Heartland Human Services

360 NLRB No. 47 NOTICE: This opinion is subject to formal revision before publication in the bound volumes of NLRB decisions. Readers are requested to notify the Executive Secretary, National Labor Relations Board, Washington, D.C. 20570, of any typographical or other formal errors so that corrections can be included in the bound volumes. Heartland Human Services and American Federation of State, County and Municipal Employees (AFSCME), Council 31, AFL–CIO. Case 14– CA–113519 February 20, 2014 DECISION AND ORDER BY CHAIRMAN PEARCE AND MEMBERS MISCIMARRA AND HIROZAWA The General Counsel seeks summary judgment in this case on the ground that there are no genuine issues of material fact as to the allegations of the complaint, and that the Board should find, as a matter of law, that the Respondent has violated Section 8(a)(5) and (1) of the Act. Upon a charge and amended charges filed by Ameri- can Federation of State, County and Municipal Employ- ees (AFSCME), Council 31, AFL–CIO (the Union) on September 17, November 12 and 20, 2013, respectively, the General Counsel issued the complaint on November 20, 2013, against Heartland Human Services (the Re- spondent), alleging that the Respondent violated Section 8(a)(5) and (1) of the Act by (a) changing its employees’ health insurance by increasing the deductible from $1500 to $5000 and requiring the employees to seek reim- bursement for their out of pocket expenditures from a third-party administrator without prior notice to the Un- ion and without affording the Union an opportunity to bargain; and (b) bypassing the Union and dealing directly with the unit employees regarding a rewards program for employees who timely bill their services. The Respondent filed an answer admitting all of the factual allegations in the complaint, denying all of the legal conclusions in the complaint, and asserting an af- firmative defense. On December 6, 2013, the General Counsel filed with the Board a Motion for Summary Judgment. On December 11, 2013, the Board issued an order transferring the proceeding to the Board and a No- tice to Show Cause why the motion should not be grant- ed. The Respondent filed a response, raising an addi- tional affirmative defense, and stating among other things that it agreed that no genuine issues of material fact exist warranting a hearing. The National Labor Relations Board has delegated its authority in this proceeding to a three-member panel. Ruling on Motion for Summary Judgment The complaint alleges, and the Respondent admits, that the Union was certified as the exclusive collective- bargaining representative of the unit employees, that a decertification election was conducted on June 4, 2012, that a revised tally of ballots showed that a majority of valid votes had not been cast for the Union, and that on September 28, 2012, the Board adopted the hearing of- ficer’s recommendation in Case 14–RD–063069 that a rerun election be conducted. The complaint further al- leges, and the Respondent admits, that on March 18, 2013, the Board issued a Decision and Order in Case 14– CA–0878861 granting the General Counsel’s motion for summary judgment and finding, among other things, that the Respondent violated Section 8(a)(5) and (1) of the Act by withdrawing recognition from the Union as the exclusive collective-bargaining representative of the unit (Heartland I). Upon the Respondent’s refusal to comply with the Board’s March 18, 2013 Order, the Board has sought enforcement of its Order in the United States Court of Appeals for the Seventh Circuit (Case 13– 1954).2 The Respondent admits its continued refusal to recog- nize and bargain with the Union but contends that its conduct does not violate Section 8(a)(5) and (1) because the Respondent lawfully withdrew recognition from the Union based on the fact that it no longer enjoyed the ma- jority support of its employees. Thus, the Respondent admits that about September 1, 2013, it changed employees’ health insurance by increas- ing the deductible from $1500 to $5000, and requiring employees to seek reimbursement for their out-of-pocket expenditures from a third-party administrator without prior notice to the Union and without affording the Un- ion an opportunity to bargain. The Respondent further admits that about October 16, 2013, its Executive Direc- tor Jeff Bloemker bypassed the Union and dealt directly with the unit employees regarding a rewards program for employees who timely bill their services. The Respond- 1 359 NLRB No. 76. 2 Subsequently, in Heartland Human Services, 360 NLRB No. 8 (2013) (Heartland II), the Board again granted the General Counsel’s Motion for Summary Judgment, finding that the Respondent violated Sec. 8(a)(5) and (1) by unilaterally changing the employees’ terms and conditions of employment without prior notice to the Union and with- out affording the Union an opportunity to bargain with the Respondent with respect to this conduct. As in Heartland I, the Respondent admit- ted the complaint allegations but asserted that its conduct was not un- lawful because the Union lacked majority status and therefore the Board should enter summary judgment in its favor or at least stay the proceedings pending the court’s decision in Heartland I. The Board filed an application for enforcement in Heartland II (Case 13–3706), but moved to hold the case in abeyance, as the parties agreed that the issues