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Parties Involved:
National Labor Relations Board
Petitioner
San Miguel Hospital Corporation
Respondent

Document Text:

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 10, 2012 Decided November 2, 2012

No. 11-1198

SAN MIGUEL HOSPITAL CORPORATION,

PETITIONER

v.

NATIONAL LABOR RELATIONS BOARD,

RESPONDENT

Consolidated with 11-1209, 11-1319, 11-1349

On Petitions for Review and Cross-Applications for

Enforcement

of Orders of the National Labor Relations Board

Kaitlin Kaseta argued the cause for petitioner. On the briefs

were Don T. Carmody and Bryan T. Carmody.

Kellie Isbell, Attorney, National Labor Relations Board,

argued the cause for respondent. With her on the brief were

John H. Ferguson, Associate General Counsel, Linda Dreeben,

Deputy Associate General Counsel, and Julie B. Broido,

Supervisory Attorney. 

Before: BROWN, Circuit Judge, EDWARDS and SILBERMAN,

Senior Circuit Judges.

USCA Case #11-1209 Document #1402781 Filed: 11/02/2012 Page 1 of 13
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Opinion for the Court filed by Senior Circuit Judge

SILBERMAN.

SILBERMAN, Senior Circuit Judge: Petitioner, San Miguel

Hospital Corp., essentially is challenging the Board’s

determination that a “wall to wall” bargaining unit of the

Hospital’s professional and non-professional employees is

appropriate. Although Petitioner unleashes a blizzard of

separate arguments, both substantive and procedural, only one

— relating to the burden of proof — even gives us pause. We

deny the petitions and grant the Board’s cross-applications for

enforcement.

I.

The Hospital is an acute-care facility in Las Vegas, New

Mexico. About five years ago the National Union of Hospital

and Healthcare Employees District 1199 NM petitioned for an

election in a unit combining all on-site professional and nonprofessional employees (excluding, of course, guards).1

 The

Hospital objected to the unit, contending that certain nurses were

statutory supervisors (no longer an issue) and, more importantly,

that the Board’s Health Care Rule, which sets forth the

appropriate units in the health care industry, was illegal because

it violated Section 9(c)(5) of the National Labor Relations Act. 

This provision prohibits the Board from using “the extent to

which the employees have organized” as the “controlling” factor

in unit determination. 29 U.S.C. § 159(c)(5). The Health Care

Rule states:

1

 The National Labor Relations Act precludes guards from being

represented in the same bargaining unit as other employees. 29 U.S.C.

§ 159(b)(3).

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Except in extraordinary circumstances and in

circumstances in which there are existing nonconforming units, the following shall be appropriate

units, and the only appropriate units, . . . except that, if

sought by labor organizations, various combinations of

units may also be appropriate:

(1) All registered nurses.

(2) All physicians.

(3) All professionals except for registered nurses and

physicians.

(4) All technical employees.

(5) All skilled maintenance employees.

(6) All business office clerical employees.

(7) All guards.

(8) All nonprofessional employees except for technical

employees, skilled maintenance employees, business

office clerical employees, and guards.

29 C.F.R. § 103.30(a).

Petitioner also claimed that the Board violated the Rule

itself by combining professionals and non-professionals together

in the absence of a showing of “extraordinary circumstances.” 

Although the regional director was obliged to (and did) hold a

separate Sonotone election2

 among the professionals to

determine whether they wished to be part of the wall-to-wall

2

 “Sonotone election” refers to the kind of election that

determines whether professionals will be included in a collectivebargaining unit with non-professionals pursuant to 29 U.S.C.

§ 159(b)(1). See generally Sonotone Corp., 90 N.L.R.B. 1236,

1240-42 (NLRB 1950). 

USCA Case #11-1209 Document #1402781 Filed: 11/02/2012 Page 3 of 13
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unit, petitioner contended that was insufficient. The Board’s

Regional Director nevertheless found the proposed units

appropriate and directed a secret-ballot election to be conducted

in the two voting groups on whether they desired Union

representation. The Hospital requested Board review of the

Regional Director’s Decision and Direction of Election, but the

Board denied this request.

