UPMC and its Subsidiary, UPMC Presbyterian Shadyside, Single Employer, d/b/a UPMC Presbyterian Hospi, (2017)
NOTICE: This opinion is subject to formal revision before publication in the bound volumes of NLRB decisions. Readers are requested to notify the Executive Secretary, National Labor Relations Board, Washington, D.C. 20570, of any typographical or other formal errors so that corrections can be included in the bound volumes.
UPMC and its subsidiary, UPMC Presbyterian Shadyside, single employer, d/b/a UPMC Presbyterian Hospital and d/b/a UPMC Shadyside Hospital and SEIU Healthcare Pennsylvania CTW, CLC. Cases 06–CA–102465, 06–CA– 102494, 06–CA–102516, 06–CA–102518, 06–CA– 102525, 06–CA–102534, 06–CA–102540, 06–CA– 102542, 06–CA–102544, 06–CA–102555, 06–CA– 102559, 06–CA–104090, 06–CA–104104, 06–CA– 106636, 06–CA–107127, 06–CA–107431, 06–CA– 107532, 06–CA–107896, 06–CA–108547, 06–CA– 111578, and 06–CA–115826
December 11, 2017
DECISION AND ORDER
BY CHAIRMAN MISCIMARRA AND MEMBERS PEARCE, MCFERRAN, KAPLAN, AND EMANUEL
This dispute involves 22 different cases in which the General Counsel alleges that Respondent UPMC (UPMC) is a single employer together with its subsidiary, Respondent UPMC Presbyterian Shadyside (Presbyterian Shadyside). All of the disputed unfair labor practices were alleged to have been committed by Presbyterian Shadyside, and UPMC’s disputed status as an alleged single employer would require extensive litigation, possibly taking many years to resolve, with no certainty as to outcome, and substantially delaying any final Board adjudication of the numerous alleged violations. However, there was a potentially promising development: UPMC agreed to resolve the disputed single-employer issue by offering to guarantee the performance of any remedies ultimately awarded against Presbyterian Shadyside. Administrative Law Judge Mark Carissimi accepted the offer, with modifications, over the objections of the General Counsel and Charging Party, both of whom filed exceptions to the judge’s decision in this regard, which are before us now in the instant proceeding.1
1 The judge issued the attached supplemental decision on July 31, 2015. The General Counsel and Charging Party each filed exceptions and a supporting brief, the Respondent filed an answering brief to the General Counsel’s exceptions, and the General Counsel filed a reply brief. The Respondent filed a limited cross-exception and a supporting brief, and the General Counsel filed an answering brief. After considering the supplemental decision and the record in light of the exceptions, cross-exception, and briefs, we have decided, for the reasons stated in this opinion, to grant the Respondent’s limited crossexception, to modify the judge’s recommended Order accordingly, and to affirm the judge’s rulings, findings, and conclusions in all other respects.
In the interim, a divided Board, in United States Postal Service, 364 NLRB No. 116 (2016) (Postal Service), decided that judges are no longer permitted to accept a respondent’s offered settlement terms, over the objection of the General Counsel and charging party or parties, unless the offer constitutes “a full remedy for all of the violations alleged in the complaint.” Id., slip op. at 3.
We find, as did the judge, that UPMC’s offer to act as guarantor of any remedies ultimately awarded against Presbyterian Shadyside effectuates the purposes of the National Labor Relations Act (NLRA or Act). Therefore, we find that the judge properly accepted the proffered terms in settlement of the single-employer allegation against UPMC.
Furthermore, we overrule Postal Service, and we agree with the dissenting views of Chairman (then-Member) Miscimarra in that case, who pointed out that Postal Service imposed an unacceptable constraint on the Board itself, which retained the right under prior law to review the reasonableness of any respondent’s offered settlement terms that were accepted by the judge. We believe the “full remedy” standard adopted by the Board in Postal Service was an ill-advised and counterproductive departure from longstanding precedent. As illustrated by the instant case, adhering to the Postal Service standard would predictably cause incalculable delay in resolving the alleged violations, while potentially jeopardizing the prospect of obtaining any remedy against UPMC. Today, we return to the Board’s prior practice of analyzing all settlement agreements, including consent settlement agreements, under the “reasonableness” standard set forth in Independent Stave, 287 NLRB 740 (1987).2
The Amended Consolidated Complaint (Complaint) against UPMC and its subsidiary Presbyterian Shadyside issued in this matter on January 9, 2014, consolidating unfair labor practice allegations in 22 separate cases. In each of these 22 cases, Presbyterian Shadyside is alleged to be the culpable party. The Complaint’s sole allegation against UPMC is that UPMC and Presbyterian Shadyside “are a single integrated business and a single employer within the meaning of the Act.”
The hearing before Judge Carissimi began on February 12, 2014. Litigation of the single-employer allegation
2 The Board has used various terms to describe settlement terms to which the respondent has agreed but the General Counsel and charging party or parties have not, including “consent order” and “unilateral settlement by consent order.” See, e.g., Lin Television Corp., 362 NLRB No. 197 (2015) (consent order); Local 872, 28-CB-118809, 2015 WL 153954 (Jan. 12, 2015) (unilateral settlement by consent order). We will refer to these as consent settlement agreements.
stalled over disputes regarding subpoenas issued by the General Counsel seeking documents allegedly relevant to that allegation. UPMC and Presbyterian Shadyside (collectively, the Respondents) petitioned to revoke the subpoenas. The judge denied the petitions in substantial part and ordered the Respondents to produce the subpoenaed documents. The Respondents refused to comply with the judge’s order, and the General Counsel filed an application to enforce the subpoenas in federal district court. The court granted the General Counsel’s application, and the Respondents appealed the district court’s order to the Court of Appeals for the Third Circuit, where it remains pending.
After the General Counsel filed his application to enforce the subpoenas in federal district court, Judge Carissimi severed the single-employer allegation from the unfair labor practice allegations so as not “to delay [his] resolution of the substantive unfair labor practice issues in the complaint.” The parties then proceeded to litigate the substantive unfair labor practice allegations against Presbyterian Shadyside over the course of a 19-day hearing, during which (according to the judge) “no evidence [was] presented . . . that UPMC independently committed any unfair labor practices.” On November 14, 2014, the judge issued a 120-page decision, in which he found that Presbyterian Shadyside committed multiple violations of the Act. Exceptions to the judge’s decision are pending before the Board. The single-employer allegation remained unlitigated and undecided.
