DHSC, LLC v. Cal. Nurses Ass'n/National Nurses Org. Comm.

• Decision Date: 31 May 2016
• Docket Number: CASE NO. 5:13CV1770
• Citation: 189 F.Supp.3d 701
• Parties: DHSC, LLC d/b/a Affinity Medical Center, Plaintiff, v. California Nurses Association/National Nurses Organizing Committee (C.N.A./ NNOC), AFL-CIO, Defendant.
• Court: U.S. District Court — Northern District of Ohio

189 F.Supp.3d 701

DHSC, LLC d/b/a Affinity Medical Center, Plaintiff,

v.California Nurses Association/National Nurses Organizing Committee (C.N.A./ NNOC), AFL-CIO, Defendant.

CASE NO. 5:13CV1770

United States District Court, N.D. Ohio, Eastern Division.

Signed May 31, 2016

David C. Van Dyke, Emily E. Bennett, Howard & Howard, Chicago, IL, Tracy C. Litzinger, Howard & Howard, Peoria, IL, for Plaintiff.

Carol A. Igoe, M. Jane Lawhon, Pamela S. Allen, California Nurses Association, Oakland, CA, Dennis Haines, Ira J. Mirkin, Green Haines Sgambati, Youngstown, OH, for Defendant.

MEMORANDUM OF OPINION AND ORDER

[Resolving ECF No. 45]

Benita Y. Pearson, United States District Judge

Pending is Defendant's Motion to Dismiss for Lack of Subject-Matter Jurisdiction Pursuant to Fed. R. Civ. P. 12(b)(1)(ECF No. 45). The Court has been advised, having reviewed the record, the parties' briefs, and the applicable law. The Court has also considered the Memorandum by Amicus Curiae The National Labor Relations Board ("NLRB" or "Board") in Support of Defendant's Motion (ECF No. 63-2) and the oral arguments of counsel offered during the Telephonic Status Conference on March 14, 2016. For the reasons that follow, the motion is granted.

I.

In early 2012, the Parties began negotiating a framework for an agreement governing their relationship during Defendant California Nurses Association/National Nurses Organizing Committee, AFL-CIO's (Defendant or "Union") efforts to organize the registered nurses employed by Plaintiff DHSC, LLC, d/b/a Affinity Medical Center (Plaintiff or "Affinity"), as well as the Parties' conduct during any collective bargaining negotiations that might follow. Amended Complaint for Breach of Contract, Specific Performance, and Declaratory Judgment and for a Speedy Hearing Under Fed. R. Civ. P. 57(ECF No. 18) at PageID #: 200, ¶ 14. The Parties produced two documents with the terms of their negotiations—a Labor Relations Agreement ("LRA") (ECF No. 18-1) and an Election Procedure Agreement ("EPA") (ECF No. 18-2). Both documents provide terms for arbitration of disputes: the LRA provides that "[t]he Parties agree to submit any unresolved disputes about [the LRA] to final and binding arbitration[;]" (ECF No. 18-1 at PageID #: 223) and the EPA provides that "...either party may ...submit [an] unresolved dispute about [the EPA] for final and binding resolution[.]" (ECF No. 18-2 at PageID #: 249). The Parties, however, did not sign or execute either the LRA or the EPA. ECF No. 18 at PageID #: 200, ¶ 16.

On August 20, 2012, the Union filed a petition with the NLRB seeking to represent registered nurses working at the Massillon, Ohio facility operated by Plaintiff. On August 22, 2012, Affinity and the Union signed a formal Consent Election Agreement (ECF No. 45-2 at PageID #: 541-43) using the standard Board form. The signed Consent Election Agreement was approved by the NLRB's Regional Director for Region 8 the same day it was signed. ECF No. 45-2 at PageID #: 543. Paragraph 12 gave the Regional Director final authority to rule on election challenges and objections. ECF No. 45-2 at PageID #: 542-43. Plaintiff does not dispute that neither party advised the Regional Director that any previous or conflicting agreements existed between them with respect to the election. Respondent's Post-Hearing Brief (ECF No. 45-3 at PageID #: 593). Thereafter, in accordance with the terms of the Consent Election Agreement (ECF No. 45-2 at PageID #: 541-43), the NLRB's Regional office supervised and conducted the election held on August 29, 2012. One hundred votes were cast for the Union, 96 against, with seven challenged ballots.¹ Since the challenged ballots were sufficient in number to be determinative of the outcome of the election, the Regional Director investigated the matter, soliciting statements of position from Plaintiff and Defendant. The Union provided its position on the challenged ballots on September 17, 2012; Plaintiff did not file any statement or response regarding the challenged ballots. On September 5, 2012, Plaintiff filed with the Regional Director a statement of its objections to the election which made no mention of a private election agreement with the Union. See Report on Challenged Ballots and Objections (ECF No. 45-2 at PageID #: 545). In a letter dated September 7, 2012, the Regional Director explicitly requested that Plaintiff provide its supporting documents and advised that the failure to provide supporting evidence "will result in your objections being overruled without further investigation." SeeECF No. 45-2 at PageID #: 548. On September 21, 2012, the Regional Director issued a report on the challenged ballots and objections, overruling Plaintiff's objections because no substantiating evidence had been submitted. ECF No. 45-2 at PageID #: 544, 548. The report concluded that four of the seven challenged ballots were cast by eligible voters. When these four ballots were counted, a majority of voters had voted in favor of Union representation. ECF No. 45-2 at PageID #: 544-49. On October 5, 2012, the Regional Director certified the Union as the National Labor Relations Act (NLRA) Section 9(a) representative of the nurses at Affinity. SeeECF No. 45-2 at PageID #: 564;² ECF No. 18 at PageID #: 199, ¶ 8.

