Rego Park Nursing Home

REGO PARK NURSING HOME Rego Park Nursing Home and Local 1115, Joint Board, Nursing Home and Hospital Employees Division Van Doren Nursing Home and Local 1115, Joint Board, Nursing Home and Hospital Employees Division. Cases 29-CA-5029 and 29-CA-5030 July 11, 1977 DECISION AND ORDER BY CHAIRMAN FANNING AND MEMBERS PENELLO AND MURPHY On March 10, 1977, Administrative Law Judge Sidney J. Barban issued the attached Decision in this proceeding. Thereafter, Respondent Rego Park and Respondent Van Doren filed exceptions and sup- porting briefs. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the National Labor Relations Board has delegated its authority in this proceeding to a three-member panel. The Board has considered the record and the attached Decision in light of the exceptions and briefs and has decided to affirm the rulings, find- ings,' and conclusions 2 of the Administrative Law Judge and to adopt his recommended Order. 3 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 Administrative Law Judge and hereby orders that the Respondents, Rego Park Nursing Home and Van Doren Nursing Home, Rego Park, New York, their respective officers, agents, successors, and assigns, shall take the action set forth in said recommended Order, except that the attached notices shall be substituted for the one of the Administrative Law Judge. In the final paragraph of sec. B, of his Decision, the Administrative Law Judge found that Respondent Rego Park asserted that during contract negotiations the parties had an implicit understanding that the contractually agreed-upon wages were contingent upon reimbursement by the State and that Rego Park's failure to pay the wage increases was excused by the general savings clause contained in the contract. Respondent Van Doren was in fact the proponent of these contentions, whereas Respondent Rego Park took the position that no such agreement was contemplated during contract negotiations. The Administrative Law Judge also found, at fn. I of his Decision, that Respondents requested that the transcript of the hearing in Nassau County Health Facilities, er al., Cases 20-CA-4797, etc., be made part of the instant record. The record establishes. however. that Respondent Rego Park agreed only to receipt of "the testimony of one witness [George Meitchl in that transcript." As the Administrative Law Judge found no implicit understanding was evidenced by the record in Nassau and that the general savings clause of the contract is not applicable to the circumstances herein. we find that Respondent Rego Park was not prejudiced by the foregoing inadvertent errors. 230 NLRB No. 105 2 No party contends that the individuals in the unit composed of "all nursing supervisors, excluding the Director of Nursing, Licensed Practical Nurses, Registered Nurses, Administrator. Assistant Administrators. office clerical, confidential employees, service maintenance employees, watchmen and guards." found appropriate by the Administrative Law Judge. are supervisors within the meaning of Sec. 2(11) of the Act. 3 The contracts in these cases cover, inter alia, separate units of licensed practical nurses. Although Member Penello ordinarily does not find a licensed practical nurses unit appropriate, he agrees with and abides by the Board's reluctance to disturb bargaining units in the health care industry which have been mutually agreed upon by the parties so long as such units do not contravene the Act or established Board policy. Si. Joseph Hospital & Medical Center, et al., 219 NLRB 892, 893 (1975); Valley Hospital. lid., 220 NLRB 1335, 1343(1975). APPENDIX A NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government WE WILL NOT, unilaterally and without consent of Local 1115, Joint Board, Nursing Home and Hospital Employees Division, fail and refuse to pay or provide wage increases due you under our collective-bargaining contracts with the Union or otherwise unilaterally modify the provisions of such contracts during the term of the contracts. WE WILL NOT in any other manner interfere with, restrain, or coerce you in the exercise of your rights under Section 7 of the National Labor Relations Act. WE WILL honor and give retroactive effect to the terms and conditions of our contracts with the Union, including provisions providing for em- ployees wage increases from and after May 1, 1976, and WE WILL give to each of you the pay that you lost because we did not pay you the wage increases due under the contracts with the Union, with interest on the amount of that backpay. VAN DOREN NURSING HOME APPENDIX B NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government WE WILL NOT, unilaterally and without consent of Local 1115, Joint Board, Nursing Home and Hospital Employees Division, fail and refuse to pay or provide wage increases due you under our collective-bargaining contracts with the Union or otherwise unilaterally modify the provisions of such contracts during the term of the contracts. WE WILL NOT in any other manner interfere with, restrain, or coerce you in the exercise of 725 DECISIONS OF NATIONAL LABOR RELATIONS BOARD your rights under Section 7 of the National Labor Relations Act. WE WILL honor and give retroactive effect to the terms and conditions of our contracts with the Union, including provisions providing for em- ployee wage increases from and after May 1, 1976, and WE WILL give to each of you the pay that you lost because we did not pay you the wage increases due under the contracts with the Union, with interest on the amount of that backpay. REGO PARK NURSING HOME DECISION STATEMENT OF THE CASE SIDNEY J. BARBAN, Administrative Law Judge: This matter was heard at Brooklyn, New York, on September 27, 