Amicus Curiae Brief — American Hospital Assn. v. NLRB

Supreme Court, U 3,

FILE pb

NOV 21 4999

E. SPANIOL, JR,

p&ERK

In the Supreme Court of the United States

OCTOBER TERM, 1990

AMERICAN HOSPITAL ASSOCIATION,

PETITIONER

V.

NATIONAL LABOR RELATIONS BOARD, ET AL..,

RESPONDENTS

On Writ of Certiorari

to the United States Court of Appeals

for the Seventh Circuit

BRIEF AMICUS CURIAE OF WILLIAM BEAUMONT

HOSPITAL, HENRY FORD HOSPITAL, ST. JOHN

HOSPITAL AND MEDICAL CENTER, AND

THE MICHIGAN HOSPITAL ASSOCIATION

IN SUPPORT OF THE PETITIONER

THEODORE R. OPPERWALL

Dickinson, Wright, Moon,

Van Dusen & Freeman

800 First National Building

Detroit, Michigan 48226

(313) 223-3500

Attorneys for Amici Curiae

BOWNE OF DETROIT

610 W. CONGRESS - DETROIT, MICHIGAN 48226 - (313) 964-1330

y

The Board’s Rule Is Precluded By The Congres-

sional Admonition Against Proliferation of Bar-

gaining Units In The Health Care Industry

III. The Board’s Rule is Arbitrary And Capricious ..

CONCLUSION

ii

TABLE OF AUTHORITIES

CASES:

Allegheny General Hospital v. NLRB, 608 F.2d 965 (3d

Cir, IF7P) 2. cc ccccccceccuncdeeebeueeeeenreeeeen

Baker Hospital, 279 NLRB 308 (1986) ...............

Big Y Foods, Inc. v. NLRB, 651 F.2d 40 (lst Cir. 1981) ..

Cleveland Board of Education v. Loudermill, 470 U.S. 532

CRDGSD. coccccvccccdcdevsteteseabeseseas eau

Greene v. McElroy, 360 U.S. 474 (1959) ..............

Heckler v. Campbell, 461 U.S. 458 (1983) ...........

International Brotherhood of Electrical Workers v. NLRB,

814 P.26 G7 (DC. 1ST) aos. hee ER.

Long Island’ College Hospital v. NLRB, 566 F.2d 833 (2d

Cir. 1977), cert. denied, 435 U.S. 896 (1978) ........

Mary Thompson Hospital v. NLRB, 621 F.2d 858 (7th

Che. BBR ic inisincele 60s cle dune bo cdibls dole een ees

Memorial Hospital of Roxborough v. NLRB, 545 F.2d 351

(96 GE TIVE cic ccccvgeccestcceseeneneuneenten

Motor Vehicle Manufacturers Ass'n v. State Farm Mutual,

463 UB. DD CIGGSD 0 occ vnacccasesesenesaeeeeae

Newton- Wellesley Hospital, 250 NLRB 409 (1980).....

NLRB vy. Hearst Publications, Inc., 322 U.S. 111 (1944) ..

NLRB vy. Mercy Hospital Association, 606 F.2d 22 (2d Cir.

1979), cert. denied, 445 U.S. 971 (1980)............

NLRB vy. St. Francis Hospital of Lynwood, 601 F.2d 404

(Sula Cis. 197B) ooo. cccccceceseeusanes suena

NLRB v. West Suburban Hospital, 570 F.2d 213 (7th Cir.

. PPT Tre

Packard Motor Car Co. v. NLRB, 330 U.S. 485 (1947)

Presbyterian/St. Luke's Medical Center v. NLRB, 653 F.2d

450 (IG Cis. TGGE). 0c cccescccceuneeseneneeeee

St. Francis Hospital I, 265 NLRB 1025 (1982) ........

