Community Hospitals of Central Cal. v. N.L.R.B.

• Citation: 335 F.3d 1079
• Decision Date: 25 July 2003
• Docket Number: No. 01-1432.,01-1432.
• Parties: COMMUNITY HOSPITALS OF CENTRAL CALIFORNIA, d/b/a University Medical Center, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent. CALIFORNIA NURSES ASSOCIATION, Intervenor.
• Court: United States Courts of Appeals. United States Court of Appeals (District of Columbia)

Page 1079

335 F.3d 1079

COMMUNITY HOSPITALS OF CENTRAL CALIFORNIA, d/b/a University Medical Center, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent CALIFORNIA NURSES ASSOCIATION, Intervenor.

No. 01-1432.

United States Court of Appeals, District of Columbia Circuit.

Argued December 9, 2002.

Decided July 25, 2003.

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On Petition for Review and Cross-Application for Enforcement of an Order of the National Labor Relations Board.

G. Roger King argued the cause for petitioner. With him on the brief was Daniel H. Bromberg.

James M. Oleske, Jr., Attorney, National Labor Relations Board, argued the cause for respondent. With him on the brief were Arthur F. Rosenfeld, General Counsel, John H. Ferguson, Associate General Counsel, Aileen A. Armstrong, Deputy Associate General Counsel, and David Habenstreit, Supervisory Attorney. Anne M. Lofaso, Attorney, entered an appearance.

Before: GINSBURG, Chief Judge, and ROGERS and TATEL, Circuit Judges.

Opinion for the Court filed by Chief Judge GINSBURG.

GINSBURG, Chief Judge:

A union representing nurses charged the new owner of a hospital with an unfair labor practice when it refused to recognize and to bargain with the union. The National Labor Relations Board held the new owner was a successor employer, the nurses at the hospital constituted an appropriate bargaining unit, and the employer, in declining to deal with the union, did not rely upon a good-faith reasonable doubt about the union's majority status. The Board also held certain provisions of the employer's handbook for employees likely to chill protected activity and therefore unlawful. We uphold the decision of the Board and grant its application for enforcement with respect to all matters except the employee handbook, as to which we grant the employer's petition for review.

I. Background

For some years Community Hospitals of Central California (Community), a private non-profit company, operated two hospitals in the Fresno, California area, while the County of Fresno operated Valley Medical Center (VMC) and other medical facilities in the County. Nurses working at VMC were the majority of bargaining Unit 7, which included nurses at other facilities operated by the County. Unit 7 was represented by the California Nurses Association (CNA or the Union) for more than 20 years.

In October 1996 Community acquired VMC and renamed it University Medical Center (UMC). In connection with the acquisition, Community instituted various changes at UMC. In brief, Community consolidated many administrative and support services with those of its other hospital facilities, and by its own account "replaced VMC's traditional, hierarchical facility-based management model with a flattened, service-based system-wide `shared governance' management structure." Community also allowed nurses to transfer between UMC and its other facilities.

In August 1996, when it was becoming apparent that Community might acquire VMC, the Union demanded that Community recognize and bargain with it. Community acknowledged receipt of the demand, but refused to recognize or to bargain with the Union. The Union filed an unfair labor practice charge and the General Counsel issued a complaint alleging that Community had violated § 8(a)(5) of the National Labor Relations Act, 29 U.S.C. § 158(a)(5). The Regional Director on his own initiative added an allegation that the maintenance of certain provisions in Community's employee handbook was an unfair labor practice in violation of § 8(a)(1) of the Act.

An Administrative Law Judge held (1) Community was a successor employer to the County, contrary to Community's argument that there was not "substantial continuity" between VMC and UMC; (2) the Unit 7 nurses at UMC constituted an appropriate bargaining unit, notwithstanding Community's argument that the Unit 7 nurses at UMC shared a community of interest with the nurses at its other hospitals; and (3) in failing to recognize the Union, Community did not have or rely upon a good-faith reasonable doubt regarding the Union's majority status. Cmty. Hosps. of Cent. Cal., 335 N.L.R.B. No. 87, at 15-24, 2001 WL 1158836 (2001) (Order). The ALJ also held that (4) Community's handbook violated the Act, as alleged. Id. at 24-25. The Board affirmed and substantially adopted the findings and decision of the ALJ,^* id. at 1-6, over Chairman Hurtgen's dissent with regard to the employee handbook issue. Id. at 6-9.