On June 14, 2015, UPMC filed a Partial Motion to Dismiss, in which UPMC moved to dismiss the allegation that it constitutes a single employer with Presbyterian Shadyside. At the same time, UPMC offered to “guarantee the performance by Presbyterian Shadyside of any remedial aspects of the Administrative Law Judge’s Decision and Order [that] survive the exceptions and appeal process.” In its Partial Motion to Dismiss, UPMC further stated that it “would be responsible for any remedy along with Presbyterian Shadyside.”
In a supplemental decision issued July 31, 2015 (Supplemental Decision), Judge Carissimi accepted UPMC’s offer and granted the Partial Motion to Dismiss, reasoning as follows:
UPMC is now proposing that the single employer allegation in the complaint be resolved on the basis that it guarantees compliance with any remedies the Board may issue regarding any unfair labor practices committed by Presbyterian Shadyside in the original decision in this case that is presently pending before the Board. It is important to note that the complaint does not allege that UPMC independently committed any of the unfair labor practices alleged in the complaint. In addition,
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there was no evidence presented at the trial that UPMC independently committed any unfair labor practices. Thus, any liability that UPCM [sic] would have for any of the unfair labor practices committed by Presbyterian Shadyside would be solely dependent upon a finding that it constitutes a single employer with Presbyterian Shadyside.
In my view, accepting UPMC’s offer to serve as a guarantor and ensure that Presbyterian Shadyside complies with any remedies provided for in a Board order is an appropriate way to resolve the single employer allegation. In accepting this offer, I will dismiss the allegation in the complaint that UPMC and Presbyterian Shadyside constitute a single employer, but I will retain UPMC as a party to the case in order to ensure that there is a mechanism to enforce, if necessary, its willingness to serve as a guarantor for any remedies ordered by the Board.
. . . . . . . . .
Accepting UPMC’s offer to serve as a guarantor of any remedy that the Board may ultimately order against Presbyterian Shadyside and providing UPMC do so pursuant to an order, in my view, is as effective a remedy as I would provide if I were to find UPMC and Presbyterian Shadyside to be a single employer and thus jointly and severally liable for the unfair labor practices I have found were committed by Presbyterian Shadyside.
Having accepted UPMC’s offer, the judge dismissed the single-employer allegation.
The General Counsel and Charging Party filed exceptions to the Supplemental Decision, arguing that the judge erred by finding that UPMC’s guarantee is as effective as the remedy that would result from a singleemployer finding. Specifically, the General Counsel argues that acceptance of UPMC’s guarantee deprives the General Counsel of a finding that UPMC is jointly and severally liable and, as such, directly liable for the unfair labor practices found in this proceeding.3
UPMC filed a limited exception to the Supplemental Decision, objecting to the wording of the judge’s recommended Order. The Supplemental Decision’s recommended Order binds UPMC’s “officers, agents, successors, and assigns” in addition to UPMC. UPMC argues that the Order’s reference to “officers, agents, suc-
3 The General Counsel and the Union also contend that by accepting UPMC’s offer, the judge improperly infringed on the General Counsel’s prosecutorial discretion. The Union raised the same argument to the judge, who rejected it and explained why. For the reasons stated by the judge, we reject the General Counsel’s and Union’s contention.
cessors, and assigns” exceeds “the parameters of UPMC’s guarantor proposal,” and UPMC requests that the Order be modified to state only that UPMC shall act as a guarantor.
The Board’s Longstanding Policy Has Been to Accept Settlements That Are Reasonable.
Section 10(a) of the Act gives the Board “exclusive power to deal with unfair labor practices and to prescribe the appropriate remedy.” Borg-Warner Corp, 121 NLRB 1492, 1495 (1958); see generally Section 10(a) of the Act (stating, in relevant part, that the Board’s power to prevent unfair labor practices “shall not be affected by any other means of adjustment or prevention that has been or may be established by agreement, law, or otherwise”). In exercising this power, “[t]he Board has long had a policy of encouraging the peaceful, nonlitigious resolution of disputes.” Independent Stave, above at 741; see also The Wallace Corporation v. NLRB, 323 U.S. 248, 253–254 (1944) (“To prevent disputes like the one here involved, the Board has from the very beginning encouraged compromises and settlements.”).
This policy has been pursued with great success. For example, in fiscal year 2016, 93 percent of meritorious unfair labor practice cases were settled.4 This high rate of settlement assists the Board in effectuating the policies of the Act, both with regard to the settled cases themselves and by permitting the Agency to devote its limited resources to more intractable disputes, often involving nuanced or difficult issues of law. Nevertheless, settlement is not an end in itself. Precisely because Section 10(a) of the Act grants the Board exclusive jurisdiction to prevent unfair labor practices, the Board has the statutory authority to reject settlement agreements “at odds with the Act or the Board’s policies.” Borg-Warner Corp., above at 1495.
With this statutory responsibility in mind, the Board has traditionally considered a number of factors in reviewing settlement agreements to ensure they advance the policies of the Act, including “the risks involved in protracted litigation which may be lost in whole or in part, the early restoration of industrial harmony by making concessions, and the conservation of the Board’s resources.” Farmers Co-operative Gin Assn., 168 NLRB 367, 367 (1967). “The determination of the appropriate
4 See National Labor Relations Board, FY 2016, Performance and Accountability Report, at 16, available at https://www.nlrb.gov/sites/default/files/attachments/basic-page/node-1674/15184%20NLRB%202016%20PAR_508.pdf. A “meritorious” unfair labor practice case is one in which the regional director decides to issue complaint.
remedy in unfair labor practice cases is a matter of administrative judgment reached after the Board has balanced all factors and equities in light of the policies of the Act.” Roselle Shoe Corp., 135 NLRB 472, 475 (1962), enfd. 315 F.2d 41 (D.C. Cir. 1963). In determining whether to approve settlement agreements, “the discretion of the Board is recognized as broad.” Id. In applying its broad discretion, the Board has regularly approved settlement agreements that provide remedies less than would be awarded if the General Counsel were to prevail on every allegation of the complaint. For example, in Roselle Shoe Corp., the Board weighed the alleged incompleteness of the proposed remedy— providing only $12,000 of the $80,000 in backpay that the union claimed was owed—against the “normal uncertainties of litigation” and concluded that the settlement was “appropriate and proper.” Id. at 474–478.
