Hospital San Francisco, Inc

HOSPITAL SAN FRANCISCO 171 Hospital San Francisco, Inc and Unidad Laboral de Enfermeras (os) y Empleados de la Salud Case 24-CA-5721 March 13, 1989 DECISION AND ORDER BY CHAIRMAN STEPHENS AND MEMBERS JOHANSEN AND HIGGINS On December 13, 1988, Administrative Law Judge Richard A Scully issued the attached deci- sion The Respondent filed exceptions and a sup- porting brief, and the General Counsel filed a brief in support of the decision The National Labor Relations Board has delegat- ed its authority in this proceeding to a three member panel The Board has considered the decision and the record in light of the exceptions and briefs and has decided to affirm the judge's rulings, findings, I and conclusions and to adopt the recommended Order Briefs submitted on behalf of the General Counsel and the Respondent have been given due consideration On the entire record and from my observation of the de meanor of the witnesses, I make the following FINDINGS OF FACT I THE BUSINESS OF THE RESPONDENT At all times material, the Respondent was a Puerto Rico corporation engaged in the operation of a hospital providing medical, surgical, and related health care serv ices at facilities located at 371 DeDiego Street, Rio Pie dras, Puerto Rico Based on its operations since Decem ber 23, 1987, annually, in the course and conduct of its business, the Respondent will derive revenues in excess of $250,000, and will purchase and receive at its Rio Pie dras facility equipment, goods, and materials valued in excess of $50,000 directly from suppliers located outside the Commonwealth of Puerto Rico The Respondent admits, and I find, that it is an employer engaged in com merce within the meaning of Section 2(2), (6), and (7) of the Act and a health care institution within the meaning of Section 2(14) of the Act ORDER The National Labor Relations Board adopts the recommended Order of the administrative law judge and orders that the Respondent, Hospital San Francisco, Inc, Rio Piedras, Puerto Rico, its offi- cers, agents, successors, and assigns, shall take the action set forth in the Order ' We do not rely on the judges discussion in fn 17 of whether em ployees should have to go without representation for more than 90 days under any circumstances Efrain Rivera Vega Esq for the General Counsel Tristan Reyes Gilestra Esq, of San Juan, Puerto Rico, for the Respondent DECISION STATEMENT OF THE CASE RICHARD A SCULLY, Administrative Law Judge On a charge and an amended charge filed on January 11 and March 28 1988, respectively by Unidad Laboral de Enfermeras(os) y Empleados de la Salud (the Union) the Regional Director for Region 24 of the National Labor Relations Board (the Board) issued a complaint on March 31, 1988, alleging that Hospital San Francisco, Inc (the Respondent) had violated Section 8(a)(5) and (1) of the National Labor Relations Act (the Act) by fail ing and refusing to recognize and bargain with the Union as the exclusive collective bargaining representative of employees in a unit of registered nurses The Respondent filed a timely answer denying that it had committed any violation of the Act A hearing was held in Hato Rey, Puerto Rico, on June 21-23, 1988, at which all parties were given a full oppor tunity to participate, to examine and cross examine wit nesses, and to present other evidence and argument II THE LABOR ORGANIZATION INVOLVED The Respondent admits, and I find that the Union is a labor organization within the meaning of Section 2(5) of the Act III ALLEGED UNFAIR LABOR PRACTICES A The Successorship Issue Since December 1975 Hospital Monteflores Inc (the Predecessor) had been licensed and had operated a gen eral hospital at the facilities at 371 DeDiego Street in Rio Piedras under the name Hospital San Martin " On May 13 1977, and October 29, 1981 following elections the Union was certified by the Board as the exclusive collective bargaining representative of all employees in a unit described as follows All registered nurses employed by the Employer at its Hospital located in Rio Piedras, Puerto Rico ex cluding all other employees professional personnel guards and supervisors as defined in the Act During the course of their relationship, the Predecessor and the Union entered into a series of collective bargain ing agreements the most recent of which by its terms, was to extend from June 21, 1985, through May 14, 1988 Prior to December 1987, the Respondent commis sioned and received certain feasibility studies and en gaged in negotiations to purchase the facilities of Hospi tai San Martin Prior to the date of purchase the Re spondent was given notice by the Predecessor of the ex istence of its collective bargaining agreement with the Union and was sent a copy of the agreement On De cember 23, 1987 the Respondent purchased for $5 3 mil lion all the real property and structures of the Predeces sor, as well as most of its fixed assets and equipment, 293 NLRB No 25 172 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD from four physicians and their wives who had previously acquired title The purchase