114 [98 Op. Att’y

LABOR LAW

P UBLIC A GENCIES AND E NTITIES

– NLRA

– G ENERAL

A SSEMBLY M AY A DD THE U NIVERSITY OF M ARYLAND

M EDICAL C ENTER TO L IST OF E NTITIES S UBJECT TO

M ARYLAND C OLLECTIVE B ARGAINING L AW

November 21, 2013

David A. Smulski Policy Analyst Department of Legislative Services General Assembly of Maryland

On behalf of the Senate Finance Committee of the Ma ryland General Assembly, you have requested our opinion re garding whether the employees of the University of Maryland Medical Center (“UMMC” or “the Medical Center”)—the flagshi p hospital within the University of Maryland Medical System (“UMMS” or “the System”)—are covered by either the National Labor Relations Act (“NLRA”) or Maryland labor laws . You have also asked us to explain the “status” of UMMS and/or the

Medical Center “in relation to State Government.” Your request emerges from the Committee’s consideration, during the 2013 session, of proposed legislation that would have ad ded the

Medical Center to the list of State entities that a re subject to Maryland’s collective bargaining law. See Senate Bill 759 (2013). Given the context in which your request arose, we i nterpret your request as asking whether the Medical Center—and no t the other constituent member hospitals of UMMS—is a State ent ity and whether the General Assembly could place the Medica l Center’s employees under the purview of Maryland collective bargaining laws that apply only to State employees.

In our opinion, the Medical Center is exempt from t he NLRA and is not currently included within the scope of Maryland’s collective bargaining law, which grants protections similar to those in the NLRA to specific classes of State employees. As for the “status” of the Medical Cent er in relation to the State, we cannot broadly determine whether a n entity is an instrumentality of the State for all purposes. Rat her, the Court of Appeals requires us to evaluate the entity’s State status within a particular statutory context and with reference to the class of entities (such as “instrumentalities of the State” or “public bodies”) that the statute covers. The Maryland sta tute governingGen. 114] 115

the collective bargaining process, however, does no t lend itself to this type of inquiry because it simply lists the specific entities to which it applies; it does not identify a general ca tegory of entities to which it applies or establish a set of criteria that govern inclusion on the list. Nevertheless, in light of t he recent decision by the Court of Appeals that UMMS is an instrumenta lity of the State for purposes of the Public Information Act (“ PIA”), Napata v. University of Md. Med. Sys. Corp. , 417 Md. 724 (2011), we conclude that the General Assembly has retained suf ficient

control over the Medical Center to add it to the li st of employers that are covered by the State collective bargaining law if it so

chooses.

I

Background

A. The University of Maryland Medical Center and th e University of Maryland Medical System

The University of Maryland Medical Center traces it s origins to the Baltimore Infirmary, which was found ed in 1823 by the faculty of the University of Maryland College o f Medicine to serve as a teaching hospital. The Infirmary became part of the University of Maryland in 1897 and was renamed the University of Maryland Hospital. It was owned and operated by the University for the next 87 years, first as a privat e corporation, and then, after merging in 1920 with what is now the Un iversity of Maryland, College Park, as a governmental entity. See 63 Opinions of the Attorney General 106, 109-111 (1978) (citing University of Maryland v. Williams , 9 G. & J. 365 (1838)); see also Pearson v. Murray , 169 Md. 478, 483 (1936) (concluding that, after the merger with the College of Agricult ure in College Park, the School of Law was without question “a bra nch or agency of the state government”).

In 1984, the General Assembly determined that it ha d become “unnecessarily costly and administratively c umbersome for the University [of Maryland] to finance, manage , and carry out the patient care activities of an academic inst itution within the existing framework of a State agency, since many ap plicable laws, management structures, and procedures were de veloped to implement types of governmental functions which dif fer from the operations of a major patient care facility.” Md. Code Ann.,116 [98 Op. Att’y

Educ. (“Educ.”) § 13-302(5). 1 According to the General Assembly, these “patient care operations” would be “more efficiently served by contemporary legal, managemen t, and procedural structures utilized by similarly situate d, private entities throughout the nation.” Id. The Legislature also found that the “interests of the citizens of the State, the region , and the community naturally served by University Hospital w ill be best met by . . . creat[ing] a separate legal and organi zational structure for the medical system to provide independence and flexibility of management and funding, while assuring a compatible and mutually beneficial relationship with the Universit y [of Maryland].” Id. § 13-302(7).

On the basis of these concerns, the General Assembl y passed legislation creating the University of Maryland Med ical System Corporation to own and operate the University Hospi tal as a “private, nonprofit, nonstock corporation formed un der the general corporation laws of this State.” Id. § 13-301(m); see generally id . §§ 13-302–13-313; see also 1984 Md. Laws, ch. 288. The legislation also established a process fo r transferring the assets of the State-owned hospital to UMMS. Educ. § 13-307. The express purpose of the new entity was to “provi de medical care of the type unique to University medical facil ities for the citizens of the State and region,” id. § 13-302(1), and “render[] comprehensive health care to the community naturall y served by University Hospital . . . .” Id. § 13-302(3). Accordingly, the University Hospital became part of UMMS in 1984, as did the University Cancer Center and the clinical arm of th e Maryland Institute for Emergency Medical Services Systems (n ow called the R Adams Cowley Shock Trauma Center). See id. §§ 13- 301(k), 13-302(8). Subsequently, in 1998, UMMS cha nged the name of the University of Maryland Hospital to the University of Maryland Medical Center. See Maryland Manual, University of Maryland Medical System, http://msa.maryland.gov/ms a/ mdmanual/25ind/priv/html/medh.html (last visited No v. 12,
2013).

