MI Comm Svcs v. NLRB

• Court: Court of Appeals for the Sixth Circuit
• Decided: October 30, 2002
• Docket: 00-2440
• Status: Published

Opinion

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$*5,&8/785$/ ,03/(0(17  implemented by a centralized agency. Specifically, the Court  in New York Telephone Co. stated, :25.(56 2) $0(5,&$ $)/&,2 6800(5¶6 /,9,1*  The overriding interest in a uniform, nationwide  6<67(06 ,1&HWDO  interpretation of the federal statute by the centralized ,QWHUYHQRUV 1 expert agency created by Congress not only demands that the NLRB’s primary jurisdiction be protected, it also forecloses overlapping state enforcement of the 2Q3HWLWLRQVIRU5HYLHZDQG&URVV$SSOLFDWLRQIRU prohibitions in § 8 of the Act [29 U.S.C. § 158] . . . as (QIRUFHPHQWRIDQ2UGHURIWKH well as state interference with the exercise of rights 1DWLRQDO/DERU5HODWLRQV%RDUG protected by § 7 of the Act [29 U.S.C. § 157]. 1RV&$HWDO Id. at 528 (citations and footnotes omitted). See also NLRB $UJXHG-XO\ v. Waterman S.S. Corp., 309 U.S. 206, 226 (1940) ("The control of the election proceedings, and the determination of 'HFLGHGDQG)LOHG2FWREHU the steps necessary to conduct that election fairly were matters which Congress entrusted to the Board alone.") %HIRUH6,/(5&2/(DQG&/$<&LUFXLW-XGJHV Further, we note that the extension of comity to the MERC- conducted elections involving SLS would appear to be BBBBBBBBBBBBBBBBB inconsistent with the Board’s own policy. See Doctor’s &2816(/ Osteopathic Hosp., 242 NLRB 447, 449 (1979), aff’d 624 F.2d 1089 (3d Cir. 1980) (noting that "it is only where the $5*8('  *UHJRU\ - %DWRU %$725  %(5/,1 state agency’s procedure is clearly repugnant to the Act that %LUPLQJKDP0LFKLJDQIRU3HWLWLRQHUVDQG6XPPHU¶V/LYLQJ we will refuse comity"). Accordingly, we deny AFSCME’s 6\VWHPV ,QF  5LFKDUG $ &RKHQ 1$7,21$/ /$%25 petition for review. 5(/$7,216 %2$5' 2)),&( 2) 7+( *(1(5$/ &2816(/:DVKLQJWRQ'&IRU5HVSRQGHQW0DUJDUHW$ CONCLUSION 0F&DQQ :DVKLQJWRQ '& IRU $PHULFDQ )HGHUDWLRQ RI 6WDWH &RXQW\  0XQLFLSDO (PSOR\HHV $)6&0( $)/ For the foregoing reasons, we DENY the petitions for &,221%5,()*UHJRU\-%DWRU%$725 %(5/,1 review by MCS in Case No. 00-2192 and AFSCME in Case %LUPLQJKDP$ODEDPDIRU3HWLWLRQHUVDQG6XPPHU¶V/LYLQJ No. 00-2451, and ENFORCE the Board’s order in Case No. 6\VWHPV ,QF 'DQLHO $ *ZLQQ %$725  %(5/,1 00-2440 finding that it is supported by substantial evidence %LUPLQJKDP0LFKLJDQ5RGJHU:HEE'HWURLW0LFKLJDQIRU on the record. 3HWLWLRQHUV  5LFKDUG $ &RKHQ 1$7,21$/ /$%25 5(/$7,216 %2$5' 2)),&( 2) 7+( *(1(5$/ &2816(/ :DVKLQJWRQ '& $LOHHQ $ $UPVWURQJ 1$7,21$//$%255(/$7,216%2$5'$33(//$7( &2857 %5$1&+ :DVKLQJWRQ '& IRU 5HVSRQGHQW  0LFK&RPPXQLW\6HUYV 1RV 1RV 0LFK&RPPXQLW\6HUYV  HWDOY1/5% HWDOY1/5%

"Want of jurisdiction of the subject matter cannot be 0DUJDUHW $ 0F&DQQ :DVKLQJWRQ '& IRU $PHULFDQ waived; that jurisdiction of the subject matter cannot be )HGHUDWLRQ RI 6WDWH &RXQW\  0XQLFLSDO (PSOR\HHV supplied by the consent of the parties; and that objection $)6&0($)/&,2&DWKHULQH-7UDIWRQ$662&,$7( to lack of such jurisdiction may be interposed or noticed *(1(5$/&2816(/,17(51$7,21$/81,218$: at any stage of the action." 1A Barron and Holtzoff, Fed. 'HWURLW 0LFKLJDQ *HRUJH % :DVKLQJWRQ 6&+()) Practice and Procedure, § 370b (Wright ed., 1960). :$6+,1*721 'HWURLW 0LFKLJDQ /DZUHQFH 5 :HEE 'HWURLW0LFKLJDQ'DQLHO$*ZLQQ%$725 %(5/,1 353 F.2d 366, 369 (6th Cir. 1965). Thus, the Board was free %LUPLQJKDP0LFKLJDQIRU,QWHUYHQRUV to exercise its discretion and assume jurisdiction at any time. BBBBBBBBBBBBBBBBB In this case, the Board, after issuing Management Training, had exclusive jurisdiction to direct or supervise the elections. 23,1,21 See Sears, Roebuck & Co. v. Carpenter’s Dist. Council (San BBBBBBBBBBBBBBBBB Diego), 436 U.S. 180, 202 (1978) ("The primary-jurisdiction rationale unquestionably requires that when the same &/$<&LUFXLW-XGJH0LFKLJDQ&RPPXQLW\6HUYLFHV,QF controversy may be presented to the state court or the NLRB, DQGWZHQW\HLJKWRWKHUQRQSURILWFRUSRUDWLRQVFROOHFWLYHO\ it must be presented to the Board.") As Intervenor SLS ³0&6´ ZKLFK DUH OLFHQVHG E\ WKH 6WDWH RI 0LFKLJDQ WR rightly argues, quoting from San Diego Building Trades SURYLGHUHVLGHQWLDOFDUHIRUGHYHORSPHQWDOO\GLVDEOHGDGXOWV Council v. Garmon, 359 U.S. 236, 246 (1959), state LQDUHVLGHQWLDOVHWWLQJDSSHDOLQ&DVH1Rfrom the jurisdiction is displaced if conduct is "arguably within the final decision and order entered by the National Labor compass of § 7 or § 8 of the Act." Given that the elections Relations Board ("the NLRB" or "the Board") in Summer’s were "arguably within the compass of § 7 or § 8 of the Act," Living Systems, Inc., 2000 WL 1460041 (NLRB 2000) the elections conducted by MERC should be void. See Mass. (unpublished) in which the NLRB declined to set aside union Labor Relations Comm’n v. Blue Hill Spring Water Co., 414 representation elections and held that MCS engaged in unfair N.E.2d 351 (Mass. Ct. App. 1980) (recognizing that labor practices under §§ 7 and 8(a)(1) and (5) of the National proceedings in the Massachusetts Labor Relations Committee Labor Relations Act, 29 U.S.C. §§ 157, 158(a)(1) and would be void if the Board had asserted jurisdiction of an (5) ("the Act") by refusing to bargain collectively with the unfair labor practice complaint). American Federation of State, County & Municipal Employees, AFL-CIO ("AFSCME"), and the International Because MERC did not have jurisdiction to conduct the Union, United Automobile, Aerospace and Agricultural elections involving SLS after the issuance of