8, 9

TABLE OF AUTHORITIES — (Continued)

CASES: Page

St. Francis Hospital II, 271 NLRB 948 (1984) ........ 5,9

St. Francis Hospital Ili, 286 NLRB 1305 (i1987)....... 14

St. Vincent Hospital, 285 NLRB 265 (1987) ........ . 12, 13

Trustees of the Masonic Hall & Asylum Fund v. NLRB,

et Cc ccc scoccvecccccs 8, 9

MISCELLANEOUS:

Davis, Administrative Law Text (3d ed. 1972) ......... 5

Davis, Administrative Law Treatise (1979) ............ 5

Final Rule, 54 Fed.Reg. 16336 (1979) ............... passim

H.R.Rep. No. 1051, 93d Cong., 2d Sess (1974) ........ 8

Notice of Proposed Rulemaking, 52 Fed.Reg. 25142

SE ho nenceeea DTCEEEEs pd pee eeneccepae cent passim

Notice of Proposed Rulemaking II, 53 Fed. Reg. 33900

SPU PERC CGM ade cdbnebddcleeceedesccdcccedes passim

S.Rep. No. 766, 93d Cong., 2d Sess (1974) ........... 8

No. 90-97

Inu the Supreme Court of the United States

OcToOBER TERM, 1990

AMERICAN HOSPITAL ASSOCIATION,

Petitioner

Vv.

NATIONAL LABOR RELATIONS BOARD, ET AL.,

Respondents

On Writ of Certiorari '

to the United States Court of Appeals

for the Seventh Circuit

BRIEF AMICUS CURIAE OF WILLIAM BEAUMONT

HOSPITAL, HENRY FORD HOSPITAL, ST. JOHN

HOSPITAL AND MEDICAL CENTER, AND

THE MICHIGAN HOSPITAL ASSOCIATION

IN SUPPORT OF THE PETITIONER

William Beaumont Hospital, Henry Ford Hospital, St. John

Hospital and Medical Center, and the Michigan Hospital Associ-

ation respectfully submit this amicus curiae brief in support of

Petitioner American Hospital Association.!

INTEREST OF THE AMICI CURIAE

The three individual hospitals submitting this amicus curiae

brief — William Beaumont Hospital, Henry Ford Hospital, and

St. John Hospital and Medical Center — are among the largest

ar.d most diversified acute care hospitals in the state of Michigan.

! The written consent of each of the parties to the filing of this brief has

been filed with the Court.

2

Located in metropolitan Detroit, these three hospitals account for

nearly 20 percent of all hospital admissions in southeastern

Michigan. They collectively employ nearly 20,000 individuals at

their primary hospital locations and at numerous medical centers

and satellite facilities throughout the Detroit metropolitan area.

With only the remotest of exception (largely involving guards),

the workforces of these hospitals have not been organized by labor

unions.

The fourth amicus curiae, the Michigan Hospital Associa-

tion, is a voluntary non-profit membership corporation consisting

of 209 organizations that provide critical health care services to

the 9,000,000 citizens of Michigan. Member facilities range in

size from the 15-bed 379th Strategic Hospital at the Wurtsmith

Air Force Base to the 960-bed Henry Ford Hospital in downtown

Detroit. Approximately one-half of the Association’s members

are small institutions having fewer than 100 beds; most of these

are located in rural areas of Michigan where they serve as the

primary providers of health care services in their communities.

The other half of the Association’s members serve the various

urban areas of the state.

The three individual hospitals submitting this amicus brief,

and a substantial number of the Association’s other members, are

deeply affected by the National Labor Relations Board’s promul-

gation through rulemaking of a virtually conclusive presumption

that eight collective bargaining units are appropriate for them and

for all other acute care hospitals throughout the United States.

The Board’s rule is predicated on a fundamentally mistaken

“empirical” premise: that all acute care hospitals are the same, as

if fashioned from a single cookie cutter, regardless of their

substantial differences in mission, location, size, organizational

structure, staffing patterns, and the like. The Board’s rule purports

to treat all hospitals according to a least-common-denominator

model without any pretense of giving consideration to the unique

characteristics of each hospital — uniquenesses that are illus-

trated by the hospitals and Association members submitting this

brief.

3

Due to the legal infirmities of the Board’s rule, which will

have significant ramifications for acute care hospitals in Michigan

and elsewhere, amici curiae respectfully urge the Court to declare

that the Board’s rule was improperly promulgated and cannot be

applied.

