Manhattan Eye Ear & Throat Hosp. v. N.L.R.B., AFL-CI
| Citation | 942 F.2d 151 |
| Decision Date | 24 October 1991 |
| Docket Number | 1370,Nos. 1161,D,I,AFL-CI,s. 1161 |
| Court | United States Courts of Appeals. United States Court of Appeals (2nd Circuit) |
| Parties | 138 L.R.R.M. (BNA) 2238, 138 L.R.R.M. (BNA) 2875, 119 Lab.Cas. P 10,882, 14 Employee Benefits Cas. 1176 MANHATTAN EYE EAR & THROAT HOSPITAL, Petitioner-Cross-Respondent, v. NATIONAL LABOR RELATIONS BOARD, Respondent-Cross-Petitioner, Local 1199, Drug, Hospital and Health Care Employees Union, RWDSU,ntervenor. ockets 90-4138, 90-4184. |
Francis Carling, New York City (Michael A. Kalish, Frederick A. Brodie, Maria M. Homan, Winthrop, Stimson, Putnam & Roberts, of counsel), for petitioner-cross-respondent, Manhattan Eye, Ear & Throat Hosp.
Margaret Bezou, Atty., N.L.R.B., Washington, D.C. (Collis Suzanne Stocking, Supervisory Atty., Jerry M. Hunter, General Counsel, D. Randall Frye, Acting Deputy Gen. Counsel, Aileen A. Armstrong, Deputy Associate Gen. Counsel, N.L.R.B., Washington, D.C., of counsel), for respondent-cross-petitioner, N.L.R.B.
Harold Ickes, Mineola, N.Y. (Jeffrey G. Stark, Barry J. Peek, Meyer, Suozzi, English & Klein, P.C., of counsel), for intervenor, Local 1199 Drug, Hosp. and Health Care Employees Union, RWDSU, AFL-CIO.
Before OAKES, Chief Judge, and LUMBARD and CARDAMONE, Circuit Judges.
On this appeal we consider whether a remedy imposed by the National Labor Relations Board may successfully be challenged by an employer or whether it should be enforced, as requested by the Board in its cross-appeal. While the employer believes the remedy was imposed as a punitive measure, the Board relies on the broad discretion accorded it under the National Labor Relations Act (the Act) to shape remedies arising from unfair labor practices. The basic question to be answered in such litigation is whether the remedy effectuates the purposes of the Act. If it does, it will be enforced; otherwise, not.
In the case at hand an employer withdrew recognition from a union at the request of a majority of its employees, and immediately removed those employees from union health and pension benefits programs, placing them in management-run plans. Several years later, the withdrawal of recognition was held to be void because an unfair labor practice occurred during the period when the petition for withdrawal of recognition took place but which, significantly, was not found to have influenced the petition. At the employees' request, the union then negotiated to keep the employees in the management-run plans and--when faced with a decertification election it was certain to lose--disclaimed any further interest in representing the employees.
Even though the employees had requested the original withdrawal of recognition and were fully compensated thereafter by equivalent or superior management-run plans, and the union had disclaimed any future interest in representing them, and union funds had suffered little or no loss from the employer's actions, the National Labor Relations Board ordered the employer to pay approximately $2.2 million in retroactive payments to the union health and pension funds (including interest). Because this remedy fails to benefit the employees, results in a windfall for the union funds, and is punitive to the employer, we remand to the Board for recalculation of the remedy.
In June 1984 Local 1199, Drug, Hospital and Health Care Employees Union (Local 1199 or union), called a city-wide hospital strike in New York City. The registered nurses employed by Manhattan Eye Ear & Throat Hospital (hospital), whom the union had represented since 1981, were required to join the strike. On July 18, 1984 shortly after the strike commenced, the nurses--dissatisfied with their representation--filed a decertification petition that resulted in an election being scheduled for August 30. Later that summer a part-time hospital relief nursing supervisor, Euphemia James, while talking with four nurses on the telephone asked whether they planned to cross the picket line. On August 2 the union filed an unfair labor charge alleging that James had threatened the four nurses in an attempt to get them to resign from the union. By filing this charge, it succeeded in blocking the scheduled August 30 decertification election.
