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Parties Involved:
FPA Medical Management, Inc.
Petitioner
National Labor Relations Board
Respondent
United Health Care Employees
Intervenor

Document Text:

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 1, 1998 Decided September 29, 1998

No. 97-1454

Thomas-Davis Medical Centers, P.C. and

FPA Medical Management, Inc.,

Petitioners

v.

National Labor Relations Board,

Respondent

Federation of Physicians and Dentists/AHPE, NUHHCE,

AFSCME, AFL-CIO,

Intervenors

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No. 97-1660

FPA Medical Management, Inc.,

Petitioner

v.

National Labor Relations Board,

Respondent

United Health Care Employees/AHPE, NUHHCE,

AFSCME, AFL-CIO,

Intervenors

On Petitions for Review and Cross-Applications

for Enforcement of Orders of the

National Labor Relations Board

Minh N. Vu argued the cause for the petitioners. Maureen E. Mahoney and Gregg J. Tucek were on brief.

Julie B. Broido, Attorney, National Labor Relations Board,

argued the cause for the respondent. Linda Sher, Associate

General Counsel, John D. Burgoyne, Acting Deputy Associate

General Counsel, and Peter D. Winkler, Attorney, were on

brief.

Susan J. Martin argued the cause for the intervenors.

Before: Edwards, Chief Judge; Henderson and Garland,

Circuit Judges.

Opinion for the court filed by Circuit Judge Henderson.

Karen LeCraft Henderson, Circuit Judge: Petitioners

Thomas-Davis Medical Centers, P.C. (TDMC) and its sole

shareholder FPA Medical Management, Inc. (FPA) seek review of two separate decisions of the National Labor Relations Board (NLRB, Board) that concluded the petitioners

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violated section 8(a)(1), (5) of the National Labor Relations

Act (NLRA, Act), 29 U.S.C. s 158(a)(1), (5). The Board

found that TDMC unlawfully refused to bargain with, sequentially: (1) the Federation of Physicians and Dentists, AHPE,

NUHHCE, AFSCME, AFL-CIO, (Physician Union), which

had been certified as the bargaining representative of physicians at TDMC's six medical clinics in Pima County, Arizona,

Thomas-Davis Med. Ctrs., P.C., 324 N.L.R.B. No. 15 (July

24, 1997), and (2) the United Health Care Employees,

NUHHCE, AFSCME, AFL-CIO, (Staff Union), which had

been certified as the bargaining representative of support

staff at TDMC's clinics, FPA Medical Management, Inc., 324

N.L.R.B. No. 128 (Oct. 22, 1997). In each case the Board

determined that its "no-relitigation" rule precluded TDMC

from arguing that its physicians were statutory "supervisors" 1 of support staff after TDMC voluntarily withdrew the

issue during the evidentiary hearing to determine the appropriate bargaining unit at the start of the Physician Union

representation proceedings. FPA petitioned for review of

each of the NLRB's two final unfair labor practice decisions,

contending that it was not afforded an opportunity in either

case to show that the TDMC physicians were statutory

supervisors by virtue of their supervision of support staff.

The Board filed a cross-application for enforcement of each

decision. The court has jurisdiction under section 10(e)-(f) of

the NLRA, 29 U.S.C. s 160(f). For the reasons set out

below, we slice the baby in twain: we deny review and grant

enforcement of the Physician Union decision and we remand

the Staff Union case for the Board to explain its application of

__________

1 The NLRA excludes from its definition of "employee ... any

individual employed as a supervisor." 29 U.S.C. s 152(3). A

"supervisor" is defined as "any individual having authority, in the

interest of the employer, to hire, transfer, suspend, lay off, recall,

promote, discharge, assign, reward, or discipline other employees,

or responsibly to direct them, or to adjust their grievances, or

effectively to recommend such action, if in connection with the

foregoing the exercise of such authority is not of a merely routine

or clerical nature, but requires the use of independent judgment."

Id. s 152(11).

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the no-relitigation rule to bar litigation of the supervision

issue in the representation and unfair labor practice proceedings based on TDMC's earlier waiver of the argument in the

Physician Unit representation proceeding. We address each

petition separately.

I. The Physician Union Case

On September 4, 1996 the Physician Union petitioned the

Board for certification as the exclusive representative of

TDMC's "Regular Full Time and Regular Part-time Physicians, including physicians elected Department Chairpersons." TDMC, then a wholly owned subsidiary of Foundation

Health Corporation (Foundation), opposed the certification

petition on various grounds, including that the physicians

were statutory supervisors because, inter alia, they supervised support staff.2 An evidentiary hearing was conducted

in late September 1996 to determine whether the proposed

bargaining unit was appropriate. Toward the end of the

hearing TDMC expressly withdrew its support staff supervision argument. At the time FPA had entered an agreement

to purchase all of TDMC's stock from Foundation with the

transfer planned for the beginning of October 1996. Although acquisition was delayed "due to a routine audit by the

Securities and Exchange Commission," FPA began managing

TDMC on October 1, 1996 under a management agreement

with Foundation. Joint Appendix (JA) 2, 6.

