American Hospital Association v. National Labor Relations Board

• Decision Date: 23 April 1991
• Docket Number: No. 90-97,90-97
• Parties: AMERICAN HOSPITAL ASSOCIATION, Petitioner, v. NATIONAL LABOR RELATIONS BOARD et al
• Court: U.S. Supreme Court

499 U.S. 606

111 S.Ct. 1539

113 L.Ed.2d 675

AMERICAN HOSPITAL ASSOCIATION, Petitioner,

v NATIONAL LABOR RELATIONS BOARD et al.

No. 90-97.

Argued Feb. 25, 1991.

Decided April 23, 1991.

Syllabus

The National Labor Relations Board has promulgated a rule providing that, with exceptions for, inter alia, cases presenting "extraordinary circumstances," eight, and only eight, defined employee units are appropriate for collective bargaining in acute care hospitals. Petitioner, American Hospital Association, brought this action challenging the rule's facial validity on the grounds that (1) § 9(b) of the National Labor Relations Act (NLRA) requires the Board to make a separate bargaining unit determination "in each case" and therefore prohibits the Board from using general rules to define bargaining units; (2) the rule violates a congressional admonition to the Board to avoid the undue proliferation of bargaining units in the health care industry; and (3) the rule is arbitrary and capricious. The District Court agreed with petitioner's second argument and enjoined the rule's enforcement, but the Court of Appeals found no merit in any of the three arguments and reversed.

Held: The Board's rule is not facially invalid. Pp. 609-620.

(a) The Board's broad rulemaking powers under § 6 of the NLRA authorize the rule and are not limited by § 9(b)'s mandate that the Board decide the appropriate bargaining unit "in each case." Contrary to petitioner's reading, the clear and more natural meaning of the "in each case" requirement is simply to indicate that whenever there is a disagreement between employers and employees about the appropriateness of a bargaining unit, the Board shall resolve the dispute. In doing so, the Board is entitled to rely on rules that it has developed to resolve certain issues of general applicability. See, e.g., United States v. Storer Broadcasting Co., 351 U.S. 192, 205, 76 S.Ct. 763, 771-772, 100 L.Ed. 1081. The rule at issue does not differ significantly from the Board's many prior rules establishing general principles for the adjudication of bargaining unit disputes. This interpretation is reinforced by the NLRA's structure and policy. Nor is petitioner aided by § 9(b)'s sparse legislative history. Even if any ambiguity could be found in § 9(b) after application of the traditional tools of statutory construction, this Court would still defer to the Board's reasonable interpretation of the statutory text. Pp. 609-614.

(b) The rule is not rendered invalid by the admonition, contained in congressional Reports accompanying the 1974 extension of NLRA- cover age to all acute care hospitals, that the Board should give "[d]ue consideration . . . to preventing proliferation of bargaining units in the health care industry." The argument that the admonition—when coupled with Congress' 1973 rejection of a bill that would have placed a general limit of five on the number of hospital bargaining units—evinces an intent to emphasize the importance of § 9(b)'s "in each case" requirement is no more persuasive than petitioner's reliance on § 9(b) itself. Moreover, even if this Court accepted petitioner's further suggestion that the admonition is an authoritative statement of what Congress intended by the 1974 legislation, the admonition must be read to express the desire that the Board consider the special problems that proliferation might create in acute care hospitals. An examination of the rulemaking record reveals that the Board gave extensive consideration to this very issue. In any event, the admonition is best understood as a congressional warning to the Board, and Congress is free to fashion a remedy for noncompliance if it believes that the Board has not given "due consideration" to the problem of proliferation in this industry. Pp. 614-617.

(c) The rule is not, as petitioner contends, arbitrary and capricious because it ignores critical differences among the many acute care hospitals in the country. The Board's conclusion that, absent extraordinary circumstances, such hospitals do not differ in substantial, significant ways relating to the appropriateness of units was based on a "reasoned analysis" of an extensive rulemaking record and on the Board's years of experience in the adjudication of health care cases. Pp. 617-619.

899 F.2d 651 (CA7 1990), affirmed.

STEVENS, J., delivered the opinion for a unanimous Court.

James D. Holzhauer, Chicago, Ill., for petitioner.

David L. Shapiro, Chicago, Ill., for respondents.

Justice STEVENS delivered the opinion of the Court.

