Maryland Attorney General Opinion 98 OAG 114

114] [98 Op. Att’y

LABOR LAW

PUBLIC AGENCIES AND ENTITIES – NLRA – GENERAL

ASSEMBLY MAY ADD THE UNIVERSITY OF MARYLAND

MEDICAL CENTER TO LIST OF ENTITIES SUBJECT TO

MARYLAND COLLECTIVE BARGAINING LAW

November 21, 2013

David A. Smulski

Policy Analyst

Department of Legislative Services

General Assembly of Maryland

On behalf of the Senate Finance Committee of the Maryland

General Assembly, you have requested our opinion regarding

whether the employees of the University of Maryland Medical

Center (“UMMC” or “the Medical Center”)—the flagship

hospital within the University of Maryland Medical System

(“UMMS” or “the System”)—are covered by either the National

Labor Relations Act (“NLRA”) or Maryland labor laws. You

have also asked us to explain the “status” of UMMS and/or the

Medical Center “in relation to State Government.” Your request

emerges from the Committee’s consideration, during the 2013

session, of proposed legislation that would have added the

Medical Center to the list of State entities that are subject to

Maryland’s collective bargaining law. See Senate Bill 759 (2013).

Given the context in which your request arose, we interpret your

request as asking whether the Medical Center—and not the other

constituent member hospitals of UMMS—is a State entity and

whether the General Assembly could place the Medical Center’s

employees under the purview of Maryland collective bargaining

laws that apply only to State employees.

In our opinion, the Medical Center is exempt from the

NLRA and is not currently included within the scope of

Maryland’s collective bargaining law, which grants protections

similar to those in the NLRA to specific classes of State

employees. As for the “status” of the Medical Center in relation

to the State, we cannot broadly determine whether an entity is an

instrumentality of the State for all purposes. Rather, the Court of

Appeals requires us to evaluate the entity’s State status within a

particular statutory context and with reference to the class of

entities (such as “instrumentalities of the State” or “public

bodies”) that the statute covers. The Maryland statute governing

Gen. 114] 115

the collective bargaining process, however, does not lend itself to

this type of inquiry because it simply lists the specific entities to

which it applies; it does not identify a general category of entities

to which it applies or establish a set of criteria that govern

inclusion on the list. Nevertheless, in light of the recent decision

by the Court of Appeals that UMMS is an instrumentality of the

State for purposes of the Public Information Act (“PIA”), Napata

v. University of Md. Med. Sys. Corp., 417 Md. 724 (2011), we

conclude that the General Assembly has retained sufficient

control over the Medical Center to add it to the list of employers

that are covered by the State collective bargaining law if it so

chooses.

I

Background

A. The University of Maryland Medical Center and the

University of Maryland Medical System

The University of Maryland Medical Center traces its

origins to the Baltimore Infirmary, which was founded in 1823 by

the faculty of the University of Maryland College of Medicine to

serve as a teaching hospital. The Infirmary became part of the

University of Maryland in 1897 and was renamed the University

of Maryland Hospital. It was owned and operated by the

University for the next 87 years, first as a private corporation, and

then, after merging in 1920 with what is now the University of

Maryland, College Park, as a governmental entity. See 63

Opinions of the Attorney General 106, 109-111 (1978) (citing

University of Maryland v. Williams, 9 G. & J. 365 (1838)); see

also Pearson v. Murray, 169 Md. 478, 483 (1936) (concluding

that, after the merger with the College of Agriculture in College

Park, the School of Law was without question “a branch or

agency of the state government”).

In 1984, the General Assembly determined that it had

become “unnecessarily costly and administratively cumbersome

for the University [of Maryland] to finance, manage, and carry

out the patient care activities of an academic institution within the

existing framework of a State agency, since many applicable

laws, management structures, and procedures were developed to

implement types of governmental functions which differ from the

operations of a major patient care facility.” Md. Code Ann.,

116] [98 Op. Att’y

Educ. (“Educ.”) § 13-302(5).1 According to the General

Assembly, these “patient care operations” would be “more

efficiently served by contemporary legal, management, and

procedural structures utilized by similarly situated, private entities

throughout the nation.” Id. The Legislature also found that the

“interests of the citizens of the State, the region, and the

community naturally served by University Hospital will be best

met by . . . creat[ing] a separate legal and organizational structure

for the medical system to provide independence and flexibility of

management and funding, while assuring a compatible and

mutually beneficial relationship with the University [of

Maryland].” Id. § 13-302(7).

On the basis of these concerns, the General Assembly passed

legislation creating the University of Maryland Medical System

Corporation to own and operate the University Hospital as a

“private, nonprofit, nonstock corporation formed under the

general corporation laws of this State.” Id. § 13-301(m); see

generally id. §§ 13-302–13-313; see also 1984 Md. Laws, ch.

288. The legislation also established a process for transferring the

assets of the State-owned hospital to UMMS. Educ. § 13-307.

The express purpose of the new entity was to “provide medical

care of the type unique to University medical facilities for the

citizens of the State and region,” id. § 13-302(1), and “render[]

comprehensive health care to the community naturally served by

University Hospital . . . .” Id. § 13-302(3). Accordingly, the

University Hospital became part of UMMS in 1984, as did the

University Cancer Center and the clinical arm of the Maryland

Institute for Emergency Medical Services Systems (now called

the R Adams Cowley Shock Trauma Center). See id. §§ 13-

301(k), 13-302(8). Subsequently, in 1998, UMMS changed the

name of the University of Maryland Hospital to the University of

Maryland Medical Center. See Maryland Manual, University of

Maryland Medical System, http://msa.maryland.gov/msa/

mdmanual/25ind/priv/html/medh.html (last visited Nov. 12,

2013).