The nurses were caught in a dispute that threatened to extinguish their statutory right to select representation of their own choosing, see 29 U.S.C. §§ 157, 159 (1988). Hence, a majority of nurses responded to the union's unfair labor charge by petitioning the hospital on September 6 to withdraw union recognition. This presented the hospital with a delicate dilemma: on one hand it had a demand from a majority of the bargaining unit that it cease recognizing the union--denial of that demand could constitute an unfair labor practice under §§ 158(a)(1)-(2) of the Act; on the other hand, with the union's unfair labor practice charge pending, withdrawal of recognition might later be found tainted by James' conduct, were it to prove well-founded. James advised the hospital that she had not told any employee to resign from the union. There is no evidence that, even were the union's allegations proved, they would show a nexus between James' alleged conduct and the decision by a majority of the nurses to petition for withdrawal of recognition. Under these circumstances, the hospital resolved its predicament After withdrawal, the hospital transferred the nurses out of the joint union/management National Benefit Fund for Hospital and Health Care Employees (Joint Benefit Fund) and National Pension Fund for Hospital and Health Care Employees (Joint Pension Fund) (collectively Joint Funds), and into the hospital's own medical insurance program (Hospital Medical Plan) and the Pension Plan of the League of Voluntary Hospitals and Homes of New York (League Pension Plan) (collectively Management Plans). This action severed the nurses' contact with the union, and eventually led to the backpay proceeding that is at the heart of this litigation.
by acceding to the nurses' demand and withdrawing union recognition.
Following a hearing on the unfair labor practice charge in March 1985, an Administrative Law Judge (ALJ) dismissed the complaint on August 16, 1985. The ALJ determined that James' comments to the nurses were "devoid of coercion." In light of this conclusion, the ALJ did not decide whether there was any nexus between James' alleged actions and the nurses' decision for union decertification.
The union appealed, and on May 30, 1986--almost two years after the events in question--the Board overruled the ALJ. It did not address whether James' conduct actually influenced the nurses' demand for withdrawal of recognition in any way, nor could it since those facts were not in the record before it. The Board simply held the hospital's withdrawal of recognition unlawful because it did not occur "in a context free of unfair labor practices of the type aimed at causing disaffection from the Union." Accordingly, the Board required the hospital to
On request, restore the terms and conditions of employment in existence prior to the unlawful unilateral changes and make whole the employees for any losses suffered by reason of the unlawful unilateral changes and make contributions to the [Joint Funds], if any, which would have been made but for the [Hospital's] unilateral institution of the pension, health, and insurance plans.
Regarding the scope of the remedy, the Board stated:
In ordering the [Hospital] to make whole the employees for losses suffered by reason of its implementing new pension, health, and insurance plans, we note that the record is unclear whether the new plans were substitutes for preexisting benefit plans and whether any losses were incurred by this conduct.
We upheld the Board's decision in an unpublished opinion. NLRB v. Manhattan Eye, Ear & Throat Hospital, 814 F.2d 653 (2d Cir.1987).
On August 25, 1988 the hospital and the union signed a successor collective bargaining agreement, which maintained the nurses in the Management Plans retroactive to July 1, 1987. The nurses had demanded that they be allowed to remain in these plans, and the union had negotiated with management accordingly. The agreement did not affect the period from September 1984 to June 31, 1987, that is, the period after the hospital had discontinued payment to the Joint Funds and instead was providing alternative benefits through the Management Plans.
A backpay specification to remedy the effects of the hospital's adjudicated unfair labor practice resulted in hearings before the ALJ in July and August 1988. The ALJ denied the hospital's request that it be permitted to offer evidence to show that neither the nurses nor the Joint Funds incurred any loss from the hospital's actions. Evidence of the adverse financial impact on the hospital of the order compelling it to make retroactive payments to the Joint Funds was also rejected.
The ALJ's decision, rendered on April 6, 1989, gave the hospital no credit for its provision of benefits to the nurses under the Management Plans during the same period. Instead the ALJ ordered the hospital to pay approximately $2.2 million to the Joint Funds, on the ground that the hospital would have paid that amount to the Funds had the nurses not unilaterally been withdrawn from them by the hospital.
While the hospital's appeal of that decision was pending, the Board determined, in Eight months after the union disclaimed interest in representing the nurses, the ALJ's backpay decision was affirmed by the NLRB in a Supplemental Decision and Order dated September 28, 1990. In its opinion the Board stated "[i]t is well settled that the appropriate remedy for unlawful withdrawal of recognition and unilateral changes in employee benefits is the restoration of the status quo ante, or conditions as they would have existed but for the unfair labor practices." In...
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