did not include the stock or accounts receivable of the Predecessor By letter, dated December 21, 1987, the employees of Hospital San Martin were informed that its assets were being sold to the Respondent, effective December 23, and that it would cease operations At the same time, the Respondent distributed a memorandum to the same em ployees advising that it would be acquiring the hospital and recruiting employees and that applications for em ployment would be available at the hospital personnel office at noon on December 21 On December 23, 1987, the Respondent began business without any interruption in the operation of the hospital According to Francisco Perez, who was acting administrator of the hospital from the time the Respondent began operations until the end of February 1988, a considerable number of Hospital San Martin s employees were hired and went to work for the Respondent December 23, 1987 The parties have stipu lated that as of February 29, 1988, 19 of the 31 registered nurses, 17 of the 18 licensed practical nurses, all 19 of the dietary employees, 9 of the 10 housekeeping employ ees 7 of the 10 admissions department employees, and 4 of the 6 accounting department employees employed by the Respondent had previously been employed by Hospi tal San Martin at the time it ceased operations By letter dated January 5, 1988, the Union requested that the Respondent recognize it as the bargaining repre sentative of the registered nurses and that it be provided with certain information relating to the Respondent s purchase of the hospital The Respondent replied in a letter from Francisco Perez, dated January 8, 1988, in which it declined to recognize the Union on the grounds that the nurses it had hired had not completed a proba tionary period and, therefore, were not yet permanent employees and promising a further reply once the hospi tal s transition period ended and operations were normal ized By letters of January 14 and 22 1988 the Union requested additional information from the Respondent and by letter of January 21 1988, it informed the Re spondent of its willingness to negotiate a new collective bargaining agreement By letter of January 26 1988 Perez reiterated the Respondents position that the nurses were still in a probationary period and said that in view of the charge the Union had filed with the Board it would wait until the Board had ruled on the status of the Union as the nurses representative The General Counsel and the Union contend that the Respondent is a successor to Hospital San Martin and re quired to recognize and bargain with the Union as the exclusive representative of the unit registered nurses The Respondent denies that it is a successor employer Analysis and Conclusions The crucial inquiry in determining whether there is successorship is whether there is substantial continuity of the employing industry i As stated by the Supreme Court in Fall River Dyeing Corp v NLRB2 Under this approach the Board examines a number of factors whether the business of both employers is essentially the same, whether the employees of the new company are doing the same jobs in the same working conditions under the same supervi sors, and whether the new entity has the same pro duction process, produces the same products, and basically has the same body of customers It is clear that both the Respondent and the Predeces sor were engaged in essentially the same business, the operation of a general hospital at the facilities in Rio Pie dras, rendering health care services to the general public One of the most important considerations in determining successorship is continuity in the identity of the work force 3 In the present case, the Respondent began oper ations without any hiatus or interruption in services and utilizing substantially the same employees as the Prede cessor throughout the hospital and most importantly, on its staff of registered nurses The evidence shows that the Respondent made employment applications available to the employees of the hospital at the same time they were notified that Hospital San Martin would cease oper ations It further shows that, with possibly one or two exceptions, the Respondent did not examine any of the Predecessors personnel files before hiring its former em ployees thus, indicating that the Respondent was relying primarily on the fact of their employment with the Pred ecessor and taking advantage of the same skills utilized in that employment, as well as their familiarity with the hospital s operations While the Respondent points to many alleged differ ences in the operations of the two hospitals in support of its argument against successorship, it must be kept in mind that the analysis of this issue must be conducted from the perspective of the employees who have been retained and that emphasis is to be placed on whether they will view their job situations as essentially unal tered "4 Here the focus is directed to the perspective of the registered nurses employed by the Respondent and there is little to suggest that the differences wrought by the change in