Wilkes-Barre Hosp. Co. v. Nat'l Labor Relations Bd.

• Decision Date: 19 May 2017
• Docket Number: No. 15-1318,C/w 15-1384,15-1318
• Citation: 857 F.3d 364
• Parties: WILKES-BARRE HOSPITAL COMPANY, LLC, doing business as Wilkes–Barre General Hospital, Petitioner v. NATIONAL LABOR RELATIONS BOARD, Respondent Pennsylvania Association of Staff Nurses and Allied Professionals, Intervenor
• Court: U.S. Court of Appeals — District of Columbia Circuit

857 F.3d 364

WILKES-BARRE HOSPITAL COMPANY, LLC, doing business as Wilkes–Barre General Hospital, Petitioner

v. NATIONAL LABOR RELATIONS BOARD, RespondentPennsylvania Association of Staff Nurses and Allied Professionals, Intervenor

No. 15-1318

C/w 15-1384

United States Court of Appeals, District of Columbia Circuit.

Argued March 21, 2017

Decided May 19, 2017

Kaitlin Kaseta, Mount Pleasant, SC, argued the cause for petitioner. With her on the briefs was Bryan T. Carmody.

Kellie J. Isbell, Attorney, National Labor Relations Board, argued the cause for respondent. On the brief were Richard F. Griffin, Jr., General Counsel, John H. Ferguson, Associate General Counsel, Linda Dreeben, Deputy Associate General Counsel, Elizabeth Heaney, Supervisory Attorney, and Michael R. Hickson, Attorney.

Before: Pillard, Circuit Judge, and Edwards and Sentelle, Senior Circuit Judges.

Sentelle, Senior Circuit Judge:

Petitioner Wilkes-Barre Hospital Company, LLC d/b/a Wilkes-Barre General Hospital (the "Hospital") petitions for review of the National Labor Relations Board's ("NLRB" or the "Board") decision and order finding that the Hospital violated section 8(a)(1) and (a)(5) of the National Labor Relations Act (the "Act"), 29 U.S.C. § 158(a)(1), (5), by unilaterally ceasing the payment of longevity-based wage increases to its nurses after the expiration of the parties' collective bargaining agreement. See generally Litton Fin. Printing Div. v. NLRB , 501 U.S. 190, 111 S.Ct. 2215, 115 L.Ed.2d 177 (1991) ; NLRB v. Katz , 369 U.S. 736, 82 S.Ct. 1107, 8 L.Ed.2d 230 (1962). The NLRB cross-applies for enforcement of its decision and order. The Hospital argues that the language of the agreement and the parties' shared understanding of that language demonstrate that the Hospital was not obligated to continue paying longevity-based increases upon expiration of the agreement. Relying on NLRB v. Noel Canning , ––– U.S. ––––, 134 S.Ct. 2550, 189 L.Ed.2d 538 (2014), the Hospital also challenges the NLRB Regional Director's authority to issue and prosecute the underlying complaint against the Hospital. For the reasons set forth below, we deny the Hospital's petition for review and grant the NLRB's cross-application for enforcement.

I.The Collective Bargaining Agreements

Petitioner operates an acute care facility in Wilkes-Barre, Pennsylvania. The Hospital's full-time and part-time graduate and registered nurses are represented by the Pennsylvania Association of Staff Nurses and Allied Professionals, AFL-CIO (the "Union"). The Union is the exclusive collective bargaining representative for a bargaining unit of approximately 450 of the Hospital's nurses.

In or around May 2009, the Union negotiated with the new owner of the Hospital a memorandum of agreement that served as the parties' collective bargaining agreement through June 30, 2009 ("2009 CBA"). The 2009 CBA incorporated by reference certain terms of the prior collective bargaining agreement between the Hospital's former owner and the Union ("2005 CBA"), including Article 25, which provided nurses with annual across-the-board raises and longevity-based wage increases. After the 2009 CBA expired on July 1, 2009, the parties began negotiations but did not reach a successor collective bargaining agreement until April 30, 2011 ("2011 CBA"). Accordingly, the parties were without a collective bargaining agreement from July 1, 2009, to April 30, 2011. No wage increases, including the longevity-based increases, were paid to the nurses in January 2010 or January 2011.

In response to the Hospital's failure to pay longevity-based increases in January 2010, the Union filed an unfair labor practice charge with the NLRB's Regional Office. The NLRB's Regional Director dismissed the charge and the General Counsel upheld the dismissal. The Union did not file an unfair labor practice charge in connection with the Hospital's failure to pay longevity-based increases in January 2011.

The 2011 CBA became effective on April 30, 2011, and expired on April 30, 2013. The new CBA, like the 2009 CBA, provides that a nurse's minimum base hourly rate would be determined by his/her experience level. The seven experience levels were grouped as follows: 0-2 years; 3-4 years; 5-9 years; 10-14 years; 15-19 years; 20-24 years; and 25+ years. Similar to the 2005 CBA and the 2009 CBA, Article 25 and Appendix A of the 2011 CBA provide for two types of wage increases: across-the-board raises and longevity-based increases.

