The opinion
United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued November 14, 2023 Decided July 5, 2024
No. 22-1272
HOSPITAL DE LA CONCEPCION,
PETITIONER
v.
NATIONAL LABOR RELATIONS BOARD,
RESPONDENT
Consolidated with 22-1297
On Petition for Review and Cross-Application
for Enforcement of an Order
of the National Labor Relations Board
David Fortney argued the cause for petitioner. On the
brief was José R. González-Nogueras.
Brady Francisco-FitzMaurice, Attorney, National Labor
Relations Board, argued the cause for respondent. With him
on the brief were Jennifer A. Abruzzo, General Counsel, Ruth
E. Burdick, Deputy Associate General Counsel, David S.
2
Habenstreit, Assistant General Counsel, and Usha Dheenan,
Supervisory Attorney.
Before: HENDERSON, MILLETT and PILLARD, Circuit
Judges.
Opinion for the Court filed by Circuit Judge HENDERSON.
KAREN LECRAFT HENDERSON, Circuit Judge: Hospital de
la Concepción, Inc. (HDLC) petitions the court for review of a
decision and order of the National Labor Relations Board
(NLRB or Board), reported at 371 NLRB No. 155 (Sept. 29,
2022). In that decision, the Board affirmed and adopted with
modifications the findings of an Administrative Law Judge
(ALJ). The ALJ found that HDLC violated Section 8(a)(1) and
(5) of the National Labor Relations Act (NLRA), 29 U.S.C.
§ 158(a)(1) & (5), by failing to bargain with the labor union
which represents four units of HDLC’s employees, Unidad
Laboral de Enfermeras(os) y Empleados de la Salud (Union),
before reducing those employees’ work hours and by failing to
provide the Union with requested information relevant to the
decision to reduce work hours. HDLC asserts that it was
privileged under the operative collective-bargaining
agreements (CBAs) to unilaterally reduce employees’ work
hours without bargaining, that it had no obligation to provide
the Union with the information requested and, in the
alternative, that it satisfied any such obligation by responding
to the Union’s requests. The Board cross-applies for
enforcement of its decision and order. For the reasons set forth
below, we deny HDLC’s petition and grant the NLRB’s cross-
petition for enforcement.
I. Background
3
HDLC operates an acute care hospital in San German,
Puerto Rico. On March 12, 2020, then-Governor of Puerto Rico
Wanda Vázquez-Garced declared a state of emergency in
response to the COVID-19 pandemic. On March 15, 2020,
Governor Vázquez-Garced issued an executive order requiring
residents to remain in their homes and non-essential businesses
to suspend in-person operations. The stay-at-home provision
was subject to several enumerated exceptions; in relevant part,
residents were permitted to leave their homes to keep medical
appointments, visit a hospital, laboratory or other healthcare
facility, and travel to and from workplaces deemed essential
and therefore not subject to the closure provision—including
hospitals. Although the March 15 executive order expired on
March 30, subsequent executive orders issued on March 30 and
April 12 extended the lockdown measures set forth in the initial
order and imposed additional restrictions including the
suspension of all elective medical procedures through May 3,
2020.
By mid-April, HDLC observed a decline in its average
daily patient volumes. J.A. 917. Based on internal financial
projections, HDLC predicted that its operating expenses would
eclipse its revenues beginning in March 2020 and continuing
through the rest of the year. J.A. 1373. On April 14, 2020,
HDLC announced by letter addressed to all employees that it
intended to “implement certain suspensions without salary of
several employees,” “reduce the compensation of the exempt
employees” and “reduce the work schedule[s] of many
employees that will continue to provide services at the
Hospital.” J.A. 1369. By way of explanation, the letter stated
that HDLC was “forced to [make] a series of difficult
decisions” to stem the “unexpected enormous financial impact
related to the effects of this pandemic in the increase in cost of
the necessary materials and equipment for protection, the
dramatic reduction in the census of patients and the limitations
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imposed by the Executive Orders in the services that [HDLC]
can provide.” J.A. 1368–69. That day, HDLC began
distributing individualized letters to affected employees
specifying their reduced hours.
