National Labor Relations Board v. Peninsula General Hospital Medical Center

36 F.3d 1262
CourtCourt of Appeals for the Fourth Circuit
DecidedOctober 18, 1994
DocketNos. 94-1202, 94-1232
StatusPublished
Cited by1 cases

This text of 36 F.3d 1262 (National Labor Relations Board v. Peninsula General Hospital Medical Center) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fourth 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. Peninsula General Hospital Medical Center, 36 F.3d 1262 (4th Cir. 1994).

Opinion

Petition for review granted and enforcement denied by published opinion. Judge SHEDD wrote the opinion, in which Judge WILKINS and Judge WILLIAMS joined.

OPINION

SHEDD, District Judge:

The National Labor Relations Board (“Board”) has applied for enforcement, and Peninsula Regional Medical Center (“Peninsula”) has petitioned for review, of an order reported at 312 N.L.R.B. No. 97 (1993), in which the Board found that an employee organization known as the Nursing Services Organization (“NSO”), which Peninsula formed, is a “labor organization” within the meaning of § 2(5) of the National Labor Relations Act (“the Act”), 29 U.S.C. § 152(5); and that Peninsula dominated the NSO in violation of §§ 8(a)(1) and 8(a)(2) of the Act, 29 U.S.C. §§ 158(a)(1) and (a)(2). The Board ordered Peninsula inter alia to cease and desist from “[djominating, assisting, or contributing financial or other support to the NSO or any other labor organization” and to “withdraw all financial or other support from and completely disestablish the NSO.” Peninsula’s only contention in support of its petition for review is that the Board erred in determining that the NSO is a “labor organization” within the meaning of § 2(5). Because we agree with Peninsula, we grant the petition for review, set aside the Board’s order, and deny enforcement.

I

The central purpose of the Act is “to protect and facilitate employees’ opportunity to [1264]*1264organize unions to represent them in collective bargaining negotiations.” American Hosp. Ass’n v. NLRB, 499 U.S. 606, 609, 111 S.Ct. 1539, 1541-12, 113 L.Ed.2d 675 (1991). The heart of the Act is § 7, which “grants employees the right to organize and form labor unions for the purpose of collective bargaining and other concerted activities.” Ultrasystems Western Constructors, Inc. v. NLRB, 18 F.3d 251, 255 (4th Cir.1994). Section 7 provides in pertinent part that:

Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection. ...

29 U.S.C. § 157. Section 8 “identifies as unfair labor practices specific actions which interfere with the rights granted by [§] 7.” Ultrasystems Western Constructors, 18 F.3d at 255.

Relevant for our purposes here, § 8(a)(2) provides that it is an unfair labor practice for an employer “to dominate or interfere with the formation or administration of any labor organization.”1 This section reflects congressional recognition that “the maintenance of a ‘company union,’ dominated by the employer, may be a ready and effective means of obstructing self-organization of employees and their choice of their own representatives for the purpose of collective bargaining.” NLRB v. Pennsylvania Greyhound Lines, 303 U.S. 261, 266, 58 S.Ct. 571, 574, 82 L.Ed. 831 (1938). This Court has similarly noted the problem associated with company unions:

[T]he purpose of the Act is to prohibit anything which will enable the employer to exert influence on the representatives of the employees in the collective bargaining which it is the purpose of the Act to promote. When the employer himself assists in setting up the bargaining agency, provides the machinery by which the bargaining representatives are chosen, allows the elections to be conducted on his premises and at his expense and pays the representatives for the time devoted to bargaining, he is manifestly taking too great a part in a matter with which he is supposed to have nothing whatever to do. Collective bargaining becomes a delusion and a snare if the employer, either directly or indirectly, is allowed to sit on both sides of the bargaining table; and, with the great advantage that he holds as the master of pay and promotions, he will be on both sides of the table if he is allowed to take any part whatever in the choice of bargaining representatives by the employees.

American Enka Corp. v. NLRB, 119 F.2d 60, 62-63 (4th Cir.1941); see also NLRB v. Norfolk Southern Bus Corp., 159 F.2d 516, 518 (4th Cir.1946), cert. denied, 330 U.S. 844, 67 S.Ct. 1085, 91 L.Ed. 1290 (1947) (“Promotion and sponsorship by the employer ... of an organization for collective bargaining is ... condemned” by the Act).

Although § 8(a)(2) “has effectively achieved its goal of eliminating traditional company unions[J ... the concern over company unions is not a moot point.” Robert B. Moberly, The Worker Participation Conundrum: Does Prohibiting Employer-Assisted Labor Organizations Prevent Labor-Management Cooperation?, 69 Wash.L.Rev. 331, 345 (1994). This is so because of the “broad scale implementation of employee participation programs throughout American industry.” Dennis M. Devaney, Much Ado About Section 8(a)(2): The NLRB And Workplace Cooperation After Electromation And du Pont, 23 Stetson L.Rev. 39, 50 (1993). These programs, “[w]hile usually less overt, ... foster the same concerns of employer domination or interference that section 8(a)(2) was intended to counter.” [1265]*1265Moberly, supra, at 345. Nevertheless, perhaps due in part to the fact that employee participation programs have become a “vital part of American industry today,” id. at 359; even the Board has recognized that there is “some room” for lawful cooperation between employers and employees through the use of such programs. See E.I. du Pont de Nemours & Co., 311 N.L.R.B. 893 (at 893) (1993). In this respect, we find particular force in the words of Judge John Minor Wisdom:

No one can question the rightness of a policy intended to preserve the integrity of collective bargaining by labor representatives free of interference from management. Everyone would agree that in carrying out this policy the Board and the courts should regard employer-employee committees with suspicion and scrutinize them carefully in order to prevent an employer’s using a committee as a company-dominated labor organization or as a device for frustrating rights guaranteed labor under Section 7 of the Act. But this policy becomes too much of a good thing when it is pushed so far as to leave no place for a bona fide, socially desirable employee committee or joint employer-employee committee that is something less than a labor organization and something more than a Great Books Study Group.

NLRB v. Walton Mfg. Co., 289 F.2d 177, 182 (5th Cir.1961) (Wisdom, J. dissenting).

II

We now turn to the facts of this case. Peninsula, a Maryland corporation located in Salisbury, Maryland, operates as a hospital and provides medical and professional care services to the general public.

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