The legislation that created UMMS addressed the System’s

relationship to State government. The statute explicitly provided

that UMMS “shall not be a State agency, political subdivision,

public body, public corporation, or municipal corporation” and

exempted UMMS from “any provisions of law affecting only

1

Unless otherwise indicated, all citations to the Education Article

are to the 2008 Replacement Volume and the 2013 Supplement.

Gen. 114] 117

governmental or public entities.” Educ. § 13-303(a)(2). The

System was to be a “private, nonprofit, nonstock corporation

formed under the general corporation laws” with “all powers of a

Maryland corporation which are not expressly limited by this

subtitle,” including “the power to convey, lease mortgage,

encumber, and otherwise deal with all its assets.” Id. §§ 13-

301(m), 13-303(b).

Although it established UMMS as an ostensibly private

corporation, the General Assembly ensured that the State would

continue to play a prominent role in the System’s governance.

For example, the authorizing statute required that UMMS’s

articles of incorporation and the initial transfer of assets from the

State be approved by the Board of Public Works. Id. §§ 13-

303(a)(1), 13-307(e). The voting members of UMMS Board of

Directors are all appointed by the Governor,2 id. § 13-304(b), and

the appointments the Governor makes must include three

members of the Board of Regents of the University System of

Maryland (“USM”) and two members of the General Assembly.

Id. § 13-304(c)(2), (3). The Chancellor of the USM, the President

of the University of Maryland, Baltimore, and the Dean of the

University of Maryland School of Medicine also serve ex officio

as nonvoting members of the UMMS board. Id. § 13-304(c)(7).

The General Assembly also provided for continuing

operational coordination between UMMS and the University.

The Chief Executive Officer of UMMS is elected by the UMMS

Board of Directors, but must also be appointed to a “joint office”

as Vice President of UMMS by the Board of Regents. Id. § 13-

304(i). The Medical Center was required to continue to serve as

the teaching hospital for the University of Maryland, see id.

2

The UMMS Board of Directors submits a list of nominees to the

Board of Regents of USM “for comment and to the Governor for

consideration.” Educ. § 13-304(e). As we have explained in prior

advice, however, the final authority to appoint rests solely with the

Governor. See Letter from William R. Varga, Assistant Attorney

General, to Clifford M. Kendall, Chairman of the Board of Regents

(Aug. 15, 2008). The Maryland Court of Appeals reached the same

conclusion in Napata. 417 Md. at 730 (“[A]ll voting members on

UMMS Board of Directors are appointed by the Governor . . . .”).

Indeed, in 2008, the Governor appointed members to the UMMS board

who had not been nominated by the board. See Alexander Pyles, Union

Organizing at University of Maryland Medical Center, Daily Record

(Oct. 22, 2012).

118] [98 Op. Att’y

§§ 13-302(1), 13-305(a), and “continue to make available medical

services to residents of various State institutions whose residents

. . . were served by the Hospital.” Id. § 13-303(l). UMMS is

required to enter into annual contracts with the University

regarding “all financial obligations, exchanges of services, and

any other agreed relationships between the University and

[UMMS] for the ensuing fiscal year,” id. § 13-306(a), and may

only establish “nonprofit or for-profit subsidiaries or related

entities to the extent approved by the University in the annual

contract.” Id. § 13-303(k).

With respect to personnel, the statute provided that the

clinical faculty at the University would serve as the medical staff

of the Medical Center and hold positions within both institutions.

Id. § 13-305(a). Other “University employee[s] working in the

medical system” were given the option to remain a University

employee covered by the State personnel system or become an

employee of UMMS. Id. § 13-305(b)(2). Those who elected to

become UMMS employees nevertheless remained eligible to

participate in the State Employees’ Retirement System under

certain conditions. See Md. Code Ann., State Pers. & Pens.

(“SPP”) §§ 31-102(2)(xx) and 31-107 (2009 Repl. Vol. and 2013

Supp.).3 New employees hired after the July 1, 1984 “transfer

date,” however, qualified as medical system employees

exclusively, such that, in practice, University employment would

be phased out over time. In the meantime, the Legislature

mandated that UMMS “treat medical system University personnel

on the same basis as Medical System Corporation employees” and

maintain “an integrated seniority list” of UMMS and University

personnel. Educ. § 13-305(b)(3), (4).

Certain other aspects of UMMS’s operations also reflect a

continuing governmental presence. For example, although the

medical system was exempted from State procurement laws in

general, it was nonetheless required to “conduct procurement

activities consistent with minority purchasing standards

applicable to State government agencies.” Id. § 13-303(e). And

while the statute includes a specific provision requiring UMMS to

retain private counsel to represent the University employees who

elected not to become employees of the System, the Attorney

General’s Office retained the authority to determine whether

3

Unless otherwise indicated, all citations to the State Personnel

and Pensions Article are to the 2009 Replacement Volume and 2013

Supplement.

Gen. 114] 119

those University employees were entitled to representation in the

first place. Id. § 13-308(d).

The General Assembly provided that the State would

maintain some financial control over UMMS as well. Although

UMMS does not depend on the State budget for resources, it must

“coordinate” its “fund-raising efforts” with the University of

Maryland, id. § 13-303(j), and may only receive grants from the

General Assembly after approval from the Board of Regents. Id.

§ 13-303(i). Moreover, to ensure the System’s “financial indepen-

dence and stability,” the legislation provided that the State

Treasurer would hold an “Operating Reserve Fund” from which

the System’s board of directors could request loans. Id. § 13-309.

The transfer of such funds requires the approval of the Board of

Public Works. Id. UMMS also must file annual audited financial

statements with the Governor and Board of Regents. Id. § 13-

303(g).