Four units of HDLC’s employees—medical technologists;
technical employees and practical nurses; registered nurses;
and diet, cafeteria and maintenance employees—are
represented by the Union. Although the record does not reflect
the precise number of unit employees whose hours were
reduced, HDLC does not dispute the ALJ’s finding that “the
reduction in work hours . . . affected approximately 349 unit
employees’ pay and other benefits, such as vacation, sick time,
holidays, continuing education, and Christmas bonuses, which
are accrued based upon the number of hours or days worked
per the CBAs,” Hospital De La Concepcion, 371 NLRB No.
155, slip op. at 7 (Sept. 29, 2022).
On April 15, 2020, Union Representative Ariel Echevarria
emailed HDLC’s Human Resources Director, Jorge Rodriguez
Diaz, requesting that HDLC withdraw its decision to
implement a reduction in employees’ work schedules because
HDLC had provided the Union with neither notice nor an
opportunity to bargain over the decision before its
implementation. J.A. 376. Echevarria alternatively requested
that, if HDLC declined to withdraw the decision, it provide the
Union with information responsive to several requests for
information relevant to its April 14th action. See J.A. 376–77.
HDLC declined to withdraw its decision and only partially
responded to the Union’s information requests.
On May 7, 2020, the Union filed a charge against HDLC
with the NLRB, alleging that HDLC had negotiated in bad faith
by implementing a reduction in work hours, temporarily
closing the Endoscopy Department without notifying or
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negotiating with the Union and refusing to provide the Union
with information it requested related to those decisions. On
March 17, 2021, the Union amended the charge to allege that
HDLC violated Section 8(a)(1) and (5) of the Act by
unilaterally reducing the work hours of the unit employees
without notice to or negotiation with the Union and by refusing
to furnish requested information necessary for it to perform its
duties as the exclusive bargaining representative of the unit
employees. The ALJ found that HDLC violated the Act as
alleged and issued a recommended order. Hospital De La
Concepcion, 371 NLRB No. 155, slip op. at 13–16 (Sept. 29,
2022) (requiring HDLC to rescind the changes it unilaterally
implemented in April 2020, negotiate with the Union before
implementing any changes in wages, hours or other terms and
conditions of employment of the represented employees, and
make affected employees whole for any loss of earnings and
other benefits suffered as result of the changes, including by
compensating affected employees for the adverse tax
consequences, if any, of receiving lump-sum backpay awards).
On review, the Board affirmed the ALJ’s findings and
conclusions with some modifications and adopted the
recommended order with amendments to the remedy. Id. at 1.
As modified, the Board’s order requires HDLC to: (1) rescind
the changes it unilaterally implemented to the unit employees’
terms and conditions of employment in April 2020; (2) provide
the Union with notice and opportunity to bargain over any
changes in unit employees’ wages, hours or other terms and
conditions of employment before implementing such changes;
(3) make the affected employees whole for any loss suffered as
a result of the reduction in scheduled hours; (4) compensate
affected employees for the adverse tax consequences, if any, of
a lump-sum backpay award; (5) furnish to the Union the
information it requested in April 2020; and, (6) post and
electronically distribute a remedial notice. Id. at 2–3.
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II. Analysis
HDLC mounts several challenges to the Board’s decision
and order. First, it argues that the Board erred in concluding
that it violated Section 8(a)(5) and (1) of the Act by failing to
bargain with the Union over its decision to reduce unit
employees’ work hours because, in its view, the CBAs
authorized it to take such action unilaterally. Second, with
respect to the same violation, HDLC argues that the Board
erred by failing to consider whether it had a sound arguable
basis to interpret the CBAs as authorizing it to reduce
employees’ work schedules without bargaining. Third, HDLC
argues that the Board erred in concluding that it violated
Section 8(a)(5) and (1) of the Act by failing to respond to the
Union’s requests for information relevant to the decision to
reduce unit employees’ work hours because, in its view, it had
no statutory obligation to provide the requested information; in
the alternative, HDLC argues that it provided the Union with
the information it requested. Fourth, HDLC argues that the
Board erred by finding that it had not established that its failure
to bargain was excusable under the economic exigency
defense. Finally, HDLC argues that the Board erred in
calculating the make-whole remedy insofar as it failed to
exclude the interim earnings of any employees who obtained
other employment during the period their hours were reduced.
