Asseo v. Centro Medico Del Turabo, Inc.

• Decision Date: 05 April 1990
• Docket Number: No. 89-1874,89-1874
• Citation: 900 F.2d 445
• Parties: 133 L.R.R.M. (BNA) 3090, 114 Lab.Cas. P 12,067 Mary Zelma ASSEO, Regional Director of the Twenty Fourth Region of the National Labor Relations Board, for and on Behalf of the National Labor Relations Board, Petitioners, Appellees, v. CENTRO MEDICO DEL TURABO, INC. and Joaquin Rodriguez d/b/a Turabo Medical Center Limited Partnership d/b/a Hospital Interamericano De Medicina Avanzada, Respondents, Appellants.
• Court: U.S. Court of Appeals — First Circuit

Page 445

900 F.2d 445

133 L.R.R.M. (BNA) 3090, 114 Lab.Cas. P 12,067

Mary Zelma ASSEO, Regional Director of the Twenty Fourth Region of the National Labor Relations Board, for and on Behalf of the National Labor Relations Board, Petitioners, Appellees, v. CENTRO MEDICO DEL TURABO, INC. and Joaquin Rodriguez d/b/a Turabo Medical Center Limited Partnership d/b/a Hospital Interamericano De Medicina Avanzada, Respondents, Appellants.

No. 89-1874.

United States Court of Appeals First Circuit.

April 5, 1990.

Ruben T. Nigaglioni, Hato Rey, P.R., with whom Heber E. Lugo Rigau, Ledesma, Palou & Miranda, Hato Rey, P.R., was on brief for respondents, appellants.

Theresa M. Squillacote, Attorney, N.L.R.B., with whom Jerry M. Hunter, General Counsel, was on brief for petitioners, appellees.

Before BREYER, TORRUELLA and SELYA, Circuit Judges.

TORRUELLA, Circuit Judge.

This is an appeal from an order of the United States District Court for the District of Puerto Rico granting the National Labor Relations Board's petition for temporary injunctive relief. For the reasons specified below, we affirm the district court's order. Although the record is replete with detail, we constrain ourselves here to reciting only those facts essential to this appeal.

I. BACKGROUND

Hospital San Rafael, Inc. (San Rafael) operated a 104 bed hospital in Caguas, Puerto Rico from 1958 to 1988. By the late 1970's, however, the limited capacity of San Rafael, as well as its deteriorating physical plant, rendered it unable to adequately meet the needs of the community. Two groups applied to the Department of Health of the Commonwealth of Puerto Rico for a Certificate of Need and Convenience to establish another hospital in Caguas: Turabo, doing business as the Hospital Interamericano de Medicina Avanzada (HIMA), and the Caguas Doctors' Hospital Group. After the Certificates were obtained, both groups applied to the United States Department of Health and Human Services for federally-funded mortgage insurance, a prerequisite to obtaining financing for the projects. The agency refused to finance competing hospitals, and funding was consequently refused to both groups.

The Certificates issued to Turabo and Doctors' Hospital were conditioned on San Rafael's cessation of operations. To meet this condition, Turabo proposed, and San Rafael agreed, that by October, 1983, San Rafael would surrender its Commonwealth Operation License, in exchange for signing a License Surrender Agreement and $1,000,000 from Turabo. Turabo also paid $800,000 to Doctors' Hospital so that it would surrender its Certificate of Need, which would then allow Turabo, as the sole applicant for hospital financing, to obtain federally-funded mortgage insurance.

In May, 1983, a feasibility study commissioned by Turabo was completed. The study projected that the new facility would have at least 300 beds, which in turn would require a substantially larger work force than that needed by San Rafael. The study assumed that the new facility's service area would be the same as that of San Rafael, and that the "San Rafael Hospital physicians would form the core of the active staff faculty at the [new facility]."

Between 1983 and 1985, San Rafael informed its employees of the plans for the new facility in the in-house publication, Hablemos. A thorough report on the imminent construction and planned physical layout, and of the new corporate officers of Turabo, was presented to the San Rafael employees in the Winter, 1985 issue of that publication.

In 1983, simultaneous with the development of plans for the new facility, the Union commenced an organizing drive among the employees of San Rafael. Prominent among the employees in the drive was X-ray technician Milton Suarez, who had been employed at San Rafael since October, 1980. He visited employees at their homes, distributed Union literature in front of the Hospital, and conducted organizational meetings. Suarez' activities were well-known to the management officials of both San Rafael and Turabo.

The Union won Board-conducted elections in two units at San Rafael--one consisting of all registered nurses, and the other consisting of licensed practical nurses, technicians and clerks (technical unit). On January 30, 1984, the Union was certified as the collective-bargaining representative of San Rafael employees in both units.