Finally, the General Assembly gave the Board of Regents

and Board of Public Works the authority to terminate UMMS if

they both find that UMMS has “failed to realize” its public

purposes. Id. § 13-311(c). In that event, UMMS assets would

revert to the State. Id. § 13-311(b).

Since its inception in 1984, UMMS has expanded to form

affiliations with eight more “member institutions” in addition to

the Medical Center: the University of Maryland Rehabilitation

and Orthopedics Institute (formerly Kernan Hospital); the

University of Maryland Medical Center Midtown Campus

(formerly Maryland General Hospital); the Mount Washington

Pediatric Hospital; the University of Maryland Baltimore-

Washington Medical Center; University of Maryland Shore

Regional Health; the Upper Chesapeake Health System (which

includes Upper Chesapeake Medical Center and Harford

Memorial Hospital); the University of Maryland Charles Regional

Medical Center; and the University of Maryland St. Joseph

Medical Center. See UMMS, “Member Institutions,” http://

www.umms.org/hospitals/index.htm(last visited Nov. 5, 2013). It

is our understanding that these member institutions were

previously private hospitals and, upon affiliation with UMMS,

retained some form of separate legal status and currently maintain

120] [98 Op. Att’y

their own, separate, boards of directors.4 By contrast, the Medical

Center is governed directly by the UMMS board and is not a

separate legal entity.

B. The National Labor Relations Act

The National Labor Relations Act was enacted in 1935 in

response to “[t]he denial by some employers of the right of

employees to organize and the refusal by some employers to

accept the procedure of collective bargaining . . . .” 29 U.S.C.

§ 151. Among other things, the legislation established the National

Labor Relations Board (“NLRB”). The NLRB facilitates the

election of collective bargaining representatives by private-sector

employees,5 investigates charges of unfair labor practices, and

adjudicates disputes between private-sector employers and

employees under the NLRA. See id. §§ 159-161. The NLRA

does not, however, apply to “any State or political subdivision

thereof.” Id. § 152(2). Thus, state employers (and employees) are

not covered by the NLRA, and they do not fall under the

jurisdiction of the NLRB.

Although private hospitals are covered by the NLRA, the

particular relationship between UMMS and the State of Maryland

rendered uncertain the applicability of federal law to the Medical

Center. In 1989, in part out of concern that federal law might not

apply, the General Assembly considered a bill that would have

amended the UMMS authorizing statute to grant UMMS

employees some of the same labor privileges that State employees

enjoyed at the time. See House Bill 303 (1989); Letter from

Robert A. Zarnoch, Assistant Attorney General, and Noreen A.

Armetta, Staff Attorney, to Del. Anne S. Perkins (March 20,

1989). The draft legislation was never enacted.

In 1990, an employee at the Medical Center—which at that

point was still called the University Hospital—filed a charge with

the NLRB alleging violations of the NLRA. As discussed in

4

The boards of the various UMMS member institutions are listed

on each institution’s website. See, e.g., http://www.stjosephtowson.com/

About-us/Leadership.aspx (listing Board of Directors of St. Joseph);

http://www.shorehealth.org/news/article.shtml?id=940 (listing Board of

Shore Regional Health).

5

The NLRB does, however, have jurisdiction over the U.S. Postal

Service—the only governmental entity with that distinction. 39 U.S.C.

§ 1203.

Gen. 114] 121

more detail below, a regional director of the NLRB6 concluded

that UMMS was a “political subdivision” of Maryland under

§ 152(2) of the NLRA and therefore refused to issue a complaint

for lack of jurisdiction. See Letter Determination of the Regional

Director, NLRB Region 5, Case 5-CA-20678 (Feb. 7, 1990). The

NLRB revisited the issue in 2010 and again concluded that

UMMS qualified as a political subdivision and, thus, was not

subject to the NLRA. See Dismissal Letter from the Regional

Director, NLRB Region 5, Case 5-CB-10912 (Sept. 10, 2010).

C. State Collective Bargaining Law

The Maryland collective bargaining law, enacted in 1999,

gives certain classes of State employees the right to collectively

bargain, subject to certain exceptions. See SPP § 3-301; 1999

Md. Laws, ch. 298; Maryland Transp. Auth. v. Maryland Transp.

Auth. Police Lodge #34 of the Fraternal Order of Police, 420 Md.

141, 162 (2011). Prior to 1999, State employees’ collective

bargaining rights were defined by Executive Order. See

Executive Order 01.01.1996.13. But the Executive Order

permitted State employers to enter into only non-binding

collective bargaining agreements because, under established

Court of Appeals precedent, a government agency was not

allowed to enter into a binding agreement that would delegate its

discretion without explicit authorization from the General

Assembly. See McCulloch v. Glendening, 347 Md. 272, 275

(1997).

The collective bargaining law provides such explicit

legislative authorization for collective bargaining to employees of

the principal departments in the Executive Branch of State

government and eleven other specified agencies: the Maryland

Insurance Administration, the State Department of Assessments

and Taxation, the State Lottery and Gaming Control Agency, the

USM, Morgan State University, St. Mary’s College of Maryland,

Baltimore City Community College, the Comptroller, the State

Retirement Agency, the State Department of Education, and, for

certain employees, the Maryland Transportation Authority. SPP

§§ 3-102(a), 3-301(a). Conversely, the statute identifies certain

categories of employees within those agencies who are not

6

The NLRA permits the NLRB to delegate certain decision-

making authority to its regional directors, subject to the Board’s

review. 29 U.S.C. § 153(b).

122] [98 Op. Att’y

conferred collective bargaining rights. See Id. § 3-102(b).

Relevant to our purposes, “employee[s] who [are] entitled to

participate in collective bargaining under another law” are not

covered by the statute. Id. § 3-102(b)(8). Employees covered by

the NLRA, therefore, would not be covered by the State law.

