Opinion ID: 201690
Heading Depth: 2
Heading Rank: 4

Heading: Subcontracting Union Work

Text: 31 The final issue concerns the Hospital's subcontracting of union work. Under section 8(a)(5) of the NLRA, 29 U.S.C. § 158(a)(5), an employer has a duty to bargain to impasse with its employees over the terms and conditions of employment before making a unilateral change in conditions. See Litton Fin. Printing Div. v. NLRB, 501 U.S. 190, 198, 111 S.Ct. 2215, 115 L.Ed.2d 177 (1991). The Supreme Court has held that, in some cases, this requirement includes an employer's decision to subcontract work that could be performed by members of the bargaining unit. See Fibreboard Paper Prods. Corp. v. NLRB, 379 U.S. 203, 209-17, 85 S.Ct. 398, 13 L.Ed.2d 233 (1964). Failure to bargain over subcontracting in such circumstances violates sections 8(a)(1) and 8(a)(5) of the Act. See Automatic Sprinkler Corp. of Am. v. NLRB, 120 F.3d 612, 616 (6th Cir.1997). 32 The relevant facts are as follows. From August 1996 until the end of 2000, the Hospital subcontracted radiology technician work from the night, weekend, and holiday shifts to a company called GK Professional Services. Similarly, beginning in 1998, the Hospital subcontracted certain respiratory care work to outside contractors for these same shifts. There is no dispute that the subcontracted work was identical to work performed by members of the bargaining unit. The Hospital did not notify the Union of its decision to subcontract this work. Nor did it provide the Union with an opportunity to bargain over the subcontracting decisions or their effects. The Board concluded that this was a violation of the Hospital's duty to notify and bargain with the Union before deciding to subcontract the radiology technician and respiratory therapy work. See Torrington Indus., 307 NLRB 809, 1992 WL 127799 (1992) (holding that employer unlawfully subcontracted work unilaterally where the subcontracting involved nothing more than the substitution of one group of workers for another to perform the same work and does not constitute a change in the scope, nature, and direction of the enterprise). 33 Citing Westinghouse Elec. Corp., 150 NLRB 1574 (1965), the Hospital argues that it did not have an obligation to bargain over the subcontracting decision because it had an established practice of subcontracting this sort of work before the Union was certified. But the operative date is not the date of union certification (January 1997); it is the date of the election of the Union (December 1994). See NLRB v. Westinghouse Broadcasting & Cable, Inc., 849 F.2d 15, 20-22 (1st Cir.1988). Thus, for the Hospital to benefit from the safe harbor for an established past practice of subcontracting, the Hospital had to establish that it subcontracted this work on a consistent basis prior to December 1994. 34 The Board found that no such practice existed prior to 1994. One witness for the Hospital testified that the Hospital had subcontracted this work well before 1994. But the ALJ declined to credit this witness based on the Hospital's failure to produce any pre-1994 agreements showing the subcontracting of respiratory therapy or radiology technician work. Moreover, other witnesses testified that, prior to 1994, the Hospital used per diem employees to fill in when there was a shortage of respiratory therapists or radiology technicians. We cannot fault the Board's conclusion that the sporadic use of per diem employees is materially different from subcontracting out entire shifts of work. Thus, the Board's finding that there was no practice of subcontracting prior to December 1994 is supported by substantial evidence. 2 35 The Hospital also argues that, as a matter of law, it did not have an obligation to bargain over its subcontracting decision because no union employee was laid off or replaced as a result of the subcontracting decision. Board precedent does not support the Hospital's argument. See Acme Die Casting, 315 NLRB 202, 202 n. 1 (1994) (holding that there is no requirement that the subcontracting result in situations in which employees are laid off or replaced for it to be a mandatory subject of collective bargaining). 36 In Puerto Rico Tel. Co. v. NLRB, 359 F.2d 983, 987 (1st Cir.1966), and W. Mass. Elec. Co. v. NLRB, 573 F.2d 101, 106 (1st Cir.1978), we held that subcontracting is not a mandatory subject of collective bargaining unless the subcontracting results in the displacement of union workers. We were careful, however, to base our holdings on the ground that, at the time of decision, the Board had never held that a subcontracting decision had to be bargained over when there was no loss of union work. See W. Mass. Elec., 573 F.2d at 106 n. 6. We recognized that because of the possibly wide-ranging implications of expanding the circumstances in which subcontracting would be a mandatory subject of bargaining, the Board was the body best equipped to adopt such a rule. Id. This approach of permitting the Board to take the lead in developing the federal labor law is consistent with the Supreme Court's conception of the role of the NLRB. As the Court has explained: 37 The responsibility to adapt the Act to the changing patterns of industrial life is entrusted to the Board .... It is the province of the Board, not the courts, [to make adjustments in the governing law] in light of changing industrial practices and the Board's cumulative experience in dealing with labor management relations. [T]he Board has the special function of applying general provisions of the Act to the complexities of industrial life, and its special competence in this field is the justification for the deference accorded its determination. [Where the Board] engages in the difficult and delicate task of reconciling conflicting interests of labor and management, the balance struck by the Board is subject to limited judicial review. 38 NLRB v. J. Weingarten, Inc., 420 U.S. 251, 266-67, 95 S.Ct. 959, 43 L.Ed.2d 171 (1974). After W. Mass. Elec. was decided, the Board concluded that the NLRA does not require a showing of job loss for subcontracting to be a mandatory subject of collective bargaining. See Acme Die, 315 NLRB at 202 n. 1. In light of this development, our task normally would be limited to determining whether the Board's rule is a reasonable construction of the Act. 39 There is good reason for the Acme Die rule. Union members have an interest in an employer's subcontracting decision in addition to the potential for layoffs. This work provides bargaining unit members with the opportunity to obtain extra shifts (possibly at overtime rates) or to expand the size of the unit through the hiring of new employees. Considering these interests (and possibly others), the Board has reasonably concluded that the duty to bargain over subcontracting extends beyond the circumstance where the employer's subcontracting decision will result in the direct loss of union employment. 40 Finally, the Hospital contends that the Union waived its right to complain about the unilateral subcontracting of work because the Hospital offered to bargain concerning the subcontracting in January 2000, and the Union declined the invitation. We disagree. The Hospital violated the Act by failing to notify the Union of its subcontracting decision. See Penntech Papers, Inc. v. NLRB, 706 F.2d 18, 27 (1st Cir.1983). The Hospital cannot cure this violation with a post-hoc offer to negotiate. See id. The Hospital's offer to negotiate its subcontracting decisions, several years after the decisions were made, represents essentially an offer to negotiate over a fait accompli. Regal Cinemas v. NLRB, 317 F.3d 300, 314 (D.C.Cir.2003). The offer was too little, too late. 3