The Board’s Regional Office conducted the election in June

2007, and the Union prevailed. The professionals voted 48 to 19

to be included in the unit with the nonprofessionals, and the two

groups together voted 121 to 73 for union representation. The

Hospital filed 24 objections to the election, but the hearing

officer recommended that all the objections be overruled. A

two-member panel of the Board then adopted all of the hearing

officer’s findings and recommendations and certified the Union

as the exclusive collective-bargaining representative of the

Hospital’s employees.

The Hospital, however, refused to bargain with the Union. 

The Board’s General Counsel accordingly issued a complaint

against the Hospital, alleging violations of Sections 8(a)(1) and

(5) of the Act. Petitioner’s defense was only that the Union was

improperly certified in light of the Hospital’s objections to the

election. The same two-member Board eventually issued an

order holding that the Hospital’s refusal to bargain violated the

Act. The Hospital petitioned for review in this Court, and the

Board cross-applied for enforcement.

Before we had a chance to resolve this dispute, the Supreme

Court decided New Process Steel, L.P. v. NLRB, 130 S. Ct.

2635, 2638 (2010), which held that a delegee group of at least

three Board members was necessary to exercise the delegated

authority of the Board; in other words, two-member Board

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decisions were invalid. Accordingly, we vacated the Board’s

two-member decisions and remanded for reconsideration. The

Board, now with three members, responded with two subsequent

decisions. The first certified the election results, once again

overruling all of petitioner’s objections, and issued a notice to

show cause on the refusal-to-bargain issue (the “Certification

Order”). The second, decided several months later, granted the

General Counsel’s motion for summary judgment and found that

the Hospital had unlawfully refused to bargain with the Union

(the “Refusal-to-Bargain Order”).

The Hospital timely petitioned for review of the Board’s

Refusal-to-Bargain Order, and the Board has cross-applied for

enforcement.3

II.

Despite all of petitioner’s legal maneuvering, the only real

question before us is the validity of the Board’s certification of

the Union. The Hospital does not deny that it has never

bargained with the Union, so if the certification was valid, it

follows apodictically that the Hospital’s refusal to bargain

violated Sections 8(a)(1) and (5) of the Act.

3

 Also before us is a separate Board decision finding that

petitioner committed various unfair labor practices related to a

unilateral change in policy and failure to provide information to the

Union. The parties have taken to calling the Refusal-to-Bargain Order

mentioned above “San Miguel I” and this separate unfair-laborpractice proceeding “San Miguel II.” Both parties agree, however,

that San Miguel II turns entirely on whether the Union was the

properly certified bargaining representative for the Hospital’s

employees. Because we find that it was, we grant the Board’s crossapplication for enforcement in both cases.

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A. The Health Care Rule

The Board rarely uses its rulemaking authority, but the

Health Care Rule is a welcome deviation from this trend. Its

promulgation in 1989 was a notable event in which the Board

responded to differing positions taken by the Board and courts

of appeals. See generally St. Margaret Mem’l Hosp. v. NLRB,

991 F.2d 1146, 1148 (3d Cir. 1993). As we noted above, the

Board announced eight possible appropriate units, but indicated

that combinations might be appropriate if sought by a labor

organization. That occurred here. The union successfully

sought to combine six of the groups, excluding only guards and

physicians.

The Health Care Rule was upheld by the Supreme Court in

American Hospital Ass’n v. NLRB, 499 U.S. 606 (1991), against

various challenges. But petitioner brings a somewhat different

challenge which (perhaps understandably) was not thought of

before — that the Rule violates Section 9(c)(5) of the Act

because it endorses the extent of a union’s organization as the

controlling factor in unit determination. It is not immediately

apparent to us why the validity of the Rule is a necessary precondition to the Board’s determination in this case. There is no

reason to think that a broad unit, in the absence of the Rule,

would somehow be inappropriate. See Vanderbilt Univ., 218

N.L.R.B. 1076, 1078 (NLRB 1975) (noting the “strong

congressional sentiment favoring broad unit determinations in

the health care industry”); see also Cleveland Constr., Inc. v.