In Independent Stave, the Board reiterated its longstanding, multi-factored approach to determining whether a settlement agreement is appropriate. It did so in part to correct what it viewed as a shift in Board law that overemphasized one factor at the expense of others: whether the proposed settlement “substantially remedied” all alleged violations. Independent Stave, above at 742. This shift was apparent in Clear Haven Nursing Home, 236 NLRB 853 (1978), reconsideration denied 239 NLRB 1244 (1979) (Clear Haven). In Clear Haven, the Board rejected, over a dissent, a proposed settlement as inadequate on the basis that it provided for reinstatement of strikers but without backpay. In Independent Stave, the Board sided with the Clear Haven dissenters and found that the majority in Clear Haven had “too narrow a focus” on whether the settlement provided a full remedy. Independent Stave, above at 742. The Board criticized this approach as based on the faulty presumption that “the General Counsel would prevail on every violation alleged in the complaint.” Id. (emphasis in original). The Board emphasized that at the settlement stage of litigation, the NLRB “is confronted with only alleged violations of the Act.” Id. (emphasis in original).
In Independent Stave the Board made clear that the “substantial remedy” factor was not to predominate over other factors. Instead, the Board stated, it would “evaluate the settlement in light of all factors present in the case to determine whether it will effectuate the purposes and policies of the Act to give effect to the settlement.” Id. at 743. Although the Board observed that it was “impossible to anticipate each and every factor which will have relevance to [its] review” of proposed settlement terms, id., it identified several nonexhaustive factors relevant to making this determination:
[I]n evaluating . . . settlements in order to assess whether the purposes and policies underlying the Act would be effectuated by our approving the agreement, the Board will examine all the surrounding circumstances including, but not limited to, (1) whether the charging party(ies), the respondent(s), and any of the individual discriminatee(s) have agreed to be bound, and the position taken by the General Counsel regarding the settlement; (2) whether the settlement is reasonable in light of the nature of the violations alleged, the risks inherent in litigation, and the stage of the litigation; (3) whether there has been any fraud, coercion, or duress by any of the parties in reaching the settlement; and (4) whether the respondent has engaged in a history of violations of the Act or has breached previous settlement agreements resolving unfair labor practice disputes.
Id. Applying these factors, the Board found that the settlement in Independent Stave was “reasonable,” even though, had the General Counsel been “fully successful” in litigating the unfair labor practice allegations, “the Charging Parties would have . . . been entitled to more backpay and the posting of a Board notice to employees.” Id. at 743 fn. 17.
The Postal Service “Full Remedy” Standard Is Contrary to the Longstanding Board Policy of Approving All
Settlements That the Board Finds Reasonable.
For nearly 30 years, the Board evaluated the reasonableness of all proposed settlement terms—including the proposed terms of consent settlement agreements—under the standard set forth in Independent Stave, above.5 In Postal Service, above, a Board majority abruptly departed from this longstanding precedent, holding that “a proposed [consent] order protects the public interest and effectuates the purposes and policies of the Act only if it
5 See, e.g., Local 872, 28–CB–118809, 2015 WL 153954 (Jan. 12, 2015) (agreeing with the judge that the proposed “unilateral settlement by consent order” met the requirements of Independent Stave); Heil Environmental, 10–CA–114054 et al., 2014 WL 2812204 (June 20, 2014) (same); Postal Service, 20–CA–31171 (May 27, 2004) (approving under Independent Stave a unilateral settlement offer opposed by the General Counsel and the charging party); Leprino Foods Co., 07– CB–43599 (Jan. 24, 2003) (same); Caterpillar, Inc., 33–CA–10164 (May 13, 1996) (same); Propoco, Inc., d/b/a Professional Services, 2– CA–27013 (June 26, 1995) (same); see also Lin Television Corp., 362 NLRB No. 197 (2015) (setting aside “consent order” as it did not meet requirements of Independent Stave); Enclosure Suppliers, LLC, 09– CA–046169, 2011 WL 2837659 (July 14, 2011) (same); Sea Jet Trucking Corp., 327 NLRB 540, 550 (1999) (setting aside unilateral settlement proposed by the respondent over the General Counsel's and charging party's objection as it did not satisfy Independent Stave requirements); Iron Workers Local 27 (Morrison-Knudson), 313 NLRB 215, 217 (1993) (same); Food Lion, Inc., 304 NLRB 602, 602 fn. 4 (1991) (same). These cases demonstrate that the Board can adequately evaluate the proposed terms of consent settlement agreements under Independent Stave, and reject, where appropriate, settlements that do not effectuate the purposes and policies of the Act.
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provides a full remedy for all of the violations alleged in the complaint.” Postal Service, 364 NLRB No. 116, slip op. at 3. The Postal Service majority further stated: “In evaluating the completeness of the remedy, we will ask whether the proposed order includes all the relief that the aggrieved party would receive under the Board’s established remedial practices were the case successfully litigated by the General Counsel to conclusion before the Board.” Id.
We find that the Board majority in Postal Service adopted an ill-advised standard less likely to effectuate the purposes and policies of the Act than the Board’s longstanding approach embodied in Independent Stave. As the instant case illustrates, adhering to the Postal Service standard would predictably cause incalculable delay in resolving the alleged violations in this case, while potentially jeopardizing the prospect of obtaining any remedy against UPMC.
For several reasons, we overrule Postal Service and return to the reasonableness standard articulated in Independent Stave when evaluating the terms of consent settlement agreements.
First and foremost, we find that it advances the purposes and policies of the Act to permit judges to accept settlement terms proffered by a respondent—even though the General Counsel and charging party or parties object to those terms—if the judge determines that the settlement is reasonable under Independent Stave, a determination that is subject to review by the Board. When a respondent offers to resolve disputed allegations based on terms that the judge and the Board deem reasonable under the circumstances, there is no valid reason for the Board to preclude such a resolution as a matter of law on the sole basis that the proffered terms include a less-thanfull remedy, as Postal Service requires. Congress has granted the Board “exclusive power to deal with unfair labor practices and to prescribe the appropriate remedy.” Borg-Warner Corp, above at 1495. To preclude the early resolution of Board litigation, on reasonable terms, simply because a party insists on a full remedy for all unfair labor practice allegations undermines the Board’s interest in “encouraging voluntary dispute resolution, promoting industrial peace, conserving the resources of the Board, and serving the public interest.” Independent Stave, above at 743. Conversely, these purposes are advanced by permitting the acceptance of settlement terms that are reasonable, notwithstanding opposition by the General Counsel and charging parties.
