude another from claiming ignorance, it is not required.... “[Wjhere a union had actual notice of an employer’s intentions at a time when there was sufficient opportunity to bargain prior to implementation of the change, the employer may not be faulted for failing to afford formal notification.”

Id. (quoting Medicenter, Mid-South Hosp., 221 N.L.R.B. 670, 678, 1975 WL 6475 (1975)).

In our case, the Hospital notified its employees, in writing on two occasions, that its practice of supplying laundered scrubs was being terminated. The registered nurses, therefore, including .those on the Union Executive Committee, were informed that scrubs would no longer be provided. Consequently, we conclude that, although the Union did not receive formal notice of the change in scrub policy, it nevertheless received actual notice sufficient to satisfy the .Hospital’s duty to notify.

B. Fait Accompli

The Hospital contends that because the Union received notice of the revised scrub policy, and because the Union failed to “promptly request that the employer bargain over the matter,” the Union waived its right to bargain. See YHA Inc., 2 F.3d at 173. The Hospital points out that the Union had knowledge of the Hospital’s intent to change the scrub policy on July 22-23, the dates the letters were sent out, and roughly five weeks prior to when the planned action would go into effect on September 1.

With respect to waiver, a union may waive its statutory right to bargain, but such waiver must be clear and unmistakable. Centra, Inc., 954 F.2d at 371.

Waiver will be found if the evidence shows that the Union received sufficient notice of the proposed change, and yet failed to protest or demand bargaining on the issue. The Board requires proof of clear and unequivocal notice such that Union’s subsequent failure to demand bargaining constitutes a “conscious relinquishment” of the right to bargain.

YHA, Inc., 2 F.3d at 173.

The ALJ concluded, however,, that even if the letters were sufficient to confer actual notice to the Union of the revised scrub policy, the Hospital did not intend to enter into good-faith bargaining, and therefore, the Union could not have waived its bargaining rights. “If a policy is implemented too quickly after notice is given, or ah employer has no intention of changing its mind, the notice constitutes nothing more than informing the union of a fait accompli.” Centra, Inc., 954 F.2d at 372 (emphasis added) (citations omitted). “Notice of a fait accompli is simply not the sort of timely notice upon which the waiver defense is predicated.” Id. (citations omitted).

In the instant ease, there is substantial evidence in the record to support the Board’s decision. In each of the communications to the employees, the scrub policy change was stated in definite terms. The Hospital’s first letter stated that it would “no longer furnish surgical scrub suits_” Moreover, the second communication stated that “the policy ’ .... has changed” and the change “affects all departments.” Given the language of these communications, the Union was left with the impression that the Hospital was not willing to enter into good-faith bargaining. The ALJ stated that “[n]either of these communication[s] suggests that the notice was of a tentative or preliminary proposal. Rather, each was a pronouncement of a final and unqualified decision.”

Furthermore, the Hospital bypassed the Union and its representatives by communicating directly with the employees. The ALJ noted that this form of direct communication sent “a strong signal that the [Union] had no effective role to play in [the Hospital’s] pre-determined process.” The ALJ also noted that when the Union did attempt to raise the scrub policy change, it was conveyed to the Union that the issue was “nonnegotiable.” According to the ALJ, therefore, the decision was already “cast in stone” and any request by the Union would have been futile.

Because notice of the new scrub policy to the Union amounted to a fait accompli, the Union did not forego an opportunity to bargain on the scrub issue. Essentially, the Hospital did not, in good faith, give the Union an opportunity to bargain. Consequently, we find that substantial evidence supports the ALJ’s determination that the unilateral termination of the scrub policy was an unfair labor practice.

2. Whether the Hospital violated the Act by reducing the number of 7/70 staff teams to zero.

The Union contended, and the Board/ ALJ concluded, that when the Hospital reduced the number of 7/70 teams to zero, without notifying or conferring with the Union, the Hospital unilaterally altered the wages, hours and other conditions of employment of bargaining unit members in violation of the Act. For example, because nurses who had elected the 7/70 shift worked only 70 hours for 80 hours pay, the elimination of the program increased the number of hours worked without a commensurate increase in wages.

