Manor Healthcare Corp.

224 MANOR HEALTHCARE CORP. Manor Healthcare Corp. and Professional and Health Care Division, United Food and Com- mercial Workers Union, Local 27, AFL-CIO, Petitioner. Case 5-RC-11974 6 August 1987 DECISION ON REVIEW BY CHAIRMAN DOTSON AND MEMBERS JOHANSEN, BABSON, STEPHENS, AND CRACRAFT On 20 May 1983 the Acting Regional Director for Region 5 issued a Decision and Direction of Election in this proceeding in which he found ap- propriate for the purposes of collective bargaining a unit consisting of certain employees employed by the Employer at its Rossville, Maryland convales- cent home. The Employer filed a request for review, contending that the smallest appropriate unit included employees employed at all three of its Baltimore-area convalescent homes, including those located in Rossville, Towson, and Ruxton, Maryland. By telegraphic order dated 12 July 1983, the Board granted the request for review. The issue before us in this case is the test to be applied in determining the appropriateness of a single-facility bargaining unit in the health care in- dustry where the employer operates more than one facility. In St. Francis Hospital, 271 NLRB 948 (1984) (St. Francis II) the Board adopted a "dispari- ty of interests" standard for determining appropri- ate units when the issue is the separate representa- tion of employees in different job classifications within a single health care facility. The standard we adopted there was a response to the views of several courts which had reviewed the Board's pre- vious attempts to conform its traditional standards for unit determination to Congress' concern with preventing proliferation of units in the health care industry, a concern that is reflected in the legisla- tive history of the 1974 amendments to the Act.l i Recently, the District of Columbia Circuit remanded that case to us because the court was of the view that we had erroneously found that the "disparity" test was mandated by the statute Electrical Workers IBEW Local 474 v NLRB (St Francis Hospital), 124 LRRM 2993 (D C Cir 1987) The court also suggested that we, and most of the other courts of appeals, had improperly relied on comments in the legislative history concerning the need to avoid undue proliferation as if those com- ments constituted independent sources of law Id at 3007-3008 Follow- ing that remand, we granted review and heard oral argument in St Vin- cent Hospital, 19-RC-11496, on the question of what we should apply in determining units within health care facilities Those cases are still under consideration, and nothing we say in this case will affect what we ulti- mately hold in those cases For the reasons stated below, we would find a rebuttable presumption of single-facility appropriateness proper in the health care industry regardless of what test we ultimately choose for de- termining units within a single facility and regardless of whether we accept or reject the District of Columbia Circuit's analysis regarding the weight to be accorded the remarks on proliferation in the legislative his- tory In contrast to its position on questions of sepa- rate representation of employees in different job classifications, the Board has continued to apply a rebuttable presumption that single-facility units are appropriate in the health care industry. Samaritan Health Services, 238 NLRB 629, 632 (1978); Nation- al G. South, 230 NLRB 976, 978 fn. 5 (1977). The only two courts that have reviewed the Board's ex- isting doctrine since the 1974 amendments, howev- er, have rejected it. In Presbyterian/St. Luke's Med- ical Center v. NLRB, 653 F.2d 450, 455 (10th Cir. 1981), the Tenth Circuit held that when the issue is the appropriateness of either one or more of a health care employer's facilities the factors that the Board traditionally considers must be balanced against the public interest in preventing fragmenta- tion, and that the Board must specify the manner in which its unit determination implements or reflects Congress' admonition that due consideration be given to preventing proliferation.2 The Second Circuit, in Long Island Jewish-Hillside Medical Center Y. NLRB, 685 F.2d 29 (1982), approved the Tenth Circuit's holding in this regard and noted that, although congressional discussion of unit pro- liferation focused on the types of employees to be included in a bargaining unit rather than on ques- tions of appropriateness of a single facility: [W]e do not believe that Congress would permit its general policy goals to be under- mined through fragmentation of the scope of bargaining units at multi-facility health care in- stitutions. Whether a large number of bargain- ing units results from decisions as to scope or composition, fragmentation is likely to produce disruption of health care services, inefficient bargaining with labor organizations, whipsaw- ing and resultant increases in health care costs. 