ownership of the hospital had any signifi cant effect on their duties and working conditions or would affect their sentiments and expectations concern ing continued representation by the Union The testimo ny of Perez did establish that the Respondent has remod eled some areas of the hospital has purchased certain new sophisticated, diagnostic equipment such as an ex pensive computerized tomography unit, has expanded it emergency room, cardiology radiology and orthopedic services and has added ophthalmology and plastic sur gery services However, this testimony related principal ly to the effects of these changes on the hospitals medi cal staff and gave no indication that they had a signifi cant impact on the activities or responsibilities of the reg istered nurses The evidence also established that there were changes in the hospital's board of directors and ad ministration particularly, the contract with Caribe Hos pital Affiliates to manage the hospital which resulted in i Woodrich Industries 246 NLRB 43 (1979) 2 482 U S 27 43 (1987) NLRB v Hudson River Aggregates 639 F 2d 865 869 (2d Cir 1981) Fall River Dyeing Corp v NLRB supra at 43 HOSPITAL SAN FRANCISCO a new and different management team, as well as some improvements in the physical plant Other alleged changes pointed to by the Respondent have not been es tablished Although Perez testified that the hospital s third floor and an intensive care unit that the Predeces sor had closed were reopened, the credible testimony of Margarita Pinto who was employed by and familiar with the Predecessors operations, was that neither had been permanently closed Pinto s testimony also contra dicted that of Perez concerning a number of positions al legedly established by the Respondent that Perez main tained had not previously existed at the hospital Accord ing to Pinto s credible testimony, many of these positions were in existence under the Predecessor Although it is clear that the Respondent instituted some changes and improvements at the hospital, the evi dence does not establish that the changes were so funda mental or significant that the hospital it operated was es sentially different from that operated by the Predecessor Evidence of similar changes" has been found not to alter the essential continuity of the employment relation ship for purposes of applying the successorship doctrine in the absence of some showing of substantial changes in unit employees jobs or significant operational changes affecting the continued appropriateness of the bargaining unit 5 There is little evidence in the record concerning the immediate supervision of the hospitals registered nurses under either the Respondent or the Predecessor There is evidence that nurse Candida Kortwnght was a supervi sor in the emergency room under both the Predecessor and the Respondent The parties stipulated that nurses Elisaura Quintero and Carmen Velazques were employed as supervisors by both employers Three nurses6 identified by the Respondent as supervi sors in a position letter to the Board, dated March 9 1988, previously worked for the Predecessor, but it is not clear whether they had worked as supervisors 7 Three other nurses,8 claimed by the Respondent to be super vised but disputed by the General Counsel on the grounds that their exercise of supervisory authority was too limited to qualify them as statutory supervisors, had worked for the Predecessor in nonsupervisory positions I find there is some evidence that there was continuity of supervision of the registered nurses Although I might not find it sufficient standing alone to tip the balance on the issue of succession, it is not inconsistent with a find mg of succession As for products and customers, there is nothing in the record to indicate significant changes in either Both em ployers provided general hospital services primarily serv mg the Rio Piedras community While the specialties of the physicians who own the Respondent may have in creased the number of orthopedic patients served by the b See Jeffries Lithograph Co 265 NLRB 1499 1504 (1982) Alondra Nursing Home & Convalescent Hospital 242 NLRB 595 598 (1979) 6 Myra I Pagen Cecilia Rodriguez and Arlene Soler 7 The similarity in their rates of pay under both employers which are significantly higher than the pay rates of many of the other registered nurses suggests that they were employed as supervisors by Hospital San Martin 6 Vernica Arana Arabel Santiago Nancy Marero 173 hospital, the testimony of Perez was that such patients constituted only about 6 to 8 percent of the patient census at any given time This does not establish that the hospital's services to patients underwent a substantial al teration There is evidence that both hospitals were certi fled to provide services to patients eligible for Medicare and, in fact they had the same provider number for Medicare, although funds due each under that program were segregated The evidence shows that the Respond ent had agreements with approximately 80 percent of the health insurances providers that served Hospital San Martin I find that the evidence