We review Board decisions with a “very high degree of
deference.” Ozburn-Hessey Logistics, LLC v. NLRB, 833 F.3d
210, 217 (D.C. Cir. 2016) (quoting Bally’s Park Place, Inc. v.
NLRB, 646 F.3d 929, 935 (D.C. Cir. 2011)). We set aside a
Board order only “when it departs from established precedent
without reasoned justification, or when the Board’s factual
determinations are not supported by substantial evidence.”
King Soopers, Inc. v. NLRB, 859 F.3d 23, 29 (D.C. Cir. 2017)
(quotation omitted). “We owe no special deference to the
7
Board’s interpretation of contract language, but review it de
novo, applying ‘ordinary principles of contract law.’” Dist. 4,
Commc’ns Workers of Am. AFL-CIO v. NLRB, 59 F.4th 1302,
1311 (D.C. Cir. 2023) (quoting Pac. Mar. Ass’n v. NLRB, 967
F.3d 878, 885 (D.C. Cir. 2020)). With these principles in mind,
we address HDLC’s arguments in turn and conclude that none
supports granting its petition for review.
A. Contract Coverage
“An employer violates Section 8(a)(5) and (1) if it makes
a material, substantial, and significant change regarding a
mandatory subject of bargaining without first providing the
union notice and a meaningful opportunity to bargain about the
change to agreement or impasse, absent a valid defense.” MV
Transp., Inc., 368 NLRB No. 66, 2019 WL 4316958, at *4
(Sept. 10, 2019) (citing NLRB v. Katz, 369 U.S. 736, 747
(1962)). Mandatory subjects of bargaining include “wages,
hours, and other terms and conditions of employment.”
29 U.S.C. § 158(d); accord NLRB v. Wooster Div. of Borg-
Warner Corp., 356 U.S. 342, 349 (1958). It is undisputed that
HDLC provided the Union with neither notice nor a
meaningful opportunity to bargain about its decision to reduce
unit employees’ work hours before implementing the change.
Insofar as HDLC seeks to challenge the Board’s finding that
the reduction constituted a material, substantial and significant
change to the status quo as unsupported by substantial
evidence, HDLC forfeited that argument by failing to address
it in its opening brief. See N.Y. Rehab. Care Mgmt., LLC v.
NLRB, 506 F.3d 1070, 1076 (D.C. Cir. 2007). Thus, we are left
to consider HDLC’s argument that it had no obligation to
bargain with the Union over its decision to reduce unit
employees’ work hours because the CBAs authorized it to take
such action unilaterally.
8
It is “well established” that an employer does not violate
the NLRA by taking unilateral action with respect to otherwise
mandatory subjects of bargaining if the CBA grants the
employer the right to take such unilateral action. MV Transp.,
368 NLRB No. 66, 2019 WL 4316958, at *1; accord Pac. Mar.
Ass’n, 967 F.3d at 890; see also NLRB v. U.S. Postal Serv., 8
F.3d 832, 836 (D.C. Cir. 1993) (“[T]he duty to bargain under
the NLRA does not prevent parties from negotiating contract
terms that make it unnecessary to bargain over subsequent
changes in terms or conditions of employment.”). “To conclude
that a CBA covers the challenged unilateral conduct, the
conduct must fall ‘within the compass or scope of contract
language granting the employer the right to act unilaterally.’”
Pac. Mar. Ass’n, 967 F.3d at 891 (quoting MV Transp., 368
NLRB No. 66, 2019 WL 4316958, at *17). We interpret the
relevant provisions of the CBAs de novo, according no
deference to the Board’s contract interpretation. Postal Serv., 8
F.3d at 837.
