Medical Foundation of Bellaire

62 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Medical Foundation of Bellaire and Region 34, International Union of District 50, Allied and Technical Workers of the United States and Canada. Case 8-CA-6023 September 7, 1971 DECISION AND ORDER BY CHAIRMAN MILLER AND MEMBERS JENKINS AND KENNEDY On May 17, 1971, Trial Examiner Benjamin B. Lipton issued his Decision in the above-entitled proceeding, finding that Respondent had engaged in and was engaging in certain unfair labor practices alleged in the complaint, and recommending that it cease and desist therefrom and take certain affirma- tive action, as set forth in the attached Trial Examiner's Decision.' Thereafter, the Party of Interest2 filed exceptions to the Decision and a brief in support thereof. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the National Labor Relations Board has delegated its powers in connection with this case to a three-member panel. The Board has reviewed the rulings of the Trial Examiner made at the hearing and finds that no prejudicial error was committed. The rulings are hereby affirmed. The Board has considered the Trial Examiner's Decision, the exceptions and brief, and the entire record in the case, and hereby adopts the findings, conclusions, and recommendations of the Trial Examiner. ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Relations Board adopts as its Order the recommend- ed Order of the Trial Examiner and hereby orders that Respondent, Medical Foundation of Bellaire, Powha- tan Point, and Harrisville, Ohio, its officers, agents, successors, and assigns, shall take the action set forth in the Trial Examiner's recommended Order. I On May 19, 1971, the Trial Examiner added an Erratum 2 United Mine Workers of America TRIAL EXAMINER'S DECISION STATEMENT OF THE CASE BENJAMIN B. LIPTON, Trial Examiner: Upon a complaint by the General Counsel alleging that the Respondent violated Section 8(a)(1) and (2) of the Act,' a hearing was held before me on February 24 in Bellaire, Ohio. All parties appeared at the hearing and were afforded full opportunity to present relevant evidence and to argue orally on the record. General Counsel and UMWA filed briefs, which have been duly considered. Upon the entire record in the case, and from my observation of the witnesses, I make the following: FINDINGS OF FACT 1. THE BUSINESS OF RESPONDENT Medical Foundation of Bellaire, herein called the Respondent, the Foundation, or the Respondent Founda- tion, is a nonprofit corporation engaged in the operation of medical clinics, confined to out-patient services,2 in Bellaire, Powhatan Point, and Harrisville, Ohio. Respon- dent has annual gross receipts from its operations in excess of $1 million; and in the calendar year 1969, for services rendered to patients it received payments in excess of $250,000, which were forwarded directly from Washington, D.C., to its locations in Ohio. The foregoing are admitted facts. More specific evidence was adduced in the testimony. In 1969, Respondent received $336,534 from the United Mine Workers Welfare Fund, for services by Respondent to members, pensioners, and their families, arising from collective-bargaining agreements of UMWA. In the same year, Respondent received from the U.S. Office of Economic Opportunity, herein called the OEO, the amount of $649,000 for services rendered to patients under a "community health center" program.3 I find that Respon- dent is an employer engaged in commerce within the meaning of the Act and that it will effectuate the Act's policies to assert jurisdiction.4 11. THE LABOR ORGANIZATIONS INVOLVED Region 34, International Union of District 50, Allied and Technical Workers of the United States and Canada, herein called District 50, is a labor organization within the meaning of the Act. United Mine Workers of America, herein called UMWA, is a labor organization within the meaning of the Act. III. THE UNFAIR LABOR PRACTICES A. Essential Issues The specific allegation in the complaint is that responsi- I All dates are in 1970, unless otherwise specified The original charge was filed by District 50 on September 4 and served by registered mail on September 9, an amended charge was filed on November 25 and served on December 5 The complaint thereon was issued on December 28. 2 As of May 1968, the articles of incorporation permit operation of "in- patient hospital and/or extended care of facilities " 9 In addition to the sums obtained from the Welfare Fund and OEO, Respondent received payments (a) from individual patients in the local communities who are not covered by UMWA or OEO programs, (b) from optional deductions from the pay of employees contractually represented by UMWA to supplement the coverage provided through the Welfare Fund; and (c) from payments made by a professional medical group for use of Respondent 's facilities ' Centerville Clinics, Incorporated, 181 NLRB No 23; Quein & Ramrtad Clinic, 173 NLRB No 182; Mayo Clinic, 168 NLRB 557. 