Labor Board Takes Another Step into Management Decision Making

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On August 23, 2011, the National Labor Relations Board (“Board”) ruled that a hospital whose nurses are represented by a union does not have the authority to unilaterally implement an employee flu vaccination program because, in the Board’s view, ensuring patient safety is not a core purpose of the enterprise. Virginia Mason Hospital, 357 N.L.R.B. No. 53 (August 23, 2011). Specifically, the Board rejected the employer’s reliance on what is known as the “Peerless defense,” and held that the National Labor Relations Act (“NLRA”) prohibits a hospital from implementing public safety programs without first bargaining over the proposal with a union that represents its employees.

As a general rule, the NLRA requires employers to bargain with union representatives over employee wages, hours and other terms and conditions of employment. In Peerless Publications the Board established a three-part test under which an employer can act unilaterally when the proposed change goes to the protection of the core purpose of the enterprise. Virginia Mason Hospital argued, and the Administrative Law Judge (“ALJ”) agreed, that it did not have to bargain with the union over the implementation of the flu prevention program because, under Peerless, the program is fundamental to a healthcare provider’s core purpose of preventing sickness. The Board, however, with little explanation, overturned the ALJ and held that the prevention of sickness is not a hospital’s core purpose under the Peerless analysis, and that “Peerless was… essentially limited to its facts.”

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