Management Implement Workers of America, AFL-CIO ("UAW"), Training, the Board properly refused to extend comity to (collectively, "the Unions"), after the unions won the these MERC-conducted elections. As pointed out by SLS, elections. In Case No. 00-2440, the NLRB has cross- extending comity in this case would directly violate the intent petitioned for enforcement of the order; the Unions have of Congress to vest exclusive jurisdiction with the Board and intervened in support of the NLRB’s cross-petition. In Case subvert the goal announced in New York Telephone Co. v. No. 00-2451, AFSCME seeks review of the NLRB’s decision New York State Dept. of Labor, 440 U.S. 519 (1979) of and order in Summer’s Living Systems dismissing unfair labor promoting a unified nationwide scheme of labor law practice allegations against Summer’s Living Systems, Inc. and eight other employers (collectively "SLS") that own  0LFK&RPPXQLW\6HUYV 1RV 1RV 0LFK&RPPXQLW\6HUYV  HWDOY1/5% HWDOY1/5%

residential care facilities. SLS has intervened in opposition concerning assertion of that oversight." Pikeville, 109 F.3d at to AFSCME’s petition. 1152 (internal citations and quotation marks omitted). In Summer’s Living Systems, the Board issued a decision In determining whether the Board had jurisdiction, this and order affirming the decision made by the administrative Court in Pikeville set forth the following standard: "Under a law judge ("ALJ") to extend comity to the union Management Training Corp. analysis, the jurisdiction of the representation elections conducted by the Michigan Employee NLRB over [an employer] is established simply by the Relations Commission ("MERC") in thirty residential care minimal showing that the [employer] both "meets the facilities owned by MCS that took place before Management definition of ‘employer’ under Section 2(2) of the Act," and Training Corp., 317 NLRB 1355 (1995) was decided, but not "meets the applicable monetary jurisdictional standards." Id. to extend comity to the MERC-conducted elections in the Under this test, the Board properly had jurisdiction over SLS. residential care facilities owned by SLS that took place after Management Training was decided on the ground that MERC In this regard, there is no merit to AFSCME’s claim that lacked jurisdiction to conduct those union representation SLS waived the jurisdictional issue by failing to raise it elections. In Management Training, the Board, overruling the before the MERC elections were held or before the Board in jurisdictional test set forth in 5HV&DUH,QF1/5% Summer’s Living Systems, Inc. As the Intervenors SLS point decided that it had MXULVGLFWLRQRYHUDQHPSOR\HUZLWK out, their failure to contest the jurisdiction of the MERC at the FORVHWLHVWRDQH[HPSWJRYHUQPHQWDOHQWLW\DVGHILQHGXQGHU time of the elections does not prevent the Board from 86&† Accordingly, the Board upheld the unfair concluding that the MERC lacked jurisdiction to conduct the labor practice complaints filed against MCS, but dismissed elections after Management Training. As this Court noted in those filed against SLS. For the reasons set forth below, we NLRB v. Ferraro’s Bakery, Inc.: DENY the petitions for review by MCS in Case No. 00-2192 and by AFSCME in Case No. 00-2451, and ENFORCE the The Board concedes that the question of its statutory Board’s order in Case No. 00-2440. jurisdiction may be raised at any time despite failure to raise this issue before the Board in a timely fashion. BACKGROUND Failure to file exceptions does not confer jurisdiction on the Board if the order is beyond the scope of its statutory The present case concerns a dispute between a group of authority. As said in N.L.R.B. v. Cheney California Michigan non-profit corporations operating group homes Lumber Company, 327 U.S. 385, 388, 66 S. Ct. 533, 554, providing residential care and services to individuals with 90 L.Ed. 739: disabilities (collectively "the Employers") and the Unions representing their employees regarding the employees’ rights "Since the court is ordering entry of a decree, it to choose union representation under § 7 of the Act. The need not render such a decree if the Board has State of Michigan Department of Mental Health ("MDMH") patently traveled outside the orbit of its authority so funds the Employers’ operations through annual contracts that that there is, legally speaking, no order to enforce." establish defined limits upon wages and benefits that the Employers may pay. In 1985, the Unions began organizing It is elementary that: efforts at the Employers’ residential care facilities, with AFSCME filing several election petitions with the Board’s  0LFK&RPPXQLW\6HUYV 1RV 1RV 0LFK&RPPXQLW\6HUYV  HWDOY1/5% HWDOY1/5%