INTRODUCTION AND SUMMARY OF ARGUMENT

At first blush the Board’s rule prescribing eight units for all

acute care hospitals throughout the country may appear to be an

efficient and sensible way of creating predictability and minimiz-

ing litigation in this important field. It becomes clear upon closer

scrutiny, however, that the Board’s rule has several severe defects

requiring its invalidation.

Perhaps most remarkably, the Board’s rule flies in the face of

the National Labor Relations Act’s own language, which in

Section 9(b) requires that bargaining unit determinations be

made “in each case.” The explanations given by the Board for

effectively erasing this language from the Act do not survive

analysis. The Act clearly requires the Board to conduct case-by-

case adjudications to determine appropriate bargaining units in

this and every other industry — thereby taking into account the

unique characteristics of particular employers and their employee

groupings.

The Board’s rule also disregards the congressional admoni-

tion against proliferation of bargaining units in the health care

industry. While the Board suggests that the eight units prescribed

for acute care hospitals in the rule are not that many more than

the three-unit statutory minimum, or the six-unit configuration

the Board proposed at the outset of its rulemaking proceeding, the

addition of even one or two more bargaining units — and these

are the units likely to become organized — causes undue prolifer-

ation and the potential for all of the disruptive consequences

feared by Congress when the Act was amended in 1974. The

Board is seeking to accomplish through rulemaking the very same

4

result that the courts have repeatedly struck down in adjudicated

cases as violative of the congressional admonition.

The Board’s rule is also arbitrary and capricious. It presumes

that alleged “empirical” evidence generally applicable to the

hospitai industry may legally surmount particularized evidence

concerning the structure and operations of a specific hospital. As

the Board’s own prior adjudicatory decisions show, there are wide

variations within this rapidly evolving industry that require flexi-

bility in unit determinations. The rule conclusively prohibits this

flexibility. In the interest of supposed efficiency, the rule deprives

hospitals of their constitutional right to be heard.

Underlying the Board’s rulemaking is its unwarranted belief

that Congress was simply wrong when it expressed concern in

1974 over work stoppages, jurisdictional disputes, whipsawing,

and leapfrogging in the health care industry. Those were then, and

are still, real and legitimate concerns for individual hospitals and

for the industry as a whole. The Board has effectively overruled

Congress’ concern. The Seventh Circuit’s decision vacating the

district court’s injunction should be reversed.

ARGUMENT

I. Section 9(b)’s “In Each Case” Requirement Mandates

Individual Bargaining Unit Determinations

In its First and Second Notices of Proposed Rulemaking,

and in promulgating its Final Rule, the Board considered but

rejected the argument raised by commentators that it is improper

for the Board affirmatively to prescribe substantive bargaining

units for a class of employers through rulemaking.j NPR I, 52

Fed.Reg. 25144-25145; NPR II, 53 Fed.Reg. 33901; Final Rule,

54 Fed.Reg. 16338. The Board acknowledged that this is the

Board’s “first venture in major, substantive rulemaking,” id. at

16339, inasmuch as its prior rulemaking had involved non-

substantive procedural or jurisdictional matters applicable to

cases generally.

5

One Board Member, Wilford W. Johansen, dissented from

the Board majority’s conclusion that Section 9(b)’s “in each

case” requirement permits this type of substantive bargaining unit

rulemaking. NPR II, 53 Fed.Reg. 33935; 54 Fed.Reg. 16347.

Eight years earlier, a differently composed Board had adopted

what has now apparently become the dissenting view. In Newton-

Wellesley Hospital, 250 NLRB 409, 411 (1980), the Board held

that the “in each case” requirement of Section 9(b) precluded

any per se approach to unit determinations. Two years later, in St.

Francis Hospital I, 265 NLRB 1025, 1028 (1982), the Board

reaffirmed the view that Section 9(b)’s “in each case” require-

ment mandated case-by-case adjudication; and it did so again in

St. Francis Hospital II, 271 NLRB 948, 954 (1984) (“[N ]o unit

is per se appropriate and ... separate representation must be

justified upon each factual record ...”).

What rational explanation has the Board presented for its

abruptly changed view of the Act’s “in each case” requirement?

The Board has essentially stated three reasons, but none with-

stands scrutiny.

First, th> Board majority has extensive’. -elied on language

from Kenneth Culp Davis’ Administrative La» Text 145 (3d ed.