685 F.2d at 33-34. We believe the Board's traditional approach to be correct. What we glean from the courts' rejec- tion, however, is that the Board has explained its position in a manner that invites the criticism that it has ignored or evaded the congressional intent. The difficulty lies in certain language in a footnote of our decision in National G. South, supra.3 The Board was responding there to the employer's ar- gument that the congressional charge to prevent undue proliferation rendered inappropriate a unit of nursing home employees working in a single facili- 2 The Tenth Circuit also held that the Board's use of a presumption, which the employer must rebut to avoid unfair labor practice liability, violated the mandate of Sec 301 of the Federal Rules of Evidence How- ever, the court has since withdrawn from that position Beth Israel Hospi tal v NLRB, 688 F 2d 697 (10th Cir 1982) (en banc) 8 230 NLRB at 978 fn 5 285 NLRB No. 31 MANOR HEALTHCARE CORP. 225 ty of a multifacility operation. The Board found that argument unpersuasive based on its reading of the legislative history as applied to the unit ques- tion before it. First, the Board observed that the proliferation of units to which the relevant com- ments in the legislative history were directed was the fragmentation of employee occupational groups within a single facility. With this observation we agree unreservedly. The Board's further articula- tion of its rationale, however, has been interpreted, perhaps not unfairly, as a general rejection of the applicability of the antiproliferation policy to ques- tions of single as opposed to multifacility units (ibid.): In the present instance we are concerned . . . with unit scope, that is, the consideration of whether the appropriate unit of employees is to comprise the employees at a single facility or at several. Congressional intent regarding undue proliferation of bargaining units has no bearing on this issue because jurisdictional dis- putes and work stoppages at one facility would hardly interfere with the operation at other facilities of a single employer. We reaf- firm prior policy that in chain operations, in- cluding health care facilities, single-facility units are presumed appropriate. In this case the Employer has presented insufficient evi- dence to rebut this presumption. In reaffirming once again the validity of this re- buttable presumption, and the National G. South ra- tionale in general, we do not intend to foreclose consideration of the congressional policy discussed above. We only decide, for the reasons set forth more fully below, that consideration of the con- gressional policy does not warrant a health care in- dustry exception to the single-facility presumption. Rather, as we explain below, the concerns underly- ing the congressional admonition can be fully ad- dressed by careful consideration of any evidence, presented in the employer's rebuttal case, demon- strating that approval of the single-facility unit will threaten the kinds of disruptions to continuity of patient care that Congress sought to prevent. The Board has long held, of course, that a single-facility unit geographically separated from other facilities operated by the same employer is presumptively appropriate for the purpose of col- lective bargaining even though a broader unit might also be appropriate. Dixie Belle Mills, 139 NLRB 629, 631-632 (162); Black & Decker Mfg. Co., 147 NLRB 825 (1964). With court approval, the Board has extended this principle of presump- tive appropriateness to single-facility units in a va- riety of contexts.4 As the Board explained in the context of retail stores (Haag Drug Co., 169 NLRB at 877-878): The [e]mployees in a single retail outlet form a homogeneous, identifiable, and distinct group, physically separated from the employees in other outlets of the chain; they generally per- form related functions under immediate super- vision apart from employees at other locations; and their work functions, though parallel to, are nonetheless separate from the functions of employees in the other outlets, and thus their problems and grievances are peculiarly their own and not necessarily shared with employ- ees in the other outlets. Judicial acceptance of such a presumption has re- flected a recognition that it "accords well with the policy of the Act, embodied in §§ 7 and 9(b), which direct the Board to choose bargaining units that `assure to employees the fullest freedom in ex- ercising the rights guaranteed by this Act."' NLRB v. WesWrn & Southern Life Ins. Co., supra, 391 F.2d at 123. Accord: Sheraton-Kauai Corp. v. NLRB, 429 F.2d 1352, 1354-1355 (9th Cir. 1970). Prior to the 1974 amendments extending cover- age of the Act to nonprofit health .are facilities, the Board had applied its single-facility presump- tion to health care employers. Jackson Manor Nurs- ing Home, 194 NLRB 892, 896 (1972).5 This policy survived in the the Board's postamendment deci- sions. National G. South, supra, was the first in which the Board focused explicitly on the validity of the presumption in light of the congressional ex- pression of concern over proliferation.6 As docu- 4 Security guard service NLRB v J W Mays, Inc, 675 