1995); NLRB v. Winco Petroleum Co., 668 F.2d 973, 982 (8th regional office in Detroit, Michigan, seeking to represent the Cir. 1982). As stated in Fall River, the appropriate inquiry is employees of the Employers operating under contracts with whether any changes have occurred such that "if [the MDMH. In CK Homes, Inc. v. AFSCME, an unpublished employees’] legitimate expectations in continued decision of the NLRB Seventh Region Director, decided representation by their union are thwarted, their February 14, 1986 (Case No. 7-RM-1275) and Residential dissatisfaction may lead to labor unrest." Fall River, 482 U.S. Systems v. UAW, an unpublished decision of the NLRB at 43-44. Further, as the Board points out, to allow new Seventh Region Director, decided April 7, 1988 (Case No. elections in this case would permit MCS "to exploit the No. 7-RC-18529), the Board, relying primarily upon Res- heightened insecurities among employees" to the detriment of Care Inc., 280 NLRB 670 (1980), dismissed AFSCME’s the Act’s fundamental policy of favoring "industrial peace." petitions, citing lack of subject-matter jurisdiction under the In any event, it is well recognized that the employees have the Act on the basis that the State of Michigan was an exempt statutorily-protected right of relieving themselves of union governmental entity. representation if they so desire. See Auciello Iron Works, Inc. v. NLRB, 517 U.S. 781, 790 (1996)(observing that the union Thereafter, on January 28, 1988, AFSCME filed petitions was "subject to a decertification petition from the workers if with MERC seeking to represent the employees of the they want to file one"); Franks Bros. Co. v. NLRB, 321 U.S. Employers’ separate units, naming MDMH and the group 702, 704-06 (1944). Thus, if the employees are not well- home providers as joint employers. MDMH opposed the served by union representation, they can pursue petitions naming it as a joint employer, claiming that decertification petitions. MERC’s jurisdiction over each private employer was preempted as a matter of federal labor policy. After finding Accordingly, we find that the Board did not err in that the named employers were joint employers, MERC extending comity to the MERC-conducted elections held asserted jurisdiction over MDMH under the Michigan Public before the issuance of Management Training. We thus deny Employment Relations Act ("PERA"), Mich. Comp. Laws MCS’ petition for review. Ann. §§ 423.201423.216, and over the group home providers under the Michigan Labor Mediation Act Case No. 00-2451: AFSCME’s Petition ("MLMA"), Mich. Comp. Laws Ann. §§ 423.1423.30. In asserting jurisdiction, MERC relied upon the Board’s refusal On the other hand, contrary to AFSCME’s claim, the Board to assert jurisdiction over the group home providers under the did not err in declining to extend comity to the MERC- Act and the decision of the Michigan Civil Service conducted elections after Management Training was decided Commission not to classify the employees of the group homes on the basis that MERC lacked jurisdiction to hold these as state civil service employees. See AFSCME v. La. Homes, elections. In reviewing this claim, we note that the NLRB Inc./Mich. Dep’t of Mental Health, MERC Case No. R88 C- "has discretion whether to exercise jurisdiction." Pikeville, 112, 1989 MERC Lab Op 51, 1990 MERC Lab Op 491, aff’d, 109 F.3d at 1152 (quoting Crestline Memorial Hosp. Ass'n, AFSCME v. La. Homes, 480 N.W.2d 280 (Mich. Ct. App. Inc. v. NLRB, 668 F.2d 243, 244 (6th Cir.1982)). "Thus, 1991), appeal denied, 487 N.W.2d 410 (Mich. 1992), absent a showing that [the Board] acted unfairly and caused vacated, 503 N.W.2d 442 (Mich. 1992), reaff’d on remand, substantial prejudice to the affected employer, a reviewing 511 N.W.2d 696 (Mich. Ct. App. 1994), appeal denied, 521 court should not disturb the NLRB’s discretionary decision N.W.2d 607 (Mich. 1994), cert. denied sub. nom., Mich.  0LFK&RPPXQLW\6HUYV 1RV 1RV 0LFK&RPPXQLW\6HUYV  HWDOY1/5% HWDOY1/5%

Dep’t of Mental Health v. Louisiana Homes, Inc., 513 U.S. Here, the Board reasonably rejected as speculative the 1077 (1995) ("Louisiana Homes"). claim of MCS that the contracts between MCS and MDMH legally preclude MCS and their employees from bargaining MERC then directed and conducted elections involving the about improved wages, benefits, staffing levels and the like. joint employers, as authorized by PERA. After elections were Even though the contracts with MDMH set the wages, conducted on April 20, 1989, the ballots were impounded, but benefits and staffing levels for which MCS will be eventually counted by MERC on June 29, 1990. The Unions reimbursed during the contracts’ annual term, these contracts won each election.$VDFRQVHTXHQFH0(5&FHUWLILHGWKH do not prevent the employers from agreeing to increase such EDUJDLQLQJUHSUHVHQWDWLYHVJLYLQJXQLWHPSOR\HHVEDUJDLQLQJ terms during collective bargaining with their employees. ULJKWVZLWKUHVSHFWWR0'0+DQGWKHLUSULYDWHHPSOR\HUVDV Thus, there is no credible evidence that MCS’ employees MRLQW HPSOR\HUV  0'0+ KRZHYHU UHIXVHG WR KRQRU would have rejected union representation had they known 0(5&¶V FHUWLILFDWLRQV DQG FKDOOHQJHG WKHP LQ VWDWH FRXUW that MDMH would not be present at the bargaining table. VHHNLQJ MXGLFLDO UHYLHZ RI WKH 0(5&¶V DVVHUWLRQ RI MXULVGLFWLRQE\FODLPLQJWKDWLWZDVQRWDMRLQWHPSOR\HURIWKH As the Board perceptively points out, the only real change VXEMHFWXQLW HPSOR\HHV DQG FRQWHQGLQJ WKDW WKH $FW in the employees’ situation resulting from the Board’s SUHHPSWHGVWDWHODZ0(5&¶VDVVHUWLRQRIMXULVGLFWLRQZDV recognition of the MERC-conducted elections held before the HYHQWXDOO\ XSKHOG RQ DSSHOODWH UHYLHZ LQ WKH /RXLVLDQD issuance of Management Training is that MCS’ employees +RPHV litigation. Throughout the appellate proceedings, the are now authorized to strike. As the Board notes, the Employers took the same position as AFSCME, that they and employees were prohibited from striking against an exempt MDMH were joint employers subject to MERC’s jurisdiction governmental entity under PERA. However, under the which was not preempted by the Act. During this time, Board’s jurisdiction, the employees are permitted to strike, however, no bargaining in the certified units took place thus strengthening their ability to enforce their bargaining because the Employers were