NLRB, 44 F.3d 1010, 1013 (D.C. Cir. 1995) (“The Board need

only select an appropriate unit, not the most appropriate unit.”

(emphasis added)).

But assuming arguendo the Rule’s validity is necessarily at

issue, we see zero merit to petitioner’s argument. All the

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Hospital points to are a few passages from the Rule’s

administrative record indicating that unions had routinely

requested or organized these units. Yet the administrative

record of the rulemaking also makes quite clear that the factors

the Board considered in deciding upon the eight listed units

included “uniqueness of function; training, education and

licensing; wages, hours and working conditions; supervision;

employee interaction; and factors relating to collective

bargaining.” Second Notice of Proposed Rulemaking for

Collective-Bargaining Units in the Health Care Industry, 53 Fed.

Reg. 33,900, 33,905-06 (Sept. 1, 1988) (“Second Notice”). 

Indeed, even if the Board did consider past and present

union organization in formulating the Health Care Rule, nothing

in the National Labor Relations Act precludes such

consideration entirely. Section 9(c)(5) requires only that the

extent of organization not be the controlling factor;

consideration of that factor among others is entirely lawful.

NLRB v. Metro. Life Ins. Co., 380 U.S. 438, 441-42 (1965);

Country Ford Trucks, Inc. v. NLRB, 229 F.3d 1184, 1191 (D.C.

Cir. 2000). 

To be sure, if a union petitions for an election in one of the

eight acceptable units, it will likely be granted, but that hardly

suggests that extent of organization is a controlling factor

because the Board has indicated that other considerations

support the appropriateness of any of these eight units. 

Moreover, a protesting employer may always seek to show

“extraordinary circumstances,” requiring a departure from the

Rule’s advance determination of appropriate units.4

4

 Petitioner also claims that the Rule was undercut by a

subsequent Board decision, Specialty Healthcare & Rehabilitation

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B. Appropriateness of the Unit

Assuming the validity of the Rule, the Hospital maintains

that the Board violated it in this proceeding because the Union

was required to show and the Board was required to find

extraordinary circumstances to join together a number of the

Rule’s designated units, particularly the professionals with the

non-professionals. According to petitioner, even if the

professionals voted to be part of the overall unit, that by itself

did not excuse the Board’s failure to find extraordinary

circumstances. This argument is based on an obvious misreading

of the Rule. Recall it states, “Except in extraordinary

circumstances and in circumstances in which there are existing

non-conforming units, the following shall be appropriate units,

and the only appropriate units, . . . except that, if sought by labor

organizations, various combinations of units may also be

appropriate.” 29 C.F.R. § 103.30(a) (emphasis added). It is

quite clear then that combinations and extraordinary

circumstances are different exceptions, and that a combination

of the designated units can be deemed appropriate without a

showing of extraordinary circumstances. 

The Hospital’s fall-back argument — which did, at first

reading, seem more troublesome — is that even if the units

“may” be combined under the Rule, that does not mean they

shall be combined without the normal showing of a shared

community of interest. See NLRB v. Action Auto., Inc., 469 U.S.

490, 494 (1985); see also United Operations, Inc., 338 N.L.R.B.

Center of Mobile, 357 N.L.R.B. No. 83 (NLRB 2011), but that opinion

dealt with non-acute care facilities like nursing homes, which are not

governed by the Health Care Rule. Nothing in Specialty Healthcare

affects the analysis for acute-care facilities. 