On November 8, 1996 the Board's Regional Director issued

a decision and direction of election which rejected TDMC's

arguments that the doctors were supervisors (except the

withdrawn supervision argument which the decision did not

address). On November 26, 1996 TDMC filed a request for

review of the Regional Director's decision on a number of

grounds but did not seek to revive the support staff supervision argument. On December 19, 1996 FPA, which had

__________

2 TDMC also argued that the proposed unit's state-wide scope

was inappropriate and that the physicians were supervisors or

managers because they supervised seven allied health professionals

and participated in standing committees and task forces.

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finally acquired TDMC's stock effective November 29, 1996,

filed a notice of appearance in the NLRB proceeding. On

January 7, 1997 the Board issued a brief order denying

TDMC's request for review.

On January 8, 1997 FPA filed a motion for rehearing and to

reopen the record "[i]n order to provide FPA with an opportunity to present its position to the Board, and in order that

the Board may consider evidence of changes in operations

which have been implemented by FPA after its acquisition of

those operations and which impact the issues raised in the

Board's decision." JA 433-34. On January 17, 1997 the

Board denied the motion because FPA "fail[ed] to specify

what additional evidence it would adduce and how, if adduced

and credited, such evidence would require a different result."

JA 436.

On February 19, 1997 FPA filed another motion for rehearing or to reopen the record on the ground that it had had no

opportunity to participate in the proceeding "until after the

hearing on September 26, 27 and 30, and after the Regional

Director's Decision and Direction of Election had issued."

JA 439. The motion was accompanied by an affidavit alleging, for the first time since the issue was withdrawn during

the September 1996 hearing, that TDMC's physicians supervised the clinics' support staff employees.3 On March 18,

1997 the Board issued an order denying the motion "as it is

untimely and because it does not establish the existence of

newly discovered evidence." JA 448.

In the meantime, the Physician Union had prevailed in a

union election on December 5, 1996 and had been certified on

February 3, 1997 as the collective bargaining agent for the

TDMC physicians. From February 15 through March 21,

1997 the Physician Union made several demands that TDMC

bargain with it. On March 24, 1997 TDMC's lawyer responded: "Your demand for bargaining is rejected since the unit is

__________

3 Although FPA indicated in its January 8, 1997 motion that it

intended to produce evidence of post-acquisition operational

changes relevant to the physicians' supervisory status, the affidavit

alleged none.

improperly certified." JA 482. The Board's General Counsel

subsequently filed a complaint charging FPA with an unfair

labor practice for refusing to bargain.4 TDMC and FPA

admitted refusing to bargain but asserted as a defense that

TDMC was "not required to bargain with the [Physician

Union] because [the Physician Union] does not represent an

appropriate unit under the National Labor Relations Act."

JA 483-84. On July 24, 1997 the Board granted summary

judgment against TDMC and FPA, ordering them to cease

and desist unfair labor practices and to bargain with the

Physician Union. The Board summarily explained its decision as follows:

All representation issues raised by the Respondents were

or could have been litigated in the representation proUSCA Case #97-1660 Document #385352 Filed: 09/29/1998 Page 5 of 11
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ceeding. The Respondents do not offer to adduce at a

hearing any newly discovered and previously unavailable

evidence, nor do they allege any special circumstances

that would require the Board to reexamine the decision

made in the representation proceeding. We therefore

find that the Respondents have not raised any issue that

is properly litigable in this unfair labor practice proceeding. See Pittsburgh Plate Glass Co. v. NLRB, 313 U.S.

146, 162 (1941). Accordingly, we grant the General

Counsel's Motion for Summary Judgment.

324 N.L.R.B. No. 15, slip op. at 1-2.

FPA petitions for review of the NLRB's unfair labor

practice decision on the ground that the Board acted arbitrarily when it refused to reopen the evidentiary record. We

reject FPA's challenge because the Board's refusal was not

an abuse of discretion. See Road Sprinkler Fitters Local

Union No. 669 v. NLRB, 789 F.2d 9, 14 (D.C. Cir. 1986) ("[A]

decision to reopen the record is within the Board's discretion.") (citing Road Sprinkler Fitters Local Union No. 669 v.

__________

4 "Refusing to bargain and thereby engendering an unfair labor

practice complaint is the standard route to challenge a certification

order, which is not subject to direct review." B B & L, Inc. v.

