Midwest Division-MMC, LLC v. National Labor Relations Board

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued January 18, 2017 Decided August 18, 2017

No. 15-1312

MIDWEST DIVISION - MMC, LLC, DOING BUSINESS AS

MENORAH MEDICAL CENTER,

PETITIONER

v.

NATIONAL LABOR RELATIONS BOARD,

RESPONDENT

NATIONAL NURSES ORGANIZING

COMMITTEE-KANSAS/NATIONAL NURSES UNITED,

INTERVENOR

Consolidated with 15-1359

On Petition for Review and Cross-Application

for Enforcement of an Order

of the National Labor Relations Board

Shay Dvoretzky argued the cause for petitioner. On the

briefs was Noel J. Francisco.

G. Roger King was on the brief for amicus curiae HR

Policy Association in support of petitioner.

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William E. Quirk was on the brief for amici curiae The

American Hospital Association, et al. in support of petitioner.

Kellie J. Isbell, Attorney, National Labor Relations

Board, argued the cause for respondent. On the brief were

Richard F. Griffin, Jr., General Counsel, John H. Ferguson,

Associate General Counsel, Linda Dreeben, Deputy Associate

General Counsel, Robert J. Englehart, Supervisory Attorney,

and Jeffrey W. Burritt, Attorney.

Nicole J. Daro argued the cause for intervenor. On the

brief was Brendan White.

Before: GARLAND, Chief Judge, and KAVANAUGH and

SRINIVASAN, Circuit Judges.

Opinion for the Court filed by Circuit Judge SRINIVASAN.

Opinion concurring in part and dissenting in part filed by

Circuit Judge KAVANAUGH.

SRINIVASAN, Circuit Judge: Kansas law calls for

hospitals to establish an internal peer-review program to

monitor the quality of care furnished by their medical

professionals. As required by state law, Menorah Medical

Center, a Kansas acute-care hospital, formed a peer-review

committee for the facility’s nursing staff. The committee

examines alleged violations of the applicable standard of care

by the hospital’s nurses and reports serious breaches to the

state licensing agency.

This case arises out of the peer-review committee’s

investigation of two nurses for substandard conduct.

Menorah denied the nurses’ requests to allow a union

representative to accompany them in their hearings before the

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committee. Menorah also refused the union’s request for a

variety of information about the committee’s operations.

Additionally, the hospital maintained a confidentiality rule

barring employees from discussing incidents within the

committee’s purview.

Those actions by Menorah led the union to file unfair-

labor-practice charges against the hospital. The National

Labor Relations Board ultimately found that Menorah had

violated the National Labor Relations Act in the various ways

alleged. Menorah now petitions for review of the Board’s

decision against it.

We set aside the Board’s determination that Menorah

improperly denied the nurses’ requests for union

representation in the peer-review-committee hearings: when,

as here, employees are not obligated to take part in an

investigatory hearing, there is no requirement that they be

permitted to bring a union representative if they elect to

participate. We sustain the Board’s decision in all other

respects, including the Board’s finding that Menorah

committed unfair labor practices in denying the union’s

request for information about the peer-review committee and

in maintaining a confidentiality rule barring workers from

discussing incidents subject to the committee’s oversight.

Accordingly, we grant Menorah’s petition for review in part

and enforce the Board’s order in part.

I.

A.

1. Section 7 of the National Labor Relations Act

establishes the right of employees “to bargain collectively

through representatives of their own choosing, and to engage

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in other concerted activities for the purpose of collective

bargaining or other mutual aid or protection.” 29 U.S.C.

§ 157. Section 8 of the NLRA declares it to be “an unfair

labor practice for an employer . . . to interfere with, restrain,

or coerce employees in the exercise of the rights guaranteed in

[Section 7]” or “to refuse to bargain collectively with the

representatives of his employees.” Id. § 158(a)(1), (5).

As relevant here, Section 8 has been construed to impose

three obligations on employers. First, an employee must be

allowed to bring a union representative to any investigatory

interview she is required to attend if she reasonably believes

the interview might result in disciplinary action. See NLRB v.

J. Weingarten, Inc., 420 U.S. 251, 256 (1975). Second,

absent an overriding need for confidentiality, employers must

furnish to labor unions (upon request) information bearing on

the administration of a collective-bargaining agreement. See

Detroit Edison Co. v. NLRB, 440 U.S. 301, 303 (1979).

Third, employees presumptively must be permitted to

communicate with one another in service of their Section 7

rights. See Martin Luther Mem’l Home, Inc., 343 N.L.R.B.

646, 646 (2004).

2. Kansas state law aims to “protect the public’s general

health, safety and welfare” by establishing a peer-review

system to monitor the quality of care provided by medical

practitioners. Kan. Stat. Ann. § 65-4929(a). Under state law,

every hospital must maintain a risk-management program

designed to identify violations of the applicable standard of

care and to facilitate the reporting of breaches to the Kansas

State Board of Nursing (the Nursing Board). See id. §§ 65-

4922(a), 65-4923.