The legislation that created UMMS addressed the Sys tem’s relationship to State government. The statute expl icitly provided that UMMS “shall not be a State agency, political s ubdivision, public body, public corporation, or municipal corpo ration” and exempted UMMS from “any provisions of law affecting only

1 Unless otherwise indicated, all citations to the E ducation Article are to the 2008 Replacement Volume and the 2013 Sup plement.Gen. 114] 117

governmental or public entities.” Educ. § 13-303(a )(2). The System was to be a “private, nonprofit, nonstock co rporation formed under the general corporation laws” with “al l powers of a Maryland corporation which are not expressly limite d by this subtitle,” including “the power to convey, lease mo rtgage, encumber, and otherwise deal with all its assets.” Id . §§ 13- 301(m), 13-303(b).

Although it established UMMS as an ostensibly priva te corporation, the General Assembly ensured that the State would continue to play a prominent role in the System’s g overnance. For example, the authorizing statute required that UMMS’s articles of incorporation and the initial transfer of assets from the State be approved by the Board of Public Works. Id. §§ 13- 303(a)(1), 13-307(e). The voting members of UMMS B oard of Directors are all appointed by the Governor, 2 id . § 13-304(b), and the appointments the Governor makes must include th ree members of the Board of Regents of the University S ystem of Maryland (“USM”) and two members of the General Ass embly.

Id. § 13-304(c)(2), (3). The Chancellor of the USM, t he President of the University of Maryland, Baltimore, and the D ean of the University of Maryland School of Medicine also serv e ex officio as nonvoting members of the UMMS board. Id . § 13-304(c)(7).

The General Assembly also provided for continuing operational coordination between UMMS and the Unive rsity. The Chief Executive Officer of UMMS is elected by t he UMMS Board of Directors, but must also be appointed to a “joint office” as Vice President of UMMS by the Board of Regents. Id . § 13- 304(i). The Medical Center was required to continu e to serve as the teaching hospital for the University of Marylan d, see id.

2 The UMMS Board of Directors submits a list of nomi nees to the Board of Regents of USM “for comment and to the Gov ernor for consideration.” Educ. § 13-304(e). As we have exp lained in prior advice, however, the final authority to appoint res ts solely with the

Governor. See Letter from William R. Varga, Assistant Attorney
General, to Clifford M. Kendall, Chairman of the Bo ard of Regents (Aug. 15, 2008). The Maryland Court of Appeals rea ched the same

conclusion in Napata . 417 Md. at 730 (“[A]ll voting members on UMMS Board of Directors are appointed by the Govern or . . . .”). Indeed, in 2008, the Governor appointed members to the UMMS board who had not been nominated by the board. See Alexander Pyles, Union Organizing at University of Maryland Medical Center , Daily Record (Oct. 22, 2012).118 [98 Op. Att’y

§§ 13-302(1), 13-305(a), and “continue to make avai lable medical

services to residents of various State institutions whose residents . . . were served by the Hospital.” Id. § 13-303(l). UMMS is required to enter into annual contracts with the Un iversity regarding “all financial obligations, exchanges of services, and any other agreed relationships between the Universi ty and [UMMS] for the ensuing fiscal year,” id. § 13-306(a), and may only establish “nonprofit or for-profit subsidiarie s or related entities to the extent approved by the University i n the annual

contract.” Id. § 13-303(k).

With respect to personnel, the statute provided tha t the clinical faculty at the University would serve as t he medical staff of the Medical Center and hold positions within bot h institutions.

Id. § 13-305(a). Other “University employee[s] workin g in the medical system” were given the option to remain a U niversity employee covered by the State personnel system or b ecome an employee of UMMS. Id. § 13-305(b)(2). Those who elected to become UMMS employees nevertheless remained eligibl e to participate in the State Employees’ Retirement Syst em under

certain conditions. See Md. Code Ann., State Pers. & Pens. (“SPP”) §§ 31-102(2)(xx) and 31-107 (2009 Repl. Vol . and 2013 Supp.). 3 New employees hired after the July 1, 1984 “trans fer date,” however, qualified as medical system employe es exclusively, such that, in practice, University emp loyment would be phased out over time. In the meantime, the Legi slature mandated that UMMS “treat medical system University personnel on the same basis as Medical System Corporation emp loyees” and maintain “an integrated seniority list” of UMMS and University personnel. Educ. § 13-305(b)(3), (4).

Certain other aspects of UMMS’s operations also ref lect a continuing governmental presence. For example, alt hough the medical system was exempted from State procurement laws in general, it was nonetheless required to “conduct procurement activities consistent with minority purchasing stan dards applicable to State government agencies.” Id. § 13-303(e). And while the statute includes a specific provision req uiring UMMS to retain private counsel to represent the University employees who elected not to become employees of the System, the Attorney General’s Office retained the authority to determin e whether

3 Unless otherwise indicated, all citations to the S tate Personnel and Pensions Article are to the 2009 Replacement Vo lume and 2013 Supplement.Gen. 114] 119

those University employees were entitled to represe ntation in the first place. Id. § 13-308(d).

The General Assembly provided that the State would

maintain some financial control over UMMS as well. Although UMMS does not depend on the State budget for resour ces, it must “coordinate” its “fund-raising efforts” with the Un iversity of Maryland, id. § 13-303(j), and may only receive grants from the General Assembly after approval from the Board of R egents. Id. § 13-303(i). Moreover, to ensure the System’s “fina ncial independence and stability,” the legislation provided that the State Treasurer would hold an “Operating Reserve Fund” fr om which the System’s board of directors could request loans

. Id. § 13-309. The transfer of such funds requires the approval of the Board of

Public Works. Id. UMMS also must file annual audited financial statements with the Governor and Board of Regents. Id. § 13- 303(g).