NLRB, 52 F.3d 366, 369 n.2 (D.C. Cir. 1995) (citations omitted).

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NLRB, 676 F.2d 826, 829 n.10 (D.C. Cir. 1982)); NLRB v.

Amalgamated Clothing & Textile Workers Union, 662 F.2d

1044, 1045 (4th Cir. 1981)).

"It is well established that, in the absence of newly discovered evidence or other special circumstances requiring reexamination of the decision in the representation proceeding, a

respondent is not entitled to relitigate in a subsequent

refusal-to-bargain proceeding representation issues that were

or could have been litigated in the prior representation

proceeding." Westwood One Broadcasting Servs., Inc., 323

N.L.R.B. No. 175, 1997 WL 331,860, at *1 (June 16, 1997)

(citing Pittsburgh Plate Glass Co. v. NLRB, 313 U.S. 146, 162

(1941)), enforced, No. 97-3495 (3d Cir. July 28, 1998); see also

29 C.F.R. s 102.67(f) ("Failure to request review [within 14

days after regional director's unit decision] shall preclude

such parties from relitigating, in any related subsequent

unfair labor practice proceeding, any issue which was, or

could have been, raised in the representation proceeding.");

Soft Drink Workers Union Local 812 v. NLRB, 937 F.2d 684,

688 (D.C. Cir. 1991); NLRB v. Mar Salle, Inc., 425 F.2d 566,

571-72 (D.C. Cir. 1970); Amalgamated Clothing Workers of

Am. v. NLRB, 365 F.2d 898, 903-06 (D.C. Cir. 1966).

FPA offered no "newly discovered evidence" to justify

deviating from the general no-relitigation rule but contends it

demonstrated special circumstances, namely, that in September 1996 TDMC's then-owner Foundation had "different incentives" from FPA, which motivated Foundation to withdraw

the supervision argument--a step FPA, had it then owned

TDMC, would not have taken. Even assuming conflicting

interests between the successive owners--and we do not

claim to comprehend entirely the conflict argument urged--

FPA has not explained why its inertia persisted as long as it

did.5 FPA declined to participate in the NLRB representa-

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5 The Board "has recognized that a stock transfer is 'the continuing existence of a legal entity, albeit under new ownership.'

Hendricks-Miller Typographic Co., 240 NLRB 1082, 1083 fn. 4

(1979)," and "has also held that the 'mere change of stock ownership

does not absolve a continuing corporation of responsibility under

tion proceeding, not only during the September 1986 evidentiary hearing but even after FPA assumed management of

TDMC on October 1, 1996 and for weeks after it acquired the

company outright on November 29, 1996. It was not until

December 19, 1996, almost six weeks after the Regional

Director's decision that the physicians were not supervisors,

that FPA even filed a notice of appearance. No further

action was taken until January 18, 1997 when FPA filed a

motion for rehearing and to reopen the record. Yet even

then FPA made no attempt to revive the waived supervision

argument. Given FPA's sustained torpor throughout this

period, we cannot say that the Board abused its discretion in

refusing to consider the argument when finally asserted in

support of FPA's February 19, 1997 motion.

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II. The Staff Union Case

In December 24, 1996 the Staff Union filed a petition for

certification as bargaining representative of TDMC's support

staff employees. A "stipulation" election was conducted on

February 13, 1997 and the union prevailed.6

On February 20, 1997 FPA filed objections to the Staff

Union election based on "[s]upervisory and management personnel interference on behalf of the union petitioner in the

non-supervisory employees' election decision which likely impaired the employees' freedom of choice in the election" and

"[o]ther acts of interference which restrained, coerced or

interfered with the employees' section 7 rights." JA 860. On

February 28, 1997 FPA filed supporting affidavits alleging

specific unlawful pro-union activities by physician supervisors.

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the Act.' Miller Trucking Services, 176 NLRB 556 (1969), affd. in

this respect 445 F.2d 927 (10th Cir. 1971), and relied on in Topinka's Country House, 235 NLRB 72, 74 (1978), enfd. 624 F.2d 770

(6th Cir. 1980)." Rockwood Energy & Mineral Corp., 299 N.L.R.B.

1136, 1139 (1990), enforced, 942 F.2d 169 (3d Cir. 1991).

6 A "stipulation" election is one held pursuant to an agreement

between the employer and the union "waiving a representation

hearing and agreeing to terms for holding an election." Smith &

Smith Aircraft Co. v. NLRB, 735 F.2d 1215, 1216 (10th Cir. 1984).

