Grane Health Care v. Nat'l Labor Relations Bd.

• Decision Date: 05 April 2013
• Docket Number: 11–4537.,Nos. 11–4345,s. 11–4345
• Citation: 712 F.3d 145
• Parties: GRANE HEALTH CARE; Ebensburg Care Center LLC, d/b/a Cambria Care Center, Petitioners Cross–Respondents v. NATIONAL LABOR RELATIONS BOARD, Respondent Cross–Petitioner.
• Court: U.S. Court of Appeals — Third Circuit

712 F.3d 145

GRANE HEALTH CARE; Ebensburg Care Center LLC, d/b/a Cambria Care Center, Petitioners Cross–Respondents

v.NATIONAL LABOR RELATIONS BOARD, Respondent Cross–Petitioner.

Nos. 11–4345, 11–4537.

United States Court of Appeals,Third Circuit.

Argued Sept. 18, 2012.

Opinion filed: April 5, 2013.

Richard J. Antonelli, Esquire (Argued), John A. McCreary, Jr., Esquire, Rebecca J. Dick–Hurwitz, Esquire, Babst, Calland, Clements & Zomnir, Pittsburgh, PA, Counsel for Petitioners/Cross–Respondents, Grane Health Care, Ebensburg Care Center LLC.

Lafe E. Solomon, Acting General Counsel, Celeste J. Mattina, Deputy General Counsel, John H. Ferguson, Associate General Counsel, Linda Dreeben, Deputy Associate General Counsel, Jill A. Griffin, Esquire, Gregory P. Lauro, Esquire (Argued), National Labor Relations Board, Appellate and Supreme Court, Litigation Branch, Division of Enforcement, Washington, DC, Counsel for Respondent

/Cross–Petitioner, National Labor Relations Board.

Before: AMBRO, GREENAWAY, JR., and TASHIMA,^* Circuit Judges.

OPINION OF THE COURT

AMBRO, Circuit Judge.

For many years Cambria County, a political subdivision of Pennsylvania, owned and operated Laurel Crest Nursing and Rehabilitation Center (“Laurel Crest”). As a state-owned facility, labor relations at Laurel Crest were subject to Pennsylvania labor law. In January 2010, however, Grane Healthcare Co. (“Grane”) bought Laurel Crest, and established a new entity, Cambria Care Center (“Cambria Care”), to serve as its operator.¹ Because Grane and Cambria Care (collectively, the “Company”) are private employers, labor relations at the facility became subject to the National Labor Relations Act (the “NLRA” or “Act”), 29 U.S.C. § 151 et seq.

The Act's preamble expressly states Congress's purpose in enacting a federal labor law.

It is hereby declared to be the policy of the United States to eliminate the causes of certain substantial obstructions to the free flow of commerce and to mitigate and eliminate these obstructions when they have occurred 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.

Id. § 151. In service of these objectives, Congress included in the NLRA a number of substantive provisions prohibiting certain labor and management practices. Among other things, the Act prohibits employers from refusing to bargain collectively with their employees' representatives, id. § 158(a)(3), and from not hiring applicants based on their union membership or activity, id. § 158(a)(5).

This case arises from a decision and order of the National Labor Relations Board (the “Board”) concluding that the Company, in connection with its takeover of Laurel Crest, violated these provisions. The Company has petitioned us for review, and the Board has cross-petitioned us for enforcement, of this decision and order. For reasons to be discussed, we deny the Company's petition for review and grant the Board's cross-petition for enforcement.²

I. Background

As noted, Laurel Crest's workforce was employed by Cambria County, a public employer subject to Pennsylvania's Public Employee Relations Act (the “PERA”), 43 Pa. Stat. § 1101 et seq. Laurel Crest had two unions—one for nonprofessional employees and one for nurses—certified under the PERA. In 1971, the Pennsylvania Labor Relations Board (the “PLRB”) certified Local Union No. 1305 (“Local 1305”) as the exclusive union representative of nursing aides, housekeepers, and other nonprofessional employees at Laurel Crest after that unit of employees elected Local 1305 to represent it. Fifteen years later, in 1986, the PLRB certified the predecessor to the Service Employees International Union (for convenience, the current union and its predecessor are referred to as the “SEIU”) as the exclusive union representative of nursing employees at Laurel Crest after that unit of employees elected representation by the SEIU. Following certification, Cambria County recognized each union as the representative of its respective employee unit, and continued to do so throughout its ownership of the facility.