Finally, the General Assembly gave the Board of Reg ents and Board of Public Works the authority to terminat e UMMS if they both find that UMMS has “failed to realize” it s public

purposes. Id. § 13-311(c). In that event, UMMS assets would

revert to the State. Id. § 13-311(b).

Since its inception in 1984, UMMS has expanded to f orm affiliations with eight more “member institutions” in addition to the Medical Center: the University of Maryland Reha bilitation and Orthopedics Institute (formerly Kernan Hospital ); the University of Maryland Medical Center Midtown Campu s (formerly Maryland General Hospital); the Mount Was hington Pediatric Hospital; the University of Maryland Balt imoreWashington Medical Center; University of Maryland S hore Regional Health; the Upper Chesapeake Health System (which includes Upper Chesapeake Medical Center and Harfor d Memorial Hospital); the University of Maryland Char les Regional Medical Center; and the University of Maryland St. Joseph

Medical Center. See UMMS, “Member Institutions,” http:// www.umms.org/hospitals/index.htm(last visited Nov. 5, 2013). It is our understanding that these member institutions were previously private hospitals and, upon affiliation with UMMS, retained some form of separate legal status and cur rently maintain120 [98 Op. Att’y

their own, separate, boards of directors. 4 By contrast, the Medical Center is governed directly by the UMMS board and i s not a separate legal entity.

B. The National Labor Relations Act

The National Labor Relations Act was enacted in 193 5 in response to “[t]he denial by some employers of the right of employees to organize and the refusal by some emplo yers to accept the procedure of collective bargaining . . . .” 29 U.S.C. § 151. Among other things, the legislation establi shed the National Labor Relations Board (“NLRB”). The NLRB facilitate s the election of collective bargaining representatives b y private-sector employees, 5 investigates charges of unfair labor practices, an d adjudicates disputes between private-sector employe rs and employees under the NLRA. See id. §§ 159-161. The NLRA does not, however, apply to “any State or political subdivision

thereof.” Id. § 152(2). Thus, state employers (and employees) ar e not covered by the NLRA, and they do not fall under the jurisdiction of the NLRB.

Although private hospitals are covered by the NLRA, the particular relationship between UMMS and the State of Maryland rendered uncertain the applicability of federal law to the Medical Center. In 1989, in part out of concern that feder al law might not apply, the General Assembly considered a bill that would have amended the UMMS authorizing statute to grant UMMS employees some of the same labor privileges that St ate employees enjoyed at the time. See House Bill 303 (1989); Letter from Robert A. Zarnoch, Assistant Attorney General, and Noreen A. Armetta, Staff Attorney, to Del. Anne S. Perkins (M arch 20, 1989). The draft legislation was never enacted.

In 1990, an employee at the Medical Center—which at that point was still called the University Hospital—file d a charge with the NLRB alleging violations of the NLRA. As discu ssed in

4 The boards of the various UMMS member institutions are listed

on each institution’s website. See

, e.g. , http://www.stjosephtowson.com/ About-us/Leadership.aspx (listing Board of Director s of St. Joseph); http://www.shorehealth.org/news/article.shtml?id=94 0 (listing Board of Shore Regional Health).

5 The NLRB does, however, have jurisdiction over the U.S. Postal Service—the only governmental entity with that dist inction. 39 U.S.C.
§ 1203.Gen. 114] 121

more detail below, a regional director of the NLRB 6 concluded that UMMS was a “political subdivision” of Maryland under § 152(2) of the NLRA and therefore refused to issue a complaint for lack of jurisdiction. See Letter Determination of the Regional Director, NLRB Region 5, Case 5-CA-20678 (Feb. 7, 1 990). The NLRB revisited the issue in 2010 and again conclude d that UMMS qualified as a political subdivision and, thus , was not subject to the NLRA. See Dismissal Letter from the Regional Director, NLRB Region 5, Case 5-CB-10912 (Sept. 10, 2010).

C. State Collective Bargaining Law

The Maryland collective bargaining law, enacted in 1999, gives certain classes of State employees the right to collectively bargain, subject to certain exceptions. See SPP § 3-301; 1999
Md. Laws, ch. 298; Maryland Transp. Auth. v. Maryland Transp. Auth. Police Lodge #34 of the Fraternal Order of Po lice , 420 Md. 141, 162 (2011). Prior to 1999, State employees’ c ollective bargaining rights were defined by Executive Order. See

Executive Order 01.01.1996.13. But the Executive O rder permitted State employers to enter into only non-bi nding collective bargaining agreements because, under est ablished Court of Appeals precedent, a government agency was not allowed to enter into a binding agreement that woul d delegate its discretion without explicit authorization from the General Assembly. See McCulloch v. Glendening , 347 Md. 272, 275 (1997).

The collective bargaining law provides such explici t legislative authorization for collective bargaining to employees of the principal departments in the Executive Branch o f State government and eleven other specified agencies: th e Maryland Insurance Administration, the State Department of A ssessments and Taxation, the State Lottery and Gaming Control Agency, the USM, Morgan State University, St. Mary’s College of Maryland, Baltimore City Community College, the Comptroller, the State Retirement Agency, the State Department of Educatio n, and, for certain employees, the Maryland Transportation Auth ority. SPP §§ 3-102(a), 3-301(a). Conversely, the statute ide ntifies certain categories of employees within those agencies who a re not

6 The NLRA permits the NLRB to delegate certain deci sionmaking authority to its regional directors, subject to the Board’s review. 29 U.S.C. § 153(b).122 [98 Op. Att’y

conferred collective bargaining rights. See Id . § 3-102(b). Relevant to our purposes, “employee[s] who [are] en titled to participate in collective bargaining under another law” are not covered by the statute. Id. § 3-102(b)(8). Employees covered by the NLRA, therefore, would not be covered by the St ate law.

