Crozer-Chester Med. Ctr. v. Nat'l Labor Relations Bd.

Decision Date24 September 2020
Docket Number18-1973,Nos. 18-1640,s. 18-1640
Citation976 F.3d 276
Parties CROZER-CHESTER MEDICAL CENTER; Delaware County Memorial Hospital, Petitioners/Cross-Respondents v. NATIONAL LABOR RELATIONS BOARD, Respondent/Cross-Petitioner
CourtU.S. Court of Appeals — Third Circuit
OPINION OF THE COURT

CHAGARES, Circuit Judge.

It has long been established that an employer, as part of its obligation under the National Labor Relations Act ("NLRA"), 29 U.S.C. § 151 et seq., to bargain in good faith with a union, must furnish to the union all information relevant to the union's bargaining obligations. In this case, a union representing certain employees of a healthcare network learned that the network was being sold to another entity. And it also learned –– from the employer itself –– that the sale agreement contained information bearing on the terms and conditions of its members’ employment. So the union asked the employer for a full copy of the sale agreement for "effects bargaining." But the employer, asserting that the agreement was confidential and not relevant to collective bargaining, refused to provide any of it. Eventually, the union filed unfair labor charges with the National Labor Relations Board (the "Board"), which found that at least part of the agreement was indeed relevant and that the employer, in failing to turn it over, violated the NLRA. As a remedy, the Board ordered the employer to provide a complete, unredacted copy of the agreement to the union. The employer now petitions us to review the Board's order, and the Board cross-petitions to enforce it. For the following reasons, we conclude that substantial evidence supported the Board's conclusion that the employer violated the NLRA, but we also conclude that the Board abused its broad remedial discretion in ordering the employer to disclose the entire agreement. We therefore will grant the employer's petition in part and deny it in part, grant the Board's cross-petition in part and deny it in part, and remand to the Board for further proceedings.

I.
A.

Crozer-Keystone Health System ("Crozer") is a healthcare network that –– at least at the start of this litigation –– comprised four hospitals1 and several other healthcare facilities. Crozer's employees, at all relevant times, consisted of ten bargaining units, represented in total by five unions. This case is about Crozer's interactions with one of those unions –– the Pennsylvania Association of Staff Nurses and Allied Professionals (the "Union").

The Union heard rumors about the sale of Crozer beginning in fall 2015 and engaged in discussions with the putative buyer, Prospect Medical Holdings ("Prospect"), in approximately November 2015. In January 2016, Crozer informed the Union that it had reached a "Definitive Agreement" to be acquired by Prospect. Joint Appendix ("J.A.") 59. Crozer shared with the Union a letter to all Crozer employees and physicians about the Prospect sale on January 8, 2016 (the "January 8 letter"). In that letter, Crozer explained that several things would not change "under [the] Definitive Agreement with Prospect." Id. Crozer wrote that "Prospect will offer to hire active non-union employees in good standing at the rate of pay, title and seniority level at time of close, subject to standard pre-employment screening processes." Id. And Crozer explained that "unionized employees in good standing will be offered employment subject to initial terms set by Prospect," which would "meet with the various labor organizations that represent [Crozer] employees and enter into appropriate recognition agreements with them."2 Id.

But Crozer also noted in that letter that certain things will change, including that "Prospect will assume [Crozer]’s outstanding pension liability, funding $100 million of the obligation at closing and providing distributions to pay all benefits owed to pension participants and beneficiaries within five years of the closing date." J.A. 60. Attached to the letter was a list of Frequently Asked Questions, which included short explanations about how the Prospect sale would affect the terms and conditions of employment for unionized and nonunionized employees, as well as the continued operation of the hospitals and union relations.

Ten days after receiving a copy of the January 8 letter, the Union emailed Crozer, "requesting the complete Asset Purchase Agreement [ ("APA") ] and all attachments and schedule[s] of the agreement." J.A. 67. The Union wrote that "[u]pon receipt of the agreement we will review and you can expect a request for effects bargaining shortly after." Id. Crozer responded that it was "unable to give [the Union] a copy of the APA at this time because it is confidential and proprietary." J.A. 69. Crozer explained that the APA "is covered by the terms of a confidentiality agreement to which Crozer is subject" and that "the entire APA is not relevant for effects bargaining over the terms and conditions of employment of bargaining unit members." Id. It told the Union that it was "open to considering any alternative requests [the Union] may have." Id.