HDLC relies on Article XXXII (the “Management Rights”
or “Administration Rights” Article) of the CBAs as authority
for its unilateral implementation of reductions to unit
employees’ work hours. Article XXXII provides as follows:
Nothing agreed herein will be understood as a
limitation of the right of the Hospital to direct
and administer its operations according to the
criteria of its directors. Therefore, all of the
rights, powers, authority and functions which
up to the present has been exercised by the
Board of Directors, or which in the future it may
exercise in relation to the direction and
administration of the Hospital, will correspond
solely to the Hospital. It is expressly recognized
that these rights, powers, authority and
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prerogatives include, without any limitation
whatsoever the full and exclusive control and
operation of the hospital, the determination of
the activities which the Hospital will be
engaged in, the adoption of standards and
procedures referring to the rendering of
medical-hospital services, the method and
manner in which said services will be rendered,
the materials and equipment to be used by the
Hospital and the medical, paramedical or office
personnel that are required for said purposes;
the right to establish work shifts; to make
changes to the same and to assign personnel to
cover said shifts, the right to create new
positions, to establish job descriptions for all of
the work posts or positions, to change said job
descriptions, the right to conduct
reorganizations, whether partial or total of all of
its operations, to eliminate departments and to
establish others; to adopt new measures and/or
procedures and to make technological changes
in all of its operations, the right to maintain the
order and the efficiency in the hospital; the right
to deem all of its operations terminated as well
as also the right to transfer all of its operations
or any part of the same to any other entity,
corporation or institution. It also includes the
right to promote and to put into effect safety
measures and measures of conduct, the
determination of the number of employees, the
selection of new employees and the direction of
all of its employees, including, without any
limitation whatsoever, the right to employ, re-
employ, select and train new employees and the
right to assign, reassign, temporarily suspend,
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reinstate, promote, withdraw, discipline,
remove and transfer its employees. . . .
J.A. 369–70 (emphases added); see also J.A. 121–22, 205–06,
288–89.
HDLC asserts that the language emphasized in the
foregoing excerpt of Article XXXII encompasses reductions to
employees’ work hours. We disagree. The right to establish and
make changes to work shifts is not synonymous with a right to
make changes to the total number of hours worked. Although
changes to an employee’s shifts will affect his “hours” in the
sense of starting and ending times, such changes do not
necessarily effect a change in his total number of work hours
per week. See Control Servs., 303 NLRB 481, 483–84 (1991),
enforced, 961 F.2d 1568 (3d Cir. 1992) (unpublished table
decision) (clause reserving employer’s right to “schedule hours
of employment” did not authorize employer to unilaterally
reduce the number of hours employees would work).
Management rights clauses purporting to reserve the
employer’s right to reduce employees’ working hours are
commonly found in collective-bargaining agreements. Where
found, the right to reduce work hours tends to be stated
explicitly and separately from the right to change work shifts.
See, e.g., MV Transp., 368 NLRB No. 66, 2019 WL 4316958,
at *21 (reserving company’s right to, inter alia, “decide and
assign all schedules, work hours, [and] work shifts”); Sts. Mary
& Elizabeth Hosp., 282 NLRB 73, 81 (1986) (reserving right
to “establish, determine and change: shift starting and quitting
times, daily and weekly hours of work, and number, time and
length of shifts for groups of employees and or individual
employees”); S-B Mfg. Co., 270 NLRB 485, 490 (1984)
(reserving right to “determine the number of employees, the
number of hours, and the schedules of employment”). The
rights to promote and to put into effect safety measures and
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measures of conduct and to determine the number of
employees in no way imply a concomitant right to reduce
employees’ work hours. And although HDLC characterized the
hour reductions as “temporary suspensions without pay” in its
April 14, 2020 letter announcing the measure, J.A. 1369, the
individualized letters it distributed to affected employees
informed them not that they were “temporarily suspended” but
that their work schedules were reduced, J.A. 878–915, 1150–
1308. 1
HDLC’s proposed interpretation of Article XXXII sits in
tension with Article XIII of the CBAs (“Working Days”),
which states that, for all unit employees, “[t]he weekly regular
work days will be of 40 hours within a period of 168 hours each
week” and “[t]he regular daily work day will be of 8 hours
within a period of 24 consecutive hours.” J.A. 102, 184, 267,
350. Article XIII also provides that unit employees will receive
additional pay for “[e]very hour worked in excess of 8 hours a
1
We note that the joint appendix includes a few individualized
letters that refer to temporary suspensions rather than reductions in
work schedule. See, e.g., J.A. 1331. The record establishes that the
employees who received letters containing such language voluntarily
requested temporary suspension or unpaid leave—with two
exceptions: letters to Joel Vázquez Linares (Indoor Trolley Driver,
Security Department) and Julio Rodríguez Colón (Outdoor Trolley
Driver, Security Department) dated April 6, 2020 and March 30,
2020, respectively, purported to inform them that they were
temporarily suspended, J.A. 1328, 1329, and no other evidence in the
record suggests that they requested the suspension. Given that the
dates of these letters pre-date the April 14, 2020 letter to all
employees, that we do not know whether these employees were
represented by the Union, and that the General Counsel represented
in his briefing to the Board that no bargaining unit employees were
subjected to a non-disciplinary suspension like that described in the
letters to Vázquez Linares and Rodríguez Colón, J.A. 1876, we
discount them in our analysis.