Like the NLRA, Title 3 of the Personnel and Pension s Article prohibits unfair labor practices, id. § 3-306, establishes procedures for employees to elect a bargaining repr esentative, id. §§ 3-401–3-407, and regulates the collective bargai ning process.

Id. § 3-502. Responsibility for administering and enf orcing the

law is divided between the State Labor Relations Bo ard (“SLRB”) and the State Higher Education Labor Relations Boar d (“SHELRB”). The SLRB has jurisdiction over the emp loyees of all of the units listed in § 3-102 except for the U SM, Morgan State, St. Mary’s College, and Baltimore City Commu nity College. Id. § 3-205(a). Employees of these other government units fall under the jurisdiction of the SHELRB. Id. § 3-2A-05(a).

D. Senate Bill 759

During the 2013 legislative session, the Senate Fin ance Committee considered Senate Bill 759, which would h ave added the Medical Center to the list of employers covered by the State collective bargaining law. 7 It appears that the purpose of the proposed legislation was to rectify a perceived ine quity between the labor protections afforded to employees at the Medical Center and those provided to similar employees at other UM MS hospitals and private hospitals in general. During hearings on this proposed legislation, the committee heard testimony that the other member hospitals of UMMS were covered by the NLRA and that the eligible employees of all UMMS hospitals, except fo r the Medical Center, were represented by labor unions. 8 Some legislators and

7 Senate Bill 759 did not specify whether the Medica l Center would be subject to the jurisdiction of the SLRB or the S HELRB, which has responsibility for the University of Maryland emplo yees who work alongside the Medical Center employees. Any future legislation should place the Medical Center under the jurisdiction of a particular regulatory entity.

8 In October 2012, the UMMS Board gave labor union o fficials access to the Medical Center for ninety days to all ow SEIU Local 1199 the opportunity to convince certain employees to jo in the union. See Pyles, Union Organizing at University of Maryland Medical Center

. Based on the testimony at the hearing, it appears t hat the union’s efforts

were unsuccessful.Gen. 114] 123

proponents of the bill explained that the Medical C enter fell outside the jurisdiction of the NLRB and, hence, th at amendments to State law were required to afford Medical Center employees the same collective bargaining rights as the employ ees at other UMMS hospitals.

UMMS opposed the bill on two grounds. First, the G eneral

Counsel asserted that factual circumstances had cha nged since 1990 and that the NLRB, if faced with the question again today, might well conclude that the Medical Center is no l onger a “political subdivision” of Maryland. Second, she a rgued that the General Assembly could not subject the Medical Cent er to the jurisdiction of the SLRB (or SHELRB) because the Me dical Center is not a State agency and its employees are not State employees. Although the Committee took no further action on the bill, the questions about the Medical Center ra ised during the hearing appear to have prompted this request for ad vice. Given that context, we direct our analysis to the Medical Center in particular, rather than the other member hospitals of UMMS, which, as we understand it, already have employees with collective bargaining representation.

II

Analysis

We first consider whether the Medical Center is cov ered by the NLRA. If it is, the provisions of the federal law would likely preempt any effort to add it to the entities subjec t to Maryland’s collective bargaining law. We then examine the Mar yland law to determine whether the Medical Center is already enc ompassed by one of the entities covered by the law; if so, furt her inquiry into the System’s “status” for purposes of collective ba rgaining would be unnecessary. And finally, as we conclude that n either federal nor Maryland law affords the System’s employees col lective bargaining rights, we explore whether UMMC remains subject to

a level of State control sufficient to enable the G eneral Assembly to add it to the list of employers that are subject to the Maryland

law. We believe that it is.

A. The Medical Center is Exempt from the National Labo r Relations Act as a “Political Subdivision.”

The NLRA excludes from its definition of “employer” “any State or political subdivision thereof.” 29 U.S.C. § 152(2). Thus,124 [98 Op. Att’y

the collective bargaining rights set forth in feder al law do not extend to employees of a state or a political subdi vision of a state.

Although UMMS’s authorizing statute specifically pr ovides that the system is not a “State agency” or a “polit ical subdivision,” the Supreme Court has held that “[f]e deral, rather than state, law governs the determination, under [§ 152(2)], whether an entity created under state law is a ‘pol itical subdivision’ of the State and therefore not an ‘emp loyer’ subject

to the Act.” NLRB v. Natural Gas Utility Dist. of Hawkins County

, Tennessee , 402 U.S. 600, 602-03 (1971); see also Shelby County Health Care Corp. , 343 N.L.R.B. 346, 358 (2004) (citing Hawkins County for the proposition that “state law is not controlling on the question of whether an entity is a political subdivision and that it is to ‘the actual operation s and characteristics’ of the entity that the Board must look in deciding whether the entity is exempt from the Act’s coverag e”). The fact that the Maryland statute uses the same term as the NLRA, therefore, is not determinative. Federal law gover ns.

As the Supreme Court has recognized, the NLRA does not define the term “political subdivision,” and the “A ct’s legislative history does not disclose that Congress explicitly considered its meaning.” Hawkins County , 402 U.S. at 604. However:

The legislative history does reveal . . . that Congress enacted the [§ 152(2)] exemption to except from Board cognizance the labor relations of federal, state, and municipal governments, since governmental employees did not usually enjoy the right to strike. In the light of that purpose, the Board . . . “has limited the exemption for political

subdivisions to entities that are either (1) created directly by the state, so as to constitute departments or administrative arms of the government, or

(2) administered by individuals who are responsible to public officials or to the general electorate.”