193 NLRB No. 11 MEDICAL FOUNDATION OF BELLAIRE bility is attributable to Respondent Foundation for the organizing campaign and solicitation of authorization cards of its employees undertaken by UMWA in the months of April to August 1970. General Counsel's theory, predicated mainly on Centerville Clinics, Incorporated, 181 NLRB No. 23, may be described as follows: In substantial respects, UMWA holds trustee memberships and other offices of influence and control in, and contributes financial support to, the Foundation; by reason of a basic conflict of interests, UMWA is not competent to represent the employees of the Foundation; shortly after UMWA's campaign, Respondent ceased its contractual relations with District 50; Respondent was aware of and acquiesced in the UMWA organizing activities; and Respondent thereby rendered assistance and support to UMWA in violation of Section 8(a)(2). Respondent denies the alleged unfair labor practices. Under Rule 43(b),5 two witnesses testified for General Counsel, one of whom was cross-examined by UMWA. No witnesses were put on by Respondent or UMWA. B. Relationship of UMWA to Respondent Foundation The board of trustees is responsible for all policies of the Foundation. In the original articles of incorporation dated October 14, 1958,6 10 individuals were specified as trustees of the Foundation. Six of these trustees were officers of UMWA or its subordinate bodies:7 Thomas A. Williams, since January 1965, has been president of District 6 of UMWA, whose geographical jurisdiction embraces all facilities of the Foundation. Williams was appointed by Tony Boyle, international president of UMWA. He is answerable to Boyle, or to UMWA, and is paid directly by UMWA. Since the beginning of the Foundation, Williams has maintained his membership on the board of trustees. Adolf Pacifico was president of District 6 and, upon his decease, was succeeded in this office by William. Pete Phillippi, an international representative and executive board member of District 6, has continued his membership on the board of trustees Herman Perzanowski, Michael P. Gretchen, and Joseph Kostecka, officials of UMWA at the time, have since been severed or replaced as trustees. As of the hearing date, there were 34 members on the Foundation's board of trustees, each entitled to one vote.8 Of these, 15 are UMWA representatives and I (Marsh) is indicated as a member of UMWA.9 The same 16 UMWA trustees were on the board prior to July 11, 1970, when there were 28 members of the board of trustees.io Since the inception of the Foundation, George A. Goldstein has been its administrator and then retitled S Federal Rules of Civil Procedure 8 Certain amendments to these articles were effected in April 1960, February 1961, and June 1966 to modify the statement of the purposes of the corporation in respects which are not significant to the issues herein. 7 The remaining four were David B Cooper, an attorney, and currently a trustee , Ann L McGraw, a nursing home proprietor and currently a trustee , a housewife , and John W. Hibbett, a technician in a local steel company and currently a trustee 8 The list in evidence designates two groups comprising 24 "trustees at large" and 10 "organizational trustees " In the latter group are the representatives (most of them officers) of 9 particular locals chartered by UMWA and one housewife representing OEO Other representatives of 63 executive director. The executive director also holds the offices of secretary-treasurer of the Foundation and of the executive board. Under the Foundation's constitution and bylaws, the executive board consists of the president, vice president, and secretary treasurer, plus two trustees who are elected. Initially, and for at least a substantial portion of his trusteeship, Pacifico was president of the Foundation. From and through 1969 to date, John M. Marsh, currently a member of UMWA,11 has been president; Attorney Cooper, vice president; Goldstein, secretary-treasurer; Steve Kubic, UMWA representative, and Ann McGraw have been the elected executive board members. The executive director, Goldstein, is the chief administra- tive officer, responsible for the day-to-day operation of the Foundation. He is overseen by the executive board. However, his appointment and salary are subject to the discretion and decision of the full board of trustees, which passes on the budget and may