establishes substantial continuity in the areas of customers (patients) and serv ices provided After considering all the circumstances surrounding the transfer of operations from Hospital San Martin to the Respondent, I find there was substantial continuity of the employing industry and that it is unlikely that the employees' sentiments concerning unionization had changed The Respondent took over the hospital without any hiatus in operations and, most importantly utilized a substantial portion of the Predecessors employees to carry on those operations In the unit of registered nurses, all of those working for the Respondent on De cember 23 had been employees of the Predecessor Al though there were improvements made to the facilities and some new equipment purchased and installed, the fundamental nature of the employing industry-a general health care facility-did not substantially change, nor did the unit employees' duties or working conditions There was also significant continuity in the areas of supervision, products and services and customers (patients) served I find under these circumstances that the Respondent was a successor to Hospital San Martin 9 B The Substantial and Representative Complement Issue Having found that the Respondent is a successor to Hospital San Martin it must be determined whether it employed a majority of the Predecessors employees in the appropriate unit at the time it reached a substantial and representative complement of employees 10 If it did not, it is under no obligation to recognize and bargain with the Union representing the Predecessor's employ ees ii In deciding whether a substantial and representative work force existed on a certain date the Board must balanc[e] the objective of selection of a bar gaining representative by the maximum number of employees with the objective of employee represen tation as soon as possible Premium Foods, 260 NLRB 708 718 (1982), enfd 709 F 2d 623 (9th Cir 1983) (quoting NLRB v Hudson River Aggregates, 639 F 2d 865 (2d Cir 1981) enfg 246 NLRB 192 (1979)) When a new employer expects, with rea sonable certainty to increase its employee comple e Premium Foods 260 NLRB 708 714-715 (1982) Alondro Nursing Home & Convalescent Hospital supra 1' Fall River Dyeing Corp v NLRB supra " Myers Custom Products 278 NLRB 636 637 (1986) 174 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD ment substantially within a relatively short time, it is appropriate to delay determining the bargaining obligation for that short period 12 There is no mathematical formula to be applied, each case depends on its particular facts Here, the Respond ent contends that it had a definite plan to increase the employee complement within the unit of registered nurses and that, although it had undertaken to do so, it still had not reached a substantial and representative complement within the unit as of the date of the hearing It further contends that because, as of the hearing date, there was no longer a majority of the Predecessors em ployees in the unit, the complaint should be dismissed The General Counsel takes the position that a substantial and representative had been reached as of January 5, 1988, the date that the Union requested recognition by the Respondent, when a majority of the unit was coin prised of the Predecessors employees As noted above, the Respondent bought for a substan tial sum and took over an open and functioning general hospital without any hiatus in operations or any disrup tion in patient care Consequently, this does not involve a situation in which the successor was attempting to re establish and rebuild a business that had collapsed under the predecessor employer, as is often found in cases in volving the application of the "successorship and sub stantial and representative complement" doctrines On the other hand, it is clear from the feasibility studies on which the Respondent relied in deciding to purchase the hospital and from the testimony of Francisco Perez, who was involved in the purchase and served as acting ad ministrator of the hospital following the takeover that the Respondent had a definite plan to expand its oper ations and to increase the employee complement It is also clear that because of the nature of the hospital in dustry expansion of operations was directly related to and dependent on an increase in the number of registered nurses employed From the time it purchased the hospi tal, the Respondent made an extensive and concerted effort to recruit more registered nurses, but had limited success in doing so because of the shortage of nurses available in Puerto Rico According to Perez, the Re spondent planned to operate at a level of 143 to 147 beds requiring a minimum of 100 registered nurses, and needed 127 beds and 90 registered nurses in order to function normally However, by June 1, 1988 more than 5 months after it began operations, despite its extent sive recruiting efforts it had no more than 37 registered nurses in its employ Under these circumstances 13 to accept the Respondents position that 90 registered nurses would constitute