Id. at 604-05 (quoting the NLRB’s brief) (emphasis add ed) ; see also N.L.R.B. v. Princeton Memorial Hosp. , 939 F.2d 174, 177 (4th Cir. 1991) (describing “two part test in Hawkins County ”); Univ. of Vermont , 297 N.L.R.B. 291, 294-95 (1989) (applying test to University).Gen. 114] 125

In a 1990 decision, an NLRB regional director concl uded that UMMS was a “political subdivision,” relying on both prongs of the Supreme Court’s decision in Hawkins County . With respect to the first prong, the regional director f irst noted that “the Employer is a corporation . . . established directl y by an act of the [Maryland] General Assembly” and that the legislati on required

UMMS to enter into annual contracts with the Univer sity. Letter Determination of the Regional Director, Case 5-CA-2 0678, at 1. He also emphasized that over 200 employees—includin g the one who brought the charges under review—“retain[ed] th eir eligibility for State employee benefits” and that, therefore, “the Employer in the instant case operates as a joint em ployer with the University . . . .” Id. With respect to the second prong, the director reasoned that “the Employer is administere d by a board of directors, all of whom are appointed by the gove rnor” and that the CEO of UMMS “concurrently serves as a vice pres ident” of the University of Maryland. Id. at 1-2. On the basis of these facts, the Regional Director concluded that the NLR A did not apply:

The Board does not have jurisdiction over

employers which constitute departments or administrative arms of the government or over employers administered by individuals who are responsible to public officials or to
the electorate. From these facts, it would appear that [UMMS], in addition to its status as a joint employer with a department or
administrative arm of the state, is also an entity administered by individuals who are responsible to public officials or to the electorate. I therefore am refusing to issue [a] complaint in this matter.

Id. at 2 (internal citations omitted). Another NLRB R egional
Director reaffirmed this determination in 2010, con cluding that “UMMS is an instrumentality of the State of Marylan d; thus, it is

excluded from the National Labor Relations Board’s jurisdiction under Section [152(2)] . . . .” Dismissal Letter f rom the Acting Regional Director, NLRB Region 5, Case 5-CB-10912.

These decisions establish that, at least as of 2010 , the NLRB did not believe it had jurisdiction over the Medica l Center. Given that all voting UMMS board members remain gubernato rial appointees, we see little reason to believe that th e NLRB would126 [98 Op. Att’y

not still find that the Medical Center is “administ ered by individuals who are responsible to public officials or to the general electorate.” 9 Hawkins County , 402 U.S. at 604-05. Under federal law, this is sufficient to exclude an emplo yer from the jurisdiction of the NLRA as a “political subdivisio n.” Id.; see also Univ. of Vermont , 297 N.L.R.B at 295 (finding the University of Vermont to be a political subdivision of the State of Vermont, and thus exempt from coverage under the NLRA, where “12 of the 21 trustees are selected by the State, either by legis lative election or by gubernatorial appointment”). As noted above, th is view is also consistent with our previous advice, issued in 1989 , that UMMS was likely exempt from the NLRA because “it is clea r that the Corporation is administered by individuals who are responsible to public officials.” March 20, 1989 Advice Letter at 2.

To be sure, some circumstances have changed since 1 990. For example, fewer employees of the Medical Center remain part of the State personnel system. As a result, the Me dical Center is not a “joint employer” with the University to the s ame extent it was in 1990. Nevertheless, even if changed circums tances have weakened part of the rationale for the NLRB’s earli er decision, the regional director’s analysis also rested on the alternative,

9 Although the UMMS statute contains no provisions governing the removal of the UMMS board members, the NLRB has exp lained that the power to remove a board member is a factor, but not the “critical factor,” in determining whether an entity is respon sible to public

officials. Economic Sec. Corp. , 299 N.L.R.B. 562, 565 (1990), overruled on other grounds by Enrichment Services Program

, Inc. , 325 N.L.R.B. 818 (1998). “Responsibility to public off icials or the general electorate has never been interpreted to require th at the board members be subject to removal from office by public officia ls . . . in addition to being placed in office by public officials . . . .” Economic Sec. Corp.

, 299 N.L.R.B. at 564. The NLRB has on multiple occa sions found that an entity was a political subdivision for purposes of the federal law even without any evidence that the Board members co uld be removed by public officials or the electorate. Id. at 564-65 (citing Univ. of

Vermont , 297 N.L.R.B. at 295 n.23; Prairie Home Cemetery , 266 N.L.R.B. 678 (1983); Community Health & Home Care , 251 N.L.R.B. 509 (1980); Northern Cmty. Mental Health Ctr. , 241 N.L.R.B. 323 (1979); City of Austell Nat. Gas Sys. , 186 N.L.R.B. 280 (1970)). It is worth noting, however, that a former Chairman of th e NLRB disagreed and claimed that “a critical factor in establishing accountability under

the Hawkins analysis is whether public officials or the genera l electorate have an unfettered right of removal duri ng an individual’s

term.” Oklahoma Zoological Trust , 325 N.L.R.B. 171, 173 (1997) (Gould, dissenting).Gen. 114] 127

unchanged ground that the UMMS Board of Directors w as appointed by the Governor. And the NLRB re-affirme d its position only three years ago, having concluded aga in that UMMS remains “an instrumentality of the State of Ma ryland” for purposes of its jurisdiction. Dismissal Letter fro m the Acting Regional Director, NLRB Region 5, Case 5-CB-10912. 10 Given that the NLRB’s position is consistent with our pri or advice, we

see little reason to withhold the deference ordinar ily afforded a federal agency’s interpretation of the statute it a dministers.

Lechmere v. NLRB , 502 U.S. 527, 536 (1992) (“Like other administrative agencies, the NLRB is entitled to ju dicial deference when it interprets an ambiguous provision of a statute that it administers.”). Thus, we conclude that UMM S is currently not subject to the NLRA.