call into question any of his actions. In the past, Goldstein has negotiated collective- bargaining agreements with District 50. C. The UMWA Welfare Fund The Welfare Fund is a separate organization governed by a three-member board of directors: one appointed by UMWA, who is Tony Boyle; one appointed by the coal operators; and one public member, Josephine Roach, formerly a coal operator. Coverage under the Welfare Fund embraces members of UMWA locals, pensioners, and their dependents. The Welfare Fund receives its income from royalties per ton contributed mainly by coal operators under contract with UMWA. As earlier indicated, the Welfare Fund paid the Foundation for services in 1969 the amount of $336,534. It separately pays a medical group for professional services to patients of the Foundation's clinics, and the medical group reimburses the Foundation for use of the facilities. D. District 50 The parties stipulated to the following language taken from the Centerville case: 12 District 50 was born in 1935-1936 as an integral part of UMWA. It continued in that form until 1961 when it was organized into an international union in its own right and in that capacity it then entered into an affiliation agreement with UMWA. This relationship continued unchanged until February or March 1968 when a dispute, the nature of which does not appear in this record, arose between District 50 and UMWA.13 Since March 1961, the Foundation has had a succession OEO, added in September 1969 and September 1970, are three housewives and a farmer 9 Among the remaining trustees are Attorney Cooper; and "attorney's assistant"; five housewives , a farmer, an optician, a stockbroker, and a professor 10 On July I I and September 12, 1970, the board was expanded by six trustees, none of whom is a UMWA representative. 11 Marsh was formerly an officer of a local union in UMWA, as of early 1969 12 181 NLRB No 23 (TXD) 13 Footnote as quoted from Centerville "Counsel for UMWA indicated that the dispute is currently the subject of litigation in the courts " 64 DECISIONS OF NATIONAL LABOR RELATIONS BOARD of contracts with District 50 covering employees at the three locations of its clinics.14 The last contract was effective from February I through October 31, 1970. After the contract's expiration, the Foundation ceased further recognition of District 50. On August 20, District 6 of UMWA filed a representation petition with the Board 15 for the same employees.[, E. District 6 of UM WA The aforementioned petition was signed by Williams, president of District 6, on behalf of UMWA, bearing an address in Washington, D.C. The close coordination of Williams and District 6 with International President Tony Boyle and UMWA has already been described, above. In addition, there are three International representatives, Peter Phillippi, Rudolph Vitter, and Thomas Starks, who are assigned to District 6 and work under Williams' direction. The latter are also members of the Foundation's board of trustees. Two other trustees, Steve Kubic and Rodney Hatten, are also officials of District 6. UMWA engaged in organizational work through District 6 and other similar districts. As stipulated, District 6 is an "arm" of UMWA. From April to August 1970, employees of the Foundation were solicited to sign authorization cards designating District 6, International UMWA.17 Under the direction and supervision of President Williams of District 6, the solicitations were conducted by John Pollack and Henry Prime, field representatives. Executive Director Goldstein was aware that these solicitations by UMWA were taking place. He reported such information and the "question of representation" to the Foundation's board of trustees.18 F. Concluding Findings From the foregoing evidence, it is clear beyond question that UMWA, by reason of an inherent conflict of interest in its relations with the Foundation, is not competent under the Act to represent any of the Foundation's employees.19 The principle has been long and well established that employees have the right to be represented in collective bargaining by a union which has the single-minded purpose 14 The unit consisted of approximately 50 employees at Bellaire, 10-12 employees at Powhatan Point , and 12- I5 employees at Harrisville Is Case 8-RC-7955. The petition is held in abeyance 16 Maintenance , housekeeping, and office clerical employees , nurses, technicians, and nursing aides. 