“Far from the run-of-the-mill failure to bargain,” a health care employer deliberately obstructed any meaningful negotiations with the union that won an election to represent employees at one of its acute-care hospitals. Given that the NLRB’s finding in this regard “cannot be seriously doubted,” the D.C. Circuit rejected the employer’s bid to overturn the Board’s extraordinary remedy ordering the employer to reimburse the union for the negotiating costs that it had fruitlessly expended in earnest (Fallbrook Hospital Corp. dba Fallbrook Hospital v. NLRB, May 8, 2015, Edwards, H.).

As for the employer’s contention that changed circumstances warranted remand—namely, the fact that it decided to shut down the facility and terminate bargaining unit employees one month after the Board issued its ruling—this argument was not only meritless, the appeals court found, but “it reflects real chutzpah.” At any rate, noting finally that “the court has no business second-guessing the Board’s judgments regarding remedies for unfair labor practices,” the appeals court granted the NLRB’s cross-petition for enforcement.

“No intent to bargain.” The NLRB certified the California Nurses Association (CNA-NNOC) as bargaining representative for a unit of registered nurses at Fallbrook Hospital. During the first bargaining session, the union presented more than 30 initial proposals, but the hospital’s attorney said the employer would not submit any proposals or counterproposals until the union provided all of its proposals in full. The hospital then steadfastly refused to submit any proposals or counterproposals over the course of seven more bargaining sessions. It also left a bargaining session abruptly and without explanation, left another session three minutes after arriving, and refused to respond to the union’s requests for future bargaining dates.

The Board found a slew of unfair labor practices based on Fallbrook’s conduct at the bargaining table (including refusing to bargain over mandatory subjects, refusing to furnish requested information) and concluded that, given the totality of the employer’s conduct, it was clear that “there was no intent to bargain.” Moreover, this bad-faith bargaining was sufficiently egregious to have “infected the core of” the bargaining process for a first contract “to such an extent that its effects cannot be eliminated by the mere application of our traditional remedy of an affirmative bargaining order.” Consequently, the majority (Member Johnson dissented) ordered the employer to reimburse the union for six months’ worth of negotiating expenses, including salaries, travel expenses, and per diems.

Shutdown. A month after the Board issued its decision and order, the employer decided it would terminate “nearly all core services” at the hospital. A few months later, it did so, terminating core services along with virtually all of the employees at the facility. During that time, it engaged in effects bargaining with the union on a few occasions, but it declared impasse with no agreement having been reached. (The union filed three more unfair labor practice charges based on the hospital’s conduct during effects bargaining.)

Since it had shut down the hospital anyhow, the employer abandoned its challenge to the Board’s affirmative bargaining order, its one-year extension of the union’s certification period, cease-and-desist order, and notice posting. Thus, the only question before the D.C. Circuit was whether the Board abused its discretion in awarding negotiation expenses to the union.

Too little to go on? The employer argued that, in issuing this extraordinary remedy, the Board failed to take into account the totality of the circumstances and instead based its order on only three factors. This claim “mischaracterizes” the Board’s holding, the appeals court noted. The NLRB had affirmed and adopted the law judge’s extensive factual findings that “‘the totality of the conduct indicates [Fallbrook] operated with a closed mind and put up a series of roadblocks designed to thwart and delay bargaining.’” Moreover, the Board panel separately concluded that the hospital’s dogged attempts to challenge the union’s certification made it quite clear that the employer “does not welcome the Union.” The remedial order was based on an extensive list of unfair labor practices which the hospital had not contested. “Given this litany of misconduct showing Fallbrook’s deliberate attempts to prevent any actual bargaining, the Board’s chosen remedy is supported by substantial evidence in the record,” the appeals court held.

Mitigating factors? Nor was the court swayed by Fallbrook’s assertion that the NLRB had failed to consider mitigating factors. The employer claimed, for example, that the Board should have credited the fact that the parties entered into a precertification agreement pertaining to certain subjects of bargaining, and also that it was operating under the assumption that any dispute between the parties would go to an arbitrator for resolution. But the precertification agreement alluded to had been executed previously between the union and Fallbrook’s parent company; there was no evidence Fallbrook itself entered into such an agreement. And its assertion regarding arbitration was not supported by the record evidence.

