In Virginia Mason Hospital, the key litigated issue before the NLRB was whether a labor union representing nurses waived its right to bargain over a hospital's flu prevention policy, a mandatory subject of bargaining, by agreeing to a broad management rights clause in its collective bargaining agreement (CBA).

On August 23, 2011, the NLRB held in its initial decision in Virginia Mason Hospital that a hospital's flu prevention policy, which required nurses to either receive a flu vaccine or wear a mask when caring for patients, was a mandatory issue of bargaining that did not fall within the core-purpose exception to bargaining under Peerless Publications. The NLRB reversed the decision of the administrative law judge (ALJ) and remanded the case to the ALJ to consider the other defenses that the hospital raised for unilaterally implementing the policy (for more information, see Legal Update, NLRB Narrows Scope of the Core-purpose Exception to Mandatory Bargaining).

On remand, the ALJ again held in its November 25, 2011, decision that the hospital was not required to bargain with the union over implementing the policy. The ALJ found that the union "clearly and unmistakably" waived its right to bargain when it agreed to a broad management rights clause (see Provena Hosps.) in the CBA, which gave the Hospital the right to, among other things:

The ALJ held that even though the management-rights clause does not expressly discuss face masks or the other aspects of the flu prevention policy, the hospital's infection-prevention guidelines in effect at the time the CBA was ratified included measures like wearing face masks in certain situations. In addition, the ALJ found that the face masks were among "equipment" that the employer had the right to determine and require under the management-rights clause. The ALJ also found that the management-rights clause allowed the hospital to unilaterally extend, improve and enforce its infection-prevention guidelines, as it did through the flu prevention policy.

In a supplemental decision dated June 25, 2012, the NLRB affirmed the holding of the ALJ and dismissed the union's charge that the hospital unlawfully failed to bargain over the effects of its decision to implement the policy.

Employers should not rely on the "core purpose" exemption after the Board's initial opinion in Virginia Mason Hospital. After all, if a hospital cannot unilaterally require employees to take precautions to avoid infecting patients with the flu based on its core purposes of promoting and ensuring patient health, the exception is impossibly narrow, if it exists at all. However, the Board's supplemental opinion in this case highlights the importance of employers seeking broad management rights clause language reserving authority to make operational decisions related to their core purposes. The Board continues to acknowledge that unions may waive bargaining rights by accepting broad management rights clauses.