NLRB Advice Memoranda, Auburn Memorial Medical Services, National Labor Relations Board, (May 10, 2022)

United States Government

National Labor Relations Board

OFFICE OF THE GENERAL COUNSEL

Advice Memorandum

530-6033-7001-0000

530-6033-7056-0000

530-6067-4001-8500

The Region submitted this case for advice as to whether the conduct of Auburn Memorial Medical Services (“the Employer”) during negotiations for an initial collective-bargaining agreement constituted bad-faith bargaining in violation of Section 8(a)(5). We conclude that the Employer violated Section 8(a)(5) by engaging in bad faith bargaining because it insisted on predictably unacceptable proposals and engaged in other conduct intended to frustrate the possibility of arriving at an agreement.

FACTS

The Employer operates about a dozen medical practice offices or clinics in or near Auburn, New York. In 2018, 1199 SEIU United Healthcare Workers East (“the Union”) sought to organize nurses, medical technicians, receptionists, and other administrative employees across all the Employer's facilities as a single bargaining unit. On October 26, 2018, after the Union had been selected by a majority of bargaining unit employees in a Board-conducted secret ballot election, the Region certified the Union as the exclusive bargaining representative for a single, multi-location bargaining unit comprising all the Employer's facilities in and around Auburn.

In early 2019, the parties began bargaining towards an initial collective-bargaining agreement. Both the Union and the Employer agree that the initial negotiations were somewhat productive. Between the beginning of negotiations and February 2020, the parties met for about 30 bargaining sessions and signed tentative agreements on about 22 contract articles, although the parties did not reach agreement on any economic terms. After the last February 2020 bargaining session, the parties agreed to take an extended break from bargaining due to the COVID-19 pandemic. Prior to the pandemic-related break the parties took from bargaining, the Employer had never countered the Union's initial wage proposal. In December 2020, the parties returned to the bargaining table.

On December 3, 2020, at the first bargaining session after the nine-month break, the Employer refused to provide a wage proposal to counter the Union's initial wage proposal because its negotiators asserted they were waiting for approval of a proposal but refused to disclose whose approval they needed. Instead, the Employer demanded a “concrete proposal” on wages from the Union despite the Union's reminder that it had already given the Employer its proposal at the start of negotiations. The Employer ended the bargaining session by stating it would have wage and benefits proposals at the next session.

At the next bargaining session on December 17, 2020, the Employer again stated it was not prepared to counter the Union's initial wage proposal at that time. Instead, the Employer proposed several provisions that would have allowed it to unilaterally control employees' terms and conditions during the term of the agreement. Those provisions included:

• a management rights article stating the Employer retained the right to utilize non-represented personnel to perform bargaining unit work on both a temporary and permanent basis by merely providing the Union with written notice and “meet[ing] with the Union to discuss” and including a provision that would act as a zipper clause permitting the Employer to unilaterally change terms and conditions of employment not explicitly addressed in the contract;

• an article on medical, vision, dental, disability, and life insurance benefits granting the Employer the right to make unilateral changes to unit employees' benefit packages to match non-bargaining unit employees' benefits; and,

• a “Union Matters” article providing for an open shop.

From January to May 2021, [1] the parties met for 11 sessions, about twice a month. The Employer did not offer any changes to its initial proposals on management rights, benefits, or “Union Matters” articles at any of those bargaining sessions.

At the January 14 bargaining session, the Employer made its initial counteroffer on wages. The Employer's wage proposal kept unit employees at the same wage rate they had been making since negotiations began in early 2019 but included a one-time increase of 1% in September 2021 with no additional wage increases afterwards. When the Union raised issues with both aspects of the Employer's proposal, the Employer repeatedly stated it had been losing money and could not offer significant wage increases for that reason. Additionally, the Employer's wage proposal gave it unfettered discretion to hire new unit employees at higher rates than those it was offering in its proposal for existing unit employees based solely on the Employer's assessment of the new employees' experience.