On March 5, 1997 the Regional Director recommended that

FPA's objections be overruled and that the Staff Union be

certified because the physicians' supervisory status "was previously and comprehensively litigated" in the Physician Union

proceeding. JA 881. TDMC filed a request for review of the

Regional Director's recommendation on March 18 1997 and a

revised request for review on March 24, 1997. On June 10,

1997 the Board issued a decision summarily rejecting

TDMC's objections to the Regional Director's report and

recommendation, adopting his findings and recommendations

and certifying the Staff Union as the representative of support staff employees.

When TDMC subsequently refused to bargain with the

Staff Union, the General Counsel again filed an unfair labor

practice complaint against FPA. As a defense FPA asserted

it did "not have an obligation to bargain with the [Staff

Union] because supervisory personnel interfered with the

Union election." JA 1050. On October 22, 1997 the Board

again granted summary judgment against FPA, stating, in

language almost identical to that in the July 24, 1997 Physician Union decision:

All representation issues raised by the Respondent were

or could have been litigated in the prior representation

proceeding. The Respondent does not offer to adduce at

a hearing any newly discovered and previously unavailable evidence, nor does it allege any special circumstances that would require the Board to reexamine the

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decision made in the representation proceeding. We

therefore find that the Respondent has not raised any

representation issue that is properly litigable in this

unfair labor practice proceeding. See Pittsburgh Plate

Glass Co. v. NLRB, 313 U.S. 146, 162 (1941). Accordingly, we grant the Motion for Summary Judgment.

324 N.L.R.B. No. 128, slip op. at 1.

As in the Physician Union case, FPA contends that the

Board's use of the no-relitigation rule improperly deprived

FPA of all opportunity to raise the staff supervision issue. In

this case, which arrives in a different posture from the

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Physician Union case--and, as far as we can tell, a unique

one--we conclude that the Board failed to adequately explain

its reliance on the rule in light of past practice.

The no-relitigation rule, as formulated in the Board's case

law and rules, bars relitigation of a waived issue only in an

unfair labor practice proceeding that is "related" to the

proceeding in which the waiver occurred. See 29 C.F.R.

s 102.67(f) and Westwood One Broadcasting Servs., Inc., 323

N.L.R.B. No. 175, 1997 WL 331,860, at *1 (both quoted supra,

p. 7. It is by no means clear that the Staff Union proceedings, in which the no-relitigation bar was invoked, were

"related," as the Board has previously used the term, to the

Physician Union representation proceeding in which TDMC

waived the supervision argument. In the past the Board has

applied its rule in unfair labor practice proceedings 7 to

preclude relitigation of an issue that could have been raised in

an earlier proceeding in the same case involving the same

local and the same bargaining unit. By contrast, here the

Board invoked the rule as a bar during the Staff Union

certification proceeding based on the fact that TDMC could

have raised the supervision argument in the separate Physician Union case which addressed whether a different local

was to represent a different bargaining unit. The Board

must provide a reasoned explanation, either consistent with

precedent or explaining its departure therefrom, if it chooses

to so expand the rule's scope and it has offered none. See

Hicks v. NLRB, 880 F.2d 1396, 1400 (D.C. Cir. 1989) (remanding to Board "for further action either consistent with

its existing precedents or for generation of a new jurisdictional rule" where Board decision below "revealed no reasoning

by which to fit its extension of jurisdiction"); ConAgra, Inc. v.

NLRB, 117 F.3d 1435, 1443-44 (D.C. Cir. 1997) ("[I]t is

'axiomatic that an agency adjudication must either be consistent with prior adjudications or offer a reasoned basis for its

__________

7 The Board has limited a "related" unfair trade practice proceeding to one which involves a s 8(a)(5) refusal-to-bargain charge,

expressly excluding from the rule's coverage s 8(a)(1) and s 8(a)(3)

proceedings. See Clark & Wilkins Indus., Inc. v. NLRB, 887 F.2d

308, 316 (D.C. Cir. 1989), cert. denied, 495 U.S. 934 (1990).

departure from precedent.' ") (quoting Kelley v. FERC, 96

F.3d 1482, 1489 (D.C. Cir. 1996)). Neither the summary

certification decision of June 10, 1997 nor the boilerplate

language in the October 22, 1997 unfair labor practice order

satisfies this standard. Accordingly, the matter must be

remanded to the Board for explanation.

For the preceding reasons we deny the petition for review

and enforce the Board's bargaining order in the Physician

Union case (No. 97-1454) and deny enforcement and grant

review in the Staff Union case (No. 97-1660). We remand in

the latter for the Board to explain whether and, if so, how the

Staff Union refusal-to-bargain and certification proceedings

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relitigation rule. If the Board cannot do so, it must reconsider the staff supervision issue, as appropriate, in the Staff

Union case.

So ordered.

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