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123, 123 (NLRB 2002) (listing the factors considered in a

standard community-of-interest analysis). The Hospital points

out that the Board’s commentary on the final proposed Rule

indicated that it was abandoning a position expressed in the

initial notice of proposed rulemaking — that all combinations

shall be appropriate. See Second Notice, 53 Fed. Reg. at 33,932

(“[W]e believe that we have insufficient evidence at this time to

say that, per se, all combinations will be found appropriate. We

believe this is a matter we will have to decide in the course of

individual cases, by adjudication.”). That indicates, according

to petitioner, that the Board recognized that combined units

could well be objectionable if they transgressed the reigning

community-of-interest standard. That seems correct to us. We

further recognize that community of interest is a factual question

which the Board bears the burden of establishing on appeal.5

But the flaw in this argument is that the Hospital never put

the issue in play; it never challenged the combined unit’s

community of interest at the initial representation hearing. The

Hospital disputed the status of several nurses and presented its

arguments relating to the legality and interpretation of the Rule,

but despite invitation by both the hearing officer and the Union’s

counsel, it never questioned community of interest (probably

because the argument was an obvious loser). A number of

5

 The APA states that “[e]xcept as otherwise provided by statute,

the proponent of a rule or order has the burden of proof,” 5 U.S.C.

§ 556(d), and the Supreme Court has clarified that “burden of proof”

here means burden of persuasion, not just burden of production. Dir.,

Office of Workers’ Comp. Programs, Dep’t of Labor v. Greenwich

Collieries, 512 U.S. 267, 276 (1994). Of course, even if the Board has

the burden before us as the proponent of its own order, our review of

its unit determination is highly deferential. Country Ford Trucks, Inc.

v. NLRB, 229 F.3d 1184, 1189 (D.C. Cir. 2000).

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subordinate questions are often litigated in representation cases

— such as personnel practices, supervision, common tasks,

working interrelationship, etc. — that together point to a

community of interest or the lack thereof. But it is hardly to be

expected that a hearing officer would engage in a self-directed

inquiry into the myriad of such questions in the absence of an

employer’s claim that a proposed unit lacked a community of

interest. 

Interestingly, there is no Board (or court) decision cited by

the Board’s counsel, nor one that we could find, that addresses

this precise point. Theoretically, we suppose under SEC v.

Chenery Corp., 332 U.S. 194 (1947), we could remand to the

Board to explicitly address this issue. But in this unusual

instance we will not, because we think the proposition — that

the employer must challenge a proposed unit on community-ofinterest grounds before the Board is required to rule on the issue

— is so painfully obvious that a remand is unnecessary. We

therefore conclude that the Hospital waived any subsequent

challenge based on the supposed lack of community interest by

not raising it before the hearing officer.

C. Procedural Challenges to the Certification

Petitioner raises three procedural objections to the Board’s

underlying proceedings, but all are marked more by imagination

than substance. First, the Hospital makes the extraordinary

claim that the Board’s Certification Order was unlawful because

it was issued only four business days after our order vacating

and remanding in light of New Process Steel. It is argued that,

given the complexity of the case, the Board must have either de

facto reopened the case prior to remand or else given only

superficial consideration to the Hospital’s arguments. 

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To dispose of this rather silly argument, it is hardly

necessary to rely on the presumption of regularity that agency

proceedings enjoy. See Hercules, Inc. v. EPA, 598 F.2d 91, 123

(D.C. Cir. 1978). Suffice it to say that nothing prevented the

Board from merely thinking about cases affected by the

Supreme Court’s decision in New Process Steel before actual

remand orders were issued. See NLRB v. KSM Indus., Inc., 682

F.3d 537, 544 (7th Cir. 2012) (finding unproblematic even a

one-day turnround for a Board decision because “[t]he pendency

of New Process Steel was hardly a secret, and for all we know

the Board was already busy taking another look at the cases that

were potentially affected by it”).