1972) that Section 9(b)’s “in each case” requirement

does not prevent the Board from supplanting the original

discretionary chaos with some degree of order, and the

principal instruments for regularizing the system of deciding

“in each case” are classifications, rules, principles, and

precedents.

NPR I, 52 Fed.Reg. 25144; NPR II, 53 Fed.Reg. 33901; see also

Final Rule, 54 Fed.Reg. 16338.? Beyond that, the Board majority

notes that “[i]t has long been the Board’s practice to formulate

‘rules’ to guide it in representation matters,” including contract

* Davis’ Administrative Law Text is a law student hornbook. /d. at III. The

quoted comment concerning the Act’s “in each case” requiremeni does not

appear in Davis’ subsequent treatises, which more broadly discuss the Board's

rulemaking power. See, e.g., 2 Davis, Administrative Law Treatise §7:25 (1979).

6

bar rules, voter eligibility list requirements, and the like. NPR II,

53 Fed.Reg. 33901.

The shortcoming in the Board majority’s reasoning is that

Davis’ comment was not referring to substantive rules affirma-

tively prescribing universally appropriate bargaining units for an

entire industry. Davis was referring instead to “classifying

problems, ... developing rules or principles, ... or relying on

precedent cases which establish narrow or broad propositions.”

Administrative Law Text, supra. What the Board has now done is

a far cry from establishing those types of general groundrules

(exemplified by the contract bar rule and voting eligibility list

requirement), which merely define the playing field on which

representation questions will be determined. The Board’s rule

instead decides in advance the outcome of the game. It is a

remarkable stretch of logic to suggest, as the Board majority does,

that Davis’ comment or the Board’s own prior rulemaking can

legitimize the instant rule. The dissenting Board Member prop-

erly rejected this justification.

The Board secondly contends that this Court’s decision in

Heckler v. Campbell, 461 U.S. 458 (1983), a case addressing the

Social Security Administration’s “grid” method of determining

disability benefit entitlements, supports the Board’s substantive

unit determinations for the hospital industry. But Heckler pro-

vides no support at all, and indeed counsels the contrary. This

Court there held that an “agency may rely on its rulemaking

authority to determine issues that do not require case-by-case

consideration.” Jd. at 467 (emphasis added). Here the Board is

obligated by Section 9(b) of the Act to make a unit determina-

tion “in each case.” What is more, Heckler held that the Secre-

tary was required to make “findings on the basis of evidence

adduced at a hearing” with regard to a claimant’s individual

abilities and qualifications, and that the Secretary could utilize

rulemaking on/y for determining “an issue that is not unique to

each claimant.” Jd. at 467-468. It is this portion of the Heckler

decision that applies here.

7

There may be historical or statistical information regarding

hospitals — analogous to the national employment and economic

information in Heckler — that the Board could properly assimi-

late into a representation case’s hearing record through rulemak-

ing. But the existence vel non of distinct and appropriate

bargaining units in a particular hospital is unquestionably an issue

that is “unique” to that hospital.

Third, the Board asserts that, notwithstanding its eight-unit

rule, an acute care hospital will always be permitved a hearing in a

representation case and that a hospital cam im any event invoke the

“extraordinary circumstances” exception if its own unique char-

acteristics do not fit the mold of the rule. Final Rule, 54 Fed.Reg.

16338 and n.2. These offerings by the Board ring hollow. If the

Board had been serious about this, it would have crafted a rule

containing rebuttable, rather than virtually irrebuttable, presump-

tions of appropriate units; the Board rejected that option as

unnecessary and inefficient. NPR I, 52 Fed.Reg. 25145; Final

Rule, 54 Fed.Reg. 16338-16339. It could not be clearer that the

Board does not want individualized hearings on hospital bargain-

ing units. Only evidence concerning ancillary issues — not related

to appropriate units — could be presented by a hospital in a

representation hearing. Final Rule, 54 Fed.Reg. 16338. And the

“extraordinary circumstances” exception has been repeatedly de-

scribed by the Board as so narrow as to banish it from existence.

NPR I, 52 Fed.Reg. 25145; NPR II, 53 Fed.Reg. 33932. The

Board's catalog of factual “variations in acute care hospitals” that

will not be considered under the “extraordinary circumstances”

exception (id.) is so comprehensive as to render it meaningless.