Cherry-picking defense unavailing. Fallbrook’s additional claim that its actions did not amount to “unusually aggravated misconduct” was belied by the evidence. The employer had “cherry-picked” the record, then argued that its isolated examples of misconduct did not, in and of themselves, justify the remedy. “The problem with Fallbrook’s approach is obvious: the Board’s decision rests on the Hospital’s entire record of unfair labor practices, which in this case is quite extensive,” the court wrote. “The Board found that the totality of Fallbrook’s misconduct justified the remedy. This is perfectly appropriate under established law.”

In line with precedent. Finally, the court rebuffed Fallbrook’s contention that the award of negotiation expenses to the union in this case ran contrary to Board law, rejecting the notion that its conduct was less egregious than the misconduct in other cases where such relief was granted. Calling the hospital’s take on applicable Board precedent “distorted,” the appeals court said that the Board’s standard approach is to weigh the facts before it to decide whether reimbursement of expenses is justified to make the charging party whole for wasted resources resulting from the employer’s conduct. The Board adhered to that standard here. Ultimately, its conclusion that Fallbrook’s “deliberate misconduct so infected the core of the bargaining process as to justify a reimbursement of negotiations expenses” was supported by substantial evidence, the appeals court found.

Remand unwarranted. Fallbrook also filed a motion to remand the case to the NLRB, pursuant to Section 10(e), for the Board to consider additional evidence. Given that it had terminated the entire bargaining unit by closing the facility in question, changed circumstances justified the Board’s reconsideration of its award of negotiating expenses to the union, it urged. In support of its motion, Fallbrook noted that it no longer employed any union-represented employees; the parties will never resume bargaining negotiations given the closure of the facility; and the parties reached an interminable impasse over effects bargaining. Underlying Fallbrook’s request was its theory that the Board had awarded negotiating expenses both to redress the employer’s past misconduct and to provide the union with “prospective strength at the bargaining table.” The latter purpose can no longer be served because of the hospital’s shutdown, the employer reasoned; thus, “a principal justification for the Board’s remedy has been undercut.”

But this didn’t sit well with the appeals court, which rejected the argument as “specious.” The purpose of the Board’s order, as plainly stated in the agency decision, was to restore the status quo ante and to reimburse the union for the resources it wasted “by attempting in vain to bargain” with the employer, the court explained. Nothing in the decision suggested that the remedy was meant to ensure the union’s future bargaining strength. (Nor could the relief be divvied up between remedying the union’s wasted resources and beefing up its future bargaining strength; Fallbrook’s argument that it could feasibly be apportioned in this manner “makes no sense.”)

Moreover, even if it were seriously to entertain the employer’s “two prongs” theory, the appeals court said, “we would disagree with Fallbrook that the Board’s rationale for returning the Union to its status quo ante at the bargaining table was rendered moot.” After all, the parties continued to engage in effects bargaining after the facility was closed down—and after the Board’s decision was handed down. Consequently, even if the Board’s remedy was intended to ensure prospective union strength at the bargaining table, the relief would still be “fully justified.” Consequently, the appeals court agreed with the Board that the “changed circumstances” were irrelevant; they did not mitigate the injury inflicted on the union during the futile bargaining period.

Relief was proper. A reimbursement remedy is appropriate “where it may fairly be said that [an employer’s] substantial unfair labor practices have infected the core of a bargaining process to such an extent that their effects cannot be eliminated by the application of traditional remedies,” the Board stated in its decision. And, in fashioning this remedy in this case, the Board “was acting at the ‘zenith’ of its discretion,” the appeals court said. Given the highly deferential standard of review that applies to such agency decisions, the D.C. Circuit saw no basis for overturning the Board’s order requiring the employer to reimburse the union its negotiation expenses.

Original posting: http://www.employmentlawdaily.com/index.php/news/nlrb-rightly-ordered-obstinate-employer-to-pay-union-negotiating-expenses