Like the NLRA, Title 3 of the Personnel and Pensions

Article prohibits unfair labor practices, id. § 3-306, establishes

procedures for employees to elect a bargaining representative, id.

§§ 3-401–3-407, and regulates the collective bargaining process.

Id. § 3-502. Responsibility for administering and enforcing the

law is divided between the State Labor Relations Board (“SLRB”)

and the State Higher Education Labor Relations Board

(“SHELRB”). The SLRB has jurisdiction over the employees of

all of the units listed in § 3-102 except for the USM, Morgan

State, St. Mary’s College, and Baltimore City Community

College. Id. § 3-205(a). Employees of these other government

units fall under the jurisdiction of the SHELRB. Id. § 3-2A-05(a).

D. Senate Bill 759

During the 2013 legislative session, the Senate Finance

Committee considered Senate Bill 759, which would have added

the Medical Center to the list of employers covered by the State

collective bargaining law.7 It appears that the purpose of the

proposed legislation was to rectify a perceived inequity between

the labor protections afforded to employees at the Medical Center

and those provided to similar employees at other UMMS hospitals

and private hospitals in general. During hearings on this proposed

legislation, the committee heard testimony that the other member

hospitals of UMMS were covered by the NLRA and that the

eligible employees of all UMMS hospitals, except for the Medical

Center, were represented by labor unions.8 Some legislators and

7

Senate Bill 759 did not specify whether the Medical Center would

be subject to the jurisdiction of the SLRB or the SHELRB, which has

responsibility for the University of Maryland employees who work

alongside the Medical Center employees. Any future legislation should

place the Medical Center under the jurisdiction of a particular

regulatory entity.

8

In October 2012, the UMMS Board gave labor union officials

access to the Medical Center for ninety days to allow SEIU Local 1199

the opportunity to convince certain employees to join the union. See

Pyles, Union Organizing at University of Maryland Medical Center.

Based on the testimony at the hearing, it appears that the union’s efforts

were unsuccessful.

Gen. 114] 123

proponents of the bill explained that the Medical Center fell

outside the jurisdiction of the NLRB and, hence, that amendments

to State law were required to afford Medical Center employees

the same collective bargaining rights as the employees at other

UMMS hospitals.

UMMS opposed the bill on two grounds. First, the General

Counsel asserted that factual circumstances had changed since

1990 and that the NLRB, if faced with the question again today,

might well conclude that the Medical Center is no longer a

“political subdivision” of Maryland. Second, she argued that the

General Assembly could not subject the Medical Center to the

jurisdiction of the SLRB (or SHELRB) because the Medical

Center is not a State agency and its employees are not State

employees. Although the Committee took no further action on

the bill, the questions about the Medical Center raised during the

hearing appear to have prompted this request for advice. Given

that context, we direct our analysis to the Medical Center in

particular, rather than the other member hospitals of UMMS,

which, as we understand it, already have employees with

collective bargaining representation.

II

Analysis

We first consider whether the Medical Center is covered by

the NLRA. If it is, the provisions of the federal law would likely

preempt any effort to add it to the entities subject to Maryland’s

collective bargaining law. We then examine the Maryland law to

determine whether the Medical Center is already encompassed by

one of the entities covered by the law; if so, further inquiry into

the System’s “status” for purposes of collective bargaining would

be unnecessary. And finally, as we conclude that neither federal

nor Maryland law affords the System’s employees collective

bargaining rights, we explore whether UMMC remains subject to

a level of State control sufficient to enable the General Assembly

to add it to the list of employers that are subject to the Maryland

law. We believe that it is.

A. The Medical Center is Exempt from the National Labor

Relations Act as a “Political Subdivision.”

The NLRA excludes from its definition of “employer” “any

State or political subdivision thereof.” 29 U.S.C. § 152(2). Thus,

124] [98 Op. Att’y

the collective bargaining rights set forth in federal law do not

extend to employees of a state or a political subdivision of a state.

Although UMMS’s authorizing statute specifically provides

that the system is not a “State agency” or a “political

subdivision,” the Supreme Court has held that “[f]ederal, rather

than state, law governs the determination, under [§ 152(2)],

whether an entity created under state law is a ‘political

subdivision’ of the State and therefore not an ‘employer’ subject

to the Act.” NLRB v. Natural Gas Utility Dist. of Hawkins

County, Tennessee, 402 U.S. 600, 602-03 (1971); see also Shelby

County Health Care Corp., 343 N.L.R.B. 346, 358 (2004) (citing

Hawkins County for the proposition that “state law is not

controlling on the question of whether an entity is a political

subdivision and that it is to ‘the actual operations and

characteristics’ of the entity that the Board must look in deciding

whether the entity is exempt from the Act’s coverage”). The fact

that the Maryland statute uses the same term as the NLRA,

therefore, is not determinative. Federal law governs.

As the Supreme Court has recognized, the NLRA does not

define the term “political subdivision,” and the “Act’s legislative

history does not disclose that Congress explicitly considered its

meaning.” Hawkins County, 402 U.S. at 604. However:

The legislative history does reveal . . . that

Congress enacted the [§ 152(2)] exemption

to except from Board cognizance the labor

relations of federal, state, and municipal

governments, since governmental employees

did not usually enjoy the right to strike. In

the light of that purpose, the Board . . . “has

limited the exemption for political

subdivisions to entities that are either (1)

created directly by the state, so as to

constitute departments or administrative arms

of the government, or (2) administered by

individuals who are responsible to public

officials or to the general electorate.”