The Hospital contends, however, that its decision to reduce the number of 7/70 teams to zero was clearly within its express rights under the CBA The primary provision upon which the Hospital relies, Article 46, § 1, provides:

Assignments to the Seventy Hour Shift will be made by the Director of Nursing in cooperation with the employees involved. The Director of Nursing will decide the number of assignments and the work areas that will be under the Seventy. Hour Shift,....

The Hospital argues, therefore, that it had discretion to reduce the 7/70 nursing teams to zero, and its decision to do so was a specifically reserved right under the CBA.

When an employer and union bargain about a subject and memorialize that bargain in a collective bargaining agreement, they create a set of rules that govern their future relations. Unless the parties agree otherwise, there is no continuous duty to bargain with respect to a matter" covered by the contract. Thus, we are bound to enforce lawful labor agreements as written. See NLRB v. United States Postal Serv., 8 F.3d 832, 836 (D.C.Cir.1993).

On the other hand, an employer commits an unfair labor practice if, without bargaining to impasse, it effects a unilateral change of an existing term or condition of employment. NLRB v. Katz, 369 U.S. 736, 82 S.Ct. 1107, 8 L.Ed.2d 230 (1962). Thus, our issue becomes whether the Hospital acted pursuant to a right under the CBA, or rather, whether the Hospital attempted an unlawful unilateral modification. The Board’s interpretation of contract terms is subject to de novo review. Litton Fin. Printing Div. v. NLRB, 501 U.S. 190, 201-03, 111 S.Ct. 2215, 2223, 115 L.Ed.2d 177 (1991).

The ALJ in the instant case found that .the ‘reduction to zero’ decision was, in essence, an elimination of the program which consequently resulted in mass layoffs and altered wages, hours, and conditions of employment for bargaining unit members. The ALJ concluded that, although Article 46 permits hospital management to determine the specific number of nurses assigned to the 7/70 program, it neither states nor implies that management may unilaterally abolish the program altogether.⁴ We disagree. Rather, we agree with the Hospital that elimination of the special shift program was clearly within the Hospital’s authority. The language of Article 46 is clear and unambiguous in granting authority to the Hospital to determine the number of shifts, including zero, in the 7/70 program.⁵ Consequently, the Hospital’s actions with respect to the 7/70 shift program were not in violation of the Act.

III.

For the foregoing reasons, we DENY enforcement of the Board’s order on the issue of the Hospital’s termination of the 7/70 staffing program. As to all other determinations, the Board’s order shall be ENFORCED.

1 . In 1981, as a means of attracting registered nurses to night shift assignments, the Hospital negotiated with and obtained the Union’s consent to a new staffing procedure called the “7/70” program. The program provided that each member of a paired team would work a full seven-day, ten-hour, night-shift and receive 80 hours pay for 70 hours work, or 1.19 times more than the regular hourly rate.

2 . For example, the Hospital explained that twenty-three full-time registered nurse positions would likely be eliminated. The Hospital indicated, however, that if the Union was willing to forego an earlier negotiated 8% wage increase, only eleven registered nurse positions would have to be eliminated. The Union countered that it could not forego the wage increase but would consider a deferral of the pay raise to a later time. The Hospital rejected this counter-offer as well as other cost-cutting ideas of the Union.

3 . The Director of Nursing is part of the Hospital's management.

4 . The Board/ALJ recognized that the Hospital reinstated the 7/70 program some time later. However, it found that when the Hospital announced that the shift would be abolished, it gave no indication that it might be restored. The Board/ALJ, therefore, considered the reinstatement a separate, unilateral act which did not affect its decision here.

5 . What if, for example, the Hospital had reduced the number of 7/70 teams to one rather than zero. It seems to this court that such a decision would, even under the Board/AU's reasoning, be authorized under Article 46, although there would be a significant impact on the employment conditions of the 7/70 nurses.