Offering Employees Relocation Options Not Previously Presented to Union Was Unlawful Direct Dealing: NLRB
On June 26, 2012, the National Labor Relations Board (NLRB) held in Mercy Health Partners that meeting directly with unionized employees to inform them of a decision to relocate, presenting them with three relocation options and attaching conditions of acceptance without seeking the approval of the union was unlawful direct dealing in violation of the National Labor Relations Act (NLRA). This decision distinguishes Capital Ford, in which unilateral employer announcements were held not to be direct dealing because they merely notified employees of predetermined courses of action.
On June 26, 2012, the NLRB held in Mercy Health Partners that meeting directly with unionized employees to inform them of a decision to relocate, presenting them with three options and attaching conditions of acceptance without first seeking the approval of the union was unlawful direct dealing in violation of the NLRA. This decision distinguishes Capital Ford, in which unilateral employer announcements were held not to be direct dealing because they merely notified employees of predetermined courses of action.Close speedread
Key Litigated Issue
On June 26, 2012, the NLRB issued a decision in Mercy Health Partners. The key litigated issue was whether meeting directly with unit employees to inform them of a decision to relocate, presenting them with three options and attaching conditions of acceptance without seeking the approval of the union was unlawful direct dealing in violation of Section 8(a)(5) of the NLRA.
The Respondent, Mercy Health Partners (MHP), is a regional healthcare provider that operated multiple hospitals in Michigan, including Hackley and Mercy. Each hospital was responsible for performing pre-registration work for its own patients. There was a collective bargaining agreement (CBA) between MHP and the union, which represented the Hackley-based pre-registration employees. Mercy's pre-registration employees were unrepresented. In November, 2009, MHP representatives met with five Hackley pre-registration employees. The MHP representatives notified the employees that:
As part of MHP's holding company's transition, their positions would be relocated to Mercy.
Under the collective-bargaining agreement, they would have 72 hours to decide whether to accept layoff or bump a less senior unit employee.
They also had 72 hours to decide whether to accept a transfer to one of the new positions created at Mercy.
All five employees accepted transfers to Mercy. Next, the MHP representatives:
Informed the five employees that the positions at Mercy were nonunion, but would have nearly the same wages and benefits as their positions at Hackley.
Distributed letters to the five employees which:
summarized the information the representatives had told them; and
advised the employees that they could consult their labor relations manager or union representative with any questions.
A few weeks before the November meeting, a Hackley pre-registration employee learned from her colleague at Mercy that MHP was preparing an office for them at Mercy. The employee confronted her supervisor who:
Confirmed the rumor.
Told her not to tell the union steward, because the relocation had not been formally announced.
Despite the supervisor's request, the employee alerted the union steward.
Immediately following the November announcement to employees, MHP formally notified the union that:
decided to relocate unit work from Hackley to Mercy; and
notified employees of their rights under the CBA.
The relocation of work would be completed by December 7.
Later that day, the union demanded effects bargaining. The parties engaged in effects bargaining on December 7.
The union filed an unfair labor practice charge, alleging that MHP unlawfully failed to bargain about its relocation decision and engaged in unlawful direct dealing at the November meeting. However, an NLRB administrative law judge (ALJ):
Relied on Dubuque Packing, finding that the employer had shown that labor costs were not a factor in its decision.
Relied on Capital Ford, finding that MHP lawfully presented the Hackley employees with a predetermined course of action.
Recommended that the complaint be dismissed.
The General Counsel appealed by filing exceptions with the panel (Board) heading the NLRB's judicial functions.
A three-member panel (Chairman Pearce and Members Hayes and Block) considered the decision. In a 2-1 decision (Member Hayes dissented in part), the Board majority reversed, finding that MHP unlawfully bypassed the union and dealt directly with the employees.
In particular, the Board majority found the following actions unlawful:
MHP representatives meeting directly with unit employees to inform them of the decision to relocate unit work without seeking the approval of the union.
Presenting the employees with three options, including an option to transfer that was not covered by the parties' CBA or bargained over with the union.
Attaching a condition of acceptance within 72 hours of the offer to transfer which was not previously presented to the union. This crossed the line from discussing the relocation decision to discussing the effects of that decision on the employees.
MHP's conduct of confirming the rumor of the upcoming relocation but asking the employee not to tell the union steward. This suggested that MHP intended to undercut the union's role as bargaining agent.
The Board majority held that the ALJ improperly relied on Capital Ford because Capital Ford was factually distinguishable. In Capital Ford, the Board majority found that:
Authorizing paid holidays and a productivity bonus were not unilateral changes.
Even assuming unilateral action, the employer's announcements were not direct dealing because they merely notified employees of predetermined courses of action.
Conversely, in this case, MHP:
Offered employees three options, one of which it had not previously bargained over or presented to the union.
Received responses to the options from all but two of the employees before informing the union.
Allowed the employees to choose the option they preferred.
Requested that an employee not inform the union steward of the decision to relocate.
The Board concluded that the evidence indicates that MHP was primarily interested in resolving effects issues with its employees rather than with their union. This was unlawful direct dealing.
Member Hayes dissented, stating, in agreement with the ALJ, that there was no direct dealing because:
The mere presentation of a predetermined employment term does not constitute prescribed dealing with unit employees.
There is negligible support for their claim that MHP intended to undermine the union's representative status as it bargained over the effects of the relocation on the union's request.
The Board affirmed the ALJ's conclusion that there was no obligation to bargain over the closing of operations under Dubuque Packing. Member Hayes concurred in that part of the decision but found that the closure was a fundamental shift in the scope of the enterprise making First National Maintenance the appropriate standard to apply.
To avoid an accusation of unlawful direct dealing, employers should be cautious of offering unionized employees options that have not been previously bargained into their CBA or presented to the union.