in Heartland II (unilateral changes) would be decided in Heart- land I. The court consolidated the Board’s application for enforcement and the Respondent’s cross-petition in Heartland II, and that consoli- dated appeal is being held in abeyance pending the outcome in Heart- land I. DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 2 ent urges the Board to grant summary judgment in favor of the Respondent and dismiss the complaint, or in the alternative, to stay these proceedings until the Seventh Circuit Court of Appeals renders its judgment in Heart- land I. We find that there are no issues warranting a hearing because the Respondent has admitted the crucial factual allegations set forth above. In accord with its position in Heartland I and Heartland II, the Respondent claims that its admitted conduct is not unlawful because of its rea- sonable belief that the Union does not enjoy the majority support of the employees in the collective-bargaining unit, based exclusively on the Union’s loss of the June 4, 2012 representation election and the Board’s erroneous direction to conduct a rerun election in Case 14–RD– 063069. As noted, the Respondent’s defense was raised to the Board and found to be without merit in Heartland I and Heartland II and it is rejected here for the same reasons. With respect to the Respondent’s request to dismiss the complaint or, in the alternative, to stay these proceed- ings pending a determination in Heartland I by the Sev- enth Circuit, the request is denied. It is well settled that the pendency of collateral litigation does not suspend a respondent’s duty to bargain under Section 8(a)(5).3 Accordingly, we grant the Motion for Summary Judg- ment. On the entire record, the Board makes the following FINDINGS OF FACT I. JURISDICTION At all material times the Respondent, an Illinois corpo- ration with an office and place of business located at 1200 North 4th Street, Effingham, Illinois, has been en- gaged in providing residential and outpatient mental health services. In conducting its operations during the 12-month peri- od ending October 31, 2013, the Respondent derived gross revenues in excess of $100,000, and purchased and received at its Effingham, Illinois facility goods valued in excess of $20,000 directly from points located outside the State of Illinois. We find that the Respondent is an employer engaged in commerce within the meaning of Section 2(2), (6), and 3 See Heartland Human Services, 360 NLRB No. 8, slip op. at 2 fn. 3 (2013); Maywood Do-Nut Co., 256 NLRB 507, 508 (1981) (citing Keller Aluminum Chairs Southern, Inc., 173 NLRB 947, 952 fn. 14 (1968)); see also Great Dane Trailers, Inc., 191 NLRB 6 (1971); Porta-Kamp Mfg. Co., 189 NLRB 899 (1971); and Sec. 10(g) of the Act, which provides: “The commencement of proceedings under sub- section (e) or (f) of this section shall not, unless specifically ordered by the court, operate as a stay of the Board’s order.” (7) of the Act, is a health care institution within the meaning of Section 2(14) of the Act, and that the Union, American Federation of State, County and Municipal Employees (AFSCME), Council 31, AFL–CIO, is a labor organization within the meaning of Section 2(5) of the Act. II. ALLEGED UNFAIR LABOR PRACTICES At all material times, the following individuals held the positions set forth opposite their respective names and have been supervisors of the Respondent within the meaning of Section 2(11) of the Act and agents of the Respondent within the meaning of Section 2(13) of the Act: Jeff Bloemker — Executive Director Debra Johnson — Human Resources Director Linda Warner — Director of Case Management The following employees of the Respondent (the unit) constitute a unit appropriate for the purposes of collec- tive bargaining within the meaning of Section 9(b) of the Act: All full-time and regular part-time employees em- ployed by Respondent at its Effingham, Illinois facility, excluding office clerical and professional employees, guards and supervisors as defined in the Act. On February 1, 2006, the Union was certified as the exclusive collective-bargaining representative of the unit. The most recent collective-bargaining agreement cover- ing the unit was effective from August 21, 2009, through August 20, 2011. At all material times since February 1, 2006, based on Section 9(a) of the Act, the Union has been the exclusive collective-bargaining representative of the unit. On June 4, 2012, pursuant to a petition filed in Case 14–RD–063069, an election was conducted in the unit. The tally of ballots disclosed that 19 ballots were cast for the Union, 18 votes were cast against the Union, and there was 1 challenged ballot, which was sufficient to affect the results of the election. On June 11, 2012, the Union filed objections to the election. On June 28, 2012, a hearing on the challenged ballot and the objections was held. On July 18, 2012, the hearing officer issued a re- port recommending that the challenged ballot be opened and counted. If the revised tally of ballots disclosed that a majority of valid votes had not been cast for the Union, the hearing officer recommended that a rerun election be conducted, having further recommended that three objec- tions be sustained. On August 9, 2012, the Respondent filed exceptions to the hearing officer’s report. On Sep- tember 28, 2012, the Board adopted the hearing officer’s HEARTLAND HUMAN SERVICES 