Id. at 604-05 (quoting the NLRB’s brief) (emphasis added); see

also N.L.R.B. v. Princeton Memorial Hosp., 939 F.2d 174, 177

(4th Cir. 1991) (describing “two part test in Hawkins County”);

Univ. of Vermont, 297 N.L.R.B. 291, 294-95 (1989) (applying test

to University).

Gen. 114] 125

In a 1990 decision, an NLRB regional director concluded

that UMMS was a “political subdivision,” relying on both prongs

of the Supreme Court’s decision in Hawkins County. With

respect to the first prong, the regional director first noted that “the

Employer is a corporation . . . established directly by an act of the

[Maryland] General Assembly” and that the legislation required

UMMS to enter into annual contracts with the University. Letter

Determination of the Regional Director, Case 5-CA-20678, at 1.

He also emphasized that over 200 employees—including the one

who brought the charges under review—“retain[ed] their

eligibility for State employee benefits” and that, therefore, “the

Employer in the instant case operates as a joint employer with the

University . . . .” Id. With respect to the second prong, the

director reasoned that “the Employer is administered by a board

of directors, all of whom are appointed by the governor” and that

the CEO of UMMS “concurrently serves as a vice president” of

the University of Maryland. Id. at 1-2. On the basis of these

facts, the Regional Director concluded that the NLRA did not

apply:

The Board does not have jurisdiction over

employers which constitute departments or

administrative arms of the government or

over employers administered by individuals

who are responsible to public officials or to

the electorate. From these facts, it would

appear that [UMMS], in addition to its status

as a joint employer with a department or

administrative arm of the state, is also an

entity administered by individuals who are

responsible to public officials or to the

electorate. I therefore am refusing to issue

[a] complaint in this matter.

Id. at 2 (internal citations omitted). Another NLRB Regional

Director reaffirmed this determination in 2010, concluding that

“UMMS is an instrumentality of the State of Maryland; thus, it is

excluded from the National Labor Relations Board’s jurisdiction

under Section [152(2)] . . . .” Dismissal Letter from the Acting

Regional Director, NLRB Region 5, Case 5-CB-10912.

These decisions establish that, at least as of 2010, the NLRB

did not believe it had jurisdiction over the Medical Center. Given

that all voting UMMS board members remain gubernatorial

appointees, we see little reason to believe that the NLRB would

126] [98 Op. Att’y

not still find that the Medical Center is “administered by

individuals who are responsible to public officials or to the

general electorate.”9 Hawkins County, 402 U.S. at 604-05. Under

federal law, this is sufficient to exclude an employer from the

jurisdiction of the NLRA as a “political subdivision.” Id.; see also

Univ. of Vermont, 297 N.L.R.B at 295 (finding the University of

Vermont to be a political subdivision of the State of Vermont, and

thus exempt from coverage under the NLRA, where “12 of the 21

trustees are selected by the State, either by legislative election or

by gubernatorial appointment”). As noted above, this view is also

consistent with our previous advice, issued in 1989, that UMMS

was likely exempt from the NLRA because “it is clear that the

Corporation is administered by individuals who are responsible to

public officials.” March 20, 1989 Advice Letter at 2.

To be sure, some circumstances have changed since 1990.

For example, fewer employees of the Medical Center remain part

of the State personnel system. As a result, the Medical Center is

not a “joint employer” with the University to the same extent it

was in 1990. Nevertheless, even if changed circumstances have

weakened part of the rationale for the NLRB’s earlier decision,

the regional director’s analysis also rested on the alternative,

9

Although the UMMS statute contains no provisions governing the

removal of the UMMS board members, the NLRB has explained that

the power to remove a board member is a factor, but not the “critical

factor,” in determining whether an entity is responsible to public

officials. Economic Sec. Corp., 299 N.L.R.B. 562, 565 (1990),

overruled on other grounds by Enrichment Services Program, Inc., 325

N.L.R.B. 818 (1998). “Responsibility to public officials or the general

electorate has never been interpreted to require that the board members

be subject to removal from office by public officials . . . in addition to

being placed in office by public officials . . . .” Economic Sec. Corp.,

299 N.L.R.B. at 564. The NLRB has on multiple occasions found that

an entity was a political subdivision for purposes of the federal law

even without any evidence that the Board members could be removed

by public officials or the electorate. Id. at 564-65 (citing Univ. of

Vermont, 297 N.L.R.B. at 295 n.23; Prairie Home Cemetery, 266

N.L.R.B. 678 (1983); Community Health & Home Care, 251 N.L.R.B.

509 (1980); Northern Cmty. Mental Health Ctr., 241 N.L.R.B. 323

(1979); City of Austell Nat. Gas Sys., 186 N.L.R.B. 280 (1970)). It is

worth noting, however, that a former Chairman of the NLRB disagreed

and claimed that “a critical factor in establishing accountability under

the Hawkins analysis is whether public officials or the general

electorate have an unfettered right of removal during an individual’s

term.” Oklahoma Zoological Trust, 325 N.L.R.B. 171, 173 (1997)

(Gould, dissenting).

Gen. 114] 127

unchanged ground that the UMMS Board of Directors was

appointed by the Governor. And the NLRB re-affirmed its

position only three years ago, having concluded again that

UMMS remains “an instrumentality of the State of Maryland” for

purposes of its jurisdiction. Dismissal Letter from the Acting

Regional Director, NLRB Region 5, Case 5-CB-10912.10 Given

that the NLRB’s position is consistent with our prior advice, we

see little reason to withhold the deference ordinarily afforded a

federal agency’s interpretation of the statute it administers.

Lechmere v. NLRB, 502 U.S. 527, 536 (1992) (“Like other

administrative agencies, the NLRB is entitled to judicial

deference when it interprets an ambiguous provision of a statute

that it administers.”). Thus, we conclude that UMMS is currently

not subject to the NLRA.