a substantial and representative complement would be to negate the Board's mandate, as stated in Myers Custom Products, supra that the employ er's expansion plans be based on reasonable certainty 12 Ibid 13 Unlike a situation in which an employer can hire and train the workers it needs as its business expands from the general public here the Respondent had no control over the degree or rate of its expansion be cause it was limited to recruiting persons who had successfully completed graduate nurses training programs of whom there was a critical shortage in Puerto Rico and be "accomplished within a relatively short time It would also frustrate the goal of permitting employees to be represented as quickly as possible 14 I find the Re spondent s expansion plans did not meet the Board s re quirements as to certainty or duration 15 Whatever its long range plans, the Respondent on De cember 23, 1987, took over a functioning hospital oper ation without any interruption in services and did so by utilizing the Predecessor's former work force Even ac cepting the Respondent's figures, the number of regis tered nurses employed in the unit on December 23, 1987, 23 had only risen to 35 as of March 18, 1988 During the payroll period ended January 8, 1988, during which the Union requested recognition, there were 25 nurses em ployed This was 60 percent of the maximum of 40 em ployed at any time between December 23, 1987, and June 1, 1988 I find that the 25 registered nurses em ployed by the Respondent as of January 8, 1988, consti tuted a substantial and representative complement I also find that a majority of the nurses employed on that date were formerly employed by the Predecessor 16 This was also the case on March 18, 1988, nearly 90 days after the Respondent took over the hospital 17 Inasmuch as a ma jonty of the employees in the appropriate bargaining unit at the time the Union requested recognition were former employees of the Predecessor, the Respondent was obli gated to recognize and bargain with the Union Its fail ure to do so violated Section 8(a)(5) and (1) of the Act 18 C Failure to Provide Information Requested by the Union It is not clear whether the Respondent disputes that the Union is entitled to the information it requested on January 5 14 and 22 1988, once the question of succes sorship has been resolved against the Respondent This information which concerns the purchase of the hospital by the Respondent and the names compensation and other information relating to the registered nurses em ployed by the Respondent is relevant to collective bar gaining and no reasons have been shown why such infor mation should not be provided Having found that the 14 Fall River Dyeing Corp v NLRB supra 15 See Miner Industries 285 NLRB 234 (1987) Indianapolis Mack Sales 272 NLRB 690 (1984) 16 The figures relating to the number of nurses employed by the Re spondent between December 23 1987 and June 1 1988 are taken from a joint report prepared for the U S District Court for the District of Puerto Rico by the parties in Asseo v Hospual San Francisco Civil No 88-1101 (JP) submitted after this hearing Although the parties differ whether certain nurses should be considered supervisors and not part of the unit the number in dispute is not sufficient to affect the determination that a majority of the unit was employed by the Predecessor In this regard the Respondents motion to submit into evidence several nursing licenses issued after the hearing is denied as they have no bearing on the issue of when the Respondent employed a substantial and representative complement of registered nurses 17 Notwithstanding the Respondents plans for expansion in the ab sence of a substantial increase in employee complement it is questionable whether the employees should have to go without representation for more than 90 days under any circumstances See Myer Custom Products supra 's Fall River Dyeing Corp v NLRB supra NLRB v Hudson River Ag gregates supra Premium Foods supra HOSPITAL SAN FRANCISCO Respondent is a successor employer, I also find that its failure to provide this information violated Section 8(a)(5) and (1) of the Act 19 CONCLUSIONS OF LAW 1 The Respondent, Hospital San Francisco, Inc is an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act 2 The Union is a labor organization within the mean ing of Section 2(5) of the Act 3 The following described unit of the Respondent s employees is appropriate for collective bargaining pur poses All registered nurses employed by the Employer at its hospital in Rio Piedras, Pureto Rico , excluding, all other employees professional personnel , guards and supervisors as defined in the Act 4 At all times since April 1977, the Union had been the exclusive collective bargaining representative of the employees, in the above described unit 5 By failing and refusing on and after January 5, 1988, to recognize and bargain with the Union as the repre sentative of the employees in the above described unit the Respondent violated Section 8(a)(5) and ( 1) of the Act 6 By failing and refusing to provide the Union