A hospital’s risk-management personnel must refer any

qualifying incidents to a peer-review committee established

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by the facility. Id. § 65-4923(a)(2). Menorah’s committee for

its nursing staff is called the Nursing Peer Review Committee.

The Committee must in turn “report to the appropriate state

licensing agency”—here, the Nursing Board—anytime it

finds that a nurse has “acted below the applicable standard of

care” in a way that “had a reasonable probability of causing

injury to a patient, or in a manner which may be grounds for

disciplinary action by the appropriate licensing agency.” Id.

If the Nursing Board elects to strip a nurse of his license, he

can no longer practice professional nursing in the state. Id.

§ 65-1114(a)(1).

The Nursing Peer Review Committee does not itself

impose that (or any other) form of state-administered

discipline. Rather, the Committee collects information and

refers reportable incidents to the Nursing Board so that “the

[Board] may take appropriate disciplinary measures.” Id.

§ 65-4923(a)(2). Under the Kansas statute, though, the

members of hospitals’ peer-review committees are deemed

“state officers engaged in a discretionary function.” Id. § 65-

4929(b).

Kansas law attaches a confidentiality privilege to certain

aspects of peer-review proceedings:

[T]he reports, statements, memoranda,

proceedings, findings and other records

submitted to or generated by peer review

committees or officers shall be privileged and

shall not be subject to discovery, subpoena or

other means of legal compulsion for their

release to any person or entity or be admissible

in evidence in any judicial or administrative

proceeding. Information contained in such

records shall not be discoverable or admissible

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at trial in the form of testimony by an

individual who participated in the peer review

process.

Id. § 65-4915(b).

Menorah sought to fortify confidentiality protections

through a provision of its Risk Management Plan. The

hospital’s Confidentiality Rule prohibits employees from

“disclos[ing] information concerning reportable incidents

except to their superiors, Hospital Administration, the Risk

Manager, the appropriate Hospital and Medical Staff

committees, legal counsel for the Hospital, or the applicable

licensing agencies,” without prior approval from the “Risk

Manager, Administration, or legal counsel.” D.A. 69.

Menorah and the union representing its nurses, the

National Nurses Organizing Committee, have entered into a

collective-bargaining agreement. Because the bargaining unit

is comprised of registered nurses, a nurse who loses her

license also relinquishes her union representation.

B.

In May 2012, Menorah nurses Sherry Centye and Brenda

Smith received letters from the hospital’s Risk Manager

alleging that they had “exhibited unprofessional conduct as

defined by the Kansas Nurse Practice Act.” Id. at 71, 73. The

letters informed both nurses that their “conduct has

preliminarily been determined to be a Standard of Care Level

4: grounds for disciplinary action.” Id. They were then

reminded that, “[a]s governed by Kansas Statute, a final

Standard of Care Level 4 determination must be reported to

the Kansas Board of Nursing.” Id.

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The letters afforded each nurse “an opportunity to

address the Peer Review Committee regarding any potentially

reportable incident prior to any final determination of a

Standard of Care by the Committee.” Id. But the letters

specified that an in-person exchange would take place only “if

you choose.” Id. Each nurse was also given the option to

“submit a written response to the Committee if you wish in

lieu of an appearance.” Id. Centye’s letter further stated that

“the Committee cannot fairly and accurately make a final

decision without more details that can only be provided by

you.” Id. at 71.

Both nurses asked the hospital’s Risk Manager to allow a

union representative to accompany them to their hearings

before the Peer Review Committee. Centye requested union

assistance before her interview began; Smith did so after her

interview had commenced. The Risk Manager denied both

requests, and the hearings proceeded with both nurses’

participation. After the hearings, the Committee reduced each

nurse’s standard-of-care violation to a level 2, meaning that it

would not be reported to the Nursing Board.

After the first hearing, a union representative, Sheilah

Garland, communicated with Menorah’s Human Resources

Department. She requested information pertaining to (i) the

structure and functions of Menorah’s Nursing Peer Review

Committee and its members; (ii) allegations against nurses

investigated by the Committee (and the sources of those

allegations); and (iii) any discipline issued by the Committee.

Garland also maintained that nurses appearing before the

Committee are entitled to bring a union representative.

Menorah provided Garland with a copy of the hospital’s

Risk Management Plan but otherwise declined to supply

information responsive to her requests. Menorah’s Director

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of Labor Relations stated that the Committee cannot impose

discipline but merely investigates and reports to the Nursing

Board; that the requested information was privileged by

Kansas law; that the information in any case did not pertain to

administration of the collective-bargaining agreement; and

that the nurses had no entitlement to the presence of a union

representative at peer-review hearings.

The Union filed unfair-labor-practice charges against

Menorah with the Board. The Board’s General Counsel

issued a complaint alleging that Menorah had violated the

NLRA by (i) denying both nurses’ requests for a union

representative at their hearings before the Peer Review

Committee; (ii) refusing to furnish the information about

peer-review proceedings that had been sought by the Union;

and (iii) maintaining an unduly broad confidentiality rule that

operated to restrict discussion among employees about

incidents within the Committee’s ambit.