3 report, findings, and recommendations. On October 12, 2012, the challenged ballot was opened and counted. The revised tally of ballots disclosed that a majority of valid votes had not been cast for the Union. According- ly, a rerun election will be conducted at an appropriate date, time, and place to be determined by the Regional Director. On March 18, 2013, the Board issued a Decision and Order in Case 14–CA–087886, finding, among other things, that the Respondent violated Section 8(a)(5) and (1) by withdrawing recognition from the Union as the exclusive collective-bargaining representative of the unit. Subsequently, the Respondent engaged in the follow- ing conduct at issue here. About September 1, 2013, the Respondent changed the employees’ health insurance by increasing the deductible from $1500 to $5000, and requiring employees to seek reimbursement for their out-of-pocket expenditures from a third-party administrator. The subject set forth above relates to wages, hours, and other terms and conditions of employment of the unit and is a mandatory subject for the purposes of collective bar- gaining. The Respondent engaged in the conduct described above without prior notice to the Union and without af- fording the Union an opportunity to bargain with the Respondent with respect to this conduct. About October 16, 2013, the Respondent, by Execu- tive Director Bloemker, at a residential staff meeting at the Respondent’s facility, bypassed the Union and dealt directly with the unit employees regarding a rewards program for employees who timely bill their services. CONCLUSION OF LAW By the conduct described above, the Respondent has been failing and refusing to bargain collectively and in good faith with the exclusive collective-bargaining repre- sentative of its employees in violation of Section 8(a)(5) and (1) of the Act. The Respondent’s unfair labor prac- tices affect commerce within the meaning of Section 2(6) and (7) of the Act. REMEDY Having found that Respondent has engaged in certain unfair labor practices, we shall order it to cease and de- sist and to take certain affirmative action designed to effectuate the policies of the Act. Specifically, having found the Respondent violated Section 8(a)(5) and (1) by, since about September 1, 2013, changing its employ- ees’ health insurance by increasing the deductible from $1500 to $5000 and requiring the employees to seek re- imbursement for their out of pocket expenditures from a third-party administrator, we shall order the Respondent to rescind these unilateral changes and restore the status quo ante until such time as the Respondent and the Union reach an agreement for a new collective-bargaining agreement or a lawful impasse based on good-faith nego- tiations. We shall also order the Respondent to make the unit employees whole for any losses attributable to the Respondent’s unlawful conduct, as set forth in Ogle Pro- tection Service, 183 NLRB 682 (1970), enfd. 444 F.2d 502 (6th Cir. 1971), and Kraft Plumbing & Heating, 252 NLRB 891 (1980), enfd. mem. 661 F.2d 940 (9th Cir. 1981), with interest as prescribed in New Horizons for the Retarded, 283 NLRB 1173 (1987), compounded dai- ly as prescribed in Kentucky River Medical Center, 356 NLRB No. 8 (2010). In addition, we shall order the Respondent to reim- burse the unit employees in an amount equal to the dif- ferences in taxes owed upon receipt of a lump-sum backpay payment and taxes that would have been owed had the Respondent not violated Section 8(a)(5) and (1) as concluded above. Further, we shall order the Re- spondent to submit the appropriate documentation to the Social Security Administration so that when backpay is paid, it will be allocated to the appropriate periods.4 ORDER The National Labor Relations Board orders that the Respondent, Heartland Human Services, Effingham, Illi- nois, its officers, agents, successors, and assigns, shall 1. Cease and desist from (a) Failing and refusing to bargain collectively and in good faith with American Federation of State, County and Municipal Employees (AFSCME), Council 31, AFL–CIO as the exclusive collective-bargaining repre- sentative of the employees in the following appropriate unit by unilaterally changing its employees’ health insur- ance by increasing the deductible from $1500 to $5000 and requiring the employees to seek reimbursement for their out of pocket expenditures from a third-party ad- ministrator without prior notice to the Union and without affording the Union an opportunity to bargain with the Respondent with respect to this conduct. The unit is: All full-time and regular part-time employees em- ployed by Respondent at its Effingham, Illinois facility, 4 The General Counsel has requested a notice-reading remedy. We agree that this special remedy is appropriate to dispel the effects of the Respondent’s serious and persistent unfair labor practices, especially in light of the Respondent’s repetition of the same type of misconduct previously found unlawful and previously found to warrant such a remedy. See Heartland Human Services, 359 NLRB No. 76, supra; and Heartland Human Services, 360 NLRB No. 8, supra. Therefore, we will require that the Respondent’s executive director or, at the Re- spondent’s option, a Board agent in the executive director’s presence, read the remedial notice to the Respondent’s employees. DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 4 