N.L.R.B. v. New Medico Health Care Center of Michigan, Inc., 91-5271
| Decision Date | 20 December 1991 |
| Docket Number | No. 91-5271,91-5271 |
| Citation | 951 F.2d 350 |
| Parties | 139 L.R.R.M. (BNA) 2056 NOTICE: Sixth Circuit Rule 24(c) states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Sixth Circuit. NATIONAL LABOR RELATIONS BOARD, Plaintiff-Appellant, v. NEW MEDICO HEALTH CARE CENTER OF MICHIGAN, INC., Defendant-Appellee. |
| Court | U.S. Court of Appeals — Sixth Circuit |
Before KEITH and DAVID A. NELSON, Circuit Judges; and HOOD, District Judge. *
Plaintiff-appellant, National Labor Relations Board ("NLRB" or "BOARD") requests that this Court enter a judgment enforcing its order requiring New Medico Health Care Center of Michigan, Inc. ("New Medico") to engage in collective bargaining. The NLRB ruled that New Medico violated Section 8(a)(5) and (1) of the National Labor Relations Act ("the Act") (29 U.S.C. 158(a)(5) and (1)) by refusing to bargain with the American Federation of State, County and Municipal Employees ("AFSCME") after it had been certified by the NLRB as the exclusive bargaining representative of an appropriate unit of New Medico's employees. For the reasons stated below, we ENFORCE the order of the Board.
In December 1988, AFSCME filed a petition with the NLRB seeking to represent a unit of employees at Greenbriar Care Center ("Greenbriar") in Howell, Michigan. Pursuant to a stipulated election agreement, the NLRB conducted an election by secret ballot among the unit employees of Greenbriar on February 17, 1989. ** A tally of the ballots showed that of the 88 valid votes cast, 41 were for AFSCME and 37 were against it. AFSCME challenged the remaining 10 ballots, leaving the outcome of the union election in doubt.
Greenbriar leased the real property at the Howell site from Health and Rehabilitation Properties Trust ("HRPT"), a Maryland real estate investment trust. In January 1989, a HRPT official contacted New Medico Health Care Associates, Inc. ("NMA"), New Medico's parent company, and asked if NMA would be interested in becoming the tenant of the Greenbriar facility because Greenbriar had failed to meet its lease obligations. On February 17, 1989, New Medico agreed to a three-year lease beginning on March 1, 1989.
On February 27, 1989, Greenbriar employees were notified by letter of New Medico's impending assumption of Greenbriar's lease. The letter encouraged Greenbriar employees to apply for positions with New Medico. Employees were told that New Medico would consider years of service with Greenbriar to establish the wage rate for hired employees. New Medico's wages were higher than Greenbriar's. The letter further stated that employees would receive credit for their seniority cumulated at Greenbriar. New Medico hired virtually all of Greenbriar's employees and supervisors. The one known exception was Greenbriar's administrator, who apparently declined New Medico's offer. Moreover, New Medico continued to care for Greenbriar's former patients.
During this same period, New Medico began correcting problems listed on a 21 page deficiency report from the State of Michigan. According to NMA's president testimony, New Medico planned to make substantial changes at the facility. Such changes included upgrading the facility and hiring twice the number of employees to accommodate a greater focus on the treatment and rehabilitation of traumatic head injuries. He testified that these changes would be completed in about two years.
A NLRB hearing was scheduled to resolve the controversy surrounding the ten challenged ballots, and thus the outcome of the election. Prior to the commencement of the hearing, AFSCME withdrew challenges to five of the ten remaining ballots. The tally was now 43 for AFSCME, 40 against and five challenged ballots. At the hearing, however, the parties agreed to stipulate to four of the remaining five challenged ballots. The parties stipulated that the challenges to the ballots cast by Christine Schullar and Margie Kuhn be overruled and that their ballots be opened and counted. The parties also stipulated that the ballots cast by Joan Kehres and Barbara McCreary be sustained, and that their ballots not be counted. The remaining ballot was that of Susan Griffin ("Griffin"). AFSCME challenged Griffin's ballot on the grounds that she worked as a supervisor at Greenbriar.