In December 2013, an ALJ issued a decision and

recommended order finding that Menorah had violated the

NLRA as alleged. On August 27, 2015, the NLRB affirmed

the ALJ’s determinations that Menorah had violated the

NLRA in the three alleged respects. The Board also affirmed

the ALJ’s decision to admit testimony that shed light on the

Nursing Peer Review Committee’s proceedings.

Menorah now petitions for review of the Board’s order,

and the Board seeks cross-enforcement of its order. The

Union has intervened in support of the Board’s decision.

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II.

A.

Menorah first maintains that the Board wrongly asserted

jurisdiction over this dispute. We find no error in the Board’s

exercise of jurisdiction.

Menorah’s jurisdictional argument arises from the

NLRA’s definition of “employers” subject to the Act’s

mandates. Section 8 of the NLRA enumerates practices that

an “employer” may not perform. 29 U.S.C. § 158(a). The

Act defines the term “employer” to exclude “any State or

political subdivision thereof.” Id. § 152(2). The Supreme

Court has upheld the Board’s construction of the term

“political subdivision” under that provision to mean an entity

“(1) created directly by the state, so as to constitute [a]

department[] or administrative arm[] of the government, or

(2) administered by individuals who are responsible to public

officials or to the general electorate.” NLRB v. Nat. Gas Util.

Dist. of Hawkins Cty., 402 U.S. 600, 604-05 (1971). An

entity satisfying either prong of that test falls outside the

Board’s jurisdiction because it is not a statutory “employer.”

Menorah argues that its Nursing Peer Review Committee

qualifies as a political subdivision under both prongs of the

Hawkins County test, and that the hospital therefore does not

function as a statutory employer when it acts through the

Committee to fulfill obligations imposed by state law.

According to Menorah, the Committee’s ostensible status as a

non-employer should be imputed to Menorah with regard to

all of the alleged unfair labor practices in this case.

As an initial matter, the Board exercised jurisdiction over

Menorah itself, not its Nursing Peer Review Committee.

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Menorah was the sole respondent in the proceedings before

the agency, and, as the “aggrieved party,” 29 U.S.C. § 160(f),

is the only petitioner here. There is no dispute that Menorah

itself qualifies as a statutory employer capable of committing

unfair labor practices in violation of the NLRA. And both the

ALJ and the Board attributed the charged NLRA violations to

Menorah.

To the extent the status of the Committee (as opposed to

Menorah itself) as a statutory employer nonetheless bears on

the Board’s exercise of jurisdiction over the hospital, the

Board reasonably concluded that the Committee is not a

“political subdivision” of Kansas. The ALJ rejected

Menorah’s jurisdictional objection, explaining that, “[s]imply

because medical providers’ peer review committees must

conform to state requirements does not make them a political

subdivision that is exempt from the Act.” ALJ Decision, D.A.

391-92. The Board reasonably adopted the ALJ’s conclusion

in that respect.

With respect to Hawkins County’s first prong, the

Committee was not “created directly by the state, so as to

constitute [a] department[] or administrative arm[] of the

government.” Hawkins Cty., 402 U.S. at 604. It is true that

Kansas law envisions the existence of peer-review

committees within each medical facility in the state. See, e.g.,

Kan. Stat. Ann. § 65-4929. But the Kansas statute makes

each hospital responsible for “establish[ing] and

maintain[ing]” its own system of risk management, subject to

the requirements of state law. Id. § 65-4922(a). The very

statutory scheme that requires the existence of peer-review

committees thus specifies that they are created and

administered by hospitals, not the state. Another state statute

reinforces that understanding, permitting a documentary

privilege to be “claimed by the legal entity creating the peer

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review committee.” Id. § 65-4915(b). A hospital—not the

state—is entitled to claim that privilege as the “entity creating

the peer review committee.” See Adams v. St. Francis Reg’l

Med. Ctr., 264 Kan. 144, 158 (1998).

Moreover, we hesitate to conclude that a committee

whose members are “supervised, compensated, hired,

appointed, and evaluated by [Menorah] without input from

the state,” ALJ Decision, D.A. 391, nonetheless functions as a

department or administrative arm of the state. It is true that

committee members are deemed “state officers engaged in a

discretionary function” with regard to their participation in the

committee proceedings. Kan. Stat. Ann. § 65-4929(b). But

that is for the purpose of according them the “immunity of the

state . . . , including [immunity] from the federal and state

antitrust laws.” Id. The members’ state-conferred immunity

for those purposes does not transform a hospital’s peer-review

committee into a state agency or department. Indeed, the

same provision specifies that committee members are not

subject to “any other law relating to or regulating state

agencies, officers or employees.” Id. § 65-4929(c).