unwilling to participate in demands. Given that the employees were given authorization bargaining if MDMH was also not a participant. to strike, the Board correctly reasons that it is unlikely that the changed circumstance occasioned by the Board’s After the United States Supreme Court denied MDMH’s jurisdiction of this matter would cause the employees to petition for a writ of certiorari in the Louisiana Homes case abandon union representation. Because it is not very likely on January 9, 1995, bargaining eventually commenced, but that the absence of the MDMH at the bargaining table would did not last long. In mid-1995, the Board announced a have affected employee views and attitudes about union change in policy in Management Training, overruling the test representation, there was no support for nullifying the stated in Res-Care and declaring that it had jurisdiction over elections upon the basis of a changed circumstance. private employers under contract with exempt state agencies. In light of the Board’s decision in Management Training, Consequently, MCS cannot repudiate its bargaining MDMH petitioned the Michigan Court of Appeals to obligations. As the Board makes clear, the situation in this reconsider and reverse its previous decision finding that case is similar to one in a successorship context in which new owners cannot repudiate an existing bargaining obligation on the ground of changed circumstances. See Fall River Dyeing  $ ZRQ DOO WKH HOHFWLRQV H[FHSW IRU RQH WKDW ZDV ZRQ E\ WKH & Finishing Corp. v. NLRB, 482 U.S. 27, 38, 47 (1987); 8$: ARMCO, Inc. v. NLRB, 832 F.2d 358, 362-63 (6th Cir.  0LFK&RPPXQLW\6HUYV 1RV 1RV 0LFK&RPPXQLW\6HUYV  HWDOY1/5% HWDOY1/5%

that MERC conducted the elections, it was the case that MERC’s jurisdiction was not preempted as a matter of federal MDMH was considered to be a joint employer. However, as labor policy. Thereafter, on January 26, 1996, the Michigan Intervenor AFSCME states, "everyone knew, or should have Court of Appeals, in reliance upon Management Training, known, that the status of the state as employer under PERA vacated MERC’s decisions requiring the Employers and was subject to vigorous litigation." AFSCME Br. at 22. MDMH to bargain with the Unions in all the adult residential Thus, contrary to MCS’ unsupported assertion, there is no care cases before MERC, concluding that MERC’s indication that the MERC-conducted elections at the time jurisdiction was preempted as a matter of federal labor policy. "denied employees a free and fair choice based upon the AFSCME v. Mental Health Dep’t., 545 N.W.2d 363 (Mich. truth;" nor is there any basis to believe that "the complexity Ct. App. 1996).7KXVWKH0LFKLJDQ&RXUWRI$SSHDOVKHOG of the interrelationships between the State of Michigan WKDWWKHDGXOWUHVLGHQWLDOFDUHSURYLGHUVWKDWFRQWUDFWHGZLWK Department of Mental Health, the state judiciary, the MERC, 0'0+ZHUHSURSHUO\XQGHUWKHMXULVGLFWLRQRIWKH%RDUG the Board, and the parties to the election robbed employees $VDUHVXOW0'0+DQGWKH(PSOR\HUVZHUHUHOLHYHGRIDQ\ and Employers of a clear understanding as to the impact of GXW\ WR EDUJDLQ XQGHU VWDWH ODZ  7KHUHDIWHU WKH 0LFKLJDQ the union elections." MCS Br. at 18. Because there was no &RXUW RI $SSHDOV LQ DQ RUGHU HQWHUHG RQ 0DUFK   misrepresentation concerning MDMH’s status as a joint GHQLHG $)6&0(¶V PRWLRQ IRU UHKHDULQJ EXW JUDQWHG LWV employer, there is no basis to set aside the elections. PRWLRQIRUDVWD\ Nevertheless, MCS’ real complaint is whether the changed ,QWKHPHDQWLPHDIWHUWKH%RDUG¶VGHFLVLRQLQ0DQDJHPHQW circumstance of MDMH not being at the bargaining table 7UDLQLQJEXWEHIRUHWKH0LFKLJDQ&RXUWRI$SSHDOVUXOHGRQ called into question whether the election results reflected the WKHIHGHUDOSUHHPSWLRQLVVXHLQ$)6&0(Y0HQWDO+HDOWK desires of their employees to be represented by the Unions. 'HS¶WAFSCME proceeded with elections that previously had Thus, MCS claims: been directed by MERC, though not yet conducted. AFSCME won those union representation elections involving Had employees known in the present case that the State the employees of units of Summer’s Living Systems, Inc. and of Michigan would ultimately not participate in eight other employers ("SLS"). However, following the collective bargaining, the result of the election could Michigan Court of Appeals’ decision in AFSCME v. Mental easily have been different. Without the Health Dep’t vacating MERC’s certifications on preemption misrepresentation regarding the state’s involvement, grounds, the State of Michigan refused to bargain with the employees could have weighed the extraction of union Unions. When the Unions requested that the Employers dues out of modest earnings against the improbability of continue to bargain under the Act without MDMH’s the union securing higher wages or different working participation, the Employers refused, claiming that the conditions. changed circumstancethe absence of MDMH from the MCS Br. at 22-23. According to MCS, the elections should be invalidated because "[i]t is doubtful that employees would  have voted for a decrease in their wages to finance a union $IWHU WKH GHFLVLRQ LQ AFSCME v. Mental Health Dep’t, 545 N.W.2d dues deduction, in light of the improbability of wage 363 (Mich. Ct. App. 1996), WKH 0LFKLJDQ OHJLVODWXUH DPHQGHG 3(5$ DW 0LFK &RPS /DZV $QQ † H WR GHILQH HPSOR\HHV ZKR ZRUNHG increases at the bargaining table." MCS Br. at 27. IRU D SULYDWH HQWLW\ XQGHU FRQWUDFW ZLWK WKH 6WDWH DV SULYDWH VHFWRU HPSOR\HHV DQG WKHUHIRUH QRW SURWHFWHG E\ 3(5$  0LFK&RPPXQLW\6HUYV 1RV 1RV 0LFK&RPPXQLW\6HUYV  HWDOY1/5% HWDOY1/5%