B. Current Applicability of the Maryland Collective Bargaining Law

As explained above, Maryland’s collective bargainin g law specifically identifies the categories of employees who do, and do not, enjoy such bargaining rights. See SPP § 3-102(a). Neither the Medical Center nor UMMS is listed in § 3-102(a) as a governmental unit to which the law is applicable. The statute thus currently does not afford collective bargaining pro tections to employees of the Medical Center. Legislation would be necessary to bring the Medical Center within the scope of Mar yland’s collective bargaining law. 11 We turn now to whether the State

maintains sufficient control over UMMS to do so.

10 Because the Medical Center meets the second part o f the Hawkins County test, there is no need to determine whether it wou ld also constitute an “administrative arm of the government ” under federal law. However, the Court of Appeals decision in Napata

, which will be discussed in more detail below, suggests that the N LRB might still find that the Medical Center also meets the first part o f the Hawkins County

test.

11 Although your request asks us to consider whether the Medical Center may be subject to “various” labor laws, we a ssume based on the context in which your request arose—and your focus on the NLRA— that you were asking about the Maryland collective bargaining law.128 [98 Op. Att’y

C. The General Assembly Retains Sufficient Control over UMMS to add the Medical Center to the List of Emplo yers Covered by the Maryland Collective Bargaining Law

During the hearings on Senate Bill 759, legislators and witnesses questioned whether the Medical Center was a State entity and whether its employees could be considere d State employees for purposes of adding them to the collec tive bargaining law. These questions reflected a concer n that it would be incongruous, or perhaps even illegal, to place t he Medical Center under the jurisdiction of the SLRB or SHELRB if the Medical Center were not a State entity. In respons e to this concern, you asked us to explain the “status” of th e Medical Center “in relation to State government.”

We are not able to provide a definitive characteriz ation of the Medical Center’s State status that would apply in each and every context; instead, we must consider whether an entity is a State entity “for a particular purpose.” A.S. Abell Publishing Co.

v. Mezzanote , 297 Md. 26, 35 (1983) (regarding the PIA). We
must, therefore, “look to the characteristics and f unctions of [the entity] in the context of the particular statute at issue to determine whether [the entity] is intended to be viewed, for purposes of that statute, as a State entity.” 78 Opinions of the Attorney General 128, 134 (1993) (emphasis added). And even within a particular statutory context, “there is no single test for det ermining whether an entity is a unit or instrumentality of the State .” Napata , 417
Md. at 733. Rather, to determine “whether a statut orilyestablished entity is an agency or instrumentality of the State for a particular purpose,” we must examine “[a]ll aspects of the interrelationship between the State and the statuto rily-established entity.” Mezzanote , 297 Md. at 35.

We have recognized that this is “essentially an ad hoc” inquiry, 70 Opinions of the Attorney General 30, 34 (1985), and, as a result, “an entity may be considered an agency , unit, or instrumentality of government for one purpose, but not for

another.” 71 Opinions of the Attorney General 206, 211 (1986). For example, the Court of Appeals has concluded tha t the Washington Suburban Sanitary Commission (“WSSC”) is a State entity for purposes of sovereign immunity, Katz v. Washington Suburban Sanitary Comm’n , 284 Md. 503, 512 (1979), and the
Administrative Procedure Act, Donocam Assocs. v. Washington Suburban Sanitary Comm’n , 302 Md. 501, 510 (1985), but is not a “state agency” for the purpose of a statute that provided citizens with a process for obtaining from the Office of the Comptroller aGen. 114] 129

refund of excess agency charges. Washington Suburban Sanitary

Comm’n v. C.I. Mitchell & Best Co. , 303 Md. 544, 561 (1985).

With respect to UMMS specifically, we have similarl y reached different conclusions about the System’s st atus depending on the specific context. For example, we have prev iously advised that UMMS was “not a public entity” for purposes of the Maryland Constitution’s prohibition on members of t he General Assembly holding multiple State offices, see Letter from Robert A. Zarnoch, Assistant Attorney General, to Sen. Lau rence Levitan (March 12, 1984), was not a “public body” under the Open Meetings Act, Letter from Robert N. McDonald, Assis tant Attorney General, to Sen. Joan Carter Conway (Oct. 4, 2007), and was not a “state agenc[y]” for purposes of the law authorizing the Maryland Stadium Authority to construct facilities for State agencies. Letter from Richard E. Israel, Assistant Attorney General, to Matthew Klein, Department of Legislativ e Services (April 3, 2003). At the same time, we have conclud ed that UMMS was likely an instrumentality of the State for purposes of the PIA, Letter from Kathryn Rowe, Assistant Attorn ey General, to Sen. Vera Jones (March 21, 2007), Oct. 4, 2007 A dvice Letter at 2-3, and that the General Assembly could require UMMS to acquire the Prince George’s County Hospital System because UMMS’s “existence is subject to legislative control ” and it has “some of the hallmarks of a State entity,” such as a board appointed by the Governor. Letter from Bonnie Kirk land, Assistant Attorney General, to Del. Victor Ramirez (Jan. 18, 2007).

The Maryland collective bargaining law, however, do es not lend itself to the type of multi-factor analysis us ed in these cases and advice letters to determine whether an entity q ualifies as a State entity for a particular purpose. The collect ive bargaining law simply lists the specific entities to which it applies; it does not apply to “a unit or instrumentality of the State go vernment or of a political subdivision,” as does the PIA, see Md. Code Ann., State Gov’t § 10-611(h), or a “public body” or public “of fice,” as do the Open Meetings Act, id . § 10-505, and Article 33 of the Maryland Constitution, respectively. The scope of Maryland’s collective bargaining law thus is determined not by whether a specific entity qualifies as a State entity but by whether the subject entity is actually named in the law.

