D.C. Circuit Denies Hospital’s Challenge to NLRB Health Care Rule

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[authors: Denise M. Keyser, Nicole M. Sugarman]

In a strongly worded decision published last week, the U.S. Court of Appeals for the D.C. Circuit firmly rejected a challenge to the National Labor Relations Board’s Health Care Rule. Promulgated in 1989 and upheld two years later by the U.S. Supreme Court in American Hospital Ass’n v. NLRB, the Health Care Rule limits the number and type of bargaining units allowed in an acute care setting.

The ruling means that acute care facilities facing union organizing efforts may continue to rely on the long-standing Health Care Rule for guidance on appropriate units, but those facilities are reminded that any challenge to the unit selected by the union for organizing purposes must occur early on if the employer believes the unit is not "appropriate."

“Except in extraordinary circumstances” (or previously existing units), the Rule permits only the following appropriate bargaining units, or “various combinations”: all registered nurses; all physicians; all professionals except for RNs and physicians; all technical employees; all skilled maintenance workers; all business office clericals; all guards; and all non-professionals other than the above.

In San Miguel Hospital Corp. v. NLRB, an acute care hospital challenged the Board’s approval of a “wall to wall” unit, meaning a unit of all of these employees, minus the guards. The hospital advanced a novel argument, contending that the Health Care Rule violated Section 9(c)(5) of the National Labor Relations Act (NLRA) because the Rule "endorses the extent of a union’s organization as the controlling factor in unit determination,” which the NLRA prohibits.

The D.C. Circuit’s position was clear: “We see zero merit to [the hospital’s] argument.” The opinion further explained that nothing in the NLRA precludes consideration of the level of past or present union organizing, and “consideration of that factor among others is entirely lawful,” provided that it is not the controlling factor in any unit determination. Thus, while a union’s preference and request for a wall to wall unit (or any other unit) may be endorsed by the Board, it does not dictate the final determination. But a union need not choose, and the Board need not approve, the most appropriate unit in any organizing case. Rather, the NLRA requires only that the unit sought be an appropriate unit. Generally speaking, a unit will be appropriate if the employees within the unit share a “community of interest.”

The D.C. Circuit distinguished San Miguel Hospital from the 2011 NLRB decision in Specialty Healthcare & Rehabilitation Center of Mobile, which dealt with non-acute care facilities such as nursing homes, and which suggested that the Board will be willing to approve a greater number and type of bargaining units in such facilities. San Miguel Hospital argued that Specialty Healthcare undercut the Health Care Rule, but the court disagreed, noting that the Rule applies only to acute care providers such as hospitals. Therefore, despite the controversy that the Specialty Healthcare opinion continues to generate elsewhere, for acute care providers, the Rule remains intact.

San Miguel Hospital also challenged the wall to wall unit under the community of interest standard. While the court agreed that such a large unit may be vulnerable to such an attack, the argument failed here because the hospital never raised the issue at the initial representation hearing, the stage at which it is typically addressed. Finding that “the proposition – that the employer must challenge a proposed unit on community of interest grounds before the Board is required to rule on the issue – is … painfully obvious[,]” the Circuit upheld the Board’s decision and declined to remand for a community of interest determination. 

Ballard Spahr attorneys regularly advise on NLRB compliance and issues affecting the health care industry. If you have questions, please contact Denise M. Keyser at 856.761.3442 or keyserd@ballardspahr.com, Nicole M. Sugarman at 215.864.8330 or sugarmann@ballardspahr.com, or the member of the Labor and Employment Group with whom you work.