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day” at rates ranging from “time and a half (1-1/2)” to “two
times the regular hourly pay of the employee,” depending on
the unit. Id. Moreover, each version of Article XIII includes a
section establishing the “work shifts” for each unit, expressed
in intervals of start times and end times, and a disclaimer that
the establishment of work shifts “will not limit the employer,
who[,] for needs of the service, can assign other work times.”
Id. at 102, 184–85, 267–68, 350–51. That Article XIII
addresses the regular number of hours worked per day and per
week separately from the times of day constituting a work shift
forecloses, we conclude, an interpretation of Article XXXII’s
“right to establish work shifts [and] make changes to the same”
as encompassing the right to reduce the total number of hours
an employee works per week.
HDLC argues that other provisions of the CBAs
demonstrate that the parties did not intend to “impose a
minimum number of guaranteed hours per day, per week or per
month.” Blue Br. 21. Even if that were true, it would lend little
support to HDLC’s contract coverage defense. To avail itself
of the defense, HDLC must show that some provision in the
CBAs affirmatively permits it to unilaterally reduce
employees’ hours; the mere absence of a provision expressly
prohibiting such action is insufficient. See Bath Iron Works
Corp., 345 NLRB 499, 502 (2005), aff’d sub nom. Bath Marine
Draftsmen Ass’n v. NLRB, 475 F.3d 14 (1st Cir. 2007) (“In the
unilateral change cases, the issue is whether the contract
privileges the conduct.”). Accordingly, we find no error in the
Board’s conclusion that the CBAs did not authorize HDLC to
unilaterally reduce its employees’ hours.
B. Sound Arguable Basis
HDLC next argues that the Board should have considered
whether HDLC had a sound arguable basis for interpreting the
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CBAs to authorize it to unilaterally reduce employees’ work
hours. The Board correctly determined that the sound arguable
basis analysis has no application to this case, in which the
General Counsel “alleged and litigated only a unilateral-change
violation,” not a contract-modification violation. See 371
NLRB No. 155, slip op. at 1 n.4.
The “unilateral change” case and the “contract
modification” case are fundamentally different
in terms of principle, possible defenses, and
remedy. In terms of principle, the “unilateral
change” case does not require the General
Counsel to show the existence of a contract
provision; he need only show that there is an
employment practice concerning a mandatory
bargaining subject, and that the employer has
made a significant change thereto without
bargaining. The allegation is a failure to
bargain. In the “contract modification” case,
the General Counsel must show a contractual
provision, and that the employer has modified
the provision. The allegation is a failure to
adhere to the contract. . . . [T]he issue [in a
contract modification case] is whether the
contract forbade the conduct. In the unilateral
change cases, the issue is whether the contract
privileges the conduct.
Bath Iron Works Corp., 345 NLRB at 501–02; accord Pac.
Mar. Ass’n, 967 F.3d at 884–85. An employer charged with an
unfair labor practice based on a contract modification theory
may raise the defense that it had a “sound arguable basis” for
its contrary interpretation of the CBA and that it was not
“motivated by union animus or acting in bad faith.” Bath Iron
Works, 345 NLRB at 502 (quotation and ellipses omitted).
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Because a unilateral change case requires no showing of a
contractual provision modified by the employer, whether the
employer had a sound arguable basis for its interpretation of a
particular term of the CBA is immaterial.