F 2d 442 (2d Cir 1982) Retail merchandising chains Haag Drug Co, 169 NLRB 877- 879 (1968), Magic Pan Inc v. NLRB, 627 F 2d 105 (7th Cir 1980), NLRB v. Sun Drug Co, 359 F 2d 408, 412 (3d Cir 1966), and cases cited Multi- branch banks Banco Credito, 160 NLRB 1504, 1506 (1966), enfd 390 F 2d 110, 111-112 (1st Cir 1968), cert denied 393 U S 832 (1968) Alaska Statebank v NLRB, 653 F 2d 1285 , 1287 (9th Cir 1981) Multiterminal trucking operation Davis Transport, 169 NLRB 557, 561-562 (1968), enfd 433 F 2d 363 (6th Cir 1970) District insurance office Metropolitan Life Insurance Co, 156 NLRB 1408, 14141415 ( 1966), Prudential Insurance Co v NLRB, 529 F 2d 66, 67, 69 (6th Cir 1976), cert denied 425 US 975 (1976), NLRB v Western & Southern Life Insurance Co, 391 F 2d 119 (3d Cir 1968), cert denied 393 U S 978 (1968) 5 Jackson Manor was overruled in part, on an unrelated issue, in Madei- ra Nursing Center, 203 NLRB 323 fn 4 (1973) a In Kaiser Foundation Health Plan, 225 NLRB 409 ( 1976), a majority of the Board found a single-facility unit inappropriate because the em- ployees at that facility did not possess a community of interest separate from that shared by other employees The Board relied on the lack of local autonomy in labor relations matters, the close relationship of the employees with those at other facilities , bargaining history, and the con- gressional admonition against unit proliferation 225 NLRB at 411 and fn. 8 Except for the last, these factors are among those traditionally used in determining whether the single-facility presumption has been overcome Thus, although the decision did not mention the presumption, it did not signify uncertainty regarding the presumption 's applicability as the court suggested in Long Island Jewish, supra, 685 F 2d at 34 226 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD mented there and in St. Francis II, supra, 271 NLRB at 950-951, the legislative history demon- strates that sponsors of the 1974 amendments ex- pressed concern about any proliferation of units that would fragment labor relations, especially so as to make more likely a disruption of health care services or to broaden the impact of any labor dis- pute. Stated concisely by Senator Taft, a principal cosponsor of the nonprofit hospital bill, the con- cern was that "[u]nwarranted unit fragmentation leading to jurisdictional disputes and work stop- pages must be prevented."7 As we noted in National G. South, supra, 230 NLRB at 978 fn. 5, however, the references to unit fragmentation in the legislative history all appeared to relate to fragmentation along employee classifi- cation lines within a particular facility. We referred there to Senator Taft's emphasis on limiting "the number of bargaining units in a health care institu- tion" (emphasis added)." Additional indications that consideration of unit proliferation focused on em- ployee groups within a facility are found in Senator Taft's observation that health care institutiol s were "particularly vulnerable to a multiplicity of bar- gaining units" as a result of "the diversified nature of the medical service provided patients"9 and in Senator Williams' comment that a number of bar- gaining units among nonsupervisory employees might be justified where there is "a notable dispari- ty of interests between employees in different job classifications." 10 We also observe that it is not ° Legislative History of the Coverage of Nonprofit Hospitals Under the National Labor Relations Act at 114 (1974) (Leg. Hist.). As reflected in the quoted excerpt from the Second Circuit's Long Island Jewish deci- sion, supra, Senator Taft also expressed concern that fragmentation of units might result in administrative inefficiencies in bargaining and wage rate "whipsawing": The administrative problems from a practical operational view- point and labor relation viewpoint must be considered by the Board on this issue. Health-care institutions must not be permitted to go the route of other industries, particularly the construction trades, in this regard. In analyzing the issue of bargaining units, the Board should also consider the issue of the cost of medical care. Undue unit prolifera- tion must not be permitted to create wage "leapfrogging" and "whipsawing." The cost of medical care in this country has already skyrocketed,- and costs must be maintained at a reasonable level to permit adequate health care for Americans from all economic sec- tors. The committee, in recognizing these issues with regard to bargain- ing unit determination, took a significant step forward in establishing the factor of public interest to be considered by the Board in unit cases. Leg Hist at 114. Since concerns about "whipsawing" on wages and inefficiencies in bar- gaining are mentioned only in this one speech by Senator Taft, we are not certain that other members of Congress felt the same urgency about them as they did about work stoppages and related matters, which the conference report indicates were seen as potential threats to continuity of patient care. Leg Hist. at 11-13 B Leg. Hhst. at 113-114. 