Second — and this one is also a doozy — petitioner claims

that the Certification Order was improper because three

Representation-Management (“RM”) Petitions were pending at

the time it was issued. But the RM petitions were obviously a

gimmick that the Board could properly ignore in determining

whether to certify the election. RM petitions (election petitions

filed by an employer) are permitted only when an employer

claims a union no longer has majority support, or in response to

a union’s demand for recognition. See 29 U.S.C. § 159(c);

NLRB Casehandling Manual, Part Two, Representation

Proceedings, Sec. 11002.1(a), 11002.2(b).6

 But a post-election

assertion that a union has lost majority support has no bearing

on the validity of an election that has already occurred. See,

6

 For a one-year period after a union’s election victory is

certified, the union is presumed to enjoy majority support, and an

employer may not challenge this status by refusing to bargain. See

Brooks v. NLRB, 348 U.S. 96, 98-104 (1954). But the RM petitions

here were filed three days before the Board’s pending Certification

Order, obviously to circumvent this one-year safe-harbor period.

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e.g., Sunbeam Corp., 89 N.L.R.B. 469, 473 (NLRB 1950). The

only issue before the Board in the Certification Order was

whether to certify the Union’s victory in the original election, so

the pending RM petitions did nothing to render this order

unlawful.7

7

 The Board suggests that we should not even consider these first

two procedural arguments because the Hospital failed to timely raise

them before the agency. Ordinarily, of course, we lack jurisdiction to

hear arguments not raised before the Board in the first instance. 29

U.S.C. § 160(e); N.Y. & Presbyterian Hosp. v. NLRB, 649 F.3d 723,

733 (D.C. Cir. 2011). But there is no dispute here that the Hospital

did make these arguments in the refusal-to-bargain proceedings —

indeed, the Board specifically considered and rejected both of them in

the Refusal-to-Bargain Order directly before us. The only question is

whether the Hospital needed to raise them earlier. 

Both of petitioner’s first two challenges pertain to the timing of

the Certification Order — the Hospital says it was issued too quickly,

and improperly issued in light of the pending RM petitions. So

petitioner could not plausibly have raised these concerns until after the

Certification Order was handed down. The Board counters that the

Hospital could have filed a motion for reconsideration pursuant to 29

C.F.R. § 102.48(d) — thereby challenging the Certification Order

immediately — and that foregoing this option and waiting until the

refusal-to-bargain proceedings waived the arguments. But the Board

ignores Rule 102.48(d)(3), which expressly states that “[a] motion for

reconsideration or for rehearing need not be filed to exhaust

administrative remedies.” See also Roundy’s Inc. v. NLRB, 674 F.3d

638, 646 n.2 (7th Cir. 2012) (noting that the Rule 102.48(d)

procedures are not mandatory); NLRB v. Mercy Hosps. of Sacramento,

Inc., 589 F.2d 968, 973-74 (9th Cir. 1978) (same). We therefore

decide these arguments on the merits, however spurious they may be.

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Lastly, petitioner claims that the Board abused its discretion

by permitting the General Counsel to amend the complaint — to

allege that petitioner had again refused the Union’s bargaining

demand — after the “deadline” for such amendments announced

in the Certification Order had passed. What this argument has

to do with “the price of tea” is not apparent. Petitioner has never

denied its refusal to bargain with the Union, so the amendment

to the complaint was of no real significance, and certainly no

prejudice to the Hospital. At the very least, it surely was not an

abuse of discretion for the Board to allow a late amendment that

did no more than reflect the undisputed facts at the time.

* * *

As we noted at the outset, the Hospital unleashed a blizzard

of arguments to challenge the Board’s unfair-labor-practice

orders. It might be appropriate to suggest that in appellate

argument, the proverbial rifle is preferable to a machine gun —

but that would assume petitioner had at least a few good

arguments; it did not. In truth, it appears to us that all the

Hospital sought was the inevitable delay that review of Board

orders affords. This is regrettable.

Accordingly, the petitions for review are denied, and the

Board’s cross-applications for enforcement are granted.

 So ordered.

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