That was unacceptable to the Union, which wrote back:

We were hoping to avoid involving the Labor Board in our request for the APA but we intend to file a charge if [the] Crozer Administration continues to refuse to provide the APA, including attachments and schedules. If your email is intended as an offer to negotiate over confidentiality, the union is prepared to bargain over confidentiality, provided there is an understanding that the APA, with attachments and schedules, will be forthcoming.

J.A. 70. Crozer didn't budge.

Crozer and the Union broached the subject again when they met the next month for a bargaining session over a nursing unit at one of Crozer's hospitals.3 There, the Union reiterated its request for the APA. Crozer again explained "that much of [the APA] was confidential and proprietary," but "that [it] would be willing to determine what was relevant and share that with the Union." J.A. 253. According to a Union official present at that bargaining session, Crozer never explained why the APA was confidential. The two sides, at any rate, remained entrenched in their positions.

The next day, Crozer sent the Union a more official response to its information request. It wrote, among other things:

[Crozer] objects to the request on the basis that it is premature, overbroad and seeks irrelevant information. Indeed, as you know, the [Crozer] transaction with Prospect is contingent upon regulatory approval that has not yet occurred and as of this point, has not yet even been scheduled. Additionally, as you may be aware, [Crozer's and the Union's attorneys] recently discussed this request. On behalf of [Crozer], [Crozer's attorney] offered to discuss with [the Union] the potential for production of those portions of the [APA] and any attachments and schedules thereto that relate to or affect [Crozer] employees, including those who are members of [the Union]. [The Union's attorney] refused this offer, stating that [the Union] wants everything. [The Union] offered nothing more to explain why the entire document is relevant or needed for it to fulfill its functions as bargaining representative for certain [Crozer] employees. We again renew that offer to discuss which portions of the documents are relevant to [the Union's] role as bargaining representative with respect to effects bargaining. Please let me know if you would like to have further discussions on this issue.
[Crozer] further objects to the request on the basis that it seeks confidential and proprietary information that is subject to legal prohibitions on disclosure. As [Crozer's attorney] explained to [the Union's attorney], the entire [APA] is the subject of a confidentiality agreement between [Crozer] and Prospect that [Crozer] is legally obliged to follow. Therefore, to the extent the parties were able to reach agreement on the production of any relevant portion of the Agreement, before [Crozer] can turn over anything contained in the Agreement, [the Union] must agree to the terms of a confidentiality agreement acceptable to [Crozer] and Prospect that adequately protects [Crozer's] and Prospect's confidential and proprietary interests in those portions of the [APA] to which [the Union] may be entitled.

J.A. 72–73. The Union did not respond. Instead, four days later, it filed charges with the Board.

Two other unions soon requested from Crozer "sections of the APA that say what Prospect is going to assume and not assume relative to employees." J.A. 74. In response to those requests, Crozer's General Counsel advised Crozer's Vice President of Human Resources, Elizabeth Bilotta, that Crozer "should provide relevant redacted excerpts from the APA" to those two unions, noting that "[t]hat is essentially what [it] previously offered to [the Union] as a compromise." Id. 4

Although Crozer still had provided no parts of the APA to the Union, the two sides proceeded to engage in effects bargaining over the Prospect sale in late May and early June 2016.

As part of the sale process, Crozer filed a petition in the Delaware County Court of Common Pleas to obtain approval of the sale.5 Because that petition included the body of the APA, the Union obtained a copy from the Pennsylvania Attorney General's Office on June 6, 2016. Crozer's filings with the Court of Common Pleas, however, did not include the APA's attachments or schedules. At the request of the Attorney General, Crozer provided the Union on June 22 with copies of schedules 4.13(a) ("Employee Benefit Plans") and 4.18(a) ("Labor, Unions, Collective Bargaining Agreements"), but no other attachments or schedules.

B.

In December 2016, an Administrative Law Judge ("ALJ") held a trial on the charges the Union filed against Crozer. Considering the demeanor of the witnesses, other evidence, and briefing, the ALJ ultimately concluded, in a written opinion, that Crozer had "violated Section 8(a)(5) and ...

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