At the February 19 bargaining session, the Employer presented a revised wage proposal that it stated was its final proposal. The new wage proposal increased the proposed September 2021 raise to 1.5% and added a reopener clause for wages in July 2022. The Union again objected to the Employer's inclusion of a clause stating that it could hire new employees at higher wage rates than those the Employer proposed for existing bargaining unit employees. After several more bargaining sessions where little progress was made, the Union requested that a mediator be present beginning with the March 25 bargaining session.

During the remaining months of bargaining, the parties made little progress on the numerous open issues, including on the subjects of management rights, benefits, wages, and layoffs and recalls. With regard to layoffs and recalls, the Union had long proposed an article that would have allowed more senior employees to “bump” less senior employees at other practices if the provider for which the more senior employee worked left an affiliated Employer practice. The Employer, on the other hand, demanded a layoff and recall provision that did not permit more senior employees to remain and instead would operate on the Employer's assessment of an employee's skills. However, by the March 25 bargaining session, the Union had conceded its position on automatic cross-practice bumping. During the April, May, and June bargaining sessions, the parties principle disagreement was over the weight to be given past discipline relative to seniority under their competing layoff and recall proposals.

At the May 7 bargaining session, the Employer refused to tentatively agree to an article concerning discipline and discharge unless the Union also agreed to accept the Employer's managements rights clause as proposed. [2] The Employer refused the mediator's suggestion to unpackage the two articles. At the next bargaining session on May 18, the Employer refused to discuss any further articles until the Union agreed to its proposed management rights clause.

At the May 28 bargaining session, the Employer again had no counteroffers and continued to insist on its prior proposals on management rights, layoff and recall, discipline and discharge, and retirement benefits. [3] The Employer again refused to offer a counterproposal on wages citing a new CFO and that its economics had changed. Notably, during this bargaining session, the Employer's ​     ​ participated remotely ​     ​

At the June 15 bargaining session, the Employer offered its only concession on its proposed management rights clause by adding a sentence stating that the parties could engage in effects bargaining over employment terms unilaterally set under the zipper clause. [4] At the next bargaining session on June 21, the Employer removed this sentence and again refused to unpackage its management rights proposal from the previously agreed-on discipline and discharge article. The Employer made several statements that it had “no more room to move” on its proposals and nothing further to offer on wages. However, when the Union directly asked the Employer whether its current proposals were the Employer's final offer, the Employer said they were not. The Employer then proceeded to tell the Union it could not move on anything else until the Union agreed to its admittedly broad management rights clause. [5] The Employer also clarified that its benefits proposals were based on its view that it needed full control over all benefits and that its position on this issue would not change. At the very end of the session, the parties reached a tentative agreement on grievance and arbitration language.

Contemporaneous with the last few months of bargaining, employees became disaffected with the progress the Union had made during bargaining. On June 23, 2021, a unit employee filed a petition to decertify the Union. [6] After the decertification petition was filed, the Employer distributed at least two least two flyers to its employees. [7] In the first flyer, dated July 8, 2021, the Employer asserted that most of the delay in bargaining had been on account of the Union insisting upon bumping rights in its layoff/recall proposals and union security language. The flyer stated that if employees voted the Union out, bargaining would cease and the Employer would evaluate employees' wages and benefits on a regular basis. In a subsequent undated flyer, the Employer asserted that the Union was focusing on forced union dues, layoffs, grievance and arbitration, and management rights at the bargaining table. As a follow-up to its initial July 8 flyer, the Employer in this undated flyer stated it could not promise anything on wages or benefits before the election, but it was mindful that wages had been stagnant since employees selected the Union in 2018. [8]

On July 12, the Union made yet another counterproposal to the Employer's management rights article to clarify the scope of the Employer's ability to reassign bargaining unit work that the Employer rejected. [9] After the Union made further concessions on its last counterproposal to the Employer's layoff and recall proposal, the Union ultimately agreed to the Employer's proposal. At the parties' final two bargaining sessions, on July 27 and August 16, the Employer again refused to consider any compromise on its proposed management rights clause.

Although the Union filed the unfair labor practice charge in this case on August 2, 2021, it did not seek to block the decertification election. On August 24, 2021, the unit employees voted to decertify the Union. The Union did not file any objections after the election. On September 2, 2021, the Region certified the results of the election.