Menorah cites no Board or judicial decision holding that

an entity established and maintained by a private company

pursuant to state law qualifies as a political subdivision of the

state. That is not surprising, given that the exemption exists

to prevent the Board from interfering with “the employment

relationships between state and local governments . . . and

their employees.” NLRB v. Princeton Mem’l Hosp., 939 F.2d

174, 178 (4th Cir. 1991). Menorah’s Nursing Peer Review

Committee thus differs from entities previously held to be

political subdivisions. To take the example on which

Menorah chiefly relies, the State Bar of New Mexico was

established by the New Mexico Supreme Court—

unquestionably a state actor—and serves as “an

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administrative arm of the judicial branch of government.”

State Bar of New Mexico, 346 N.L.R.B. 674, 676 (2006). The

same cannot be said of Menorah’s own Nursing Peer Review

Committee.

With regard to the second prong of the Hawkins County

test, the Committee is not “administered by individuals who

are responsible to public officials or to the general electorate.”

402 U.S. at 604-05. As the Board has explained, the pertinent

question is “whether a majority of the individuals who

administer the entity . . . are appointed by and subject to

removal by public officials.” Pilsen Wellness Ctr., 359

N.L.R.B. 626, 628 (2013). Menorah cites no evidence that

Committee members are either appointed or removable by

public officials (as opposed to by Menorah’s own personnel).

For those reasons, the Board reasonably concluded that

Menorah’s Nursing Peer Review Committee does not qualify

as a political subdivision of Kansas under either prong of the

Hawkins County test.

B.

On the merits of the Board’s findings of unfair labor

practices, we first consider whether Menorah violated the

NLRA by denying the nurses’ requests for union

representation in connection with their peer-review hearings

before the Committee. In NLRB v. J. Weingarten, Inc., the

Supreme Court sustained the Board’s understanding that the

NLRA “creates a statutory right in an employee to refuse to

submit without union representation to an interview which he

reasonably fears may result in his discipline.” 420 U.S. at

256. Here, neither Centye nor Smith was permitted to bring a

union representative when appearing before the Committee.

The Board held that Menorah thereby violated the nurses’

Weingarten right. The Board’s ruling cannot be sustained.

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Weingarten affirmed the Board’s conclusion that it would

be a “serious violation of the employee’s individual right to

engage in concerted activity by seeking the assistance of his

statutory representative if the employer denies the employee’s

request and compels the employee to appear unassisted at an

interview which may put his job security in jeopardy.” Id. at

257 (emphasis added) (internal quotation marks omitted). An

employee’s Weingarten right is infringed, that is, when an

employer compels him to appear at such an interview but

denies him union representation. Conversely, absent

compulsory attendance, the right to union representation

recognized in Weingarten does not arise: the Court expressly

grounded its decision on an understanding that an “employer

is free to carry on his inquiry without interviewing the

employee, and thus leave to the employee the choice between

having an interview unaccompanied by his representative, or

having no interview.” Id. at 258.

Here, Centye and Smith were given precisely that choice.

The letters advising them of the charges against them

expressly “afforded an opportunity” to appear before the

Committee “if you choose.” D.A. 71, 73 (emphases added).

Moreover, they were invited to “submit a written response . . .

if you wish in lieu of an appearance.” Id. In those

circumstances, neither nurse was compelled to attend a

Committee hearing so as to trigger a right to union

representation under Weingarten.

None of this is to deny that Centye and Smith might well

have felt it would be decidedly in their interests to participate

in a Committee hearing. After all, the letters they received

contained no information about the underlying factual

allegations against them. They understandably could have

regarded the hearing as affording them a singular opportunity

to learn about—and potentially dispel—the allegations about

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their ostensible misconduct. That would have been especially

true for Centye: her letter stated that “the Committee cannot

fairly and accurately make a final decision without more

details that can only be provided by you.” Id. at 71. So we

accept that both nurses could have believed that attending the

hearings would inure substantially to their benefit.

Even so, the Supreme Court in Weingarten explicitly

contemplated—and accepted—that an employee might have a

strong incentive to attend a hearing for those sorts of reasons.

In explaining that an employer retained the “prerogative[]” to

give an employee a “choice” between attending an interview

without a union representative and “having no interview” at

all, the Court understood that a person who elected to have no

interview would “forgo[] any benefits that might be derived

from one.” 420 U.S. at 258. Put another way, by

“refrain[ing] from participating in the interview,” an

employee would “protect[] his right to representation, but at

the same time relinquish[] any benefit which might be derived

from the interview.” Id. at 259 (internal quotation marks

omitted). In that event, the employer would “be free to act on

the basis of whatever information he had and without such

additional facts as might have been gleaned through the

interview.” Id. (internal quotation marks omitted).

Here, Centye and Smith, having been given the option to

forgo attendance at the Committee hearing, presumably

weighed the benefits and drawbacks of doing so and elected

to participate. The Board nonetheless concluded that their

Weingarten right had been infringed. The Board reasoned

that, when Menorah denied the nurses’ request for union

representation at the hearing, “it was obligated, at that point,

to give the employees the opportunity to cease their

participation in the meetings,” Midwest Div.-MMC, LLC d/b/a

Menorah Med. Ctr., 362 N.L.R.B. No. 193, 2015 WL

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5113235, at *3 (2015)—even though they had already been

told in their letters that their participation was optional (and

also that they could instead submit information in writing).