Following certification, Defendant requested that Plaintiff begin bargaining. After Plaintiff refused to bargain and denied Union representatives access to its facilities after the election, Defendant filed charges with the NLRB. The Regional Director issued a complaint alleging various violations of the NLRA. See Third Order Consolidating Cases, Amended Consolidated Complaint and Notice of Hearing (ECF No. 45-2 at PageID #: 509-21). In its Answer, Affinity raised several affirmative defenses, two of which are pertinent here: (1) that the Board's certification of the Union as exclusive bargaining representative was

invalid, and unenforceable, inasmuch as the representation election...was held not only pursuant to a consent election agreement, but also pursuant to an oral "ad hoc" agreement between Affinity and the [Union] which provided that an arbitrator possessed exclusive jurisdiction to determine challenged ballots and objections related to the conduct of the representation election[;]

and (2) that pursuant to that same "oral ‘ad hoc’ agreement...an arbitrator possesses exclusive jurisdiction over the allegations set forth by the Complaint." Answer to Amended Consolidated Complaint (ECF No. 45-2 at PageID #: 531-32). Board deferral to arbitration, however, is completely discretionary. Memorandum of Opinion and Order (ECF No. 22) at PageID #: 346 ("Only the NLRB may decide to defer a pending charge to private arbitration."). On April 30, 2015, a three-member panel of the Board issued its decision and order finding, inter alia , that Affinity had unlawfully refused to bargain with the Union and discriminatorily denied Union representatives access to its facility in violation of the Act. DHSC, LLC, d/b/a Affinity Medical Center and National Nurses Organizing Committee (NNOC ), 362 NLRB No. 78, 2015 WL 1956191 (2015). Relying on long-standing Board precedent, the panel majority rejected Affinity's procedural affirmative defenses regarding the arbitrator's exclusive jurisdiction under the purported "oral ad hoc agreement," finding that the parties had neither a collective bargaining agreement in place nor an established history of productive bargaining that would warrant the Board's deferring to any referenced arbitration provision. Id. at *1 n. 3³ (citing Arizona Portland Cement Co. , 281 NLRB 304, 1986 WL 54325 at *1 n. 2 (1986); United Technologies Corp. , 268 NLRB 557, 1984 WL 36028, at *2 (1984); San Juan Bautista Medical Center , 356 NLRB No. 102, 2011 WL 702297 at *2 (2011)).⁴

The Board's unfair labor practice decision is currently pending before the United States Court of Appeals for the District of Columbia Circuit, on Affinity's petition for review and the NLRB's cross-application for enforcement of the order under § 10(e) and (f) of the Act, 29 U.S.C. § 160(e) and (f). DHSC, LLC v. NLRB , Nos. 15 – 1426, 15 – 1499.

On August 13, 2013, Plaintiff filed a Complaint for Breach of Contract, Specific Performance, and Declaratory Judgment and for a Speedy Hearing Under Fed. R. Civ. P. 57(ECF No. 1) in the above-entitled action. On September 3, 2014, the Court granted Plaintiff leave to file an amended complaint. See Order (ECF No. 17). On September 17, 2014, Plaintiff filed an Amended Complaint (ECF No. 18) under § 301 of the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 185. ECF No. 18 at PageID #: 198, ¶ 1. Affinity alleges that it has a valid implied-in-fact collective bargaining agreement ("Implied Agreement") with Defendant which provides that both Affinity and the Union must submit any unresolved disputes about compliance with, or construction of, the Implied Agreement to binding arbitration, including disputes related to any elections. ECF No. 18 at PageID #: 198, ¶ 3; 201, ¶¶ 18-20. Affinity further alleges that Defendant breached the Implied Agreement by not submitting all unresolved disputes to final and binding arbitration. ECF No. 18 at PageID #: 205, ¶¶ 30-32; 206, ¶¶ 33-35.⁵ Affinity brings three claims against Defendant as a result of the Union's alleged breach of the Implied Agreement: (1) Defendant's breach resulted in damages to Affinity, ECF No. 18 at PageID #: 206-207, ¶¶ 38-43; (2) Affinity is entitled to Defendant's specific performance of the Implied Agreement's terms and conditions, including submission of unresolved disputes to final and binding arbitration, ECF No. 18 at PageID #: 207-208, ¶¶ 44-47; and (3) Affinity is entitled to a declaratory judgment mandating the Parties to submit all unresolved disputes under the Implied Agreement to final and binding arbitration, ECF No. 18 at PageID #: 208-209, ¶¶ 48-51.

Defendant moved the Court to dismiss the Amended Complaint pursuant to ...