B. Current Applicability of the Maryland Collective

Bargaining Law

As explained above, Maryland’s collective bargaining law

specifically identifies the categories of employees who do, and do

not, enjoy such bargaining rights. See SPP § 3-102(a). Neither

the Medical Center nor UMMS is listed in § 3-102(a) as a

governmental unit to which the law is applicable. The statute thus

currently does not afford collective bargaining protections to

employees of the Medical Center. Legislation would be necessary

to bring the Medical Center within the scope of Maryland’s

collective bargaining law.11 We turn now to whether the State

maintains sufficient control over UMMS to do so.

10

Because the Medical Center meets the second part of the Hawkins

County test, there is no need to determine whether it would also

constitute an “administrative arm of the government” under federal

law. However, the Court of Appeals decision in Napata, which will be

discussed in more detail below, suggests that the NLRB might still find

that the Medical Center also meets the first part of the Hawkins County

test.

11

Although your request asks us to consider whether the Medical

Center may be subject to “various” labor laws, we assume based on the

context in which your request arose—and your focus on the NLRA—

that you were asking about the Maryland collective bargaining law.

128] [98 Op. Att’y

C. The General Assembly Retains Sufficient Control over

UMMS to add the Medical Center to the List of Employers

Covered by the Maryland Collective Bargaining Law

During the hearings on Senate Bill 759, legislators and

witnesses questioned whether the Medical Center was a State

entity and whether its employees could be considered State

employees for purposes of adding them to the collective

bargaining law. These questions reflected a concern that it would

be incongruous, or perhaps even illegal, to place the Medical

Center under the jurisdiction of the SLRB or SHELRB if the

Medical Center were not a State entity. In response to this

concern, you asked us to explain the “status” of the Medical

Center “in relation to State government.”

We are not able to provide a definitive characterization of

the Medical Center’s State status that would apply in each and

every context; instead, we must consider whether an entity is a

State entity “for a particular purpose.” A.S. Abell Publishing Co.

v. Mezzanote, 297 Md. 26, 35 (1983) (regarding the PIA). We

must, therefore, “look to the characteristics and functions of [the

entity] in the context of the particular statute at issue to determine

whether [the entity] is intended to be viewed, for purposes of that

statute, as a State entity.” 78 Opinions of the Attorney General

128, 134 (1993) (emphasis added). And even within a particular

statutory context, “there is no single test for determining whether

an entity is a unit or instrumentality of the State.” Napata, 417

Md. at 733. Rather, to determine “whether a statutorily-

established entity is an agency or instrumentality of the State for a

particular purpose,” we must examine “[a]ll aspects of the

interrelationship between the State and the statutorily-established

entity.” Mezzanote, 297 Md. at 35.

We have recognized that this is “essentially an ad hoc”

inquiry, 70 Opinions of the Attorney General 30, 34 (1985), and,

as a result, “an entity may be considered an agency, unit, or

instrumentality of government for one purpose, but not for

another.” 71 Opinions of the Attorney General 206, 211 (1986).

For example, the Court of Appeals has concluded that the

Washington Suburban Sanitary Commission (“WSSC”) is a State

entity for purposes of sovereign immunity, Katz v. Washington

Suburban Sanitary Comm’n, 284 Md. 503, 512 (1979), and the

Administrative Procedure Act, Donocam Assocs. v. Washington

Suburban Sanitary Comm’n, 302 Md. 501, 510 (1985), but is not

a “state agency” for the purpose of a statute that provided citizens

with a process for obtaining from the Office of the Comptroller a

Gen. 114] 129

refund of excess agency charges. Washington Suburban Sanitary

Comm’n v. C.I. Mitchell & Best Co., 303 Md. 544, 561 (1985).

With respect to UMMS specifically, we have similarly

reached different conclusions about the System’s status depending

on the specific context. For example, we have previously advised

that UMMS was “not a public entity” for purposes of the

Maryland Constitution’s prohibition on members of the General

Assembly holding multiple State offices, see Letter from Robert

A. Zarnoch, Assistant Attorney General, to Sen. Laurence Levitan

(March 12, 1984), was not a “public body” under the Open

Meetings Act, Letter from Robert N. McDonald, Assistant

Attorney General, to Sen. Joan Carter Conway (Oct. 4, 2007), and

was not a “state agenc[y]” for purposes of the law authorizing the

Maryland Stadium Authority to construct facilities for State

agencies. Letter from Richard E. Israel, Assistant Attorney

General, to Matthew Klein, Department of Legislative Services

(April 3, 2003). At the same time, we have concluded that

UMMS was likely an instrumentality of the State for purposes of

the PIA, Letter from Kathryn Rowe, Assistant Attorney General,

to Sen. Vera Jones (March 21, 2007), Oct. 4, 2007 Advice Letter

at 2-3, and that the General Assembly could require UMMS to

acquire the Prince George’s County Hospital System because

UMMS’s “existence is subject to legislative control” and it has

“some of the hallmarks of a State entity,” such as a board

appointed by the Governor. Letter from Bonnie Kirkland,

Assistant Attorney General, to Del. Victor Ramirez (Jan. 18,

2007).

The Maryland collective bargaining law, however, does not

lend itself to the type of multi-factor analysis used in these cases

and advice letters to determine whether an entity qualifies as a

State entity for a particular purpose. The collective bargaining

law simply lists the specific entities to which it applies; it does not

apply to “a unit or instrumentality of the State government or of a

political subdivision,” as does the PIA, see Md. Code Ann., State

Gov’t § 10-611(h), or a “public body” or public “office,” as do

the Open Meetings Act, id. § 10-505, and Article 33 of the

Maryland Constitution, respectively. The scope of Maryland’s

collective bargaining law thus is determined not by whether a

specific entity qualifies as a State entity but by whether the

subject entity is actually named in the law.