The unsuitability of the collective bargaining law to the traditional State entity analysis does not mean, ho wever, that we130 [98 Op. Att’y

cannot answer your ultimate question about whether the Legislature may add UMMC to the list of entities su bject to the collective bargaining law. That question, we belie ve, turns on the extent of the State’s power to regulate UMMS and al ter the terms of its authorizing statute.

The Legislature’s power to alter the form or functi on of public corporations is plenary. The Court of Appea ls has defined a “public corporation” as one that is “created by t he Legislature for political purposes, with political powers, to b e exercised for purposes connected with the public good, in the adm inistration of civil government.” State v. Bd. of Educ. , 346 Md. 633, 645 (1997). Because public corporations “are instrumen ts of government subject at all times to the control of the Leg islature,” id. , the Legislature can “amend at will [their] enabling leg islation.” Atlantic Golf

, Ltd. P’shp v. Maryland Econ. Dev. Corp. , 377 Md. 115, 125 (2003).

The General Assembly’s authority over private corpo rations
is more limited. Under Article III, Section 48 of the Maryland Constitution, private corporations must be chartere d under general law unless formed for “municipal purposes” or “wher e no general laws exist, providing for the creation of corporati ons of the same general character.” While the Legislature retains the power to “alter[]” the charter of any corporation created un der the authority of Md. Const., Art. III, § 48, its power is subject to a number of substantive limitations: Legislation affecting priv ate corporations may not “defeat[] or fundamentally change[]” the co rporation’s purpose or take private property, impair contractua l obligations, or otherwise violate constitutional prohibitions. See Board of Regents of Univ. of Md. v. Trustees of Endowment Fu nd of Univ.

, 206 Md. 559, 569 (1955); 70 Opinions of the Attorney General 180, 193 (1985).

The extent of the General Assembly’s power with res pect to UMMS thus hinges to some extent on whether the Syst em is a public or private corporation. On this point, the Court of Appeals

made clear in Napata v. University of Maryland Medical System Corporation that the Medical Center is not a wholly private corporation because it is imbued with numerous publ ic attributes.

In Napata , the Court concluded that UMMS—which directly controls the Medical Center—is an “instrumentality of the State,” at least for purposes of the PIA. 12 417 Md. at 736-37. It

12 It is not clear whether the Court of Appeals inten ded this conclusion to apply to all of UMMS’s member institu tions, includingGen. 114] 131

acknowledged that UMMS had some characteristics of a private entity but held that “the attributes of UMMS’s rela tionship with the State that point to its being an instrumentalit y of the State predominate over those pointing to its private char acter, for purposes of the corporation’s inclusion in the scop e of the PIA.”

Id . (internal quotation marks omitted).

According to the Court, the first attribute pointin g toward the medical system’s State status was that “UMMS di d not exist” until created by the Legislature and “until the Sta te assets were transferred to the corporation.” Id . at 737. In addition, UMMS “served a public purpose” by “providing health care to the local community . . . and a teaching hospital for Univers ity students.”

Id . The Court also observed that the State “remains a visible and compelling force in UMMS’s operations,” given that (1) all voting members of its board of directors are appoin ted by the
Governor, and at least two are members of the Gener al Assembly; (2) UMMS must coordinate with the University on fun draising and is therefore “not free to compete with the Univ ersity for private gifts or private or federal grants”; (3) an d “its annual contracts [with the University] must be approved by the Regents of the University.” Id . Moreover, the Court noted that the Board of Regents and the Board of Public Works are empowe red to dissolve UMMS if they find that it is not fulfillin g its public purpose and, under those circumstances, the assets would revert to

the State. Id. These facts, the Court concluded, “compel the conclusion that UMMS is an instrumentality of the S tate.” Id

.

While Napata establishes that UMMS is not a wholly private corporation, the Court of Appeals might find that t he Medical Center is also not a wholly public corporation beca use the General Assembly has explicitly provided that UMMS is not a “public corporation.” Educ. § 13-303(a)(2); but see Napata , 417 Md. at 734 n.5 (cautioning that status as a State e ntity may depend on “the attributes of the relationship” and not “the terminology used to describe the relationship”). H owever, in light

of Napata and the many attributes of State status held by UM MS, we believe that, at the very least, the Medical Cen ter is a type of

those governed by separate boards with a degree of separate legal status, or only the UMMS Board and the Medical Cent er. Because your opinion request concerns only the Medical Cent er, we need not determine whether the same rationale would apply to the other UMMS

institutions.132 [98 Op. Att’y

quasi-public corporation subject to the continuing control of the Legislature.

The Court of Appeals has explained that a quasi-pub lic corporation is “not a public corporation, and, thus is a private corporation[] [b]ut . . . has the characteristics o f a public corporation in function, effect or status.” 13 Potter v. Bethesda Fire Dep’t

, Inc. , 309 Md. 347, 357 (1987). Although we have concluded in one instance that the General Assembly did not violate certain constraints on its power when it “t erminat[ed]” an existing quasi-public corporation and “replac[ed]” it with a new public corporation, see 70 Opinions of the Attorney General at 192-94, we are not aware of any Maryland cases that have directly addressed the Legislature’s power to regul ate quasipublic corporations, or where that power lies on th e spectrum between the plenary power to regulate public corpor ations and the more limited power to regulate private entities. W e are confident, though, that wherever that line is drawn, UMMS is s ufficiently imbued with public characteristics that the General Assembly retains the power to place Medical Center employees under the jurisdiction of the SLRB or SHELRB if it so chooses . As the Court of Appeals observed, “the General Assembly . . . did not relinquish all control of UMMS,” and the State rema ins “a visible and compelling force in [the Medical Center’s] oper ations.” 417 Md. at 730, 737. Indeed, we have previously advise d that UMMS
is “a creation of statute,” the existence of which “is subject to legislative control.” March 20, 1989 Advice Letter at 2. We thus conclude that a corporation, like UMMS, that is for med by the State and can be extinguished by the State, and who se management and operations remain subject to signifi cant legislative control may be added to the list of ent ities subject to the collective bargaining law. 14

13 For example, we have previously characterized the Blind Industries and Services of Maryland, which like UMM S was created by State statute and has a board of directors appointe d by the Governor, as a quasi-public corporation because it was privately owned but imbued with a public interest. See 78 Opinions of the Attorney General at 134-

37.