bargaining processundermined the efficacy of MERC’s 1979); accord Lincoln Park Zoological Soc’y v. NLRB, 116 elections as a basis for requiring the Employers to bargain as F.3d 216, 219-20 (7th Cir. 1997) (extending comity to a matter of federal labor policy. Thus, all collective voluntary recognition of the union where, pursuant to the state bargaining came to a halt. The Unions contacted the Board public employee relations act, the employer has the initial on March 18, 1996, formally demanding bargaining by the chance to refuse to recognize a union and the employees had Employers. a right to decertify the union but failed to exercise it). Thus, based upon the criteria set forth in Standby One Associates, Thereafter, the Unions filed unfair labor practice charges the Board properly extended comity to the MERC-conducted with the Board against thirty-eight of the group home elections. providers contracted by MDMH, alleging refusal to bargain under the Act as the sole employers of employees in the There is no merit to MCS’ claim that the MERC-conducted subject units.Based upon the charges filed by the Unions, elections should be set aside based upon the alleged the Board issued a series of consolidated unfair labor practice misrepresentation that MDMH was a joint employer in these complaints alleging that the refusal to bargain violated proceedings. According to MCS, the alleged § 8(a)(1) and (5) of the Act, 29 U.S.C. § 158(a)(1) and (5). misrepresentation concerning MDMH’s role affected the free After hearings in Detroit, Michigan on January 29 and 30, and fair conduct of the elections. Specifically, MCS contends 1997, the administrative law judge ("ALJ") issued a decision that the Board applied the wrong legal standard in evaluating in which he found it appropriate to extend comity to the the facts. In support of their claim of misrepresentation, MCS elections that MERC had conducted when MERC properly relies upon the five-factor test announced in Mitchellace, Inc. had jurisdiction over the private employers.7KXVWKH$/- v. NLRB, 90 F.3d 1150, 1155 (6th Cir. 1996). As this Court IRXQG WKDW 0&6 violated § 8(a)(1) and (5) of the Act, 29 stated in NLRB v. Gormac Custom Mfg., Inc., 190 F.3d 742 U.S.C. § 158(a)(1) and (5) by refusing to recognize and (6th Cir. 1999): "These factors include: (1) the timing of the bargain with the Unions.,QVRKROGLQJWKH$/-UHMHFWHGWKH misrepresentation; (2) whether the employer was aware of the (PSOR\HUV¶DUJXPHQWWKDWWKHDEVHQFHRI0'0+IURPWKH situation and had an opportunity to respond; (3) the extent of EDUJDLQLQJ WDEOH UHSUHVHQWHG D FKDQJHG FLUFXPVWDQFH WKDW the misrepresentation; (4) whether the source of the SUHYHQWHG WKH %RDUG IURP H[WHQGLQJ FRPLW\ WR WKH 0(5& misrepresentation was identified; and (5) whether there is HOHFWLRQVDVDPDWWHURIIHGHUDOODERUSROLF\+RZHYHUZLWK evidence that employees ‘actually were affected’ by the misrepresentation." Id. at 747 (citing Mitchellace, 90 F.3d at 1155). In Gormac, this Court added that "another factor that  plays a part in our analysis is the closeness of the election." ,Q WKLV FDVH WKHUH DUH WKLUW\HLJKW JURXS KRPH SURYLGHUV DQG IRUW\ 190 F.3d at 747 (citing NLRB v. Hub Plastics, 52 F.3d 608, XQLWV DW LVVXH 7ZR SURYLGHUV $OWHUQDWLYH 6HUYLFHV DQG &DUVRQ¶V $)& 613 (6th Cir. 1995)). KHOG HOHFWLRQV ERWK EHIRUH DQG DIWHU -XO\   WKXV DFFRXQWLQJ IRU WKH GLIIHUHQFH EHWZHHQ WKH QXPEHU RI SURYLGHUV DQG VXEMHFW XQLWV What is wrong with this line of attack is that there was no  misrepresentation that supports setting aside the elections. 7KH $/-¶V GHFLVLRQ LV DWWDFKHG WR 6XPPHU¶V /LYLQJ 6\VWHPV 6HH  :/  DW  Specifically, there was no evidence in the record that MCS’ employees were misled by the status of MDMH at the time of  the elections, even though MCS had every opportunity to ([FHSW IRU RQH LQVWDQFH DOO WKH XQIDLU ODERU SUDFWLFHV LQYROYHG WKH AFSCME. present such evidence during these proceedings. At the time  0LFK&RPPXQLW\6HUYV 1RV 1RV 0LFK&RPPXQLW\6HUYV  HWDOY1/5% HWDOY1/5%

In this case, the Board, adopting the ALJ’s findings, UHJDUGWRSLS, the ALJ held that its employees had voted in properly extended comity to the MERC elections conducted elections conducted by MERC after the Board’s announced before the issuance of Management Training. Specifically, change in policy preempted MERC’s jurisdiction. Thus, the the Board, citing Standby One Associates, 274 NLRB 952 ALJ dismissed the unfair labor practice allegations as to SLS, (1985), found that (1) the state-conducted elections reflect[ed] finding that the principles of comity should not be applied to the true desires of the affected employees; (2) there was no the MERC-conducted elections due to MERC’s lack of showing of election irregularities; and (3) there was no jurisdiction. substantial deviation from due process requirements." Summer’s Living Sys., Inc., 2000 WL 1460041, at *3. First, In its decision issued on September 25, 2000, the Board it would appear that the state-conducted elections reflected affirmed the ALJ’s decision to extend comity to the MERC the true desires of the affected employees. As pointed out by elections that took place before Management Training was Intervenor AFSCME, eighty-five percent of the employees in decided on July 28, 1995, but not to extend comity to the the thirty subject units voted in favor of union representation. MERC elections that took place after Management Training Moreover, in nine of the units, there were zero votes cast was decided "when [MERC] did