National Labor Relations Board v. Community Health Services, Inc.

812 F.3d 768
CourtCourt of Appeals for the Tenth Circuit
DecidedJanuary 20, 2016
Docket14-9614
StatusPublished

This text of 812 F.3d 768 (National Labor Relations Board v. Community Health Services, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Tenth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
National Labor Relations Board v. Community Health Services, Inc., 812 F.3d 768 (10th Cir. 2016).

Opinions

McHUGH, Circuit Judge.

I. INTRODUCTION

This challenge to the National Labor Relations Board’s (the Board) petition for enforcement questions whether the Board may disregard interim earnings when calculating backpay awards for employees whose labor injury falls short of unlawful termination. Respondent Mimbres Memorial Hospital and Nursing Home (the Hospital) argues the Board failed to provide adequate support for its decision to disregard interim earnings and therefore requests that we reverse the Board’s back-pay calculation. We defer to the Board’s policy-based rationale in support of its remedial decision and affirm and enforce its order.

II. BACKGROUND

A. The Unfair Labor Practice Allegations and Proceedings

The complicated procedural history of this case stems from the Hospital’s 1999 decision to reduce the hours of its full-time, respiratory-department employees. Cmty. Health Servs., Inc., 342 N.L.R.B. 398, 400-02 (2004). As a result of this reduction in hours, the United Steelworkers of America, District 12, Subdistrict 2, AFL-CIO, a union representing respiratory-department employees under an exclusive collective bargaining agreement, filed charges against the Hospital on- behalf of the impacted employees. Based on these allegations, the Board’s General Counsel filed a complaint with the Board, asserting the Hospital had violated § 8(a)(1), (5) of the National Labor Relations Act (the Act or NLRA), 29 U.S.C. § 158. The Board ultimately agreed and ordered the Hospital to “make whole any employee for any loss of earnings and other benefits suffered as a result of its unlawful actions.” Cmty. Health Servs., Inc., 342 N.L.R.B. at 404. On petition for review in this court, we enforced the Board’s order in whole. NLRB v. Cmty. Health Servs., Inc., 483 F.3d 683 (10th Cir.2007).

B. The Compliance Proceedings

The case proceeded to the compliance phase, where an administrative law judge (ALJ) determined the Hospital owed thirteen current and former employees approximately $105,000 in backpay. Cmty. Health Servs., Inc., No. 28-CA-16762, 2010 WL 3285384 (N.L.R.B. Div. of Judges July 28, 2010). In arriving at this amount, the ALJ rejected the Hospital’s argument that any income an employee had earned from secondary employment during the backpay period — i.e., interim earnings— should be deducted from that employee’s backpay calculation. Id.

[771]*771In reaching that conclusion, the ALJ applied a backpay formula the Board first pronounced in Ogle Protection Service, Inc., 183 N.L.R.B. 682 (1970). In Ogle, the Board determined that interim earnings should not be deducted from backpay awards when the underlying violation is something other than wrongful termination of employment. 138 N.L.R.B. at 683. The Board in Ogle apparently presumed that employees who remain employed by the wrongdoing employer will not make interim earnings. Id. Here, the ALJ determined that application of the Ogle formula was appropriate because to hold otherwise “would have the effect of imposing a duty on employee victims of an unfair labor practice to moonlight in order to minimize the impact of the unlawful conduct for the benefit of the wrongdoer.” Cmty. Health Servs., 2010 WL 3285384.

The Hospital filed exceptions and supporting briefs to the Board, challenging the ALJ’s decision. But in its Compliance Order, the Board affirmed the ALJ’s rulings, findings, and conclusions. Cmty. Health Servs., Inc., 356 N.L.R.B. No. 103, 2011 WL 702298, at *18 (Feb. 28, 2011).

The Hospital next petitioned the United States Court of Appeals for the District of Columbia1 for review of the Board’s Compliance Order. Deming. Hosp. Corp. v. NLRB, 665 F.3d 196 (D.C.Cir.2011). The D.C. Circuit rejected the Board’s interpretation of Ogle and the Board’s concern that deducting interim earnings would impose a duty to moonlight on the victims of wrongful hour reductions. Id. at 200. The circuit court further explained that the Compliance Order conflated two distinct concepts: an employee’s duty to mitigate (which is nonexistent when there is no cessation of employment) and the “rules governing when backpay should be reduced by interim earnings.” Id.

The D.C. Circuit also noted that, since Ogle, the Board had been inconsistent in its approach to calculating backpay in the absence of a cessation of employment. Id. at 201. In light of this unclear precedent, the court ruled the Board had not adequately explained its rationale for refusing to consider interim earnings here. It therefore remanded the Compliance Order “for a more thorough analysis of the issue.” Id.

On remand, the Board issued a Supplemental Order reaffirming its original ruling. Cmty. Health Servs., Inc., 361 N.L.R.B. No. 25, slip op. (Aug. 25, 2014). The Board identified the sole issue on remand as “whether the Board should deduct an employee’s interim earnings from other employment when calculating back-pay in cases where the employee suffers no cessation of employment with the wrongdoing respondent-employer and has no duty to mitigate by seeking interim employment” and concluded that “the deduction of interim earnings in this situation would not best effectuate statutory policy.” Id. at *1. In reaffirming its prior conclusion, the Board provided five new policy justifications for its choice of remedy. Specifically, the Board explained that declining to deduct interim earnings where there is no cessation of employment (1) encourages employment and production, (2) is more consistent with the Board’s policy of not deducting interim earnings obtained from work performed above and beyond an employee’s duty to mitigate, (3) [772]*772better accounts for the hardships that arise when taking on secondary employment, (4) discourages employers from engaging in dilatory conduct such as delaying compliance with an order to rescind unfair labor practices, and (5) prevents a windfall to the wrongdoing employer. Id. at *7-*9. Although the Board acknowledged the existence of some inconsistent precedent on this issue, it argued that the cases in which it “inadvertently” deducted interim earnings from backpay calculations “represent a tiny fraction of the hundreds of cases” in which the Board declined to deduct the interim earnings of employees whose injuries fall short of unlawful termination. Id. at *7. Based on these considerations, the Board reaffirmed its prior backpay order, concluding that “important statutory policies strongly support a practice of declining to deduct interim earnings when applying the Ogle Protection Service backpay formula for cases involving economic loss but no cessation of employment.” Id. at *9.

Next, General Counsel filed an application in this court for enforcement of the Board’s decision, and the Hospital responded in opposition. We exercise jurisdiction under 29 U.S.C. § 160(e), (f).

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Bluebook (online)
812 F.3d 768, Counsel Stack Legal Research, https://law.counselstack.com/opinion/national-labor-relations-board-v-community-health-services-inc-ca10-2016.