9 Leg. Hist. at 113. 10 Leg Hist at 363 . This comment by Senator Williams is the primary source of the "disparity of interests" test adopted by the Board in St. surprising that the focus was on the effects of nu- merous units within a single patient care facility rather than on the effects of single-facility units in multiple-facility operations, where the facilities may be many miles apart. It is difficult to see how, as a practical matter, we would create a greater risk of the spread of work stoppages or other dis- ruptions from one facility to another than we would by permitting representation only in a multi- facility unit. Indeed, often the broader unit will in- crease the danger that a work stoppage will have an adverse impact on the delivery of health care services in a relevant geographical area-a result Congress could not have intended . ' 1 See Gorman, Basic Text on Labor Law 68 (1976). Nonetheless, we are aware of the seriousness of Congress' concern that in making unit determina- tions we seek to avoid a unit structure that poses a real threat of disruptions to the continuity of pa- tient care through the spread of work stoppages and other adverse effects of labor disputes. We think we can best accommodate this concern with the mandate of Section 9(b) by retaining the single- facility presumption and, in any particular health care industry case, allowing the party opposing such a unit to rebut the presumption by a showing of circumstances that militate against its appropri- ateness, including an increased risk of work disrup- tion or other adverse consequences that the 1974 Congress appears to have wanted to minimize in this industry. Rebuttal on such grounds requires providing a reasonable basis for finding an in- creased risk that is substantial , but not necessarily overwhelming. This approach accords with the Tenth Circuit's direction that the traditional factors be balanced against the public interest in preventing fragmenta- tion and that the Board specify how its unit deter- minations reflect the congressional admonition.12 We respectfully disagree with the view that use of the presumption is inherently inconsistent with such a balancing test or that it impermissibly tips the balance. Thus, as noted above, the courts have had no difficulty in accepting the presumption in cases outside the health care industry. See footnote 4, supra; Beth Israel Hospital v. NLRB, 688 F.2d Francis II, in response to decisions of the Ninth and Tenth Circuits re- jecting the Board's earlier test. 271 NLRB at 952. As explained in fn. 1, above, we need not decide in this case whether we will adhere to that test for determining the appropriateness of units within a health care fa- cility. 11 In this regard, see the 1974 amendments to the Act which provide for the appointment of an impartial Board of Inquiry by the Director of the Federal Mediation and Conciliation Service if a threatened strike or lockout "will . . substantially interrupt the delivery of health care in the locality concerned." 29 U S C. § 183(a) i2 Presbyterian/St Luke's Medical Center P. NLRB, supra, 653 F 2d at 455. MANOR HEALTHCARE CORP. 227 697, 700 (10th Cir. 1982) (en banc), and cases cited there. This presumption means only that a party opposing a particular single-facility unit must show some likelihood of harm to the public interest as in- terpreted by Congress. The presumption we invoke here is substantive, not procedural. Based, as it is, on the Board's expe- rience that a single-facility unit normally is appro- priate for collective bargaining, the presumption is rebuttable, rather than conclusive or per se. Big Y Foods v. NLRB, 651 F.2d 40, 45 (1st Cir. 1981). Further, "appropriateness" being a term of art, no particular quantum of proof or specific factual showing can be said to be necessary for rebuttal, save that the facts presented be relevant to the policies of the Act. To pass muster, the rebuttal factors, like the presumption itself, must be ration- al. Id. at 45-46. Therefore, parties have the oppor- tunity to present any evidence that reasonably tends to show the single-facility unit to be inappro- priate, and the Board must consider the unique cir- cumstances of a particular group of employees before reaching a final determination. A final look backward may provide an additional perspective. For many years the Board viewed retail chain stores differently from other multifaci- lity enterprises. Because of the high degree of cen- tralized administration in that industry, the Board concluded that an appropriate unit must embrace an employer's administrative or geographic area, not just the single facility. However, the Board dis- carded that exception to the single-facility pre- sumption and found, as a general governing princi- ple, that the policy set forth in Section 9(b) out- weighed the factor of centralized administration. This history is set forth in Haag Drug Co., supra, from which the Board's statement concerning the homogeneity of employees in a single retail outlet is quoted above at page 6. Those general observa- tions are as valid for health care employees as for retail employees, and we are unaware of any char- acteristics peculiar to the health care industry which would require us to deviate from a policy which comports with the purpose of the statute and is consistent with related Board policy.' 