At the hearing, several former Greenbriar employees testified that Griffin exercised supervisory powers over employees. These testimonies revealed that Griffin hired, disciplined and made schedule changes. Griffin's supervisor, however, testified that Griffin did not exercise independent authority.
The hearing officer issued a Report on July 28, 1989, finding that New Medico was a successor to Greenbriar, and that Griffin was a supervisor within the meaning of § 2(11) of the Act. The hearing officer also recommended that the two ballots stipulated to be opened remain sealed since they no longer affected the outcome of the election. ***
On March 1, 1990, the Board adopted the hearing officer's findings and recommendations and certified the AFSCME as New Medico's employees exclusive bargaining representative. On March 19, 1990, New Medico refused to bargain with its employees. On March 22, 1990, AFSCME filed an unfair labor practice charge.
New Medico filed an answer contending that the hearing officer erred by sustaining the challenge to Griffin's ballot and by determining that New Medico was the legal successor to Greenbriar. The NLRB granted summary judgment against New Medico. The NLRB found that New Medico had litigated all of the representation issues that it now sought to raise in its answer. Consequently, the NLRB ordered New Medico to cease and desist in its refusal to bargain. This timely appeal followed.
The scope of our review of the Board's findings is limited to determining whether the findings are supported by substantial evidence on the record as a whole. See 29 U.S.C. § 160(e), (f); Universal Camera Corp. v. NLRB, 340 U.S. 474, 488 (1951). "The Board's application of the law to the facts is also reviewed under the substantial evidence standard, and the Board's reasonable inferences may not be displaced on review even though the court might justifiably have reached a different conclusion had the matter been before it de novo." Turnbull Cone Baking Co. v. NLRB, 778 F.2d 292, 295 (6th Cir.1985), citing NLRB v. United Ins. Co., 390 U.S. 254, 260 (1968). Substantial evidence means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. Universal Camera, 340 U.S. at 477. Where a Board's order has "no reasonable basis in law," such an order will not be enforced. Ford Motor Co. v. NLRB, 441 U.S. 488, 497 (1979).
The Board argues that its findings and conclusions were supported by substantial evidence on the record as a whole. New Medico argues that the Board's findings that New Medico was the legal successor to Greenbriar and that Susan Griffin was a supervisor were not supported by substantial evidence. We find the Board's findings and conclusions are supported by substantial evidence.
New Medico argues that it is not a "successor" to Greenbriar and thus should not be bound by the NLRB's Certification of AFSCME. The Supreme Court in NLRB v. Burns International Security Services, Inc., 406 U.S. 272 (1972), enunciated the test for determining whether or not a new company is indeed the successor to the old. "This approach ... is primarily factual in nature and is based upon the totality of the circumstances of a given situation ..." Fall River Dyeing & Finishing Corp. v. NLRB, 482 U.S. 27, 43 (1987). A successor business is bound by the predecessor's bargaining obligations if there is "substantial continuity" between the enterprises. Id. In determining whether "substantial continuity" exists, the NLRB examines whether: (1) there is continuity of the same business; (2) the new employer uses the same facility; (3) the new employer hires the same or substantially the same work force; (4) the same jobs exist under the same work conditions; (5) the same supervisors are employed; (6) the same equipment and machinery is used; and (7) the same product or service is conducted. Id.
There is substantial evidence in the record to support the NLRB's finding of "substantial continuity." New Medico operates a nursing care center as did Greenbriar. The health care operation was continued uninterrupted and in the same facility. Employee responsibilities remained the same, and virtually all of Greenbriar employees were hired except for the administrator, who rejected New Medico's offer. New Medico also informed Greenbriar employees that their years of service with Greenbriar would be used to establish their new salaries. Finally, testimony indicated that New Medico continued to care for the same patients without a substantial change in operation.
New Medico offers several reasons as to why the hearing officer erred in finding "substantial continuity," the most novel of which is New Medico's assertion that the successorship issue should have been determined as of the date AFSCME was certified, March 1, 1990, and not the date on which New Medico took over the nursing home, March 1, 1989. New Medico contends that because the successorship issue is used to determine whether a new employer has a bargaining obligation with the union, there must be a certified union before it can be determined whether the employer has an obligation to bargain....
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