Opinion ID: 795770
Heading Depth: 2
Heading Rank: 4

Heading: Implementing Subcontracting — January and February 2000

Text: 26 On or around January 3, 2000, Uy contacted Total Rehab Care and Interstate Rehab Care and solicited proposals for taking over the RC department. Uy stated that the successful bidder must provide an experienced respiratory manager and agree to hire all current employees at similar wages and benefits. Theodore Weiner, the president and CEO of Total Rehab Care, testified that his company was too small to handle a subcontracting arrangement involving twenty-seven employees before February 15, 2000, the start-up date required by St. Vincent. February 15, 2000, was three days before the scheduled Union election. 27 The two companies ultimately contacted each other and submitted a combined proposal, which St. Vincent received on January 26, 2000. The proposal was submitted under the name of California Respiratory Services, a subsidiary of Interstate Rehab Care. Under the proposal, Weiner would work for Total Rehab Care, which contracted with California Respiratory Services to provide management services. Though the proposal was open until March 26, 2000, St. Vincent agreed to the proposal on or about January 26, 2000 — the same day it was received. 28 On February 1, 2000, about three weeks after the Union filed its election petition with the Board, St. Vincent management informed the RC department of the outsourcing decision. Ramirez announced that California Respiratory Services would take over the RC department, and that, effective February 5, 2000, California Respiratory Services would directly employ the RC employees. 29 Parente, the hospital president, testified that he did not decide to subcontract the work of the RC department to prevent the RC therapists from voting in the upcoming union election. He did admit, however, that he was aware of the union election scheduled for February 18, 2000 when he made his final decision to subcontract a little over two weeks earlier. When pressed by the ALJ to explain the timing of the subcontracting decision, Parente responded that it was not precipitated by any emergency in patient care. 11 Rather, Parente explained that it was a reasonable management decision within our prerogative at the time and we made the decision and that there was a strong possibility that a serious error could occur in a treatment of a patient. 30 Parente further testified that he did not want to outsource the work of RC department managers while continuing to directly employ RC therapists. He explained that such an arrangement would create a divided accountability problem. Parente stated that in his opinion, the [RC] employees and the manager [of the RC department] belong in the same organization. He also explained that the subcontracting arrangement in another department of the hospital was a workable model that would have achieved [St. Vincent's] goals. Contrary to Parente's goal of preventing divided accountability, Weiner, the new RC manager, and the RC employees were not employed by the same employer because the RC employees worked directly for California Respiratory Services while Weiner and the department managers worked for Total Rehab Care. This arrangement clearly resulted in divided accountability because the RC therapists were accountable to California Respiratory Services while the managers were accountable to Total Rehab Care. 31 The ALJ found that [a]fter the subcontracting took effect, the same employees continued to do largely the same work in the same place, and that the same supervisors. . . were also hired by the subcontractor. Nevertheless, Weiner testified that the RC department improved somewhat after the subcontracting. Fewer physicians complained about RC department services and some hospital staff members even commented on the improvement of the RC department. 32