17 It was stipulated that the solicitations were for membership in the International as well is Goldstein testified that it is so reflected in the minutes of the board of trustees 19 Such a conflict, disabling the Union's representative capacity, has arisen in a variety of situations, as for example - Bausch & Lomb Optical Company, 108 NLRB 1555 (where the union owned a concern , in the same city, which was a competitor of the employer whose employees it claimed to represent), Welfare and Pension Funds, 178 NLRB No 3 (where the union petitioned to represent employees of a welfare and pension fund administered for the benefit of members of its sister locals - in view of the allegiances of the petitioning union with parent labor organizations which support the employer); General Teamsters, etc, Local 249, 139 NLRB 605, and Seafarers International Union of North America, 138 NLRB 1142 (where the union sought to represent employees of a sister union within the of protecting and advancing their interests vis-a-vis the employer and there must be no ulterior purpose.20 Where the union has direct and immediate allegiances which can fairly be said to conflict with its function of protecting and advancing the interests of the employees it represents, it cannot be a proper representative.21 On its part, the employer is under a duty to refrain from any action which would interfere with the employees' right to have such a representative and which would "place him even in slight degree on both sides of the bargaining table." 22 To establish such a disabling conflict of interests, it is quite clear from the cases that the union or the employer need not have effective domination or control of the other, but merely that there exist the potential of a conflict or a "proximate danger of infection of the bargaining process." 23 Here, such a finding is amply supported alone by the evidence of UMWA's substantial membership on the board of trustees, which has the ultimate power of decision over the policies and operations of the Founda- tion. An added significant factor is the Foundation's heavy reliance for its revenue upon the Welfare Fund - "which throughout its history has been closely associated" with UMWA.24 For UMWA to be recognized by the Founda- tion as bargaining representative of its employees would, in a substantive sense, enable UMWA to sit on both sides of the bargaining table. Certainly there exists an actual or potential interest by UMWA in the well being of the Foundation, such as to keep the Foundation's expenses at a minimum, and to withhold a strike which it might otherwise deem necessary to achieve its proper bargaining aims on behalf of the Foundation's employees. Thus, I conclude that the existence of UMWA's dual role gives rise to an innate or proximate danger of infecting the collective- bargaining process and legally debars UMWA at any time under these conditions from representing the Foundation's employees. The above finding of a conflict of interests, while a material consideration, does not resolve the immediate question of the Foundation's responsibility for UMWA's organizing activities. On this issue, it is necessary to examine more closely the extent of UMWA's control of the affairs of the Foundation and of the Foundation's involvement in UMWA's solicitation of the employees. It may be found, as background, that UMWA was instrumental in establishing the Foundation in 1958. And in same international or other parent body), Oregon Teamsters' Security Plan Office, 119 NLRB 207 (where the union sought to represent units of its own employees, and those of a "Security Fund," which is controlled by trustees of various trust funds established under contracts between Teamster locals and employers), Centerville Clinics, Incorporated, 181 NLRB No 23 (where the UMWA was the contractual representative of employees of the Clinic, which existed to serve members of UMWA, which heavily relied for its revenue on the Welfare Fund closely associated with UMWA, which was dominated in its board of directors by agents of UMWA and affiliates, and whose contract with UMWA was negotiated by UMWA officials sitting on both sides of the bargaining table) 20 E.g, Bausch & Lomb Optical Company, 108 NLRB 1555, 1559, Oregon Teamsters' Security Plan Office, 119 NLRB 207,211-212; Seafarers international Union of North America, 138 NLRB 1142, 1151, Welfare and Pension Funds, 178 NLRB No. 3 21 E g, General7eamsters, etc, Local 249, 139 NLRB 605, 607 22 Nassau and Suffolk Contractors' Association, Inc, 118 NLRB 174, 187. 23 E g., N.L R B v David Buttrick Company, 399 F 2d 505, 508 (C.A. 1). 