HDLC suggests that the Board was obligated to consider
its sound arguable basis defense because, insofar as the Board
decision relied on the finding that the CBAs guaranteed unit
employees a minimum of 40 hours per week, its violation was
in fact a contract modification under the guise of a unilateral
change. We do not read the Board’s decision to expressly find
that Article XIII “guaranteed” unit employees 40 work hours
per week. Our reading of the Board decision comports with that
of the Board, that is, it looked to Article XIII “not as a
contractual guarantee of a minimum number of hours that
HDLC altered, but as one piece of evidence supporting the past
practice and status quo of scheduling employees for 40 hours
per week,” Red Br. 28. In any event, “the authority of the Board
and the law of the contract are overlapping, concurrent
regimes,” and “the Board may proscribe conduct which is an
unfair labor practice even though it is also a breach of
contract.” NLRB v. Strong, 393 U.S. 357, 360–61 (1969). As
this court recognized in Pacific Maritime Association, the same
set of facts may support either a contract modification charge
or a unilateral change charge. See 967 F.3d at 884.
Accordingly, we reject HDLC’s argument that the Board erred
by failing to consider a defense not relevant to the theory under
which it was charged.
C. Failure to Respond to Information Requests
HDLC asserts two grounds for its challenge to the Board
finding that it violated Section 8(a)(5) and (1) of the Act when
it refused to provide certain information requested by the
Union relevant to HDLC’s decision to unilaterally reduce unit
15
employees’ work hours. First, HDLC argues that it had no duty
to provide the Union with any information related to the
decision because it had no duty to bargain over the decision.
This argument is unavailing because, as noted supra, HDLC
had a duty to bargain over the decision to reduce unit
employees’ work hours. Because HDLC makes no challenge
on appeal to the relevancy of the requested information to the
decision to reduce unit employees’ work hours, our conclusion
that HDLC had a duty to bargain over that decision compels
the conclusion that it had the concomitant duty to provide the
Union with the information it requested. Conversely, were we
to conclude that HDLC had no duty to bargain over the
decision, that would not compel the conclusion that HDLC had
no duty to provide the Union with the requested information
because it would leave unaddressed the Board’s additional
basis for concluding that HDLC’s refusal to provide the Union
with the requested information constituted a violation of
Sections 8(a)(5) and (1) of the Act: that the requests “put
[HDLC] on notice that the Union considered [HDLC]’s
conduct to be contrary to [HDLC]’s contractual and/or
statutory obligations, and thus that the Union sought the
information for the legitimate non-bargaining purposes of
policing its contracts with [HDLC] by evaluating the merits of
potential contractual grievances and/or unfair labor practices.”
Hospital de la Concepcion, 371 NLRB No. 155, slip op. at 2
n.4; see also Stericycle, Inc., 370 NLRB No. 89, 2021 WL
663731, at *1 n.5 (Feb. 17, 2021) (requiring employer to supply
information requested for the purpose of investigating a
potential grievance); Contract Carriers Corp., 339 NLRB 851,
858 (2003) (“[T]he union need not demonstrate that the
contract has been violated in order to obtain the desired
information.”).
Second, HDLC asserts that it fulfilled any duty it had to
respond to the Union’s information requests. The record belies
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HDLC’s assertion that it provided the Union with the
information it requested regarding the decision to reduce unit
employees’ work hours. HDLC provided only a partial
substantive response to certain of the Union’s information
requests; HDLC “responded” to the balance of the Union’s
information requests only in the sense that it raised objections
to them. See J.A. 1145–49. HDLC further argues that, because
the Union never replied to HDLC’s responses to the
information requests, HDLC “believed no more information
was pending or owed to the Union.” Blue Br. 38. But HDLC’s
letter rejecting as irrelevant a full fifteen of the Union’s
eighteen information requests arrived on May 6, 2020,
J.A. 1145–49, and the Union filed its grievance protesting
HDLC’s failure to provide the requested information the very
next day, see J.A. 1–2. The record evidence thus does not
reflect that the Union somehow misled HDLC into believing
that HDLC had responded in full. Because HDLC had a duty
to respond to the Union’s information requests and the record
demonstrates that it failed to do so, we find no error in the
Board’s conclusion that HDLC violated Section 8(a)(5) and (1)
of the Act by failing to provide information that was relevant
to a mandatory subject of bargaining and independently
relevant to the Union’s investigation of a potential grievance.