The unsuitability of the collective bargaining law to the

traditional State entity analysis does not mean, however, that we

130] [98 Op. Att’y

cannot answer your ultimate question about whether the

Legislature may add UMMC to the list of entities subject to the

collective bargaining law. That question, we believe, turns on the

extent of the State’s power to regulate UMMS and alter the terms

of its authorizing statute.

The Legislature’s power to alter the form or function of

public corporations is plenary. The Court of Appeals has defined

a “public corporation” as one that is “created by the Legislature

for political purposes, with political powers, to be exercised for

purposes connected with the public good, in the administration of

civil government.” State v. Bd. of Educ., 346 Md. 633, 645

(1997). Because public corporations “are instruments of govern-

ment subject at all times to the control of the Legislature,” id., the

Legislature can “amend at will [their] enabling legislation.”

Atlantic Golf, Ltd. P’shp v. Maryland Econ. Dev. Corp., 377 Md.

115, 125 (2003).

The General Assembly’s authority over private corporations

is more limited. Under Article III, Section 48 of the Maryland

Constitution, private corporations must be chartered under general

law unless formed for “municipal purposes” or “where no general

laws exist, providing for the creation of corporations of the same

general character.” While the Legislature retains the power to

“alter[]” the charter of any corporation created under the authority

of Md. Const., Art. III, § 48, its power is subject to a number of

substantive limitations: Legislation affecting private corporations

may not “defeat[] or fundamentally change[]” the corporation’s

purpose or take private property, impair contractual obligations,

or otherwise violate constitutional prohibitions. See Board of

Regents of Univ. of Md. v. Trustees of Endowment Fund of Univ.,

206 Md. 559, 569 (1955); 70 Opinions of the Attorney General

180, 193 (1985).

The extent of the General Assembly’s power with respect to

UMMS thus hinges to some extent on whether the System is a

public or private corporation. On this point, the Court of Appeals

made clear in Napata v. University of Maryland Medical System

Corporation that the Medical Center is not a wholly private

corporation because it is imbued with numerous public attributes.

In Napata, the Court concluded that UMMS—which directly

controls the Medical Center—is an “instrumentality of the State,”

at least for purposes of the PIA.12 417 Md. at 736-37. It

12

It is not clear whether the Court of Appeals intended this

conclusion to apply to all of UMMS’s member institutions, including

Gen. 114] 131

acknowledged that UMMS had some characteristics of a private

entity but held that “the attributes of UMMS’s relationship with

the State that point to its being an instrumentality of the State

predominate over those pointing to its private character, for

purposes of the corporation’s inclusion in the scope of the PIA.”

Id. (internal quotation marks omitted).

According to the Court, the first attribute pointing toward

the medical system’s State status was that “UMMS did not exist”

until created by the Legislature and “until the State assets were

transferred to the corporation.” Id. at 737. In addition, UMMS

“served a public purpose” by “providing health care to the local

community . . . and a teaching hospital for University students.”

Id. The Court also observed that the State “remains a visible and

compelling force in UMMS’s operations,” given that (1) all

voting members of its board of directors are appointed by the

Governor, and at least two are members of the General Assembly;

(2) UMMS must coordinate with the University on fundraising

and is therefore “not free to compete with the University for

private gifts or private or federal grants”; (3) and “its annual

contracts [with the University] must be approved by the Regents

of the University.” Id. Moreover, the Court noted that the Board

of Regents and the Board of Public Works are empowered to

dissolve UMMS if they find that it is not fulfilling its public

purpose and, under those circumstances, the assets would revert to

the State. Id. These facts, the Court concluded, “compel the

conclusion that UMMS is an instrumentality of the State.” Id.

While Napata establishes that UMMS is not a wholly private

corporation, the Court of Appeals might find that the Medical

Center is also not a wholly public corporation because the

General Assembly has explicitly provided that UMMS is not a

“public corporation.” Educ. § 13-303(a)(2); but see Napata, 417

Md. at 734 n.5 (cautioning that status as a State entity may

depend on “the attributes of the relationship” and not “the

terminology used to describe the relationship”). However, in light

of Napata and the many attributes of State status held by UMMS,

we believe that, at the very least, the Medical Center is a type of

those governed by separate boards with a degree of separate legal

status, or only the UMMS Board and the Medical Center. Because

your opinion request concerns only the Medical Center, we need not

determine whether the same rationale would apply to the other UMMS

institutions.

132] [98 Op. Att’y

quasi-public corporation subject to the continuing control of the

Legislature.

The Court of Appeals has explained that a quasi-public

corporation is “not a public corporation, and, thus is a private

corporation[] [b]ut . . . has the characteristics of a public

corporation in function, effect or status.”13 Potter v. Bethesda

Fire Dep’t, Inc., 309 Md. 347, 357 (1987). Although we have

concluded in one instance that the General Assembly did not

violate certain constraints on its power when it “terminat[ed]” an

existing quasi-public corporation and “replac[ed]” it with a new

public corporation, see 70 Opinions of the Attorney General at

192-94, we are not aware of any Maryland cases that have

directly addressed the Legislature’s power to regulate quasi-

public corporations, or where that power lies on the spectrum

between the plenary power to regulate public corporations and the

more limited power to regulate private entities. We are confident,

though, that wherever that line is drawn, UMMS is sufficiently

imbued with public characteristics that the General Assembly

retains the power to place Medical Center employees under the

jurisdiction of the SLRB or SHELRB if it so chooses. As the

Court of Appeals observed, “the General Assembly . . . did not

relinquish all control of UMMS,” and the State remains “a visible

and compelling force in [the Medical Center’s] operations.” 417

Md. at 730, 737. Indeed, we have previously advised that UMMS

is “a creation of statute,” the existence of which “is subject to

legislative control.” March 20, 1989 Advice Letter at 2. We thus

conclude that a corporation, like UMMS, that is formed by the

State and can be extinguished by the State, and whose

management and operations remain subject to significant

legislative control may be added to the list of entities subject to

the collective bargaining law.14

13

For example, we have previously characterized the Blind

Industries and Services of Maryland, which like UMMS was created by

State statute and has a board of directors appointed by the Governor, as

a quasi-public corporation because it was privately owned but imbued

with a public interest. See 78 Opinions of the Attorney General at 134-

37.