That exception surely cannot be held out by the Board as a cure-

all either for the rule’s disregard of Section 9(b)’s “in each case”

requirement or for its deprivation of procedural due process

(discussed in more detail below).

There can be no doubt that the purpose and effect of the

Board’s rule mandating eight bargaining units in all acute care

hospitals is to eliminate, once and for all, unit determinations “in

each case.” That result not only runs afoul of Section 9(b), but is

at odds with decisions of this Court addressing NLRB unit

determinations. Section 9(b)’s “in each case” requirement has

remained unchanged since 1935. As early as 1944 the Court

observed that “the complexities of modern industrial organization

make difficult the use of inflexible rules as the test of an

appropriate unit,” and that Congress had therefore directed the

Board to determine appropriate units on a case-by-case basis.

NLRB vy. Hearst Publications, Inc., 322 U.S. 111, 134 (1944). A

few years later, in Packard Motor Co. v. NLRB, 330 U.S. 485, 491

(1947), the Court again emphasized that “[t]he issue as to what

unit is appropriate for bargaining is one for which no absolute rule

of law is laid down by statute, and none should be by decision.”

These principles have not changed.

Apart from the Seventh Circuit’s decision below, other

Courts of Appeals have recognized that per se approaches by the

Board to unit determinations are violative of Section 9(b)’s “in

each case” requirement.* The Seventh Circuit’s decision uphold-

ing the Board’s rule should be reversed on this ground.

II. The Board’s Rule Is Precluded By The Congressional

Admonition Against Proliferation Of Bargaining Units

In The Health Care Industry

Much debate has focused over the past 15 years on the

weight and meaning to be ascribed to the admonition contained in

the House and Senate Reports to the Health Care Amendments

Act of 1974 that the Board give “[d]ue consideration ... to

preventing proliferation of bargaining units in the health care

industry.” S.Rep. No. 766, 93d Cong., 2d Sess. 5 (1974);

H.R.Rep. No. 1051, 93d Cong., 2d Sess. 6-7 (1974). The

Seventh Circuit’s decision below, holding the congressional ad-

3 See, e.g., Big Y Foods, Inc. v. NLRB, 651 F.2d 40, 45-46 (ist Cir. 1981);

Long Island College Hospital v. NLRB, 566 F.2d 833, 840-841 (2d Cir. 1977),

cert. denied, 435 U.S. 896 (1978); Trustees of the Masonic Hall & Asylum Fund

v. NLRB, 699 F.2d 626, 638 (2d Cir. 1983); Memorial Hospital of Roxborough

v. NLRB, 545 F.2d 351, 360 (3d Cir. 1976); Allegheny General Hospital v.

NLRB, 608 F.2d 965, 968 (3d Cir. 1979); NLRB v. St. Francis Hospital of

Lynwood, 601 F.2d 404, 416 (9th Cir. 1979).

9

monition entitled only to “respectful consideration,” runs directly

against the current of prior Court of Appeals decisions which have

given the admonition controlling weight in rejecting Board unit

determinations.‘

When the Board initially undertook hospital unit determina-

tions after the 1974 amendments, it generally found eight units

appropriate — just as the present rule does. This formulation met

with little success in the Courts of Appeals,5 primarily for the

reason that those units failed to comport with the congressional

admonition. The Board then reconsidered its overall approach to

hospital units. In St. Francis Hospital I], 271 NLRB 948 (1984),

the Board formulated a new standard, moving from a “commu-

nity of interests” test that generally produced eight appropriate

units in a hospital to a “disparity of interests” test that generally

produced five units, stating:

With the benefit of many years of thoughtful and often

conflicting analyses among the Board members, courts of

appeals, and legal commentators, we have formulated a

revised health care employee unit approach which we believe

will fulfill our dual obligations of adhering to the legislative

intent behind enactment of the 1974 health care amend-

ments to the Act and guaranteeing the representational

interests of health care employees.

271 NLRB at 948 (footnote omitted).

4 See Trustees of the Masonic Hall & Asylum Fund v. NLRB, supra, 699

F.2d 626, 638 (2d Cir. 1983); NLRB v. St. Francis Hospital of Lynwood, 601

F.2d 404, 416 (9th Cir. 1979); Presbyterian/St. Luke's Medical Center v.