3 This is particularly so if we keep in mind that Congress' concern regarding "fragmentation of bargaining units" was a function of its larger concern that the delivery and health care services in a locality not be unduly interrupted. Such interruption may be is See Haag Drug Co, supra at 877-878 See also Garden State Hosiery Co, 74 NLRB 318, 323 (1947) (in deeming the unit proposed by the union an appropriate one, the Board noted the absence of evidence of any "circumstance peculiar to the industry" that would militate against approval of the unit) perhaps an ironic but inevitable result of multifaci- lity units. We turn now to the pertinent facts of the instant case. The Employer is engaged in the operation of more than 100 convalescent or nursing homes in 22 States, the total divided administratively into 10 re- gions. Region 1, which includes the Employer's three Baltimore-area facilities, also encompasses five other homes located in Maryland, Virginia, and North Carolina. The Union seeks to represent all service, maintenance, and technical employees at the Rossville home, which is 10 miles away from the Towson home, its closest neighbor in the Em- ployer's chain, and 13 miles from the Ruxton home. Broad policies and guidelines for labor relations and overall operations are set by the Employer's corporate officials for use throughout the chain. These are put into effect at the regional level by regional directors, who review and approve or modify draft budgets for each nursing home pre- pared by the administrator of that home. However, each home administrator puts the corporate policy guidelines into operation at her or his nursing home. Operations are reviewed and inspected through periodic visits by the regional director and by members of the corporate staff whose responsi- bilities lie in specialized aspects of the operation such as maintenance, infection control, and diet. The director for region 1 visits each of his homes between 12 and 15 times a year, from 4 to 6 hours per visit, and is in telephone contact with either the home administrator or another responsible person at each home approximately once a week. Pursuant to budgetary limitations and corporate guidelines, the Rossville administrator, assisted by an assistant administrator and other supervisors, hires and fires employees for the home, sets their individual wage rates, promotes or transfers em- ployees within the home, and determines the amount of their semiannual raises. Grievances are adjusted at the individual homes. Employees have the right to appeal grievance determinations, but this option was not exercised in region 1 during the 2 years preceding the hearing. Employees at one facility are rarely used to assist at another facility, and then only on an emer- gency basis. In one instance an employee worked at two facilities for an unstated period, though this did not involve Rossville. A few specialists are shared by more than one facility, but none of them is a unit employee. Occasionally, the Baltimore- area recreational therapists participate in arranging joint outings for area patients, in which efforts some unit employees are involved. This appears to be the limit of joint activities or interaction for pa- 228 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD tient care among the three Baltimore-area homes. Employee transfers between facilities are available without loss of seniority. Out of approximately 370 service, maintenance, and technical employees in the Baltimore-area facilities, there were approxi- mately seven transfers within the 2-year period with which the present regional director was famil- iar. In exceptional circumstances a patient may be transferred from one home to another for the pa- tient's convenience. On these facts, we agree with the Acting Re- gional Director's weighing of the Board's tradition- al factors so as to find appropriate a unit confined to the Employer's Rossville facility. The closest of the Employer's, other facilities is 10 miles away and interchange between Rossville unit employees and employees at other facilities is negligible. Tempo- rary interchange is irregular and employees rarely transfer between facilities. Although there is a cer- tain degree of administrative centralization, there is an almost complete lack of functional integration. Patient care proceeds independently at each facility and all day-to-day labor matters are administered within the separate facilities, albeit under guidelines established by corporate officials and subject to their review. There is relatively infrequent contact between the facility and higher authority within the corporate structure. Finally, there is no bar- gaining