II. Analysis

"A [1] successor employer is required to recognize and negotiate with the bargaining agent of the predecessor's employees if [2] the bargaining unit remains appropriate and [3] the successor does not have a good faith doubt of the union's continuing majority support." Trident Seafoods, Inc. v. NLRB, 101 F.3d 111, 114 (D.C.Cir.1996). Community challenges the Board's application of each element in this formula, arguing (1) it was not a successor employer; (2) Unit 7 was not an appropriate bargaining unit after the acquisition; and (3) Community did have and did rely upon a good-faith reasonable doubt in refusing to recognize or to bargain with the Union. Community also claims the Board lacked jurisdiction to rule upon the propriety of its employee handbook, and that in any event the relevant provisions were not unlawful.

We must affirm the Board's order unless "the Board's [factual] findings are not supported by substantial evidence, or ... the Board acted arbitrarily or otherwise erred in applying established law to the facts of the case." Tradesmen Int'l, Inc. v. NLRB, 275 F.3d 1137, 1141 (D.C.Cir.2002). Questions of law we review with deference to the Board's expertise. NLRB v. City Disposal Sys., Inc., 465 U.S. 822, 829, 104 S.Ct. 1505, 1510, 79 L.Ed.2d 839 (1984).

A. Successorship

A new employer is a successor to a former employer "if there is substantial continuity between the enterprises" of the two, Pa. Transformer Tech., Inc. v. NLRB, 254 F.3d 217, 222 (D.C.Cir.2001) (internal quotation marks omitted). The Board's standard for determining substantial continuity is set forth in Fall River Dyeing & Finishing Corp. v. NLRB, 482 U.S. 27, 43, 107 S.Ct. 2225, 2236, 96 L.Ed.2d 22 (1987). There the Court stated with approval the factors the Board uses:

whether the business of both employers is essentially the same; whether the employees of the new company are doing the same jobs in the same working conditions under the same supervisors; and whether the new entity has the same production process, produces the same products, and basically has the same body of customers.

The Board assesses these factors, no single one of which is dispositive, from the perspective of the employees involved. Id. In this case the Board found Community "operates an acute care health facility, in the same location, using essentially the same equipment [as had the County]. The general pool of patients remains the same and they are treated in the same [treatment units]." Order at 15. Furthermore, there was no hiatus between the closing of VMC and the opening of UMC, id., and the two organizations employed many of the same supervisors. Id. at 16.

In arguing it was not a successor employer, Community does not deny the factual predicate upon which the Board based its decision. Instead it identifies a number of facts it claims cut against the Board's finding of substantial continuity: the change from public to private management; the new supervisory and management structure; changes in the duties, compensation, and benefits of the nurses at the hospital; changes in the nurses' shift schedules and in the organization of support functions; and the adoption of a "partner model" of patient care.

The Board's decision is nonetheless supported by substantial evidence. See Universal Camera Corp. v. NLRB, 340 U.S. 474, 488, 71 S.Ct. 456, 464, 95 L.Ed. 456 (1951) ("The substantiality of evidence must take into account whatever in the record fairly detracts from its weight"). The Board reasonably found that the nurses at UMC continued to do the same jobs, in the same location, using the same equipment, and treating the same patients as they had before the acquisition, and that the nature of the employer's business — an acute health care facility — remained the same. Moreover, the Board's decision is in accord with precedent. See Asseo v. Centro Medico Del Turabo, Inc., 900 F.2d 445, 451 (1st Cir.1990) (successor where hospital is "engaged in the same business of providing health care services to substantially the same community" as had predecessor and employees "perform substantially the same functions"); NLRB v. New Medico Health Care Ctr. of Mich., Inc., No. 91-5271, 1991 WL 276260, at *3, 1991 U.S.App. LEXIS 30424, at *8-*9 (6th Cir. Dec. 20, 1991) (unpublished, per curiam) (substantial evidence of continuity where nursing care center continued "uninterrupted and in the same facility," "[e]mployees [sic] responsibilities remained the same," and new employer "continued to care for the same patients without a substantial change in operation"); NRNH, Inc., 332 N.L.R.B. No. 27, 2000 WL 1449836, at *12, 2000 NLRB LEXIS 652, at *37 (2000) (substantial continuity found where "entities engaged in the same business, long-term nursing care," providing for the same patients in same building under "almost all of the same supervisors"); Hosp. San Francisco, Inc., 293 N.L.R.B. 171, 172, 1989 WL 223881, at *2, 1989 NLRB LEXIS 129, at *8 (1989) (similar).

The change from public to private ownership of the hospital does not undermine the Board's finding that Community was a successor. For the contrary proposition, Community invokes Lincoln Park Zoological Society v. NLRB, 116 F.3d 216, 220 (7th Cir.1997), in which the court observed that "there is a readily apparent contrast between a large public employer ... and a relatively small private entity." The contrast was apparent on the facts of that case because "the represented workforce was diminished by 97...