Second, the Board’s acceptance of reasonable settlement terms may well be in the best interest of parties who object to a consent settlement agreement, especially where those parties are unreasonably discounting the
risks associated with litigation. As the Board stated in Independent Stave:
At this stage of the litigation we are confronted only with alleged violations of the Act. Even though the allegations in the complaint issued after the Region's investigation and determination that reasonable cause exists to believe the allegations occurred, a charging party's right to a [full] remedy can be enforced, upon the authority of the Government, only after an adjudication. In addition, there are risks inherent in litigation. For example, witnesses may be unavailable or uncooperative; procedural delays may occur; the issues may be complex or novel; supporting documentation may have been destroyed or lost; and credibility resolutions may have to be made by the administrative law judge. By operating on a rigid requirement that the settlement must mirror a full remedy, we would be ignoring the realities of litigation.
Independent Stave, above at 742–743 (emphasis in original). The Postal Service majority’s apparent belief that a “full remedy” standard will lead to consistently better outcomes for the General Counsel and charging parties than a “reasonableness” standard rested on the faulty assumption that the General Counsel is sure to prevail. Experience teaches the contrary lesson. Litigation is never certain. It is never certain that the General Counsel will prevail on any complaint allegation, let alone all of them. The Act entrusts the Board with the prevention of unfair labor practices, and the Board should use its statutory authority to approve settlement agreements that are reasonable, even over the opposition of the General Counsel and charging party.
Third, as noted previously, by refusing to approve lessthan-full-remedy consent settlement agreements that are nonetheless reasonable, the majority opinion in Postal Service tied the hands not only of administrative judges but also of the Board itself. Again, it is the Board’s adjudicatory duty, not that of the prosecuting General Counsel and certainly not that of the charging party, to make the final determination that settlement terms are reasonable. Congress entrusted the Board with the responsibility to apply the Act to the “complexities of industrial life,”6 and in carrying out its responsibility, the Board should trust itself to do what is reasonable. It does not effectuate the purposes of the Act to craft unacceptable restraints on the Board’s ability to make that final judgment.
6 NLRB v. Erie Resistor Corp., 373 U.S. 221, 236 (1963); see also NLRB v. J. Weingarten, Inc., 420 U.S. 251, 266–267 (1975) (“The responsibility to adapt the Act to changing patterns of industrial life is entrusted to the Board.”).
Fourth, reasonable settlement terms reached at an early stage—even if the terms are less than complete—will often leave parties in a better position than would result from a Board adjudication, considering the substantial burdens and time involved in Board proceedings. The nature of Board litigation often entails substantial delay before disputed unfair labor practice allegations are resolved. Our procedures require the filing of a charge that is investigated by one of the Board’s Regional Offices, which decides whether to issue a complaint, which is followed by a hearing before an administrative law judge, with posthearing briefing in most cases. After the judge issues a decision, parties have the right to file exceptions with the Board, which typically are supported by another round of briefs, and the Board renders a decision, which can be followed by court appeals. When the Board has found a violation and has ordered backpay and other remedial measures, there are additional compliance proceedings handled by the Board’s Regional Offices, which can result in additional hearings before administrative law judges, additional posthearing briefs, supplemental decisions by the judges, and further appeals to the Board and the courts. In spite of everyone’s best efforts, this lengthy litigation process consumes substantial time and, too often, causes unacceptable delays before any Board-ordered relief becomes available to the parties.7
Finally, we overrule Postal Service because it rests on faulty premises. The majority in Postal Service incorrectly stated that by adopting a “full remedy” standard for evaluating consent settlement agreements, the Board was returning “to the standard originally adopted by the Board” in Local 201, Electronic Workers (General Electric), 188 NLRB 855 (1971).8 In General Electric, contrary to the Board majority’s claim in Postal Service, the Board did not “adopt the trial examiner’s recommendation to approve the proposed order on the ground that it provided a full remedy for all the violations alleged in
7 Cases may involve years of Board litigation and dozens or even hundreds of employee-claimants. For example, the dispute in CNN America, Inc., 361 NLRB No. 47 (2014)—involving approximately 300 employee-claimants—required 82 days of hearings, more than 1,300 exhibits, more than 16,000 pages of transcript, and more than 10 years of Board litigation. Furthermore, the recent decision by the Court of Appeals for the District of Columbia Circuit, denying in part the Board’s cross-application for enforcement of its order, leaves open the possibility that litigation will continue before the Board on remand. NLRB v. CNN America, Inc., 865 F.3d 740 (D.C. Cir. 2017). Another case being pursued by the General Counsel involves consolidated claims against McDonald's USA, LLC, and 31 other employer parties, based on 61 unfair labor practice charges filed in six NLRB regions alleging 181 unfair labor practices involving employees at 30 restaurant locations. See, e.g., McDonald's USA, LLC, 363 NLRB No. 91 (2016). Should it proceed all the way to finality, the McDonald’s litigation could last for decades.
8 Postal Service, above, slip op. at 1.
the complaint.” Postal Service, above, slip op. at 1–2 (emphasis added). Rather, the trial examiner recommended approving a consent settlement agreement that provided a full remedy, and the Board adopted the trial examiner's recommendation. General Electric, above at 855. The Board did not say that it was adopting the recommendation “on the ground that” the proposed order provided a full remedy. The Board did not say it would only approve consent settlement agreements that provide a full remedy. Nor can a “full remedy” standard be inferred from the General Electric decision. Merely because the Board in General Electric approved a consent settlement agreement that provided a full remedy, it does not follow that it would have rejected a consent settlement agreement that provided less than a full remedy. As Chairman (then-Member) Miscimarra noted in his Postal Service dissent, “a high jumper that clears the bar by a foot would also clear it if he had jumped 6 inches lower.”9 In short, the majority in Postal Service did not return Board law “to the standard originally adopted by the Board.” Id., slip op. at 1. Rather, the Postal Service majority announced a brand-new “full remedy” standard for consent settlement agreements.