24 Centerville Clinics, Incorporated, 181 NLRB No. 23 (TXD) MEDICAL FOUNDATION OF BELLAIRE a large measure , financial support for the Foundation has come from the Welfare Fund. From the Foundation's inception until July 1970, UMWA maintained a substantial majority of members on the board of trustees. Particular note is taken that UMWA's organizing campaign com- menced about April 1970. On July 11 and September 12, 1970, the board of trustees was expanded by six additional members, none of whom is directly connected with UMWA. However, UMWA continues to control 16 members, including the Foundation's president, out of 34 presently on the board of trustees. It is also observed that District 6 of UMWA, immediately responsible for the organizing drive at the Foundation, has had six officials, including its president, on the board of trustees. As virtually conceded, I find that District 6 is not independent or severable from UMWA for purposes of this proceeding. While in the circumstances knowledge can be imputed to the Foundation that UMWA was engaged in organizing its employees, there is direct evidence that Executive Director Goldstein brought up and discussed this "question of representation" with the board of trustees. It is enough on these facts to conclude that the Foundation's board of trustees tacitly approved or acquiesced in the organizing campaign of UMWA.25 The Foundation and UMWA were, presumably, aware of the legal problem that they were mutually affected by a conflict of interests. District 50 was then the recognized representative of the Foundation's employees under a contract expiring October 31, 1970. Since March 1968, a dispute of national scope has existed between UMWA and District 50. There is no evidence of any specific basis for dissatisfaction by any of the employees with the representa- tion by District 50 or that on their own initiative they undertook the campaign to transfer allegiance to UMWA during the contract term. It is fairly inferable that UMWA, involved as it is in the business of the Foundation, precipitated the effort to oust District 50 from its long-held status of bargaining agent for these employees. The employees too were undoubtedly aware of UMWA's powers by virtue of its role on the board of trustees. It cannot be regarded that, in signing authorization cards for the solicitors of UMWA, the employees had the complete and unhampered freedom of choice which the Act contemplates. As an appropriate consideration, 26 it is further found that the Foundation's employees could reasonably believe that UMWA's solicitors were acting for and on behalf of the Foundation.27 Accordingly, upon the entire record, I find that Respondent is legally responsible for UMWA's organiza- tional activities among its employees, and that it has rendered unlawful assistance and support to UMWA in violation of Section 8(a)(2), as alleged.28 25 Cf, Nassau and Suffolk Contractors' Association, Inc, 118 NLRB 174, 187 28 The question here of the Foundation's responsibility for the campaign solicitations is, of course , not determinative on the basis of strict rules of agency E g , Sec 2(13) IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE 65 The activities of Respondent set forth in section III, above, occurring in connection with the operations of Respondent described in section I, above, have a close, intimate, and substantial relation to trade, traffic, and commerce among the several States, and tend to lead to labor disputes burdening and obstructing commerce and the free flow of commerce. It has been found that Respondent Foundation rendered unlawful assistance and support to UMWA in its organizing campaign among the Foundation's employees. And it has been found, inter aka, by reason of the substantial control over the Foundation's policies and operations actually or potentially residing in UMWA, that the Foundation and UMWA are involved in an inherent conflict of interests which debars UMWA at any time under these conditions from acting as an appropriate bargaining representative of the Foundation's employees. Unlike the facts in the Centerville case, Respondent has not recognized UMWA as bargaining agent, although it refused continued recognition to District 50 after the expiration of its contract. Nevertheless, in my opinion there is a substantial possibility that UMWA will persist in, or at a future time will revive, its efforts to organize Foundation's employees and exert pressure on the Foundation for recognition, despite UMWA's representative disability. I shall therefore recommend in the cease and desist order that Respondent refrain from assisting and supporting UMWA in its soliciting and organizing activities and also from recognizing and dealing with UMWA as representa- tive of the Foundation's employees. Upon the basis of the foregoing findings of fact, and upon the entire record in the case, I make the following: CONCLUSIONS OF LAW 1. Respondent is an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act. 2. UMWA and District 50 are labor