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Quality Health Services of P.R., Inc. v. National Labor Relations Board

United States Court of Appeals, First Circuit

October 16, 2017

NATIONAL LABOR RELATIONS BOARD, Respondent, Cross-Petitioner.


          José L. Nieto-Mingo, with whom Nieto Law Offices, José R. González-Nogueras, Lloyd Isgut-Rivera, and Jiménez, Graffam & Lausell were on brief, for petitioner/cross-respondent.

          Barbara A. Sheehy, Attorney, National Labor Relations Board, with whom Elizabeth Heaney, Supervisory Attorney, Richard F. Griffin, Jr., General Counsel, Jennifer Abruzzo, Deputy General Counsel, John H. Ferguson, Associate General Counsel, and Linda Dreeben, Deputy Associate General Counsel, were on brief, for respondent/cross-petitioner.

          Before Torruella, Thompson, and Kayatta, Circuit Judges.

          TORRUELLA, Circuit Judge.

         Quality Health Services of Puerto Rico, Inc., d/b/a Hospital San Cristóbal (the "Hospital"), petitions for review of an order of the National Labor Relations Board ("NLRB" or the "Board") declaring that the Hospital had committed several unfair labor practices, in violation of section 8 of the National Labor Relations Act ("NLRA" or the "Act"), 29 U.S.C. § 158. The Board cross-applies for enforcement of that order. After careful consideration, we deny the Hospital's petition for review and grant the Board's cross-petition for enforcement.

         I. Background

         A. The Hospital Considers Cost-Cutting Measures

         During the relevant time period, Unidad Laboral de Enfermeras(os) y Empleados de la Salud (the "Union") was the exclusive collective-bargaining representative for most of the Hospital's approximately three-hundred employees, including the Hospital's respiratory therapy technicians. By 2009, the Hospital was experiencing a decrease in its number of patients, which led it to consider and implement cost-cutting measures. Between 2009 and 2010, the Hospital, without notifying or bargaining with the Union, implemented a number of changes to cut operating costs. These changes ultimately led to two Board decisions finding that the Hospital had engaged in unfair labor practices. See Hosp. San Cristóbal, 358 N.L.R.B. 547 (2012); Hosp. San Cristóbal, 356 N.L.R.B. 699 (2011). The collective bargaining agreement ("CBA") between the Hospital and the Union (together, the "Parties") expired on February 28, 2010, during which time the Parties were amid negotiating a successor CBA. In January 2011, continuing its cost-cutting plan, the Hospital considered subcontracting the services of its employees in the Respiratory Therapy Department ("Department"). On March 15, 2011, Hospital Executive Director Pedro Benetti notified the Union by letter that the Hospital intended to subcontract the Department, and offered the Union an opportunity to "negotiate the impact of [the] decision." Between March 24, 2011, and April 12, 2011, the Hospital and the Union met on several occasions to engage in bargaining around that issue.[1]

         B. The Parties Bargain

         On March 28, 2011, while negotiations were ongoing, the Hospital subcontracted with the private company Respiratory Therapy Management ("RTM") to provide non-unit respiratory therapy technicians on an as-needed basis to cover absences by the hospital's unit employees. Under the expired CBA, the Hospital was permitted to hire "temporary employees" for emergencies, "absence due to illness, vacation or any other similar motive." Nonetheless, according to the Hospital's Human Resources Director, Candie Rodríguez ("Rodríguez"), RTM's as-needed employees did not count as temporary employees. On March 30, 2011, Union representatives Ariel Echevarría ("Echevarría") and Evelyn Santa met with Rodríguez to discuss a grievance. After the meeting, Rodríguez circulated a memorandum directing employees to stop discussing the possible subcontracting of other departments. By early April 2011, the number of full-time union respiratory therapy technicians had dropped from eleven to eight, after three technicians resigned.

         On April 12, 2011, the Parties engaged in a bargaining session during which the Hospital acknowledged, on advice of counsel, that it should negotiate with the Union both the decision to subcontract the Department and the decision's effects. The Hospital then offered the Union an opportunity to present alternatives to subcontracting, and postponed the proposed subcontracting on approximately six different occasions.[2]

         C. The Parties Discuss a Food Stipend-Cutting Alternative

         On May 27, 2011, Echevarría and Rodríguez met informally to discuss possible alternatives to subcontracting, including reducing the Hospital's payment in monthly food stipends to unit employees. On June 17, the Hospital proposed reducing that monthly stipend from $55 to $15 per employee, which would have resulted in monthly savings of $7, 400 per month, or eliminating the food stipend completely, which would have saved $10, 175 per month. In comparison, if the Hospital completely subcontracted the work then performed by the Department's unit employees, the projected monthly savings would have been $7, 243. Rodríguez noted that if the Union agreed to any one of the proposals, the eight regular employees would retain their positions, but the Hospital would still continue to use RTM employees as needed, and would not assign unit employees to permanent shifts.

         The Parties held bargaining sessions on June 28 and July 5 to discuss adjusted savings projections in light of the Department's reduction to eight employees. These new projections showed monthly savings of $4, 998 ($59, 976 annually) if the work was subcontracted.

         D. The Parties Do Not Agree and The Hospital Implements the Subcontracting Plan

         At the next bargaining meeting on July 8, 2011, the Union presented a proposal addressing the proposed alternative involving reducing food stipends. The Union proposed reducing the stipend to $30, which brought the Parties within $373 of each other in terms of monthly cost savings for the Hospital. Union's proposal also included other conditions.[3] Later that day, the Hospital rejected the proposal because the Union's conditions -- including filling vacancies with regular employees, granting the permanent shift of 7:00 AM to 3:00 PM to the two most senior unit employees, and limiting the food stipend reduction to one year -- would not result in the savings the Hospital desired. After this meeting, the Hospital determined that the Parties had reached an impasse, and thus implemented its decision to subcontract the Department. Later that same day, at approximately 2:30 PM, Rodríguez began notifying the Department's eight unit employees of their termination. Additionally, the Hospital called in the Department's off-duty employees, and terminated them upon arrival. The Hospital provided each terminated employee with a termination letter, stating that the employee was immediately relieved from occupational duties, but would receive payment through July 13, 2011. RTM staff covered the terminated employees' shifts.

         E. The Parties Continue Negotiations But Fail to Reach an Agreement

         Still later on July 8, 2011, Union President Ana Meléndez told Rodríguez that the Union was available to continue negotiations until a "satisfactory agreement" could be reached. The Parties met later that night, but could not agree on a stipend amount or whether the two most senior unit employees could be granted permanent shift assignments. The Hospital required that the monthly food stipend be reduced to $25 per employee, which would have resulted in savings exceeding those of subcontracting. The Union stated it would agree to reduce the food stipend to $25 if, in exchange, the Hospital granted the Union's ...

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