Weingarten, however, contains no suggestion that the NLRA

requires an employer to renew advice to an employee that her

attendance at a hearing is optional. And the Board cited no

judicial or agency precedent establishing such a requirement.

Rather, the decisions on which the Board relies involved

circumstances in which the employer compelled the

employee’s attendance in a proceeding. E.g., U.S. Postal

Serv., 241 N.L.R.B. 141 (1979). In that situation, if an

employee requests union representation, the Board’s decisions

require the employer to discontinue the interview unless (i)

“the employee voluntarily agrees to remain unrepresented

after having been presented by the employer with the

choice[]” to “continu[e] the interview unaccompanied by a

union representative or hav[e] no interview at all,” or (ii) “the

employee is otherwise aware of those choices.” Id. at 141.

Here, the nurses, from the outset, were “otherwise aware” that

they could choose to forgo attending a hearing. Id. The

Board does not contend otherwise. In those circumstances,

there was no violation of the nurses’ Weingarten right.

That conclusion is unaffected by our decision in

American Federation of Government Employees, Local 1941

v. Federal Labor Relations Authority, 837 F.2d 495, 499

(D.C. Cir. 1988). That case involved a provision of the

Federal Service Labor-Management Relations Statute that

grants union representation to federal employees in

connection with investigations that can result in disciplinary

action. 5 U.S.C. § 7114(a)(2)(B). We noted that the

provision aimed “to make the Weingarten right applicable to

federal employees” but that “Congress anticipated that the

statutory right to representation in examinations may evolve

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differently in the federal sector.” 837 F.2d at 499 (internal

quotation marks omitted). We construed the provision to

extend a right to union representation even if a federal

employee is not compelled to attend an investigatory

interview. But in doing so, we observed that “Congress

sought to appropriate the general principles of Weingarten

and allow those principles to evolve in the unique and varying

circumstances of federal employment, not to hold those

principles to the factual and procedural context of

Weingarten.” Id. at 500.

This case does not involve “the unique and varying

circumstances of federal employment” addressed in the

FSLMRS. Rather, it involves the NLRA. And the NLRA,

under the interpretation affirmed by the Supreme Court in

Weingarten, does not recognize a right to union representation

when an employee has a choice to forgo participating in an

investigatory hearing but elects to attend in any event.

C.

Menorah next challenges the Board’s ruling that it

violated the NLRA by failing to furnish information requested

by the Union about the peer-review program. The Board

concluded that the withheld information is relevant to the

Union’s mission and that Menorah’s asserted confidentiality

interests do not outweigh the Union’s need for the materials.

We see no basis to set aside the Board’s conclusion.

An employer’s statutory obligation to engage in

collective bargaining “includes a duty to provide relevant

information needed by a labor union for the proper

performance of its duties as the employees’ bargaining

representative.” Detroit Edison Co. v. NLRB, 440 U.S. 301,

303 (1979). The relevance of the requested information for

17

that purpose is measured under a “liberal, discovery-type”

standard. DaimlerChrysler Corp. v. NLRB, 288 F.3d 434, 440

(D.C. Cir. 2002). When a union demonstrates the relevance

of the information it seeks, the Board “balance[s] a union’s

need for the information against any legitimate and substantial

confidentiality interests established by the employer.” Pa.

Power Co., 301 N.L.R.B. 1104, 1105 (1991) (internal

quotation marks omitted). The employer must furnish the

requested information if “the union’s need for the information

outweigh[s] the general policy regarding confidentiality.”

Kaleida Health, Inc., 356 N.L.R.B. 1373, 1379 (2011). State-

law privileges present a valid basis for claiming

confidentiality. Id. at 1378.

Here, after Centye and Smith received the letters

apprising them of the allegation that they had engaged in

unprofessional conduct, a representative of the Union, Sheilah

Garland, requested information from Menorah about the

operation of its Nursing Peer Review Committee. Garland’s

requests on behalf of the Union fell into three categories.

First, she sought information describing the Committee,

including the Committee’s structure, purpose, and functions,

along with the names of committee members and those

present for the hearings. Second, she requested information

about allegations investigated by the Committee, including

the names of nurses notified that they were under

investigation, the nature of the allegations against them, and

copies of investigatory information used by the hospital.

Third, she sought disciplinary documents issued by the

Committee.

The Board deemed all of the requested information to be

relevant to the Union’s enforcement of the collective-

bargaining agreement, explaining that “the Committee’s work

can lead to [Menorah’s] suspension or discharge of an

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employee.” Menorah, 2015 WL 5113235, at *7. The Board

further found any countervailing confidentiality interests to be

modest, given that the requested information “did not trench

on the Committee’s internal deliberative processes.” Id. at *6.

The Board thus found that Menorah violated Section 8 of the

NLRA by failing to comply with the Union’s informational

request.