NLRB, 653 F.2d 450, 457 (10th Cir. 1981). But see /nternational Brotherhood

of Electrical Workers v. NLRB, 814 F.2d 697, 712 (D.C. Cir. 1987), which

found the congressional admonition essentially meaningless because it was never

incorporated into the Acct itself.

5 See, e.g., Mary Thompson Hospital v. NLRB, 621 F.2d 858 (7th Cir.

1980); NLRB v. Mercy Hospital Association, 606 F.2d 22 (2d Cir. 1979), cert.

denied, 445 U.S. 971 (1980); NLRB v. West Suburban Hospital, 570 F.2d 213

(7th Cir. 1978). &

10

“After careful and thorough consideration,” the Board continued

in St. Francis II, its Members were “persuaded” that the earlier

approach was “contrary to the intent of Congress” and that “the

adoption of a disparity-of-interests tests can best effectuate our

statutory obligations in health care unit determinations ” Jd. at

950. Furthermore, “Congress clearly intended that, in determin-

ing appropriate units in the health care area, the Board should

apply a stricter standard than its traditiona! community-of-inter-

est analysis.” Jd. at 951.

The eight-unit formulation found in the Board’s rule today is

no different than the eight-unit formulation (utilized prior to St.

Francis IT) which had been rejected by many Courts of Appeals

(and the Board itself in St. Francis IJ) as inconsistent with the

congressional admonition. The only notable difference is that the

Board’s new rule purports to be based on “empirical” evidence

regarding the health care industry as a whole, rather than on an

evidentiary record compiled in a single adjudicatory proceeding;

and it purports to govern an entire industry rather than a single

hospital.

Thus, there is no dispute that the Board is attempting to

accomplish through “empirical” rulemaking exactly what the

courts have forbidden as violative of the congressional admonition

— an eight-unit configuration for hospitals. Anomalously, the

Board has taken this across-the-board approach in the only

industry for which Congress expressed concern that the Board act

with special care in determining units. No other class of employ-

ers has been singled out by the Board for the mandatory establish-

ment of bargaining units without any regard to the configuration

of their particular operations.®

6 The Board has repeatedly emphasized throughout the rulemaking pro-

ceedings that, even though its rule provides for eight separate bargaining units, it

is unusual that a hospital would actually be organized to this extent by labor

unions. NPR II, 53 Fed.Reg. 33908, 33909, 33910, 33923, 33933, 33934; Final

Rule, 54 Fed.Reg. 16346. This misses the relevant point, however, because the

Board’s ruie makes it an inevitability that there would be eight separate units in

the event unions sought to organize them. And the advance subdividing of the

work force would facilitate such organizing. It is thus illogical for the Board to

11

In summary, in conjunction with Section 9(b)’s “in each

case” requirement, the congressional admonition mandates that

the Board conduct case-by-case adjudications to determine ap-

propriate bargaining units in the health care industry — no less

than it does in all other industries — and in so doing to avoid unit

proliferation at each hospital. The Board’s rule is the very

antithesis of this mandate, because it prescribes that every acute

care hospital will have eight bargaining units.7 The Seventh

Circuit’s decision upholding the Board’s rule notwithstanding the

congressional admonition should be reversed for this reason as

well.

III. The Board’s Rule Is Arbitrary And Capricious

The Board has acknowledged that it engaged in this

rulemaking because the courts rejected its prior approach to

health care bargaining units:

Thirteen years and many hundreds of cases later, the Board

finds that despite its numerous, well-intentioned efforts to

carry out congressional intent through formulation of a

general conceptual test, it is now no closer to successfully

defining appropriate bargaining units in the health care

industry than it was in 1974.

suggest that the presently incomplete state of union organization mitigates the

violence its rule does to the congressional admonition against proliferation.

Ironically, the Board states in NPR II that proliferation is relieved by the

fact that guard units are “rarely sought” (53 Fed.Reg. 33934). It is precisely

those units that have been organized at the three hospitals submitting this brief.