1976, upon an Order consolidating cases and a consolidated complaint issued on June 30, 1976, based upon charges filed on May 28, 1976, by the above-named Charging Party (herein the "Union") against the above- named Respondents. The complaint alleges that each above-named Respondent in May 1976 notified the Union that it would be unable to pay wage increases provided in collective-bargaining agreements with the Union, and since that time has failed and refused to pay such wage increases in violation of Section 8(a)(5) and (1) of the Act. The answer of each Respondent denies the commission of unfair labor practices, but admits allegations of the complaint sufficient to justify the assertion of jurisdiction under current standards of the Board (each Respondent, engaged in the operation of a nursing home in New York State, during a recent annual period, in which it received revenues in excess of $100,000, caused to be transported and delivered to its nursing home operation goods and materials valued in excess of $50,000 directly from outside the State of New York), and to support a finding that the Union is a labor organization within the meaning of the Act. Upon the entire record in this case,' from observation of the witnesses, and after due consideration of the briefs filed by Respondent Rego Park Nursing Home (herein "Rego Park") and by Respondent Van Doren Nursing Home (herein "Van Doren") and the Union (the General Counsel did not file a brief), I make the following: I Upon the request of Respondents, and with the agreement of the General Counsel and the Union, the transcript of hearing before Adminis- trative Law Judge Herzel H. E. Plaine in Nassau County Health Facilities Association, Inc., et a., Cases 29-CA-4797, etc., was made a part of this record (referred to herein as "the Nassau record"). 2 A number of similar cases involving similar issues arising out of the same governmental action have previously been heard before other Administrative Law Judges. See, e.g., Nassau County Health Facilities Association, Inc., etaL., 227 NLRB 1680(1977). I The separate contracts cover the following units of employees: a. all employees excluding registered nurses, licensed practical nurses, confidential, office and clencal employees, supervisors, watch- men and guards. (This is referred to as the "blue collar' unit.) FINDINGS AND CONCLUSIONS A. The Alleged Unfair Labor Practices The issues in this case arise from a decision by the appropriate authorities of the State of New York to "freeze" medicaid payments to nursing homes in 1976 in that state at 1975 levels.2 Medicaid patients-that is, patients whose entire payments to the nursing home for care are derived from Medicaid payments made by Federal, state, and local governments-comprise the overwhelming majority of patients in each of the nursing homes operated by each Respondent. The amounts of Medicaid payments which will be made to such nursing homes for the year is determined by an agency of the State of New York normally in the preceding year. In the past appeals were also allowed for additional costs-apparently mainly labor costs-for which the nursing homes might become obligated. In 1975, in order to control the costs of such Medicaid payments, the State of New York advised that payments to nursing homes would be made during 1976 and for a specified period thereafter at the 1975 level, and no appeals, such as had in the past been permitted, would be entertained. Prior to the decision of the State in 1975 to freeze the payment levels of the nursing homes, Rego Park and Van Doren had each entered into four separate bargaining agreements with the Union,3 each of which required the employer to give the covered employees certain wage increases on certain dates in January and September 1975, and in May 1976. Each Respondent failed and refused to pay the wage increases by the several contracts in May 1976.4 Rego Park, and I assume Van Doren, sought to secure the Union's assent to their withholding such wage increases until such time as the nursing homes were able to secure increased Medicaid payments from the State to cover their increased costs, but the Union refused to agree to such course of action. B. Respondent's Defenses It is first argued that Respondents' actions constitute a breach of contract which is not an unfair labor practice under the Act. Secondly, it is contended that since Respondents are forbidden by law to turn away patients merely because they are covered by Medicaid (and thus have an overwhelming majority of Medicaid patients), and may not require such patients or their families to pay more than contributed by Medicaid, Respondents cannot pay increased labor costs unless and until it is reimbursed by Medicaid for such costs. It is thus asserted that Respon- b. Licensed Practical Nurses, excluding supervisory employees. c. registered nurses, excluding only the Director of Nursing and Assistant Director of Nursing. d. nursing supervisors excluding the Director of Nursing, Licensed Practical Nurses, Registered Nurses, Administrators, Assistant Admin- istrators, office clerical, confidential employees, service maintenance employees, watchmen and guards. 4 The contracts to which Rego Park was a party each required a pay increase on May 1, 1976. The Van Doren contracts each required a pay increase on May I 1, 1976. 