NLRB Advice Memoranda, Renal Advantage Inc./Fresenius Management Services, Inc. dba Fresenius Kidney Care Elk Grove Blvd., National Labor Relations Board, (May 16, 2024)

These cases were submitted for advice as to whether they are appropriate vehicles to urge the Board to overrule Shell Oil Co., 77 NLRB 1306 (1948). ​     ​. We conclude that since there are no violations of extant law, nor any related meritorious allegations, the Region should dismiss these charges. ​     ​

Briefly, the Employers, all of whom are affiliated with Fresenius Kidney Care, operate dialysis programs and clinics in California. SEIU United Healthcare Workers-West (“Union”) was certified as the collective-bargaining representative in fourteen units between December 2022 and August 2023 and the parties began engaging in coordinated bargaining in the summer of 2023. On September 18, 2023, purportedly in response to state legislation that would raise the minimum wage for healthcare workers, the Employers emailed unrepresented staff, including at least a few unrepresented statutory employees, announcing an immediate wage increase for certain healthcare staff to $23 per hour, the minimum the proposed law would mandate as of June 2024. The email made clear, among other things, that this increase would only apply to those employees who are not “represented by a collective bargaining representative” but that the Employers would “continue to maintain the status quo and engage in good faith negotiations with [represented employees'] collective bargaining representative on this issue.” The email also stated, “[c]onsistent with the requirements of federal law, the Company continues to maintain the status quo as to the terms and conditions of employment of our union represented employees and will negotiate any wage adjustments with the collective bargaining representative of our union represented employees as part of the ongoing collective bargaining negotiations.” The Union learned about the email from an unrepresented employee and subsequently requested that the Employers grant the wage increase to represented employees, offering to waive any further bargaining over that interim increase. The Employers rejected that offer and indicated that wages would be discussed as part of the parties' ongoing collective-bargaining negotiations.

We conclude that the Employers acted lawfully under extant law by withholding the wage increase from represented healthcare workers while the parties were engaged in first-contract negotiations and communicating the increase to unrepresented employees. Under Shell Oil and its progeny, granting a new benefit only to unrepresented employees, and withholding it from represented employees, is lawful unless motivated by anti-union animus. See Arc Bridges Inc., 362 NLRB 455, 456-57 (2015), enforcement denied, 861 F.3d 193 (D.C. Cir. 2017).

The evidence generally supports the Employers' claim that the wage increase was aimed at avoiding turnover as a result of anticipated industry-wide wage increases coming on the heels of the state legislation and was not for the purpose of undermining the Union. ​     ​ there is no evidence that other facilities were organizing at the time of the announcement, and the only meritorious allegation during the Union's campaign to represent the fourteen units at issue here involved an isolated threat about the risk of strikes by a low-level supervisor. Although the Employers' statement that the decision was “consistent with the requirements of federal law” was somewhat misleading inasmuch as the Employers could have lawfully granted the increase with the Union's consent, overall there is insufficient evidence of animus to sustain a violation under Shell Oil. Finally, we find the Employers' announcement of the wage increase to be lawful. The email noted that the issue of “wage adjustments” would be negotiated in good faith with the Union during bargaining, thus avoiding any unlawful suggestion that employees “are automatically and irrevocable foreclosed” from obtaining the wage increase “simply because they have a union bargaining on their behalf.” KEZI, Inc., 300 NLRB 594, 595 & n.5 (1990). Since there are no other related pending meritorious charges against the Employers, [1] the Region should dismiss these charges, absent withdrawal.

This email closes these cases in Advice. Please contact us with any questions or concerns.