ACTION

We conclude that the Employer violated Section 8(a)(5) by engaging in bad faith bargaining because it insisted on predictably unacceptable proposals and engaged in other conduct intended to frustrate the possibility of arriving at an agreement.

In determining whether a party has violated its statutory duty to bargain in good faith, the Board examines the totality of the party's conduct, both at and away from the bargaining table, to determine whether it approached the collective-bargaining process with an aim of reaching agreement. [10] However, a party's proposals at the bargaining table alone, can evidence a failure to bargain in good faith. [11] Indeed, “[s]ometimes, especially if the parties are sophisticated, the only indicia of bad faith may be the proposals advanced and adhered to.” [12] Although the Board does not evaluate whether a particular proposal is acceptable or unacceptable, it will examine whether a party's proposals, “taken as a whole, would leave the union and the employees it represents with substantially fewer rights and protection than provided by law without a contract.” [13] Moreover, the Board has consistently found that an employer's proposals evidence bad faith when they confer on the employer “unilateral control over virtually all significant terms and conditions of employment.” [14] As part of its review, the Board will consider the explanations a party offers for its proposals during bargaining. [15] Additionally, if a party remains adamant about its initial positions for a significant number of mandatory subjects, this “take it or leave it” approach may also evince bad faith. [16] Finally, the Board examines whether a party engaged in other conduct that demonstrates its bad faith, such as dilatory tactics or away-from-the-table conduct that evinces an intent to avoid an agreement entirely. [17]

In Altura Communication Solutions, LLC, the Board applied the foregoing principles to find that the employer had engaged in overall bad faith bargaining. Specifically, the Board noted that the employer's proposals, “when considered in combination, evidence a failure to bargain in good faith.” [18] The employer's proposals sought to confer on it the right to unilaterally: increase individual employees' wages; decrease employees' wages by moving them from a higher to a lower wage tier; reduce employees' hours; alter or eliminate most benefits; and eliminate the bargaining unit entirely. [19] At the same time, the employer proposed a “no strike clause that would have precluded even handbilling and ‘protest[s] regardless of the reason.’” [20] Finally, the employer proposed a broad zipper clause “under which the Union would ‘unqualifiedly waive[] the right … to bargain collectively with respect to any subject or matter whether or not covered by’ the agreement.” [21] The Board concluded that the employer's proposals, when taken together, “would have required the [u]nion ‘to cede substantially all of its representational function, and would have so damaged the [u]nion's ability to function as the employees' bargaining representative that the [employer] could not seriously have expected meaningful collective bargaining.’” [22]

The instant case is similar to Altura Communication. As in that case, the Employer here demonstrated its bad faith by showing an unyielding insistence on retaining unilateral control over several significant terms and conditions of employment. The Employer's wage proposal would have given it great latitude to set a new employee's starting wage rate by virtue of its uncontested right to determine the employee's outside experience. Likewise, the Employer's benefits proposal would have granted it the authority to unilaterally modify employee insurance plans on an ongoing basis. For example, the Employer would have retained the discretion to determine whether the plans covered family members, which healthcare services and providers would be covered, the costs of premiums and deductibles, or whether to eliminate all insurance benefits because the Employer's proposal did not require that it provide benefits at all. [23]

Furthermore, consistent with Altura, the Employer's proposals would have allowed it to unilaterally eliminate the entire bargaining unit and replace it with managers, supervisors, casual and/or temporary non-unit employees, consultants, and subcontractors. Although after two years of bargaining the Employer proposed in July 2021 an ambiguous limitation on its ability to assign bargaining unit work to non-unit employees by including language stating, “[i]n most instances [reassignments] would occur on a temporary basis,” that concession was illusory because the Employer still insisted on retaining the unlimited right to permanently reassign bargaining unit work to non-unit employees by merely providing the Union with written notice and the opportunity to “meet with the Union to discuss.”