Sections 1 through 3 of Article 25 describe the across-the-board raises, which were provided to nurses on three dates certain. After the 2011 CBA became effective on April 30, 2011, nurses received a catch-up increase in their base hourly rate in May 2011. Nurses then received a 2.75% increase in base hourly rate on January 27, 2012, and a further 2.00% increase on January 27, 2013.

Sections 4 and 5 of Article 25 provide for the longevity-based increases. Section 4 explains that wage minimums were "based upon the employee's length of continuous service as a registered nurse," and Section 5 states that longevity-based increases were to be paid on "January 27th of the year following the employee's anniversary date." Nurses received longevity-based increases as they advanced from one experience level to the next (e.g. , 0-2 years level to 3-4 years level), resulting in an increase in their hourly pay rate the following January 27th.

The initial wage scale and the subsequent increases during the term of the 2011 CBA were set forth in Appendix A in the following chart showing minimum hourly wage rates for nurses in the seven experience levels:

                Acute Care                          Health Services
                         May,    January   January             May,    January   January
                         2011     2012      2013     ______    2011     2012      2013
                 0-2    $24.90   $25.58    $26.10    ______   $19.54   $20.08    $20.48
                 3-4    $25.76   $26.47    $27.00    ______   $20.10   $20.65    $21.07
                 5-9    $26.55   $27.28    $27.83    ______   $21.04   $21.62    $22.05
                10-14   $27.87   $28.64    $29.21    ______   $22.14   $22.75    $23.20
                15-19   $28.74   $29.53    $30.12    ______   $22.68   $23.30    $23.77
                20-24   $29.17   $29.97    $30.57    ______   $23.20   $23.84    $24.31
                 25+    $30.11   $30.94    $31.56    ______   $23.84   $24.50    $24.99
                

"Reading across, the chart shows the three annual across-the-board raises; reading down, the chart shows the longevity-based wage increases." Wilkes-Barre Hosp. Co. , 362 N.L.R.B. No. 148, at *4 (July 14, 2015).

The Hospital's Failure to Pay Longevity-Based Increases in 2014

The parties began negotiations for a successor collective bargaining agreement in February 2013. The 2011 CBA expired on April 30, 2013, and the parties bargained without impasse through July 2014. Following the expiration of the 2011 CBA, the Hospital did not pay any wage increases in January 2014. The Hospital does not dispute that it neither gave the Union prior notice of its intention to cease paying longevity-based increases in 2014 nor afforded the Union the opportunity to bargain over that decision.

The Union filed charges with the NLRB's Regional Director, including its contention that the Hospital's failure to pay longevity-based increases in January 2014 violated section 8(a)(1) and (a)(5) of the Act. The Union did not assert that the nurses were entitled to additional across-the-board raises. The General Counsel, through Dennis P. Walsh, the Regional Director of Region 4, issued a consolidated complaint on April 23, 2014.

The Board Proceedings and Order

An administrative law judge considered charges that the Hospital violated section 8(a)(1) and (a)(5) by ceasing to pay longevity-based increases to nurses in January 2014. See Wilkes-Barre Hosp. Co. , Case 04-CA-123748, 2014 WL 6386518 (Nov. 17, 2014). The complaint charged that, under the rule first articulated in NLRB v. Katz , 369 U.S. 736, 82 S.Ct. 1107, 8 L.Ed.2d 230 (1962), when the 2011 CBA expired, the Hospital had a statutory obligation to maintain the status quo as to its nurses' terms and conditions of employment. See, e.g. , Honeywell Int'l, Inc. v. NLRB , 253 F.3d 125, 127, 131 (D.C. Cir. 2001). The Hospital argued that, within the status quo, the longevity-based increases operated in tandem with the across-the-board raises. The Hospital further argued that the evidence established that past practice permitted it to pretermit the payment of the longevity-based increases after the expiration of the CBA.

The ALJ accepted the General Counsel's position that the across-the-board raises and the longevity-based increases were "distinct rights" that did not "go hand-in-hand" and found it "quite simple" for the Hospital to apply "the terms that already existed in the contract and grant[ ] hourly wage rate increases as specified in appendix A" after the agreement's expiration. She therefore concluded that the Hospital violated its statutory duty to bargain by failing to pay longevity-based increases in January 2014.

She explained that the 2011 CBA did not include language either "specifically limiting the applicability of" the longevity-based increases to the term of the agreement or clearly and unmistakably waiving the nurses' statutory right to receive those increases. Thus, the ALJ held, the longevity-based increase provision "continue[d] in effect" after the agreement's expiration. She also rejected the Hospital's past practice argument, finding that the evidence did not establish that the parties had a longstanding practice of the Hospital's unilateral changes going unchallenged by the Union.

The Hospital also moved to dismiss on the ground that Director Walsh had been improperly appointed by an unconstitutionally constituted Board and therefore did not have the authority to issue the complaint upon which the proceeding was held. The ALJ denied this motion, citing the record fact that a later, lawfully constituted Board had ratified the Director's...