7 The Board itself increased the number of mandatory units at acute care

hospitals from six in NPR I (52 Fed.Reg. 25149) to eight in NPR II (53

Fed.Reg. 33934), conclusorily stating in NPR II that the addition of these two

units (skilled maintenance and business office clericals) did not produce a

proliferation of bargaining units (53 Fed.Reg. 33923, 33926). The Board noted

that 23 conceivable bargaining units (and perhaps an equal number of additional

units) could theoretically arise in any single establishment, and that it is in any

event “unlikely that all eight potential appropriate units will occur in any given

hospital” (54 Fed.Reg. 16346). Needless to say, these statistics and predictions

are of no solace to hospitals for whom the proliferation of even one or two

additional units can have major consequence.

12

NPR I, 52 Fed.Reg. 25143.8

But why should a result achieved through rulemaking suc-

ceed where the identical result achieved through adjudication had

failed? The Board’s rule rests on the mistaken notion that “empir-

ical” evidence concerning the hospital industry generally can

legitimize a result (eight per se appropriate units) that has been

and would be struck down in an adjudicatory proceeding.

The fundamental problem with the Board’s approach is

highlighted by this Court’s decision in Heckler v. Campbell,

supra. Just as individual Social Security disability claimants’

qualifications required individual hearings as to their unique facts

in Heckler, acute care hospitals are also sufficiently unique in

mission, location, size, organizational structure, staffing patterns,

and the like, to require individualized hearings concerning appro-

priate bargaining units. Individual hospitals are not fungible, nor

are they mere statistics. It is wrong for the Board to declare by

rule or fiat that they are.

This error pervades the Board’s rulemaking. NPR II repeat-

edly acknowledges that the Board has based its rule on genera-

lized least-common-denominator evidence and has purposefully

ignored deviations from the general pattern at particular hospitals.

A single but dramatic example concerns the use by some hospi-

tals of special multi-disciplinary teams. The Board emphasizes

that “the weight of the evidence shows that utilization of team

care is neither widespread among hospitals, nor extensively used

8 The Board initiated the rulemaking process in apparent reaction to the

D.C. Circuit’s decision in International Brotherhood of Electrical Workers v.

NLRB, 814 F.2d 697 (D.C. 1987), holding (as no other Circuit had) that the

Board had improperly concluded that the congressional admonition mandated a

“disparity of interests” test for hospital bargaining units. The D.C. Circuit also

held, however, that the Board possessed discretion to adopt a “disparity of

interests” test, and expressed no view as to what test the Board should embrace

in the exercise of its discretion. Jd. at 699, 708 n.37, 711-712 n.65. See also

St. Vincent Hospital, 285 NLRB 365, 367 (1987). Nothing precluded the Board

from continuing to adhere to the “disparity of interests” test notwithstanding the

D.C. Circuit’s decision in IBEW v. NLRB, as the Board chose to do in

St. Vincent Hospital.

a ee

13

within hospitals,” and that “fewer than half’ of the hospitals

studied used special multi-disciplinary teams while “/s/ome

hospitals do not utilize the team concept at all.” NPR II, 53

Fed.Reg. 33907 (emphasis added). What the Board chooses to

overlook is that many hospitals do use special multi-disciplinary

teams, in a fashion that removes them from the mainstream and

warrants consideration of a different bargaining unit structure.

There are many other examples in NPR II of individual variations

being dismissed by the Board in favor of the “typical,” “normal,”

or “general” characteristics of hospitals. It is nevertheless indis-

putable that some hospitals do not fit the Board’s mold.®

The arbitrariness of the Board’s rule can also be seen in its

treatment of its own prior decisions holding inappropriate, on the

unique facts presented in those adjudications, the very bargaining

units its rule would today declare universally appropriate. In Sz.

Vincent Hospital, 285 NLRB 365 (1987), the Board held on the

basis of an adjudicatory record that a sepagate registered nurses

unit was inappropriate at that hospital because of the hospital’s

particular organizational structure, personnel policies, integration

of employees, and other factors unique to it. The Board’s rule now

decrees that a separate registered nurses unit is universally appro-

priate regardless of such evidence. How can that be? The Board

has sought to harmonize this inconsistency as follows:

Having now had the opportunity to consider the substantial

empirical evidence adduced in this rulemaking proceeding,

we have a far better understanding of the RNs’ training,

functions, interests, and involvement in hospital opera-

tions....[W]ere we to apply the empirical evidence

presented in these hearings, we might well reach a different

result in St. Vincent.