Prior to Postal Service, the Board consistently applied the Independent Stave standard to consent settlement agreements.10 Indeed, Independent Stave itself demonstrates that the Board intended to apply a “reasonableness” standard to all types of voluntary dispute resolution by settlement agreement, including when the proposed terms are opposed by the charging party or parties and/or the General Counsel. Under the first Independent Stave factor, the Board asks “whether the charging party(ies), the respondent(s), and any of the individual discriminatee(s) have agreed to be bound,” and it also considers “the position taken by the General Counsel regarding the settlement.” Independent Stave, above at 743. Thus, the Board in Independent Stave clearly anticipated that unanimous agreement is not required for a settlement agreement to be approved. It is true that the Board in Independent Stave noted that certain charging parties had accepted the settlement, and the Board, in approving the settlement, was therefore “honoring the parties’ agreements” by eliminating risks the parties “have decided to avoid.” Id.11 However, as the Board has tacitly recognized by applying Independent Stave in evaluating consent settlement agreements, the facts of that case do not
9 Postal Service, above, slip op. at 5 (Member Miscimarra, dissenting).
10 See above fn. 5.
11 Contrary to Member Pearce’s assertion, we do not conveniently omit Independent Stave’s language regarding “honoring the parties’ agreements.” Rather, we read it in context.
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constitute a holding that the agreement of the charging party or parties is prerequisite to acceptance of a proposed settlement. Rather, the test is the reasonableness of the proposed settlement under the circumstances, and whether all or even any parties (besides the charged party) consent to the agreement is merely one among several relevant factors the Board must consider in determining whether the settlement is reasonable and should be accepted.
For all of the foregoing reasons, we overrule the Board’s decision in Postal Service, above, we reject the “full remedy” standard for evaluating consent settlement agreements, and we return to applying the “reasonableness” standard set forth in Independent Stave to evaluate such agreements.
The “Guarantor” Status Offered by UPMC Is Reasonable Under Independent Stave, and Accepting the Offer Effectuates the Purposes and Policies of the Act. When the Board announces a new standard, a threshold question is whether the new standard may appropriately be applied retroactively, or whether it should only be applied in future cases. In this regard, “[t]he Board’s usual practice is to apply new policies and standards retroactively ‘to all pending cases in whatever stage.’” SNE Enterprises, 344 NLRB 673, 673 (2005) (quoting Deluxe Metal Furniture Co., 121 NLRB 995, 1006-1007 (1958)). Yet, the Supreme Court has indicated that “the propriety of retroactive application is determined by balancing any ill effects of retroactivity against ‘the mischief of producing a result which is contrary to a statutory design or to legal and equitable principles.’” Id. (quoting Securities & Exchange Commission v. Chenery Corp., 332 U.S. 194, 203 (1947)).
Applying the Supreme Court’s balancing test, we believe it is appropriate to apply the standard we announce today retroactively to the instant case and to all other pending cases. We do not believe retroactivity will produce any “ill effects.” Although the “reasonableness” standard may result in the acceptance of reasonable settlement terms that are somewhat less than what would result if the General Counsel prevailed on every allegation of the complaint after litigating the case to completion, this does not constitute a material disadvantage given the other considerations referenced above. As we have explained, the General Counsel and charging parties who reject settlement terms on the sole basis that they do not represent a full remedy for all alleged violations still stand to benefit from today’s decision, which again makes it possible for parties to obtain a reasonable outcome on terms that are available much more quickly than would be the case if the parties were to await the conclusion of litigation. And the certainty of that outcome also
enables parties to avoid the risk that, after enduring the costs and delays of litigation, the outcome (from the perspective of the General Counsel and charging parties) may be no better than, or even worse than, the proffered settlement terms they unreasonably opposed.
Moreover, failing to apply the new standard retroactively would “produc[e] a result which is contrary to a statutory design or to legal and equitable principles.” SEC v. Chenery Corp., above. The Act grants the Board “exclusive power to deal with unfair labor practices and to prescribe the appropriate remedy,” Borg-Warner Corp, above at 1495, and by returning to a “reasonableness” standard to evaluate consent settlement agreements, the Board resumes the full exercise of its exclusive power by restoring to itself the discretion to approve such agreements over the unreasonable opposition of the General Counsel and charging party or parties. Moreover, the standard we return to today “encourage[s] voluntary dispute resolution, promot[es] industrial peace, conserv[es] the resources of the Board, and serv[es] the public interest.” Independent Stave, above at 743. Accordingly, we find that application of our new standard in this and all pending cases will not work a “manifest injustice.” SNE Enterprises, above. We proceed to do so now.
In his underlying decision, the judge addressed every allegation in this matter except for the lone allegation against UPMC—i.e., that UPMC is a single employer with Presbyterian Shadyside. Single-employer status does not, standing alone, constitute an unfair labor practice. Indeed, the judge found “there was no evidence presented at the trial that UPMC independently committed any unfair labor practices.” Rather, if the Board determines that one entity (here, UPMC) is a single employer with a second entity (here, Presbyterian Shadyside), this provides a backup party—or a potential alternate party—that is responsible for providing whatever relief is ultimately ordered. In other words, when a parent company is found to be a single employer with its subsidiary, the parent company is liable for the subsidiary’s unfair labor practices “to the same extent” as the subsidiary. Flat Dog Productions, Inc., 347 NLRB 1180, 1182 (2006).
This outcome is effectively what UPMC is offering. Without further litigation, UPMC agrees to render itself liable to the same extent as Presbyterian Shadyside. In its Partial Motion to Dismiss, UPMC offered to “guarantee the performance by Presbyterian Shadyside of any remedial aspects of the Decision and Order which survive the exceptions and the appeal process.” In its reply to the General Counsel’s and Charging Party’s exceptions to the motion, UPMC again stated that it “guaran-
tees the performance by Presbyterian Shadyside of any remedial aspects of the Administrative Law Judge’s Decision and Order which survive the exceptions and appeal process. As such, UPMC would be responsible for any remedy along with Presbyterian Shadyside.”
UPMC’s offer constitutes the type of consent settlement agreement—an agreement opposed by the General Counsel and Charging Party—that the Board in Postal Service held must never be accepted by the judge unless the proffered terms constitute “a full remedy for all of the violations alleged in the complaint.”12 As stated above, however, we overrule Postal Service. Having done so, we instead evaluate the terms of the consent settlement agreement under Independent Stave. Thus, the Board examines all the surrounding circumstances to determine whether the settlement is reasonable, which includes evaluating the following factors:
(1) whether the charging party(ies), the respondent(s), and any of the individual discriminatee(s) have agreed to be bound, and the position taken by the General Counsel regarding the settlement; (2) whether the settlement is reasonable in light of the nature of the violations alleged, the risks inherent in litigation, and the stage of the litigation; (3) whether there has been any fraud, coercion, or duress by any of the parties in reaching the settlement; and (4) whether the respondent has engaged in a history of violations of the Act or has breached previous settlement agreements resolving unfair labor practice disputes.