history. Thus under traditional standards a separate unit at Rossville is warranted. See, e.g., Pomona Golden Age Convalescent Home, 265 NLRB 1313 (1982); National Cash Register Co., 166 NLRB 173 (1967). In considering whether such a unit would lead to the fragmentation against which Congress admon- ished, it is noteworthy at the outset that the unit sought here consists of approximately 137 employ- ees consisting of all of the nonprofessional statuto- ry employees at the facility except business office clericals and guards.14 Such a broad unit as a pat- tern for bargaining within the Employer's chain of nursing homes, should tend to limit, not proliferate, the potential number of units.15 We also note that finding the single-facility unit appropriate here does not bind us to fording that every single-facility unit in the Employer's chain is an appropriate unit. Cir- cumstances in other regions or circumstances pro- duced by changes in the Employer's operations might well dictate that the single-facility presump- tion in a future case would be rebutted. We also see no evidence of any real danger that separate bargaining units in this and other similarly 14 The Employer does not argue that business office clericals should be included, and guards may not be Sec. 9(b)(3) of the Act 15 We do not address here the question of the number of appropriate units within any of the Employer's nursing homes situated facilities in the Employer's chain will cause work stoppages or jurisdictional disputes. We note again the lack of employee interchange and the in- dependence of the Rossville home's operations from those of any other of the Employer's facili- ties. The problem of jurisdictional disputes is not even relevant to this case. As for the spread of a work stoppage from one facility to another, we see no more reason to predict such a result even if the employees at each facility were represented by dif- ferent unions. If anything, an employerwide unit in this situation would tend to broaden a given dis- pute and increase the potential for disruption of pa- tient care. Although it may be true that the Employer could administer labor relations in a multifacility unit more efficiently than in individual units such as the one sought, that factor is not entitled to great weight. The legislative history does not sug- gest that Congress was intent on maximizing ad- ministrative efficiency; rather it focused on avoid- ing unit determinations that are likely to jeopardize the continuity of health care. Were a multifacility employer able to show, in a particular case, that such loss of administrative efficiency would neces- sarily have that effect, then of course the presump- tion of single-facility appropriateness would be re- butted. The Employer here has shown neither that such an effect is likely in general nor that it is present in this case. We have no difficulty in finding that single-facili- ty units would present more opportunity for "leap- frogging" or "whipsawing" the Employer into wage increases than would one multifacility unit. For reasons similar to those applicable to the factor of administrative efficiency, however, we attach little weight to this factor in the instant case. There is nothing uniquely vulnerable about the Employer because it is in this industry. It is potentially vul- nerable to wage competition among single-facility units simply because it has multiple facilities and the employees at some might be represented by dif- ferent unions or in different units. If the Employ- er's other facilities were owned and operated by other employers, the same opportunity for wage competition would exist, only the vulnerability would be shared by several employers. Further, we do not see the total effect on health care costs to be much different in either case.16 Nor do we be- lieve that Congress intended that we limit bargain- ing units so as to insulate an owner of several health care facilities from interfacility wage compe- 16 This conclusion and other predictions on economic and technical matters are, of course, subject to our further review and revision based on appropriate evidence or persuasive rebuttal presented before us in future cases MANOR HEALTHCARE CORP 229 tition and thereby place it in a stronger bargaining position than it would be if it owned only one. In sum, we believe that our application of our tradi- tional rebuttable presumption that a single-facility unit is appropriate for bargaining is not inconsistent with the congressional concern for avoiding undue unit proliferation in health care institutions. We further find that the Employer has not rebutted that presumption in this case. We therefore find the Rossville, Maryland unit appropriate. Accordingly, we shall remand this proceeding to the Regional Director in order that he may con- duct the election pursuant to his Direction of Elec- tion, as amended 10 June 1983, except that the pay- roll period for determining eligibility shall be that ending immediately before the date of issuance of this Decision on Review.