Thereafter, San Rafael and the Union negotiated a collective bargaining agreement, effective from September 1, 1984 through August 31, 1987. Prior to the expiration of that contract, the parties commenced bargaining for a successor agreement. During these negotiations, the Union sought, and San Rafael opposed, a provision that would have obligated Turabo to recognize and bargain with the Union or to apply the terms of the collective bargaining agreement at the new facility. By the last bargaining session on September 14, 1988, the parties were unable to reach agreement on a successor contract. During these negotiations, however, the Union and Turabo entered into a private agreement settling certain unfair labor practice charges that the Union had filed against Turabo and San Rafael. Under that agreement, Turabo agreed to hire a minimum of 95% of the San Rafael unit employees when it opened its new facility.

In June, 1988, San Rafael Executive Vice President Carlos Pineiro prepared a staffing guideline for Turabo's new facility. That guideline projected the job classifications, and the number of employees within each classification, for each of four projected phases by which Turabo would reach its maximum operation potential. By mid-1988, construction of the new facility was substantially completed.

On October 9, 1988, Turabo opened HIMA and commenced hiring employees. In a visit to the facility on October 27, 1988, Suarez and Union Propaganda and Education Secretary Miguel Gonzalez met with Pineiro, who had become Executive Director of HIMA. Pineiro said that Turabo did not recognize the Union at HIMA, nor did it acknowledge that the terms of the collective bargaining agreement were applicable there. He then directed the two men to the personnel director for further discussion. At that time, Suarez submitted his application for employment at HIMA.

On November 3, 1988, San Rafael began closing its facilities, and on November 7, Suarez received his notice of discharge. By November 13, San Rafael had completely ceased all operations, and ultimately sold $242,602 of its moveable equipment to Turabo for use at the HIMA facility. San Rafael also transferred to Turabo a portable X-ray unit which it had under lease.

On November 14, 1988, Turabo began providing medical services. By November 19, Turabo had hired 69 employees in the job classifications which had comprised the technical unit at San Rafael. Of those 69 employees, 51, or 74%, were former San Rafael unit employees.

On November 23, 1988, and again on December 19, 1988, the Union sent letters to Turabo requesting that it recognize the Union at HIMA. On January 5, the Union received letters from the president of the HIMA and from Turabo's attorney, which expressed their refusal to recognize the Union, denied any obligation to do so, and asserted that Turabo had already fully complied with its only obligation: to hire 95% of the former San Rafael unit employees.

In conversations during the first four months of 1989, HIMA employees told the Union that they would not cooperate further with the Union nor engage in activities that would identify them with the Union because of fears of reprisal by Turabo. One employee said that she had already experienced what she perceived to be a warning from a Turabo official not to engage in Union activities.

Between the date of its opening and April 15, 1989, Turabo gradually increased the size of its operation, until it was operating 138 beds. It employed 108 employees in former technical unit positions to maintain that operational level.

Based on this record, the district court concluded that reasonable cause existed to believe that Turabo is a legal successor to San Rafael and that, when Turabo had hired a substantial and representative complement of employees, a majority of Turabo employees in positions which had been part of the San Rafael technical unit were former San Rafael employees. The court found that there was reasonable cause to believe that Turabo had violated Section 8(a)(5), 29 U.S.C. Sec. 158(a)(5), by refusing to recognize and bargain with the Union. The court also found reasonable cause to believe that Turabo violated Section 8(a)(3), 29 U.S.C. Sec. 158(a)(3), by refusing to hire Suarez because of his Union activities. Finally, the court determined that the preliminary injunctive relief requested by the Board was just and proper to preserve the Board's ability to ultimately afford meaningful relief in the underlying unfair labor practice case.

II. APPLICABLE STANDARD FOR INJUNCTIVE RELIEF UNDER Sec. 10(j)

Section 10(j) of the National Labor Relations Act, 29 U.S.C. Sec. 160(j) (1982), authorizes district courts to grant interim injunctive relief to restore and preserve the status quo pending the Board's decision on the merits of an underlying unfair labor practice complaint. E.g., Asseo v. Pan American Grain Co., Inc., 805 F.2d 23, 25 (1st Cir.1986); Fuchs v. Hood Industries, Inc., 590 F.2d 395, 397 (1st Cir.1979). Under this statutory scheme, the district court is limited to the determination of whether there is (1) reasonable cause to believe that a violation of the Act, as alleged, has been committed, and (2) whether injunctive relief is appropriate under the circumstances. Asseo v. Pan American Grain Co., Inc., 805 F.2d at 25; Maram v. Universidad Interamericana de Puerto Rico, 722 F.2d 953, 959 (1st Cir.1983).

As we have previously stated, on appeal, this Court's review is:

limited to [determining] whether the district court was clearly erroneous in finding reasonable cause to believe that...