D. Exigent Circumstances
HDLC next argues that the Board erroneously concluded
that HDLC’s failure to bargain with the Union over the
decision to reduce unit employees’ scheduled work hours
before implementing the reduction was not excused by exigent
circumstances. Although the Board has recognized an
economic exigency exception to an employer’s obligation to
bargain, application of that exception is limited to
“extraordinary events which are ‘an unforeseen occurrence,
having a major economic effect [requiring] the company to
17
take immediate action.’” Hankins Lumber Co., 316 NLRB 837,
838 (1995) (alteration in original) (emphasis added) (quoting
Angelica Healthcare Servs., 284 NLRB 844, 853 (1987)). The
employer invoking the economic exigency exception bears a
heavy burden. RBE Elecs. of S.D., Inc., 320 NLRB 80, 81
(1995). “Absent a dire financial emergency, the Board has held
that economic events such as loss of significant accounts or
contracts, operation at a competitive disadvantage, or supply
shortages do not justify unilateral action.” Id. Moreover,
“business necessity is not the equivalent of compelling
considerations which excuse bargaining. Were that the case, a
respondent faced with a gloomy economic outlook could take
any unilateral action it wished or violate any of the terms of a
contract which it had signed simply because it was being
squeezed financially.” Hankins Lumber Co., 316 NLRB at 838
(citing Farina Corp., 310 NLRB 318, 321 (1993)).
On this record, we find no error with the Board’s
conclusion that HDLC failed to carry its burden to demonstrate
that the economic exigencies exception privileged its unilateral
reduction in employees’ scheduled work hours. HDLC argues
that it faced an “uncertain situation” because the COVID-19
pandemic and related lockdowns “had an economic impact on
the Hospital.” Blue Br. 33. But, on the record before us, HDLC
has failed to offer “evidence that its financial situation was so
dire that it either had to implement its final offer when it did”
without bargaining first “or suffer financial ruin.” U.S. Testing
Co., 324 NLRB 854, 854 (1997). The Board’s determination
that HDLC’s claim that it reasonably expected to sustain
operating losses unless it reduced labor costs starting in April
was insufficient to support application of the exception
comports with Board precedent on the economic exigency
exception, which sets a high bar for finding “compelling”
circumstances and restricts “requiring immediate action” to the
literal sense of each word in that phrase. See, e.g., Seaport
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Printing & Ad Specialties, Inc., 351 NLRB 1269, 1270 (2007)
(finding that employer was excused from bargaining layoffs
when mayor ordered a mandatory evacuation of the city due to
the impending arrival of a hurricane, forcing closure of the
employer’s facility, but that employer was not excused from
bargaining over the effects of the layoff decision and related
personnel decisions after the hurricane had passed).
E. Exclusion of Interim Earnings
Finally, HDLC argues that the court should modify the
Board’s make-whole remedy to exclude interim earnings, if
any, of employees who obtained other employment during the
period their hours were reduced. The Board determined that the
method of calculating backpay awards established in Ogle
Protection Service, 183 NLRB 682 (1970), applied because
unit employees were neither laid off nor terminated. See
Deming Hosp. Corp. v. NLRB, 665 F.3d 196, 200 (D.C. Cir.
2011). In Community Health Services, Inc., 361 NLRB 333,
334–38 (2014), the NLRB established as a matter of policy that
interim earnings should not be deducted when the Ogle method
of calculating backpay is applied in cases involving economic
loss but no cessation of employment. HDLC did not challenge
the General Counsel’s cross-exceptions to the ALJ’s
recommendation, which explicitly requested that the Board
apply Ogle as modified by Community Health Services. J.A.
1877. HDLC’s failure to object regarding the inclusion of
interim earnings in an answering brief before the Board
deprives this court of jurisdiction to review it. See Parkwood
Dev. Ctr., Inc. v. NLRB, 521 F.3d 404, 410 (D.C. Cir. 2008);
29 U.S.C. § 160(e). Accordingly, we cannot consider HDLC’s
argument that the Board should have excluded interim earnings
from its remedy.
19
For the foregoing reasons, we deny HDLC’s petition for
review and grant the Board’s cross-application for enforcement
of its order.
So ordered.