organizations within the meaning of Section 2(5) of the Act. 3. By the conduct described in section III, above, the Respondent has rendered unlawful assistance and support to UMWA and thereby has engaged in and is engaging in unfair labor practices within the meaning of Section 8(a)(2) of the Act. 4. By the foregoing conduct interfering with, restrain- ing, and coercing employees in the exercise of their rights guaranteed in Section 7 of the Act, Respondent has engaged in and is engaging in unfair labor practices within the meaning of Section 8(a)(1) of the Act. 5. The aforesaid unfair labor practices are unfair labor practices affecting commerce within the meaning of Section 2(6) and (7) of the Act. Upon the above findings of fact, conclusions of law, and 27 International Association of Machinists, et al. v N.L.R.B, 311 U.S. 72, 80 28 Centerville Clinics, Incorporated, supra 66 DECISIONS OF NATIONAL LABOR RELATIONS BOARD the entire record in the case, and pursuant to Section 10(c) of the Act, I hereby issue the following recommended. 29 ORDER Respondent, Medical Foundation of Bellaire, Powhatan Point, and Harrisville, Ohio, its officers, agents, successors, and assigns, shall: 1. Cease and desist from: (a) Rendering assistance or support to UMWA or its District 6 or other subordinate body in its organizing activities among Respondent's employees, including the soliciting, passing, or receiving membership applications, or in any other manner requesting such employees to join or support UMWA as a bargaining agent. (b) Recognizing or dealing with UMWA or any of its subordinate organizations as the representative of Respon- dent's employees. (c) In any like or related manner interfering with, restraining, or coercing employees in the exercise of the rights guaranteed in Section 7 of the Act. 2. Take the following affirmative action designed to effectuate the policies of the Act: (a) Post at its Bellaire, Powhatan Point, and Harrisville, Ohio, facilities copies of the attached notice "Appendix."30 Copies of said notice, on forms provided by the Regional Director for Region 8, shall, after being duly signed by Respondent, be posted immediately upon receipt thereof, in conspicuous places, and be maintained for a period of 60 consecutive days. Reasonable steps shall be taken to insure that said notices are not altered, defaced, or covered by any other material. (b) Notify the Regional Director for Region 8, in writing, within 20 days from the date of this Trial Examiner's Decision, what steps the Respondent has taken to comply herewith.31 29 In the event no exceptions are filed as provided by Section 102 46 of the Rules and Regulations of the National Labor Relations Board, the findings, conclusions, and recommended Order herein shall, as provided in Section 102 48 of the Rules and Regulations , be adopted by the Board and become its findings, conclusions, and order, and all objections thereto shall be deemed waived for all purposes 30 In the event that the Board 's Order is enforced by a Judgment of a United States Court of Appeals, the words in the notice reading "Posted by Order of the National Labor Relations Board" shall be changed to read "Posted Pursuant to a Judgment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board." 31 In the event that this recommended Order is adopted by the Board after exceptions have been filed, this provision shall be modified to read- "Notify the Regional Director for Region 26, in wnting, within 20 days from the date of this Order, what steps the Respondent has taken to comply herewith." APPENDIX NOTICE TO EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government WE WILL NOT assist or support United Mine Workers of America or its Distnct 6 or other subordinate body in its organizing activities among our employees , including the soliciting, passing, or receiving membership applica- tions in any form. WE WILL NOT recognize or deal with United Mine Workers of America or its Distnct 6 or any subordinate body as the representative of our employees. WE WILL NOT in any similar manner interfere with, restrain, or coerce our employees in the exercise of the rights guaranteed in the National Labor Relations Act. MEDICAL FOUNDATION OF BELLAIRE (Employer) Dated By (Representative ) (Title) This is an official notice and must not be defaced by anyone. This notice must remain posted for 60 consecutive days from the date of posting and must not be altered, defaced, or covered by any other material. Any questions concerning this notice or compliance with its provisions, may be directed to the Board's Office, 1695 Federal Office Building, 1240 East 9th Street, Cleveland, Ohio 44199, Telephone 216-522-3715.