not have jurisdiction." against union representation. There was also no showing of Summer’s Living Systems, Inc., 2000 WL 1460041. In its election irregularities. As Intervenor AFSCME notes, no decision, the Board, citing Standby One Associates, 274 objections were filed in these elections. Afterwards, there NLRB 952 (1985), found that the ALJ correctly applied the was no decertification petition or challenge to the MERC Board’s comity policy and adopted the findings of the ALJ as elections. Id. to MCS that "(1) the state-conducted elections reflect the true desires of the affected employees; (2) there was no showing There was also no apparent deviation from due process of election irregularities; and (3) there was no substantial requirements. In particular, there was testimony that state- deviation from due process requirements." Summer’s Living election procedures are as rigorous as the Board’s. While Systems, Inc., 2000 WL 1460041, at *3. The Board further MCS suggests that "[t]he State of Michigan’s extensive found that "for the reasons stated by the [ALJ] . . . the involvement in the election process painted the proceedings removal of joint employer DMH from the bargaining table is with the authority of state government," MCS Br. at 20, there not such an unusual circumstance as to relieve [MCS] from is no credible evidence that the elections did not accord with their bargaining obligation." Id. Accordingly, the Board, due process. with minor modifications not pertinent to the present appeals, upheld the unfair labor practice complaints filed against Moreover, the Board properly found that the MERC- MCS, but dismissed the unfair labor practice complaints conducted elections were consistent with the policies and against SLS. procedures of the Act. As the Board points out, it has been its longstanding policy to recognize as binding the results of In its appeal in Case No. 00-2192, MCS contends that the state-conducted elections "provided that the state proceedings representation elections should be invalidated because the reflect the true desires of the affected employees, election elections were conducted under the misrepresentation that the irregularities are not involved, and there has been no State of Michigan was a joint employer. According to MCS, substantial deviation from due process requirements." "the post-election departure of the State of Michigan from its Allegheny Gen. Hosp., 230 NLRB 954, 955 (1977), role as co-employer was a material change in circumstances enforcement denied on other grounds, 608 F.2d 965 (3d Cir. that so radically affected relationships at the bargaining table  0LFK&RPPXQLW\6HUYV 1RV 1RV 0LFK&RPPXQLW\6HUYV  HWDOY1/5% HWDOY1/5%

that the employees lacked any knowledge of the true context declares not how a case shall be decided but how it in which their votes for unionization were cast." MCS Br. at may with propriety be decided. 7-8. In Case No. 00-2440, the NRLB cross-petitions for enforcement of its order. On the other hand, AFSCME in its The statement, however, was made in a far different appeal in Case No. 00-2451 argues that the Board erred in not context, namely, the extent to which one federal court of extending comity to the elections that MERC conducted after appeals should feel itself bound by the decision of Management Training was decided. another with respect to the validity and scope of a patent. Both courts were governed by the same law and the DISCUSSION statement was made in deprecating the appellant's claim that the second court of appeals had given insufficient Before addressing the merits of the Board’s decisions to weight to "comity". More enlightening for this case, extend comity to the MERC-conducted elections before the although not dispositive, is this court's recent statement date on which Management Training was decided, but not to in NLRB v. St. Luke's Hospital, 551 F.2d 476 (2d Cir. those conducted after Management Training was issued, it is 1976). There we upheld a finding that an employer had useful to consider the key decisions culminating in the engaged in an unfair labor practice by enforcing the Board’s change of policy articulated in Management Training union security clause in a collective bargaining regarding its jurisdiction over certain private employers with agreement with a union certified by the SLRB to contractual relationships with exempt governmental entities. represent a unit which could not have been approved by Initially, in National Transportation Service, Inc. v. Truck the NLRB because of the "professional" proviso in Drivers & Helpers of America, Local Union 728, 240 NLRB § 9(b)(1). Rejecting the employer's claim to comity, 565 (1979), the NLRB set forth a test for determining whether Chief Judge Kaufman said, id. at 482 (citations omitted): it would exercise jurisdiction over employers with close ties to an exempt entity: Arrangements resulting from state agency proceedings should generally be respected if [I]n this and future cases involving a determination consistent with federal policies. "Comity" in this whether the Board should assert jurisdiction [over an sense reflects the desirability of supporting settled employer with close ties to an exempt entity], we shall relationships in the absence of compelling determine whether the employer itself meets the countervailing reasons. It is clear, however, that the definition of "employer" in [29 U.S.C. 152(2)],DQGLI NLRB is not required to defer to state proceedings where federal policy would be undermined.