excluding office clerical and professional employees, guards and supervisors as defined in the Act. (b) Bypassing the Union and dealing directly with the unit employees regarding a rewards program for employ- ees who timely bill their services. (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) Rescind the unilateral changes in terms and condi- tions of employment and restore the status quo ante until such time as the Respondent and the Union reach an agreement for a new collective-bargaining agreement or a lawful impasse based on good-faith negotiations. (b) Make the unit employees whole, with interest, for any losses sustained due to the unlawfully imposed changes in wages, benefits, and other terms and condi- tions of employment in the manner set forth in the reme- dy section of this decision. (c) Compensate the unit employees for any adverse in- come tax consequences of receiving their backpay in one lump sum, and file a report with the Social Security Ad- ministration allocating the unit employees’ backpay awards to the appropriate calendar quarters for each em- ployee. (d) Within 14 days after service by the Region, post at its facility in Effingham, Illinois, copies of the attached notice marked “Appendix.”5 Copies of the notice, on forms provided by the Regional Director for Region 14, after being signed by the Respondent’s authorized repre- sentative, shall be posted and maintained for 60 consecu- tive days in conspicuous places, including all places where notices to employees are customarily posted. In addition to physical posting of paper notices, notices shall be distributed electronically, such as by email, post- ing on an intranet or an internet site, and/or other elec- tronic means, if the Respondent customarily communi- cates with its employees by such means. Reasonable steps shall be taken by the Respondent to ensure that the notices are not altered, defaced, or covered by any other material. In the event that, during the pendency of these proceedings, the Respondent has gone out of business or closed the facility involved in these proceedings, the Re- spondent shall duplicate and mail, at its own expense, copies of the notice to all current employees and former 5 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 Na- tional Labor Relations Board” shall read “Posted Pursuant to a Judg- ment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board.” employees employed by the Respondent at any time since about September 1, 2013. (e) Within 14 days after service by the Region, hold a meeting or meetings, scheduled to ensure the widest pos- sible attendance, at which the attached notice is to be read to the employees by the Respondent’s executive director or, at the Respondent’s option, by a Board agent in the executive director’s presence. (f) Within 21 days after service by the Region, file with the Regional Director for Region 14 a sworn certifi- cation of a responsible official on a form provided by the Region attesting to the steps that the Respondent has taken to comply. Dated, Washington, D.C. February 20, 2014 Mark Gaston Pearce, Chairman Philip A. Miscimarra, Member Kent Y. Hirozawa, Member (SEAL) 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 Federal labor law and has ordered us to post and obey this notice. FEDERAL LAW GIVES YOU THE RIGHT TO Form, join, or assist a union Choose representatives to bargain with us on your behalf Act together with other employees for your bene- fit and protection Choose not to engage in any of these protected activities. WE WILL NOT fail and refuse to recognize and bargain with American Federation of State, County, and Munici- pal Employees (AFSCME), Council 31, AFL–CIO, the Union, as the exclusive collective-bargaining representa- tive of the employees in the following appropriate unit by unilaterally changing our employees’ health insurance by increasing the deductible from $1500 to $5000 and requiring the employees to seek reimbursement for their HEARTLAND HUMAN SERVICES 5 out of pocket expenditures from a third-party administra- tor without affording the Union an opportunity to bargain with the Respondent with respect to this conduct. The unit is: All full-time and regular part-time employees em- ployed by us at our Effingham, Illinois facility, exclud- ing office clerical and professional employees, guards and supervisors as defined in the Act. WE WILL NOT bypass the Union and deal directly with the unit employees regarding a rewards program for em- ployees who timely bill their services. WE WILL NOT in any like or related manner interfere with, restrain, or coerce you in the exercise of the rights listed above. WE WILL rescind the unilateral changes we made to the terms and conditions of employment for our unit em- ployees and restore the status quo ante until such time as we reach an agreement with the Union for a new collec- tive-bargaining agreement or a lawful impasse based on good-faith negotiations. WE WILL make our unit employees whole for any loss- es they sustained due to the unlawfully imposed changes in wages, benefits, and other terms and conditions of employment, with interest. WE WILL compensate our unit employees for the ad- verse tax consequences, if any, of receiving a lump-sum backpay award, and WE WILL file a report with the Social Security Administration allocating the backpay awards to the appropriate calendar quarters. HEARTLAND HUMAN SERVICES