NPR II, 53 Fed.Reg. 33916.

* That the Board will permit non-conforming stipulations (NPR II, 53

Fed.Reg. 33931) also demonstrates that some hospitals are sufficiently far from

the “normal” or “typical” configuration as to warrant different treatment.

14

The Board has used the same sleight-of-hand for a separate

skilled maintenance unit, which the Board had held inappropriate

on the factual record in St. Francis Hospital III, 286 NLRB 1305

(1987), see NPR II, 53 Fed.Reg. 33923; and a separate business

office clerical unit, which it had held inappropriate on the factual

record in Baker Hospital, 279 NLRB 308 (1986), see NPR II, 52

Fed.Reg. 33926. Regardless of a particular hospital’s configura-

tion of these employee groupings, skilled maintenance and busi-

ness Office clerical units are now declared universally appropriate.

The Board’s cavalier “about-face” on these key units demon-

strates the new rule’s arbitrariness, as the Board has hardly

supplied the requisite “reasoned analysis for the change.” Motor

Vehicle Manufacturers Ass'n v. State Farm Mutual, 463 U.S. 29,

42 (1983).

The rule’s arbitrariness is further shown by its failure to allow

for any evidentiary consideration of the unique characteristics of

large and diversified acute care hospitals (such as those submit-

ting this amicus brief) and the ramifications of those characteris-

tics on unit determinations. The delivery of health services is

rapidly evolving. What is “empirically” typical in the industry

today may be aberrational tomorrow. The Board’s rule permits no

accounting for this.

Many large urban hospitals now operate through an inte-

grated network of dispersed medical centers and other facilities

that comprise a single hospital system. Indeed, some have several

geographically separate “campuses,” but may well share employ-

ees, administrative services, and patients. Depending on a particu-

lar hospital system’s organization, various locations may, or may

not, have employees with identical interests, working conditions,

supervision, and the like. It would be arbitrary indeed for a rule to

presume irrebuttably (as the Board’s rule evidently does) that

such an organizational and geographic structure must be disre-

garded, and that only contiguous facilities be considered, in

assigning the eight bargaining units decreed by the rule. See NPR

II, 53 Fed.Reg. 33932.

ed

15

By like token, the Board’s rule allows no differentiation for

the uniqueness of the many smaller and rural hospitals that

comprise approximately one-half of the Michigan Hospital Asso-

ciation’s membership. Those smaller and rural hospitals have

dramatically different organizational structures and staffing pat-

terns to reflect the lesser size and complexity of the institution.

But the Board’s rule fictitiously treats all acute care hospitals as

though they are the same — whether they have 8,000 employees

or just 80. The rule arbitrarily denies a hospital’s right to adduce

evidence regarding its own uniqueness or differentiation from the

Board’s perceived pattern. This denial raises important procedural

due process concerns as well. See, e.g., Cleveland Board of

Education v. Loudermill, 470 U.S. 532, 542-546 (1985); Greene

v. McElroy, 360 U.S. 474 (1959).

As a final matter, the Board’s second-guessing of Congress’

concern in 1974 about proliferation of units in the health care

industry is itself evidence of arbitrariness. The Board suggests in

its Final Rule that Congress’ articulated fear of work stoppages,

jurisdictional disputes, wage whipsawing, and leapfrogging in the

health care industry was unfounded because “multiple units have

not been shown to cause an unusual number of work stoppages,

nor that have they been shown to have caused jurisdictional

disputes, wage whipsawing, or leapfrogging.... [T]here were

virtually none of the disruptive consequences which concerned

Congress during the 1974 debates” (54 Fed.Reg. 16346). The

Board’s logic misses the point that the courts have not tolerated

proliferation of bargaining units in the hospital industry. The

courts have rejected the eight units prescribed by the Board in its

early decisions. These are the same eight units as those now

prescribed in the rule. The evils feared by Congress have not been

permitted to occur, as well they might if the Board’s rule were

now allowed to take effect.