14

We recognize that quasi-public corporations can take many

different forms, and we do not attempt to articulate a rule here that

would apply to all such corporations. As the Court of Appeals has

recognized, some quasi-public corporations are imbued with more

“governmental” characteristics than others. Potter, 309 Md. at 358; see

also 78 Opinions of the Attorney General at 136. We accordingly

Gen. 114] 133

Moreover, even if the Court of Appeals were to find that the

Medical Center is a wholly private corporation, we would still

conclude that the General Assembly has the authority to add the

Medical Center to the collective bargaining law. Conferring

collective bargaining rights on UMMC employees would not

exceed the substantive limits on the Legislature’s power to

regulate private corporations. To begin with, we see nothing about

collective bargaining that would “defeat or fundamentally

change” the System’s medical purpose. Cf. State v. Good

Samaritan Hospital, Inc., 299 Md. 310, 323 (1984) (legislation

requiring hospitals that provide foot care to confer staff privileges

on qualified podiatrists does not “defeat or fundamentally change

Good Samaritan’s corporate purpose to erect and maintain a

hospital”). The employees of private hospitals have long enjoyed

the right to collectively bargain. Indeed, hospitals have been

subject to the NLRA to varying degrees since 1935 and, in 1974,

Congress amended the NLRA to extend coverage to all acute care

hospitals. Am. Hosp. Ass’n v. NLRB, 499 U.S. 606, 614-15 (1991).

Nor would extending collective bargaining rights to UMMC

employees undermine the particular purpose behind the 1984

legislation creating UMMS. As “found and determined” by the

General Assembly, that purpose was to free the hospital of the

“laws, management structures, and procedures” uniquely

applicable to State agencies. Educ. § 13-302(5). Given that the

employees of private hospitals enjoy collective bargaining rights,

we fail to see how providing those same rights to UMMC

employees would contradict the purpose of the 1984 enactment.

Extending collective bargaining rights to System employees

likewise would not abrogate vested property rights, impair the

obligation of contracts, or run afoul of any other constitutional

prohibition. There are no private property rights at stake here,

and “when the General Assembly assigns a ‘public’ task to a

private corporation, the corporation ‘acquire[s] no vested

inviolable right to that political power,’ immune from removal by

subsequent legislation.” 70 Opinions of the Attorney General at

193 (quoting Williams, 9 G. & J. at 391, and concluding that

repealing charter of quasi-public corporation and replacing it with

a public corporation was permissible). And because UMMS was

created by statute, “[i]t had no ‘incorporators’ who could

assume that some quasi-public corporations may be subject to more

legislative control than others.

134] [98 Op. Att’y

challenge the [amendment of its charter] as being an impairment

of their contract with the State.” 70 Opinions of the Attorney

General at 193 (citing Board of Regents, 206 Md. at 567-68).

We conclude that, even if UMMS is considered a wholly

private corporation, legislation adding it to the list of entities

subject to Maryland’s collective bargaining law would not exceed

the Legislature’s proper power. But because Napata convinces us

that UMMS is not wholly private, we believe that the

Legislature’s powers are somewhat closer to its plenary powers

over public corporations than to its more limited powers over

private entities. Thus, however UMMS is classified, it is our

opinion that the Legislature retains sufficient control over the

System to add UMMC to the list of entities subject to the

Maryland collective bargaining law.15

III

Conclusion

The Medical Center’s employees are not currently covered

by either the NLRA or Maryland’s collective bargaining statute.

However, because the Medical Center is a State entity for at least

some purposes and remains a creature of statute within the

ultimate control of the State, the General Assembly has the

authority to enact legislation that would subject the Medical

Center to Maryland’s collective bargaining law.

15

Regardless of how the Medical Center is characterized, we do not

believe that legislation adding Medical Center to the list of entities

covered by the State collective bargaining law would run afoul of the

exemption UMMS enjoys from “any provisions of law affecting only

governmental or public entities.” Educ. § 13-303(a)(2). Although the

collective bargaining law currently applies only to “governmental or

public entities,” id., the new legislation would deal “more specifically”

with the subject of labor protections for UMMS employees and would

therefore serve as an exception to UMMS’s more general exemption.

See Napata, 417 Md. at 738-39 (quoting Gov’t Emp. Ins. Co. v. Ins.

Comm’r, 332 Md. 124, 132-33 (1993)). We also doubt that the

Maryland Constitution’s prohibition on special laws, see Md. Const.

Art. III, § 33, would stand as an obstacle to such legislation. Such a

law would not appear to be the type of evil that the special laws

provision was intended to prevent, and, given the unique history of

UMMS and the special rules that apply to it, the Medical Center would

reasonably be considered a “class of itself.” Cities Serv. Co. v.

Governor of Md., 290 Md. 553, 568-70 (1981).

Gen. 114] 135

Douglas F. Gansler

Attorney General

Adam D. Snyder

Chief Counsel, Opinions & Advice

* Assistant Attorneys General Katherine D. Bainbridge, Clifton

Gray, and Patrick Hughes contributed significantly to the

preparation of this opinion.