We conclude that substantial evidence supports the

Board’s determination. See Wallaesa v. Fed. Aviation

Admin., 824 F.3d 1071, 1084 (D.C. Cir. 2016). As an initial

matter, we perceive no basis for rejecting the Board’s

conclusion that the requested information about the peer-

review program and investigations is relevant to the Union’s

ability to enforce the collective-bargaining agreement. The

agreement enables Menorah to “suspend, discharge or

otherwise discipline bargaining unit members for just cause.”

D.A. 115. In that regard, Menorah’s Risk Management Plan

articulates two pertinent expectations concerning “[u]se of

[r]isk [m]anagement [d]ata.” Id. at 68. First, “[w]hen the

investigation of a reported incident [i.e., by the Peer Review

Committee] results in an adverse finding, the event will be

considered at the time of . . . employee performance

evaluations.” Id. Second, “[i]nternal institutional actions

may be taken as the result of investigation.” Id.

Those disciplinary objectives are reinforced by Kansas

law, which provides that a peer-review committee may

“report to and discuss its activities, information and findings”

with a hospital’s “administrative officer” without waiving the

statutory privilege concerning peer-review proceedings. Kan.

Stat. Ann. § 65-4915(e). The Risk Management Plan also

envisions a linkage between the Nursing Peer Review

Committee and Menorah’s evaluation of its employees’

performance: one of the Plan’s stated objectives is to

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“[e]stablish communication between risk management, peer

review, . . . and performance improvement functions in the

Hospital.” D.A. 54.

With regard to Menorah’s confidentiality interests in the

information requested by the Union, Menorah describes its

interests solely by reference to the state-law provision

privileging “the reports, statements, memoranda, proceedings,

findings and other records submitted to or generated by peer

review committees.” Kan. Stat. Ann. § 65-4915(b). The

Kansas Supreme Court, however, has not construed that

privilege to encompass any document that may incidentally

come into committees’ possession. See Adams, 264 Kan. at

171. Rather, the privilege attaches to documents created to

satisfy the peer-review requirements of state law, including

eventual consideration by the applicable peer-review

committee. See id. at 165 (holding that the privilege covered

hospital disciplinary forms found to be “part of the peer

review process as envisioned by the legislature”).

The Board reasonably determined that, for all three

categories of information sought by the Union, the Union’s

interests in the information prevail over Menorah’s

confidentiality interests. As to the first category—

information pertaining to the Committee’s structure,

functions, and membership—Menorah did provide the Union

a copy of its Risk Management Plan, which broadly outlines

the Committee’s purpose and scope, as well as the Kansas

statutes outlining the Committee’s functions. But Menorah

did not furnish any other information within the scope of the

request, and the Risk Management Plan does not comment on

the Committee’s membership or the identities of members

who attended the relevant meetings. As long as the Plan

continues to enable the Committee to function as an adjunct to

the hospital’s internal disciplinary process, the Union will

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retain an interest in obtaining information about the

Committee’s structure, functions, and makeup. And as the

Board concluded, that information would seem generally to

fall outside—or at least outside the core of—the statutory

privilege.

As to the second category of requested information—that

related to allegations investigated by the Committee—the

information could have substantial relevance to the Union’s

representation of affected employees. The Board found

“nothing in the record to suggest that this information was

prepared exclusively for use by the Committee outside of the

Hospital’s regular course of business.” Menorah, 2015 WL

5113235, at *5 n.15. Menorah did not challenge that finding

in its briefs, so it has given us little reason to question the

Board’s conclusion that the Union’s interests in obtaining the

information outweigh Menorah’s confidentiality interests as

defined by the statutory privilege.

As to the third category—copies of disciplinary

records—Menorah, in declining to supply responsive

information, observed that “[t]he committee does not offer,

impose or suggest discipline to RNs[;] it investigates

reportable incidents and provides to the State its findings as

per the Kansas Statutes.” D.A. 80. But as the Board

observed, “the Committee’s disciplinary letters state that the

employee’s conduct has been preliminarily determined to be

grounds for disciplinary action,” and “the Committee’s work

can lead to [Menorah’s] suspension or discharge of an

employee.” Menorah, 2015 WL 5113235, at *7. The

requested information, moreover, would enable the Union “to

compare incidents that cause nurses to become targets of

investigations that can result in the revocation of a license and

ultimately termination from employment,” and “to properly

determine whether to file a grievance on behalf of those who

21

have been targeted for investigation by the Committee.” Id.

While the disciplinary records may implicate the state law

privilege, we find no basis to overturn the Board’s reasonable

conclusion that the Union’s significant interests in obtaining

the information outweigh Menorah’s confidentiality concerns.

D.

Menorah’s Risk Management Plan includes a

Confidentiality Rule prohibiting employees from

“disclos[ing] information concerning reportable incidents

except to their superiors” and certain other parties without

prior approval from the “Risk Manager, Administration, or

legal counsel.” D.A. 69. The Board invalidated that

provision as an excessive restriction on employees’ Section 7

rights. We sustain the Board’s ruling and conclude that it is

supported by substantial evidence.