Moreover, as in Altura, the Employer here insisted on a broadly worded zipper clause within its management rights article that gave it unrestricted discretion to act unilaterally on any issue not explicitly set forth in the contract. This would have severely hindered the Union's ability to challenge the Employer's decisions to unilaterally change significant employment terms under the provisions for which it proposed retaining discretionary authority. In sum, when taken together, the amount of discretion over core terms and conditions of employment that the Employer's proposals would have allowed it to retain, coupled with a broadly worded zipper clause that prevented the Union from bargaining over decisions not explicitly addressed in the contract, establish that the Union would have had to “cede substantially all of its representational function,” thereby undermining its ability to serve as the employees' bargaining representative. [24] Because this would have left the Union and the employees it represents “with substantially fewer rights and protection than provided by law without a contract,” [25] the Employer could not have engaged in good faith bargaining with the aim of reaching agreement.

Apart from the content of the Employer's proposals, the Employer's overall bad-faith bargaining is reinforced by its contradictory and vague explanations for its proposals affecting mandatory subjects of bargaining. The Employer's two responses to the Union's numerous counterproposals on wages was that it could not afford higher wages, and it needed discretion to compensate new hires at higher wage rates to be competitive in the market. [26] But these two explanations contradict each other. By stating that it needed unlimited discretion to offer higher wages to new employees, the Employer undercut its claim that it could not afford to offer a larger wage increase for current employees beyond its initial proposals. [27] With regard to the Employer's proposals on management rights and benefits, its repeated vague claim of needing to remain competitive with other providers as justification for not altering the language permitting it to maintain control over those terms further evinces its effort to avoid reaching agreement with the Union. [28] Indeed, the Employer's insistence on its proposed management rights clause throughout negotiations, especially considering the Employer's admission that the zipper clause language was unusually broad, shows that it approached this significant term with a “take it or leave it” attitude rather than an intent to arrive at agreement. [29]

Additionally, the Employer's other conduct, including its dilatory tactics and conduct away from the bargaining table further demonstrates its intention to frustrate the parties' ability to reach agreement. The Employer's dilatory tactics include:

• frustrating numerous bargaining sessions by conditioning further negotiations on the Union first agreeing to its management rights proposal, which the Union already had rejected [30] ;

• failing on numerous occasions to make counterproposals and instead demanding that the Union first make new proposals [31] ;

• not fully engaging in bargaining on at least two occasions because its ​     ​ participated ​     ​; [32]

• misleading the Union about its bargaining position when, at the June 21 bargaining session, which was only days before a unit employee filed a decertification petition, the Employer quickly shifted positions and conceded it had not made a final offer (or declared impasse) after the Union asked if its assertion that its proposals were “take-it-or-leave-it” meant as much. [33]

Finally, the statements in the flyers that the Employer sent to the employees in July 2021 after the decertification petition was filed further support finding that it sought to avoid both impasse and agreement so as to relieve itself from its bargaining obligation entirely. [34] For example, the Employer communicated to employees that the Union had been intransigent on the layoff and recall provision by insisting on cross-practice bumping rights for more senior employees while knowing the Union had conceded that major sticking point in March. The parties then reached a tentative agreement on the layoff and recall provisions just days after the Employer's misleading communication. [35] Moreover, despite the Employer's numerous claims at the bargaining table that it was unable to offer any more than a one-time wage increase of 1.5% in September 2021 with a wage reopener in July 2022, it reassured employees it would look into their wages because they had been stagnant since the employees had selected the Union in 2018. The clear implication of the Employer's statement was that removing the Union would result in wage increases. [36] These statements firmly establish that the Employer's goal in the last few months of bargaining was to delay both agreement and impasse to allow the decertification effort to bear fruit. [37]

That said, this case also presents a good vehicle for urging the Board to reconsider its decision in District Hospital Partners, L.P. d/b/a The George Washington University Hospital, to the extent that case may permit an employer to escape a surface bargaining violation by making insignificant movement during negotiations while adhering to a combination of proposals that would essentially force the union to cede its representational role. [38] However, given that the continuing validity of the Board's decision in George Washington University Hospital is currently unclear after the D.C. Circuit's recent remand, the Region should resubmit that issue to Advice before filing its brief with the ALJ. [39]

Accordingly, based on the analysis set forth above, the Region should allege, absent settlement, that the Employer engaged in surface bargaining in violation of Section 8(a)(5). [40]

/s/

R.A.B.

ADV.03-CA-280714.Response.AuburnMemorial. ​     ​