14 We recognize that quasi-public corporations can ta ke many different forms, and we do not attempt to articulat e a rule here that would apply to all such corporations. As the Court of Appeals has recognized, some quasi-public corporations are imbu ed with more “governmental” characteristics than others. Potter , 309 Md. at 358; see also 78 Opinions of the Attorney General at 136. We accordinglyGen. 114] 133

Moreover, even if the Court of Appeals were to find that the Medical Center is a wholly private corporation, we would still conclude that the General Assembly has the authorit y to add the Medical Center to the collective bargaining law. C onferring collective bargaining rights on UMMC employees woul d not exceed the substantive limits on the Legislature’s power to regulate private corporations. To begin with, we s ee nothing about collective bargaining that would “defeat or fundame ntally change” the System’s medical purpose. Cf. State v. Good Samaritan Hospital

, Inc ., 299 Md. 310, 323 (1984) (legislation requiring hospitals that provide foot care to confe r staff privileges on qualified podiatrists does not “defeat or fundam entally change Good Samaritan’s corporate purpose to erect and mai ntain a hospital”). The employees of private hospitals hav e long enjoyed the right to collectively bargain. Indeed, hospita ls have been subject to the NLRA to varying degrees since 1935 a nd, in 1974, Congress amended the NLRA to extend coverage to all acute care hospitals. Am. Hosp. Ass’n v. NLRB , 499 U.S. 606, 614-15 (1991).

Nor would extending collective bargaining rights to UMMC employees undermine the particular purpose behind t he 1984 legislation creating UMMS. As “found and determine d” by the General Assembly, that purpose was to free the hosp ital of the “laws, management structures, and procedures” uniqu ely applicable to State agencies. Educ. § 13-302(5). Given that the employees of private hospitals enjoy collective bar gaining rights, we fail to see how providing those same rights to U MMC employees would contradict the purpose of the 1984 enactment.

Extending collective bargaining rights to System em ployees likewise would not abrogate vested property rights, impair the obligation of contracts, or run afoul of any other constitutional prohibition. There are no private property rights at stake here, and “when the General Assembly assigns a ‘public’ t ask to a private corporation, the corporation ‘acquire[s] no vested inviolable right to that political power,’ immune f rom removal by subsequent legislation.” 70 Opinions of the Attorney General at 193 (quoting Williams , 9 G. & J. at 391, and concluding that repealing charter of quasi-public corporation and r eplacing it with a public corporation was permissible). And because UMMS was created by statute, “[i]t had no ‘incorporators’ wh o could

assume that some quasi-public corporations may be s ubject to more legislative control than others.134 [98 Op. Att’y

challenge the [amendment of its charter] as being a n impairment

of their contract with the State.” 70 Opinions of the Attorney

General at 193 (citing Board of Regents , 206 Md. at 567-68).

We conclude that, even if UMMS is considered a whol ly private corporation, legislation adding it to the l ist of entities subject to Maryland’s collective bargaining law wou ld not exceed the Legislature’s proper power. But because Napata convinces us

that UMMS is not

wholly private, we believe that the Legislature’s powers are somewhat closer to its ple nary powers over public corporations than to its more limited p owers over private entities. Thus, however UMMS is classified , it is our opinion that the Legislature retains sufficient con trol over the System to add UMMC to the list of entities subject to the Maryland collective bargaining law. 15

III

Conclusion

The Medical Center’s employees are not currently co vered by either the NLRA or Maryland’s collective bargain ing statute.
However, because the Medical Center is a State enti ty for at least some purposes and remains a creature of statute wit hin the ultimate control of the State, the General Assembly has the authority to enact legislation that would subject t he Medical Center to Maryland’s collective bargaining law.

15 Regardless of how the Medical Center is characteri zed, we do not believe that legislation adding Medical Center to t he list of entities covered by the State collective bargaining law woul d run afoul of the exemption UMMS enjoys from “any provisions of law a ffecting only governmental or public entities.” Educ. § 13-303(a )(2). Although the collective bargaining law currently applies only to “governmental or public entities,” id. , the new legislation would deal “more specifically ” with the subject of labor protections for UMMS empl oyees and would therefore serve as an exception to UMMS’s more gene ral exemption. See Napata , 417 Md. at 738-39 (quoting Gov’t Emp. Ins. Co. v. Ins.

Comm’r , 332 Md. 124, 132-33 (1993)). We also doubt that the Maryland Constitution’s prohibition on special laws

, see Md. Const.
Art. III, § 33, would stand as an obstacle to such legislation. Such a law would not appear to be the type of evil that th e special laws provision was intended to prevent, and, given the u nique history of UMMS and the special rules that apply to it, the Me dical Center would reasonably be considered a “class of itself.” Cities Serv. Co. v. Governor of Md. , 290 Md. 553, 568-70 (1981).Gen. 114] 135

Douglas F. Gansler Attorney General

Adam D. Snyder Chief Counsel, Opinions & Advice

* Assistant Attorneys General Katherine D. Bainbrid ge, Clifton Gray, and Patrick Hughes contributed significantly to the preparation of this opinion.