Sections 7 and 8 of the NLRA protect an employee’s

“right to discuss the terms and conditions of her employment

with other employees.” Cintas Corp. v. NLRB, 482 F.3d 463,

466 (D.C. Cir. 2007). An employer presumptively violates

the Act “when it maintains a work rule that . . . tends to chill

employees in the exercise of their Section 7 rights.” Martin

Luther, 343 N.L.R.B. at 646. That situation occurs when

“employees would reasonably construe the language [of a

work rule] to prohibit Section 7 activity.” Id. at 647. We

construe any ambiguity in such a rule against the employer.

Banner Health Sys. v. NLRB, 851 F.3d 35, 40 (D.C. Cir.

2017) (citing Cintas Corp., 482 F.3d at 468 n.2).

Maintaining a rule reasonably likely to chill employees’

Section 7 activity amounts to an unfair labor practice unless

the employer “present[s] a legitimate and substantial business

justification for the rule” that “outweigh[s] the adverse effect

22

on the interests of employees.” Hyundai Am. Shipping

Agency, Inc. v. NLRB, 805 F.3d 309, 314 (D.C. Cir. 2015).

Here, the Confidentiality Rule, subject to certain exceptions,

bars employees from disclosing “information concerning

reportable incidents.” Menorah contends that employees

would read the provision to refer solely to information

submitted to (or generated by) the Committee, such that the

Rule’s reach would be coextensive with the scope of the

Kansas statutory privilege earlier described, Kan. Stat. Ann.

§ 65-4915(b). But the Board found that “employees would

reasonably understand the . . . prohibition on disclosure of

‘reportable incidents’” to reach considerably more broadly, so

as to encompass “discussions about the events underlying the

peer review investigations.” Menorah, 2015 WL 5113235, at

*1 n.3 (emphasis added). That is, the Rule would bar

employees from discussing the underlying facts of incidents

investigated by the Committee. So understood, the Rule

would plainly chill the exercise of Section 7 rights.

The Board’s interpretation of the Rule is reasonable.

Menorah’s Risk Management Plan defines “reportable

incident” as “an act or practice by a ‘health care provider’”

that must be reported to the applicable licensing agency—

here, the Nursing Board. D.A. 55. And a prohibition on

disclosing information “concerning reportable incidents”

could readily be understood to encompass any discussions

about the underlying “act or practice.” Menorah does not

suggest any legitimate and substantial justification for

curtailing discussion of incidents that give rise to peer-review

proceedings. Those events may also give rise to internal

disciplinary processes, which of course can be the subject of

grievances under the collective-bargaining agreement. See

Banner Health, 851 F.3d at 41 (explaining that restrictions on

employees’ communications cannot sweep “so broadly as to

include working conditions”) (quoting Double Eagle Hotel &

23

Casino v. NLRB, 414 F.3d 1249, 1260 (10th Cir. 2005)). We

therefore affirm the Board’s conclusion that the present

Confidentiality Rule is unduly broad in violation of

employees’ Section 7 rights.

E.

Finally, Menorah challenges the Board’s affirmance of

the ALJ’s decision to admit testimony about the Committee’s

proceedings and to revoke a protective order initially covering

that testimony. Specifically, in the hearing before the ALJ,

participants in the peer-review process testified about what

they and others had said during the peer-review committee

proceedings. We review the ALJ’s admission of that

testimony for abuse of discretion, Veritas Health Servs., Inc.

v. NLRB, 671 F.3d 1267, 1273 (D.C. Cir. 2012), and we find

no abuse here.

The Board explained that the testimony was “critical” to

understanding and resolving the alleged unfair labor practices,

including, in particular, the charge that Menorah had “violated

Sec. 8(a)(1) by denying employees their right to a union

representative during their appearance before the Committee.”

Menorah, 2015 WL 5113235, at *1 n.2. Although we have

concluded, as explained, that the employees ultimately had no

Weingarten right to union representation, their testimony

about their interactions with the Committee could be highly

germane to understanding the factual context surrounding the

resolution of the Weingarten charge. The ALJ reasonably

admitted the testimony to enable an informed consideration of

the issue.

Menorah, citing the Kansas statutory privilege, contends

that the testimony about the proceedings before the

Committee should not have been admitted (or should have

24

remained subject to a protective order). A state-law privilege

is not necessarily binding in a federal proceeding. See Fed. R.

Evid. 501. At any rate, the Kansas statutory privilege—

assuming its applicability to the testimony at issue here—is

not absolute even as a matter of state law. See Adams, 264

Kan. at 166, 171-74. Rather, a court must consider “the

interest of the party in obtaining the information,” such that

“the substantive interest in preserving the confidentiality of

the information” may “give way to assure all the facts will be

available for a fair determination of the issues.” Id. at 171-72

(citation omitted).

Here, in light of the significant federal interest in

enabling an informed resolution of the unfair-labor-practice

charges, we cannot conclude that the ALJ abused her

discretion in admitting the testimony by the participants in the

Committee’s proceedings.