with the information requested in its letters dated January 5 14 and 22, 1988 the Respondent violated Section 8(a)(5) and (1) of the Act 7 The aforesaid unfair labor practices are unfair labor practices affecting commerce within the meaning of Sec tion 2(6) and (7) of the Act THE REMEDY Having found that the Respondent has engaged in cer tarn unfair labor practices I shall recommend that it be ordered to cease and desist therefrom and that it take certain affirmative action designed to effectuate the poli cies of the Act Having found that the Respondent violated Section 8(a)(5) and (1) of the Act by refusing to recognize and bargain with the Union after January 5 1988 and by failing to provide certain relevant information requested by the Union, I shall recommend that the Respondent be ordered to recognize and bargain with the Union on re quest, and that it provide the Union with all information requested in the letters dated January 5 14, and 22, 1988 On these findings of fact and conclusions of law and on the entire record, I issue the following recommend ed20 19 Amscot Coal 281 NLRB 170 (1986) 20 If no exceptions are filed as provided by Sec 102 46 of the Board s Rules and Regulations the findings conclusions and recommended Order shall as provided in Sec 102 48 of the Rules be adopted by the Board and all objections to them shall be deemed waived for all pur poses 175 ORDER The Respondent, Hospital San Francisco, Inc, Rio Piedras Puerto Rico, its officers agents, successors, and assigns shall 1 Cease and desist from (a) Refusing to recognize and bargain with the Union as the exclusive collective bargaining representative of its employees in the appropriate unit (b) Refusing to bargain collectively with the Union by refusing to furnish the information requested by the Union s letters dated January 5, 14, and 22, 1988 (c) In any like or related manner interfering with re straining, or coercing employees in the exercise of the rights guaranteed them by Section 7 of the Act 2 Take the following affirmative action necessary to effectuate the policies of the Act (a) On request bargain collectively concerning rates of pay, wages, hours of employment, and other terms and conditions of employment with the Union, as the exclu sive collective bargaining representative of all employees in the appropriate unit and, if an agreement is reached, embody it in a signed contract (b) Provide the Union with all information requested in its letters dated January 5 14, and 22, 1988 (c) Post at its facilities in Rio Piedras, Puerto Rico, in English and Spanish, copies of the attached notice marked Appendix 21 Copies of the notice, on forms provided by the Regional Director for Region 24, after being signed by the Respondents authorized representa tive, shall be posted by the Respondent immediately upon receipt and maintained for 60 consecutive days in conspicuous places including all places where notices to employees are customarily posted Reasonable steps shall be taken by the Respondent to ensure that the notices are not altered defaced, or covered by any other materi al (d) Notify the Regional Director in writing within 20 days from the date of this Order what steps the Re spondent has taken to comply 21 If this Order is enforced by a judgment of a United States court of appeals the words in the notice reading Posted by Order of the Nation al 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 APPENDIX NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government The National Labor Relations Board has found that we violated the National Labor Relations Act and has or dered us to post and abide by this notice Section 7 of the Act gives employees these rights To organize To form join or assist any union 176 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD To bargain collectively through representatives of their own choice To act together for other mutual aid or protec tion To choose not to engage in any of these protect ed concerted activities WE WILL NOT refuse to recognize and bargain collec Lively with Unidad Laboral de Enfermeras(os) y Emplea dos de la Salud as the collective bargaining representa tive of All registered nurses employed by the Employer at its hospital in Rio Piedras, Puerto Rico, excluding, all other employees, professional personnel guards and supervisors as defined in the Act WE WILL NOT refuse to bargain collectively with the Union by refusing to furnish it with the information re quested by its letters to us, dated Janaury 5, 14, and 22 1988 WE WILL NOT in any like or related manner interfere with restrain, or coerce you in the exercise of the rights guaranteed you by Section 7 of the Act WE WILL furnish the Union the information requested in its letters of January 5, 14 and 22, 1988 and WE WILL on request , bargain with it as the collective bargaining representative of the employees in the unit described above, with respect to rates of pay wages hours of em ployment, and other terms and conditions of employment and, if an agreement is reached embody it in a signed contract HOSPITAL SAN FRANCISCO, INC