When Grane, which owns multiple nursing facilities across Pennsylvania, attempted to purchase Laurel Crest on two separate occasions—unsuccessfully in 2003 and then successfully in 2009—the unions were by and large against Grane taking over. In 2003, both unions publicly opposed the sale and filed legal action intended to stop it. In 2009, Local 1305 again opposed the sale outright, and publicly took that position, while the SEIU, though less absolute, engaged in a series of rallies to raise awareness about concerns it had with the sale.

Despite the opposition and expressions of concern, in September 2009 Cambria County entered into an asset purchase agreement with Grane. Following its execution, Grane implemented transfer of the facility to Cambria Care. That transfer was officially completed on January 1, 2010, and the facility became known as Cambria Care. During that acquisition period, from September 2009 through December 2009, Grane was responsible for all decisions relating to the facility's operations, including its initial staffing. Leonard Oddo, a Grane Vice President, interviewed and hired the top administrator at Cambria Care, Owen Larkin. And, even after hiring Larkin, Oddo and other Grane representatives remained in charge of hiring Cambria Care's workforce.

A variety of labor-related decisions relevant to this petition were made around this time. Prior to the consummation of the transfer, most Laurel Crest employees applied to work at Cambria Care, and the vast majority of those applicants were hired. Grane, however, did not hire four of the five Local 1305 officers who applied for positions. It also refused to hire an SEIU-represented employee who had participated in SEIU's public activities relating to the sale. In addition, Local 1305 and the SEIU each requested that Grane and Cambria Care recognize it as the exclusive bargaining representative of its unit of employees. Both Grane and Cambria Care refused to recognize or bargain with the unions, and continued to do so until the time the Board issued its decision and order.

Though Cambria Care became the facility's operator in January 2010, Grane retained control over aspects of its operations. Importantly, during the acquisition period Grane and Cambria Care entered into a management agreement designating Grane as the manager of the facility and Cambria Care as its operator. The agreement—which was executed by two individuals who were simultaneously officers for both Grane and Cambria Care—was adopted without negotiation and has not since been altered. Per that agreement, Grane's employees maintained a significant, ongoing presence at the facility, and continued to manage significant facets of the facility's operations.

This close relationship between the companies was also preserved by their ownership structure. Grane owns a controlling stake, 99.5%, of Cambria Care, and the overlap of the companies' officers is near complete. In addition, while Larkin is nominally in charge of Cambria Care, he continues to report to and can be terminated by Oddo. Indeed, a healthcare license application filed with Pennsylvania on Cambria Care's behalf attests that all of the nursing facilities owned by Grane in Pennsylvania are under “common management, ownership, and/or control.”

Shortly after Grane and Cambria Care took over the facility, Local 1305 and the SEIU filed unfair labor practice charges against Grane and Cambria Care. Following its investigation, the Board's General Counsel issued a complaint alleging that Grane and Cambria Care were jointly and severally liable for failing to recognize and bargain with the unions in violation of NLRA § 8(a)(5) and refusing to hire the four Local 1305 officers and one SEIU-represented employee on the basis of their union membership or activities in violation of NLRA § 8(a)(3).

After a six-day hearing, an administrative law judge (“ALJ”) issued a decision in this matter making the following findings: (1) Grane and Cambria Care were a single employer subject to the Act, and thus jointly and severally liable for remedying unfair labor practices committed by either of them; (2) the Company, as a single employer, violated the Act by failing to recognize and bargain with Local 1305, though not by refusing to recognize and bargain with the SEIU; ³ and (3) the Company, as a single employer, violated the Act by not hiring the five employees due to antiunion animus. The Board affirmed the ALJ's findings, adopted its decision, and issued an order requiring the Company, among other things, to recognize and bargain with Local 1305 and hire the five employees to the positions for which they had applied.

II. Standard of Review

We afford considerable deference to the Board. The Supreme Court has “emphasized often that the [Board] has the primary responsibility for developing and applying national labor policy.” NLRB v. Curtin Matheson Scientific, Inc., 494 U.S. 775, 786, 110 S.Ct. 1542, 108 L.Ed.2d 801 (1990). “We will [therefore] uphold a Board rule as long as it is rational and consistent with the Act, even if we would have formulated a different rule had we sat on the Board.” Id. at 787, 110 S.Ct. 1542 (citations omitted). “Moreover, if the Board's application of such a rational rule is supported by substantial evidence on the record,” we will “enforce the Board's order.” Fall River Dyeing & Finishing Corp. v. NLRB, 482 U.S. 27, 42, 107 S.Ct. 2225, 96 L.Ed.2d 22 (1987); see also NLRB v. Scott Printing Corp., 612 F.2d 783, 787 (3d Cir.1979); 29 U.S.C. § 160(e). In particular, we defer to the Board's credibility determinations, and will reverse them only if they ...