* * * * *

For the foregoing reasons, we grant in part Menorah’s

petition for review and enforce the Board’s order in all other

respects.

So ordered.

KAVANAUGH, Circuit Judge, concurring in part and

dissenting in part: I join all except Part II.C of the majority

opinion. I write separately to elaborate on the Weingarten issue

addressed in Part II.B and to disagree on the information-

request issue addressed in Part II.C.

First, the Board concluded that the hospital violated the

Weingarten rights of nurses Centye and Smith. (Under

Weingarten, union members have a right to be accompanied by

a union representative during certain investigative interviews

conducted by employers. See NLRB v. J. Weingarten, Inc., 420

U.S. 251, 256 (1975).) The majority opinion rejects the

Board’s conclusion. I agree with the majority opinion. In

rejecting the Board’s conclusion, however, the majority

opinion does not address the threshold question of whether

Weingarten rights apply in the first place in peer review

committee interviews. Instead, the majority opinion concludes

that, even assuming arguendo that Weingarten rights apply,

Weingarten was not violated in this case. The majority

opinion’s silence on the threshold question of course should not

be interpreted as an implicit conclusion that Weingarten rights

apply in peer review committee interviews. See, e.g., BRYAN

A. GARNER ET AL., THE LAW OF JUDICIAL PRECEDENT 84

(2016); United States v. Shabani, 513 U.S. 10, 16 (1994).

Rather, that threshold question remains open in this Circuit for

a future panel to address and decide.

If we were to reach the threshold question, I would hold

that Weingarten rights do not apply in peer review committee

interviews. Weingarten rights apply primarily in the

disciplinary context when an employer conducts an

investigative interview of the employee. Those rights help

“redress the perceived imbalance of economic power between

labor and management.” Weingarten, 420 U.S. at 262. When

an interview is not part of the employer’s disciplinary process

but is instead, for example, part of a state licensing process

mandated by statute, Weingarten rights do not apply. Cf. Mt.

2

Vernon Tanker Co. v. NLRB, 549 F.2d 571, 575 (9th Cir. 1977).

Because the peer review committee at issue here is not part of

the hospital’s disciplinary process and is instead part of the

state licensing process, employees do not have Weingarten

rights in interviews conducted by the peer review committee.

Second, the Board concluded that the hospital violated the

National Labor Relations Act when the hospital did not comply

with the Union’s requests for information about the inner

workings of the peer review committee. The majority opinion

sustains the Board’s decision. Even taking into account our

deferential standard of review, I cannot uphold the Board’s

decision on this issue. I instead would rule in accord with

Member Johnson’s dissent from the Board’s decision.

To assess a union’s information request, the Board

balances the employer’s confidentiality interest in the

information against the union’s need for the information. See

Howard Industries, Inc., 360 NLRB No. 111, at 2 (2014).

Here, as exemplified by Kansas’s peer review statute, the

hospital possesses a strong interest in protecting the

confidentiality of the peer review process. Kan. Stat. Ann.

§ 65-4915(b). Maintaining confidentiality helps ensure the

frank participation of medical professionals in peer review

committee deliberations. As the American Hospital

Association explains: “Without strict confidentiality, peer

review’s effectiveness would collapse.” American Hospital

Association Br. 11. Confidentiality is therefore essential to an

effective peer review process, and the peer review process in

turn is critical to improving the quality and safety of health

care. For that reason, almost every State – including Kansas –

has rules protecting the confidentiality of peer review

proceedings.

3

While the hospital’s confidentiality interest in the

requested information is weighty, the Union’s need for that

information is minimal at best. That is because the peer review

committee does not itself threaten “direct adverse employment

action” against the Union’s members. Midwest Division –

MMC, LLC, 362 NLRB No. 193, at 10 (2015) (Johnson,

dissenting). As Member Johnson explained, peer review

committees are instead “part of the State’s regulatory apparatus

for overseeing its licensed healthcare professionals and the

overall adequacy of healthcare in the State of Kansas. . . .

Because the committees do not represent the [hospital] and

because their findings are submitted to the State as part of the

regulatory scheme, the Union’s interest in information about

the committee’s internal deliberations is limited. Peer review

does not directly implicate the [hospital’s] disciplinary process

nor either party’s obligations under the collective-bargaining

agreement.” Id.

After considering the hospital’s confidentiality interest

and the Union’s need for the information, the Board here

should have rejected most of the Union’s information request,

as Member Johnson explained in his dissent. Instead, the

Board granted the Union’s request. In doing so, the Board gave

very short shrift to the hospital’s confidentiality interest in the

requested information and significantly exaggerated the

Union’s need for the information. See id. at 7-11. I would

vacate the Board’s order to the extent it ruled that the Union

was entitled to all of the peer review information it requested.

I would remand to the Board to properly re-balance the

hospital’s confidentiality interest against the Union’s asserted

need for the information, in the manner suggested by Member

Johnson.

With those observations, I respectfully concur in part and

dissent in part.