726 REGO PARK NURSING HOME dents should be excused from performing their obligation under the contracts to pay wage raises by reason of "impossibility of performance," particularly since this was the direct result of governmental action.5 Rego Park asserts that the Union was well aware of the fact that Respondents' ability to pay the increases agreed upon was contingent upon the State's absorbing the increased costs as it had done in the past,6 and argues that, although the Union refused to incorporate a specific clause in the contract recognizing that contingency, Respondents' failure and refusal to pay the wage increases set forth in the contracts was excused by the general savings clause contained in the contracts, as follows: In the event that any portion of this Agreement is invalidated by the passage of legislation or a decision of a court or government agency of competent jurisdiction, such invalidation shall apply only to that portion thus invalidated and all remaining portions of this Agree- ment shall remain in full force and effect.... [emphasis as in Rego Park brief]. C. Analysis and Conclusions In Nassau County Health Facilities, supra, Administrative Law Judge Plaine held, with Board approval: An employer acts in derogation of his bargaining obligation under Section 8(d) of the Act, which was designed to stabilize during a contract term agreed- upon conditions of employment, and hence violates Section 8(a)(5) [of the Act], when without consent of the union, he modifies terms and conditions of employment contained in a contract between the employer and the union, or otherwise repudiates his undertakings under the contract before the term of the contract has run its course-and this even though he has previously offered to bargain with the union on the subject and the union has refused. The fact that the unfair labor practice is also a breach of contract for which the injured party might have another remedy, such as a suit for damages under Section 301 of the Act, does not displace the authority of the Board to deal with and remedy the unfair labor practice. In the same decision, and again with Board approval, Administrative Law Judge Plaine held that the record in that case (which was included in the present record) did not support a claim that there was an implicit understand- ing by the Union that the contractually agreed wage raises were contingent upon reimbursement by the State. I find nothing to the contrary in the instant record. 5 Rego Park adduced evidence that it was unable to secure bank loans during this period presumably for the purpose of paying the contract wage increases. F Testimony in the Nassau record shows that when the Union was asked in negotiations to agree to a protective clause that would excuse the employers from paying wage increases if the State failed to reimburse the employers. the Union, inter aha, deprecated the employers' concern, saying, "IY] ou have always gotten your labor increases from the State Health Department in the past and why should it suddenly change now?" Lastly, the Board, in the Nassau decision confirmed its previous decision in Oak Cliff - Golman Baking Company, 207 NLRB 1063 (1973), that asserted financial necessity is not a defense that excuses the unilateral repudiation of wage provisions in a collective-bargaining contract.7 I also find without merit the contention that Respon- dents' actions here were excused by the general savings clauses in the contracts. The record as a whole, and the language of the clause, make it clear that this provision has no application to the circumstances involved in the present case. On the basis of the above and the record considered as a whole, I find that Respondents, and each of them, by refusing and failing to pay the wage increases required by their collective-bargaining contracts with the Union, without the consent of the Union, acted in derogation of their obligation to recognize and bargain with the Union within the meaning of the Act and thus violated Section 8(a)(5) and (1) of the Act. CONCLUSIONS OF LAW 1. Respondent Rego Park Nursing Home and Respon- dent Van Doren Nursing Home are each an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act. 2. Local 1115, Joint Board, Nursing Home and Hospi- tal Employees Division is a labor organization within the meaning of Section 2(5) of the Act, which at all times material herein has been the exclusive bargaining represen- tative of the employees in each of the bargaining units set forth hereinbelow, within the meaning of Section 9(a) of the Act. 3. The following employees of Respondent Van Doren Nursing Home and of Respondent Rego Park Nursing Home each constitute an appropriate unit for the purposes of collective bargaining within of Section 9(b) of the Act: (a) All employees, excluding registered nurses, licensed nurses, confidential, office and clerical employees, supervi- sors, watchmen and guards. (b) All licensed practical nurses, excluding supervisory employees. (c) All registered nurses, excluding only the director of nursing and assistant director of nursing. (d) All nursing supervisors, excluding the director of nursing, licensed practical nurses, registered nurses, admin- istrators, assistant administrators, office clerical, confiden- tial employees, service maintenance employees, watchmen, and guards. 3. By refusing to honor and by repudiating the wage increases due employees in the units set forth hereinabove commencing in May 1976 under collective-bargaining contracts with the Union, Respondents, and each of them, have unilaterally and without consent of the Union modified the contracts in midterm, in derogation of 7 See also N.LR.B. v. Star Publishing Co., 97 F.2d 465, at 470, where the court said of an argument that the employer's unfair labor practice should be excused by business necessity: "We think, however, the act is controlling. The act prohibits unfair labor practices in all cases. It permits no immunity because the employer may think that the exigencies of the moment require infraction of the statute. In fact, nothing in the statute permits or justifies its violation by the employer." 