 We would strengthen the last sentence to say "is not 6HFWLRQ  SURYLGHV required or permitted."  7KH WHUP HPSOR\HU LQFOXGHV DQ\ SHUVRQ DFWLQJ DV DQ DJHQW RI DQ HPSOR\HU GLUHFWO\ RU LQGLUHFWO\ EXW VKDOO QRW LQFOXGH WKH 566 F.2d 833, 841-42 (2d Cir. 1977). Thus, as understood by 8QLWHG 6WDWHV RU DQ\ ZKROO\ RZQHG *RYHUQPHQW FRUSRUDWLRQ RU the Second Circuit in Long Island College Hospital, "comity" DQ\ )HGHUDO 5HVHUYH %DQN RU DQ\ 6WDWH RU SROLWLFDO VXEGLYLVLRQ refers to a rule of convenience or expediency whereby the WKHUHRI RU DQ\ SHUVRQ VXEMHFW WR WKH 5DLOZD\ /DERU $FW > Board sustains settled issues or relationships, so long as 86&$ †  HW VHT@ DV DPHQGHG IURP WLPH WR WLPH RU DQ\ ODERU RUJDQL]DWLRQ RWKHU WKDQ ZKHQ DFWLQJ DV DQ HPSOR\HU RU federal policy is not undermined.  0LFK&RPPXQLW\6HUYV 1RV 1RV 0LFK&RPPXQLW\6HUYV  HWDOY1/5% HWDOY1/5%

explained by the Supreme Court in Hilton v. Guyot, 159 U.S. VRGHWHUPLQHZKHWKHUWKHHPSOR\HUKDVVXIILFLHQWFRQWURO 113 (1895), RYHU WKH HPSOR\PHQW FRQGLWLRQV RI LWV HPSOR\HHV WR HQDEOH LW WR EDUJDLQ ZLWK D ODERU RUJDQL]DWLRQ DV WKHLU "Comity" in the legal sense, is neither a matter of UHSUHVHQWDWLYH absolute obligation, on the one hand, nor of mere courtesy and good will, upon the other. But it is the 2QFHLWLVGHWHUPLQHGWKDWWKHHPSOR\HUFDQHQJDJH recognition which one nation allows within its territory LQPHDQLQJIXOFROOHFWLYHEDUJDLQLQJZLWKUHSUHVHQWDWLYHV to the legislative, executive, or judicial acts of another RILWVHPSOR\HHVMXULVGLFWLRQZLOOEHHVWDEOLVKHG nation, having due regard both to international duty and convenience, and to the rights of its own citizens, or of 1DW¶O7UDQVS6HUY,QF1/5%DW7KHUHDIWHULQ&. other persons who are under the protection of its laws. +RPHV ,QF Y $)6&0( DQ XQSXEOLVKHG GHFLVLRQ RI WKH 1/5%6HYHQWK5HJLRQ'LUHFWRUGHFLGHG)HEUXDU\ Id. at 163-64. By extension, the rule of comity also applies to &DVH 1R 50 WKH UHJLRQDO GLUHFWRU KHOG WKDW WKH the recognition of federal and state courts of their respective 1/5%ZRXOGQRWDVVHUWMXULVGLFWLRQRYHUDQHPSOR\HUZKLFK judgments in our federal system of governance. See Ruhrgas ZDV D QRQSURILW 0LFKLJDQ FRUSRUDWLRQ SURYLGHU RI JURXS AG v. Marathon Oil Co., 526 U.S. 574, 586 (1999)("Most KRPHV IRU PHQWDOO\ GLVDEOHG SHUVRQV DQG ZKLFK KDG essentially, federal and state courts are complementary FRQWUDFWHG ZLWK WKH 0'0+ WR SURYLGH VHUYLFHV WR WKHVH systems for administering justice in our Nation. Cooperation SHUVRQV  $SSO\LQJ 1DWLRQDO 7UDQVSRUWDWLRQ WKH GLUHFWRU and comity, not competition and conflict, are essential to the IRXQGDVIROORZV federal design.") However, "comity," in this sense, is not limited to the recognition of judicial acts. See Calderon v. 7KXV WKH (PSOR\HU PD\ EH FRQVLGHUHG WR EH Thompson, 523 U.S. 538, 552 (1998) ("Comity is not limited WDQWDPRXQWWRDQDGPLQLVWUDWLYHDUPRIWKHJRYHUQPHQW to the judicial branch of a state government.") As used in the DQGQRWZLWKLQWKHGHILQLWLRQRI>86&@,Q present context, "comity" refers to the Board’s recognition of DGGLWLRQ WKH FRQWURO SRVVHVVHG DQG H[HUFLVHG RYHU WKH state agency proceedings. This use of "comity" was cogently (PSOR\HU VRSHUDWLRQVE\WKH6WDWHRI0LFKLJDQPDNHV explained by the Second Circuit in Long Island College PHDQLQJIXO FROOHFWLYH EDUJDLQLQJ LPSRVVLEOH    $FFRUGLQJO\DVWKH%RDUGGRHVQRWKDYHMXULVGLFWLRQRYHU Hospital v. NLRB, as follows: WKHHPSOR\HU,VKDOOGLVPLVVWKHSHWLWLRQ "Comity" is a notion of highly uncertain content. The &.+RPHVDW$-$DWResidential Sys. v. UAW, an Board refers us to the statement in Mast, Foos & Co. v. unpublished decision of the NLRB Seventh Region Director, Stover Mfg. Co., 177 U.S. 485, 488-89, 20 S.Ct. 708, decided April 7, 1988 (Case No. No. 7-RC-18529) (J.A. at 710, 44 L.Ed. 856 (1900), that 274-82). Comity is not a rule of law, but one of practice, convenience and expediency . . . (which) has a substantial value in securing uniformity of decision, DQ\RQH DFWLQJ LQ WKH FDSDFLW\ RI RIILFHU RU DJHQW RI VXFK ODERU and discouraging repeated litigation of the same RUJDQL]DWLRQ question . . . its obligation is not imperative. . . .  86& †  HPSKDVLV DGGHG 6HH 3LNHYLOOH 8QLWHG 0HWKRGLVW Comity persuades; but it does not command. It +RVS Y 86:  )G   WK &LU   0LFK&RPPXQLW\6HUYV 1RV 1RV 0LFK&RPPXQLW\6HUYV  HWDOY1/5% HWDOY1/5%