273 NLRB at 743.
The first Independent Stave factor is not conclusive: UPMC has agreed to be bound by its proposed “guarantor” status, but the General Counsel and Charging Party Union oppose resolving the single-employer allegation on this basis. The General Counsel’s opposition “is an important consideration weighing against approval,” but it is not determinative under Independent Stave. McKenzie-Willamette Medical Center, 361 NLRB No. 7, slip op. at 2 (2014); see also Iron Workers Local 27 (Morrison-Knudson), 313 NLRB at 217 (stating “it is clear” that the opposition of the General Counsel and the charging party “is not the decisive factor to be weighed”); Sea Jet Trucking Corp., 327 NLRB at 550 (same).
Independent Stave factors 3 and 4 favor approval of UPMC’s proposed remedial guarantee: there are no allegations of fraud, coercion, or duress, and there is no evidence that UPMC has a history of violating the Act or
12 Postal Service, above, slip op. at 3.
has breached previous settlement agreements resolving unfair labor practice disputes.13
Finally, we find that the “reasonableness” factor— factor 2—favors approving the settlement, and this is the most important consideration when evaluating a consent settlement agreement. For the reasons explained below, we find UPMC’s proposed remedial guarantee is reasonable in light of the nature of the violations alleged, the risks inherent in litigation, and the stage of the litigation, and we conclude that the General Counsel’s and Charging Party’s opposition to accepting UPMC’s offer is outweighed by countervailing factors that warrant accepting the remedial guarantee and dismissing the singleemployer allegation.
First, as the judge correctly found, UPMC’s remedial guarantee is as effective as a finding of single-employer status. As noted above, when a parent company is found to be a single employer with its subsidiary, the parent company is liable for the subsidiary’s unfair labor practices to the same extent as the subsidiary. The practical aim of the General Counsel’s single-employer allegation in this matter, then, is to hold UPMC responsible for Presbyterian Shadyside’s unfair labor practices along with Presbyterian Shadyside. UPMC’s remedial guarantee achieves that aim. UPMC has offered to “guarantee the remediation of any violation” found in this case, adding that “as a guarantor, UPMC is liable for Presbyterian Shadyside’s compliance with any remedy ordered and to the extent Presbyterian Shadyside fails to remediate any unfair labor practices on its own, UPMC must take any necessary action to ensure compliance” (emphasis added). In short—and in its own words—“UPMC would be responsible for any remedy along with Presbyterian Shadyside,” just as UPMC would be were singleemployer status established. Thus, the judge correctly found that UPMC’s offer to guarantee Presbyterian Shadyside’s performance of its remedial obligations provides a remedy “as effective as” a finding of singleemployer status.14
13 Although UPMC subsidiaries, including Presbyterian Shadyside, have been found to violate the Act, this does not weigh against acceptance of UPMC’s guarantee. In that case, as here, there was no allegation “that UPMC, as a separate entity, committed unfair labor practices.” UPMC, 362 NLRB No. 191, slip op. at 1 fn. 2 (2015).
14 Having accepted UPMC’s remedial guarantee offer, the judge in his Supplemental Decision ordered that “UPMC, its officers, agents, successors, and assigns, shall be the guarantor of any remedies that the Board may order in the original decision in this case.” UPMC has excepted to the inclusion of the “officers, agents, successors, and assigns” language on the ground that it was not included in UPMC’s offer. We grant the cross-exception on that basis.
The omission of this language does not render UPMC’s remedial guarantee unacceptable under Independent Stave. UPMC’s offered “guarantor” status remains reasonable and sufficient to resolve the
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
Second, UPMC’s remedial guarantee is reasonable in light of the circumstance that Presbyterian Shadyside, not UPMC, is the alleged wrongdoer here. In its exceptions, the General Counsel argues that a single-employer finding is necessary because it would render UPMC jointly and severally liable with Presbyterian Shadyside. Joint and several liability, the General Counsel argues, would allow the General Counsel to hold UPMC primarily and directly liable for any remedial failure, i.e., the General Counsel could institute contempt proceedings directly against UPMC for UPMC’s failure to comply with the Board’s Order. The General Counsel’s insistence on joint and several liability might carry more weight if the General Counsel had alleged that UPMC had violated the Act in any way. There was no such allegation, and a 19-day hearing that resulted in a 120-page decision pro-
disputed single-employer allegation here, because the record reveals that both UPMC and Presbyterian Shadyside are stable corporate entities with substantial assets. Moreover, we agree with counsel for the General Counsel’s statement in the General Counsel’s Answering Brief in Opposition to Respondent UPMC’s Exception that removal of the language “would change nothing from a legal standpoint” (Opposition
p. 3). Under Supreme Court precedent and Federal Rule of Civil Procedure 65(d)(2)(b) and (c), our Order against UPMC is binding against its officers, agents, successors, and assigns to the extent those parties would be bound under the Federal Rules of Civil Procedure, regardless of whether the Order specifically includes such language. In Regal Knitwear v. NLRB, 324 U.S. 9 (1945), the Supreme Court addressed an employer’s objection to the Board’s addition of “officers, agents, successors and assigns” to its cease-and-desist order against the employer. The Court called the controversy “abstract” because the employer merely objected to the words of the order; the Board was “not attempting to reach or hold anyone in contempt by virtue of such orders,” and no successor or assign appeared before the Court “complaining that these words put him in jeopardy.” Id. at 15–16. The Court held that contempt liability against a successor or assign does not hinge on the inclusion of the words “successors or assigns” in the order itself, but upon a “concrete set of facts” demonstrated at a “judicial hearing.” Id. at 16. Thus, although Regal Knitwear indicates that a court has the authority to make a Board order binding against a respondent’s officers, agents, successors, and assigns, that is not the end of the analysis, at least as to successors or assigns. “Rather, the court must [then] look to the actual relationship between the persons enjoined and their ‘successors and assigns,’ and if the relationship qualifies [under Rule 65(d)], third persons will be bound by the injunction whether or not the order specifically refers to successors and assigns.” 11A Charles Alan Wright, Arthur R. Miller, et al., Federal Practice & Procedure § 2956, Westlaw (database updated Apr. 2017).