727 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Respondents' bargaining obligations, and the obligation of each of them, under Section 8(d) of the Act, thereby engaging in unfair labor practices in violation of Section 8(a)(5) of the Act, which unfair labor practices affect commerce within the meaning of Section 2(6) and (7) of the Act. The Remedy It having been found that Respondents have engaged in certain unfair labor practices, it will be recommended that Respondents cease and desist therefrom and take certain affirmative action designed to effectuate the purposes of the Act. It having been found that each Respondent in derogation of their statutory obligation unilaterally failed and refused to pay or provide wage increases to employees as required by collective-bargaining agreements then in effect, it will be recommended that each Respondent honor and give retroactive effect to the terms and conditions of their collective-bargaining contracts with the Union, including but not limited to the provisions relating to increases in wages and that each make their employees whole for losses suffered by reason of the failure to honor and apply the provisions of such contracts during and since the month of May 1976, with interest at 6 percent per annum as provided in Isis Plumbing & Heating Co., 138 NLRB 716 (1962). It is argued that in the circumstances of this case effectuation of the remedy set forth above should be deferred until the State of New York has determined adjusted Medicaid rates for 1976 and thereafter, or that the parties be directed to bargain on the issues. The parties, of course, are always free to bargain out their problems, and to suggest to the Board that their agreement be accepted in compliance with the Board's Order. To defer the effectua- tion of the Order recommended, however, without the consent of all the parties, would, in effect, constitute a modification of the bargaining agreements by Board action, which is beyond our authority. See United Steel- workers of America, AFL-CIO [H. K Porter Co., Inc.] v. N.L.R.B., 397 U.S. 99 (1970). As found in Nassau County Health Facilities Assn., supra, inasmuch as Respondents' actions violated fundamental employee rights guaranteed by the Act and were destruc- tive of the basic purposes of the Act, it will be recommend- ed that Respondents cease and desist from infringing in any manner upon the rights guaranteed in the Act. Upon the foreging findings of fact, conclusions of law, and the entire record, and pursuant to Section 10(c) of the Act, I hereby issue the following recommended: n In the event no exceptions are filed as provided by Sec. 102.46 of the Rules and Regulations of the National Labor Relations Board, the findings, conclusions, and recommended Order herein shall, as provided in Sec. 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. I In the event the Board's Order is enforced by a Judgment of the United ORDER 8 The Respondents, Rego Park Nursing Home and Van Doren Nursing Home, Rego Park, New York, their officers, agents, successors, and assigns, shall: 1. Cease and desist from: (a) Unilaterally, and without consent of the Union, failing and refusing to pay or provide increases in wages or other benefits due employees under collective-bargaining contracts between such Respondent and the Union or otherwise unilaterally modifying the provisions of such contracts during the term of the contracts. (b) In any other manner interfering with, restraining, or coercing employees in the exercise of their rights guaran- teed in Section 7 of the Act. 2. Take the following affirmative action which will effectuate the policies of the Act: (a) Honor and give retroactive effect from and including May 1, 1976, to the terms and conditions of their collective- bargaining contracts with the Union, including but not limited to the provisions relating to increases in wages, and make their employees whole for the losses in pay or other benefits incurred by each employee as a result of Respon- dents' failure to honor and apply the provisions of such contracts in the manner set forth in the section of this Decision entitled "The Remedy." (b) Preserve and, upon request, make available to the Board and its agents, for examination and copying, all payroll records, social security payment records, timecards, personnel records and reports, and all other records necessary to ascertain the backpay and other redress due under the terms of this Order. (c) Post in each of Respondents' nursing homes and health related facilities covered by collective-bargaining agreements with the Union copies of the attached notice marked Appendix." 9 Copies of said notice, on forms provided by the Regional Director for Region 29,10 after being duly signed by an authorized representative of the respective Respondent, shall be posted by such Respon- dent immediately upon receipt thereof, and be maintained by it for 60 consecutive days thereafter, in conspicuous places, including all places where notices to employees are customarily posted. Reasonable steps shall be taken by Respondent to insure that said notices are not altered, defaced, or covered by any other material. (d) Notify the Regional Director for Region 29, in writing, within 20 days from the date of this Order, what steps such Respondent has taken to comply herewith. States Court of Appeals, the words in the notice reading "Posted by Order of the National Labor Relations Board" shall read "Posted Pursuant to a Judgment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board." '0 The Regional Director shall insert the respective Respondent's name at the appropriate place on said notice. 728