Subsequently, in Res-Care, Inc., 280 NLRB 670 (1986), the U.S.C. 152(2) ] of the Act, and whether such employer NLRB reaffirmed the basic test set forth in National meets the applicable monetary jurisdictional standards. Transportation, but clarified the latter prong of that test: 0JPW7UDLQLQJ317 NLRB at 1358. See Pikeville United In applying [the National Transportation] test, however, Methodist Hosp. v. USW, 109 F.3d 1146 (6th Cir. 1997) we will examine closely not only the control over (holding that, under Management Training, the NLRB’s essential terms and conditions of employment retained by jurisdiction was established over a hospital by showing that the employer, but also the scope and degree of control the hospital was an "employer" as defined by the NLRA, even exercised by the exempt entity over the employer's labor though the hospital was subject to some local governmental relations, to determine whether the employer in issue is control); Aramack Corp. v. NLRB, 179 F.3d 872 (10th Cir. capable of engaging in meaningful collective bargaining. 1999). Res-Care, 280 NLRB at 672. On July 28, 1995, the NLRB Case No. 00-2192: MCS’ Petition issued its decision in Management Training, overruling the Res-Care test and expanding its jurisdiction to include certain In this case, we review de novo the Board’s legal private employers who have close ties to exempt conclusions regarding whether comity should be extended to governmental entities: the MERC-conducted elections held before and after the issuance of Management Training, and its findings of fact In Res-Care, the Board held that, in deciding whether it under the substantial evidence standard. Harborside would assert jurisdiction over an employer with close ties Healthcare, Inc. v. NLRB, 230 F.3d 206, 208-09 (6th Cir. to an exempt government entity, it would examine the 2000); United Parcel Serv., Inc. v. NLRB, 228 F.3d 772, 774- control over essential terms and conditions of 75 (6th Cir. 2000). employment retained by both the employer and the exempt entity to determine whether the employer in issue As a legal doctrine, comity originally emerged in the is capable of engaging in meaningful collective context of international law to reflect the recognition by one bargaining. 280 NLRB at 672. After careful state or nation of the laws, policies and judicial acts of consideration of Res-Care and its progeny and for the another. See BLACK’S LAW DICTIONARY, 261-62 (7th ed. reasons set forth below, we have decided that the test set 1999) ("The comity principle is most accurately characterized forth in Res-Care is unworkable and unrealistic. Rather, as a golden rule among nationsthat each must give the we think that whether there are sufficient employment respect to the laws, policies and interests of others that it matters over which unions and employers can bargain is would have others give to its own in the same or similar a question better left to the parties at the bargaining table circumstances.")(quoting Thomas Buergenthal & Harold G. and, ultimately, to the employee voters in each case. Maier, Public Int’l Law in a Nutshell 178 (2d ed. 1990)). As *** [I]n determining whether the Board should assert  jurisdiction, the Board will only consider whether the $V SRLQWHG RXW LQ 0DQDJHPHQW 7UDLQLQJ ³6HF  H[FOXGHV IURP WKH WHUP µHPSOR\HU¶ ERWK )HGHUDO DQG VWDWH JRYHUQPHQWDO HQWLWLHV DV ZHOO employer meets the definition of "employer" under [29 DV µSROLWLFDO VXEGLYLVLRQV WKHUHRI¶´  1/5% DW  Q