We further modify the judge’s recommended Order in one additional respect. The judge stated that UPMC, as guarantor, “must ensure that Respondent UPMC Presbyterian Shadyside takes all steps necessary to comply with any remedies that may be contained in the Board’s Order, including providing for any such remedies itself, if UPMC Presbyterian Shadyside is unable to do so” (emphasis added). We shall substitute the word “fails” for the italicized phrase to better reflect UPMC’s guarantee. See UPMC's Answering Brief in Opposition to Counsel for the General Counsel's Exceptions to the Administrative Law Judge's Supplemental Decision, p. 6 (“[T]o the extent Presbyterian Shadyside fails to remediate any unfair labor practices on its own, UPMC must take any necessary action to ensure compliance” (emphasis added).).
duced no evidence that UPMC had independently committed a single unfair labor practice. Rather, all of the violations found by the judge involved Presbyterian Shadyside. Presbyterian Shadyside should be primarily responsible to remedy its own violations of the Act, and UPMC has reasonably offered to guarantee that Presbyterian Shadyside will do just that.15
Third, UPMC’s remedial guarantee is reasonable in light of the risks inherent in litigating single-employer status and the stage of the litigation. Accepting UPMC’s offer would remove the risk to the Charging Party Union and the alleged discriminatees that UPMC would not be found a single employer with Presbyterian Shadyside and thus would not bear any responsibility for Presbyterian Shadyside’s compliance with the Board’s ultimate order. If the Board rejects UPMC’s offer, UPMC may or may not be found jointly and severally liable for any unfair labor practices committed by Presbyterian Shadyside. If the Board accepts UPMC’s offer, UPMC will be responsible for Presbyterian Shadyside’s performance of any remedies the Board orders. Rejecting UPMC’s offer runs the risk that UPMC will not have any liability for Presbyterian Shadyside’s unfair labor practices.
Finally, accepting UPMC’s offer also greatly expedites the resolution of this proceeding. Barring settlement somewhere along the way, a long road stretches ahead for litigating and deciding the single-employer allegation. Since the subpoena enforcement dispute pending before the Third Circuit concerns documents potentially relevant to single-employer status, the parties must first await the Third Circuit’s resolution of that dispute. Assuming the Third Circuit upholds the district court’s decision, UPMC will comply with the subpoena, and a hearing on single-employer status will follow. Based on his knowledge of the case, Judge Carissimi estimated that such a hearing would take 4 or 5 days. As bad luck would have it (although the judge might disagree with that assessment), Judge Carissimi has retired, so another judge—one unfamiliar with the case—would conduct any further necessary hearings in this matter. See Section 102.36 of the Board’s Rules and Regulations. This new judge will then draft a decision explaining why UPMC and Presbyterian Shadyside do or do not constitute a single employer. Any party may then file exceptions to this decision with the Board. The Board would then review the judge’s decision and the record in light of the exceptions and the parties’ briefs and issue a decision in the fullness of time. The Board’s decision, of
15 As stated above, Judge Carissimi’s decision and recommended order are pending before the Board on exceptions. The Board does not prejudge the merits of this matter.
course, may not be the end of the matter, as a party might appeal the Board’s determination to a federal court of appeals. This process could take years, and the outcome is anything but certain. Accepting UPMC’s remedial guarantee offer would eliminate both the delay and the uncertainty.
Response to the Dissents of Members Pearce and McFerran
Our colleagues’ respective dissents present as longsettled Board law a false dichotomy that could not possibly have existed prior to the Board’s decision in Postal Service little over a year ago. In particular, Member McFerran incorrectly claims that “[u]ntil today, the Board had two basic frameworks” for the evaluation of settlement agreements: Independent Stave where the settlement was a “true settlement,” and Postal Service for consent settlement agreements. Not so. Postal Service issued barely more than one year ago, and the cases cited above in footnote 5 demonstrate that for three decades prior to Postal Service, the Board evaluated consent settlement agreements under Independent Stave. Indeed, by including as a relevant factor the position of the parties as to the settlement, Independent Stave itself clearly indicates that it applies to settlements where the General Counsel and/or the charging party objects. Above, we discuss at length why Postal Service constituted an unwarranted departure from precedent. It is no surprise that such an ill-advised approach has not long been the policy of the Board.
We may quickly dispense with a few additional objections raised by our dissenting colleagues. First, citing UFCW, Local No. 1996 (Visiting Nurse Health System, Inc.), 338 NLRB 1074, 1074 (2003), Member McFerran asserts that “[a] change in the Board’s composition is not a basis for revisiting an earlier decision.” The cited case is inapposite: Visiting Nurse Health System concerned a motion for reconsideration. In Visiting Nurse Health System, the Board rejected the charging party’s argument that a change in the Board’s composition constituted “extraordinary circumstances” warranting reconsideration of the prior Board’s decision in the same case. No such argument has been made by the parties in the present case, which is not before the Board on a motion for reconsideration and therefore is not governed by the “extraordinary circumstances” standard. See Sec. 102.48 of the Board’s Rules. Furthermore, Member McFerran’s assertion to the contrary notwithstanding, “[i]t is a fact of life in NLRB lore” that the Board’s interpretation of the Act will “invariably fluctuate with the changing compositions of the Board.” Epilepsy Foundation of Northeast Ohio v. NLRB, 268 F.3d 1095, 1097 (D.C. Cir. 2001). Congress created the Board with five members whose
terms are staggered so that a different member’s term expires every year, and the Board in recent years has exhibited no reluctance to modify well-established principles involving many of the most fundamental aspects of the Act. Our decision today reflects a reasoned evaluation of the modification a previous Board majority made in Postal Service. As explained above, and consistent with the views expressed by one Board member in that case,16 we believe the majority’s decision in Postal Service improperly deviated from policies favoring the appropriate settlement of disputed allegations. This is especially true given that under the preexisting standard, set forth in Independent Stave, settlements approved by regional directors or administrative law judges remain subject to review by the Board. Therefore, we overrule Postal Service for the reasons expressed above.
Second, contrary to our dissenting colleagues’ assertions, the proper standard for assessing consent settlement agreements is at issue in this matter. UPMC’s offer to guarantee Presbyterian Shadyside’s compliance with any remedies the Board may order shares the key characteristics of a consent settlement agreement. Namely, Respondent UPMC has offered to resolve the singleemployer allegation against it pursuant to terms that the judge found acceptable over the objections of the Charging Party and the General Counsel. The evaluation of a proffered settlement to which the General Counsel and charging party object falls squarely within the purview of Postal Service. Even though our dissenting colleagues claim not to see how the standard for consent settlement agreements might be at issue here, the General Counsel and Charging Party see it plainly enough. In his brief on exceptions to the judge’s decision to accept UPMC’s guarantee, the General Counsel, writing before the Board’s decision in Postal Service, argued that the guarantee did not meet the Board’s requirements for consent settlement agreements as set forth in Independent Stave. Furthermore, after the issuance of Postal Service by the Board, the Charging Party wrote “to advise the Board of a recent decision” that, in its view, supported its exceptions to the judge’s order. In its letter, the Charging Party highlighted the similarities between Postal Service and the present matter, specifically noting that Postal Service and the judge’s order “both involve an ALJ’s adoption of an order incorporating a respondent’s settlement offer over the objections of the charging party and the General Counsel to dispose of complaint allegations in a manner that did not fully remedy the violations alleged in the complaint.”