For the first time since the National Labor Relations Board (Board or NLRB) was established in 1935, the Board has promulgated a substantive rule defining the employee units appropriate for collective bargaining in a particular line of commerce. The rule is applicable to acute care hospitals and provides, with three exceptions, that eight, and only eight, units shall be appropriate in any such hospital. The three exceptions are for cases that present extraordinary circumstances, cases in which nonconforming units already exist, and cases in which labor organizations seek to combine two or more of the eight specified units. The extraordinary circumstances exception applies automatically to hospitals in which the eight-unit rule will produce a unit of five or fewer employees. See 29 CFR § 103.30 (1990).

Petitioner, American Hospital Association, brought this action challenging the facial validity of the rule on three grounds: First, petitioner argues that § 9(b) of the National Labor Relations Act (NLRB or Act) requires the Board to make a separate bargaining unit determination "in each case" and therefore prohibits the Board from using general rules to define bargaining units; second, petitioner contends that the rule that the Board has formulated violates a congressional admonition to the Board to avoid the undue proliferation of bargaining units in the health care industry; and, finally, petitioner maintains that the rule is arbitrary and capricious.

The United States District Court for the Northern District of Illinois agreed with petitioner's second argument and enjoined enforcement of the rule. 718 F.Supp. 704 (1989). The Court of Appeals found no merit in any of the three arguments and reversed. 899 F.2d 651 (CA7 1990). Because of the importance of the case, we granted certiorari, 498 U.S. 894, 111 S.Ct. 242, 112 L.Ed.2d 201 (1990). We now affirm.

I

Petitioner's first argument is a general challenge to the Board's rulemaking authority in connection with bargaining unit determinations based on the terms of the National Labor Relations Act, 49 Stat. 449, 29 U.S.C. § 151 et seq., as originally enacted in 1935. In § 1 of the NLRA Congress made the legislative finding that the "inequality of bargaining power" between unorganized employees and corporate employers had adversely affected commerce and declared it to be the policy of the United States to mitigate or eliminate those adverse effects "by encouraging the practice and procedure of collective bargaining and by protecting the exercise by workers of full freedom of association, self-organization, and designation of representatives of their own choosing, for the purpose of negotiating the terms and conditions of their employment or other mutual aid or protection." 29 U.S.C. § 151. The central purpose of the Act was to protect and facilitate employees' opportunity to organize unions to represent them in collective-bargaining negotiations.

Sections 3, 4, and 5 of the Act created the Board and generally described its powers. §§ 153-155. Section 6 granted the Board the "authority from time to time to make, amend, and rescind . . . such rules and regulations as may be necessary to carry out the provisions" of the Act. § 156. This grant was unquestionably sufficient to authorize the rule at issue in this case unless limited by some other provision in the Act.

Petitioner argues that § 9(b) provides such a limitation because this section requires the Board to determine the appropriate bargaining unit "in each case." § 159(b). We are not persuaded. Petitioner would have us put more weight on these three words than they can reasonably carry.

Section 9(a) of the Act provides that the representative "designated or selected for the purposes of collective bargaining by the majority of the employees in a unit appropriate for such purposes" shall be the exclusive bargaining representative for all the employees in that unit. § 159(a). This section, read in light of the policy of the Act, implies that the initiative in selecting an appropriate unit resides with the employees. Moreover, the language suggests that employees may seek to organize "a unit" that is "appropriate"—not necessarily the single most appropriate unit. See, e.g., Trustees of Masonic Hall and Asylum Fund v. NLRB, 699 F.2d 626, 634 (CA2 1983); State Farm Mutual Automobile Ins. Co. v. NLRB, 411 F.2d 356, 358 (CA7) (en banc), cert. denied, 396 U.S. 832, 90 S.Ct. 87, 24 L.Ed.2d 83 (1969); Friendly Ice Cream Corp. v. NLRB, 705 F.2d 570, 574 (CA1 1983); Local 627, Int'l Union of Operating Engineers v. NLRB, 194 U.S.App.D.C. 37, 41, 595 F.2d 844, 848 (1979); NLRB v. Western & Southern Life Ins. Co., 391 F.2d 119, 123 (CA3), cert. denied, 393 U.S. 978, 89 S.Ct. 445, 21 L.Ed.2d 439 (1968). Thus, one union might seek to represent all of the employees in a particular plant, those in a particular craft, or perhaps just a portion thereof.

Given the obvious potential for disagreement concerning the appropriateness of the unit selected by the union seeking recognition by the employer—disagreements that might involve rival unions claiming jurisdiction over contested segments of the work force as well as disagreements between management and labor—§ 9(b) authorizes the Board to decide whether the designated unit is appropriate. See Hearings on S.1958 before the Senate Committee on Education and Labor, p. 82 (1935) (hereinafter Hearings), 1...