16 Postal Service, 364 NLRB No. 116, slip op. at 4–8 (Member Miscimarra, dissenting).
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
Third, Member McFerran argues that UPMC’s guarantee “resolves nothing” because it is contingent on the outcome of the case against Presbyterian Shadyside. But that would be true even if the Board found that UPMC and Presbyterian Shadyside were a single employer. In either situation, Presbyterian Shadyside would be free to challenge the judge’s unfair labor practice findings before the Board and in the court of appeals, UPMC would be free to assist it in doing so, and neither entity would be required to remedy any violations until a Board order finding those violations had been enforced by the court of appeals.
Fourth and finally, Member McFerran faults us for not inviting outside briefing. Neither the Act, the Board’s Rules, nor the Administrative Procedures Act requires the Board to invite amicus briefing before reconsidering precedent. The decision to allow such briefing is purely discretionary and is based on the circumstances of each case. In the case at hand, the Board is correcting a recent, ill-advised deviation from longstanding precedent. Moreover, the Board requested briefing in Postal Service last year, and interested parties weighed in at that time. Thus, the competing arguments have been made already and recently at that, and there is no reason to believe they have changed in the interim.
Furthermore, we respectfully disagree with Member McFerran’s statement that the Board maintains a “routine practice” to issue a notice and invitation to file amicus briefs in “significant cases, particularly those where the Board is contemplating reversal of precedent.” In the past decade, the Board has freely overruled or disregarded established precedent in numerous cases without supplemental briefing. See, e.g., E.I. Du Pont de Nemours, 364 NLRB No. 113 (2016) (overruling 12-year-old precedent in Courier-Journal, 342 NLRB 1093 (2004), and 52-year-old precedent in Shell Oil Co., 149 NLRB 283 (1964), without inviting briefing ); Graymont PA, Inc., 364 NLRB No. 37 (2016) (overruling 9-year-old precedent in Raley’s Supermarkets & Drug Centers, 349 NLRB 26 (2007), without inviting briefing); Loomis Armored U.S., Inc., 364 NLRB No. 23 (2016) (overruling 32-year-old precedent in Wells Fargo Corp., 270 NLRB 787 (1984), without inviting briefing); Lincoln Lutheran of Racine, 362 NLRB No. 188 (2015) (overruling 53-year-old precedent in Bethlehem Steel, 136 NLRB 1500 (1962), without inviting briefing); Pressroom Cleaners, 361 NLRB 643 (2014) (overruling 8-year-old precedent in Planned Building Services, 347 NLRB 670 (2006), without inviting briefing); and Fresh & Easy Neighborhood Market, Inc., 361 NLRB 151 (2014) (overruling 10-year-old precedent in Holling Press, 343 NLRB 301 (2004), without inviting briefing).
For all these reasons, we find that UPMC’s proposed remedial guarantee in exchange for the dismissal of the single-employer allegation against UPMC is reasonable, and we approve it.
We shall order that the single-employer allegation in the Complaint be dismissed, but we shall retain UPMC as a party for the purpose of ensuring enforcement of UPMC’s guarantee of the remedies, if any, ultimately ordered against Presbyterian Shadyside.
The National Labor Relations Board adopts the recommended Order of the administrative law judge in his Supplemental Decision as modified below and orders that the Respondent, UPMC, Pittsburgh, Pennsylvania, shall take the action set forth in the Order as modified. The single-employer allegation in the Complaint is hereby dismissed, provided, however, that UPMC is retained as a party for the purpose indicated in the Remedy section, above.
The recommended Order is modified as follows: delete the words “officers, agents, successors, and assigns,” and substitute the word “fails” for the words “is unable.” Thus, UPMC, as guarantor, “must ensure that Respondent UPMC Presbyterian Shadyside takes all steps necessary to comply with any remedies that may be contained in the Board’s Order, including providing for any such remedies itself, if UPMC Presbyterian Shadyside fails to do so” (emphasis added).
Dated, Washington, D.C. December 11, 2017
Philip A. Miscimarra, Chairman
Marvin E. Kaplan, Member
William J. Emanuel Member
(SEAL) NATIONAL LABOR RELATIONS BOARD
MEMBER PEARCE, dissenting.
What we have here is a classic case of an answer in search of a question. The sole issue presented is whether the judge correctly dismissed the complaint allegation that UPMC and its subsidiary, Presbyterian Shadyside, constitute a single employer, based on UPMC’s offer to
serve as a guarantor of any remedies ultimately ordered against Presbyterian Shadyside. As discussed below, the judge clearly erred in concluding that UPMC’s guarantee was as effective a remedy as one that would result from a single-employer finding. Nonetheless, rather than address this issue, the newly-minted majority has substituted another issue—more to its liking—as a stratagem to reverse Board precedent. Specifically, the majority reaches out to overrule Postal Service, 364 NLRB No. 116 (2016), in which the Board clarified the appropriate standard for evaluating “consent” orders—and from which then-Member Miscimarra vigorously dissented, even though this case does not involve a consent order. Although I am not surprised by my colleagues’ eleventh hour efforts, I strongly disagree with their decision to reverse precedent that is irrelevant to the disposition of this case and which neither the judge nor the parties addressed.1
The General Counsel issued a complaint in this proceeding alleging that UPMC and Presbyterian Shadyside, as a single employer, engaged in extensive unfair labor practices in response to the Union’s attempt to organize their nonclinical support employees. Prior to the unfair labor practice hearing, UPMC filed a motion to dismiss the single-employer allegation, which the Board denied. During the hearing, the judge denied UPMC’s petitions to revoke subpoenas seeking documents relating to the single-employer allegation, and when UPMC persisted in its refusal to produce the documents, the judge severed that allegation from the remainder of the case, while the parties litigated the subpoena enforcement issue in federal court. Thereafter, the judge issued a decision finding that Presbyterian Shadyside committed more than 20 violations of Section 8(a)(1), (2), (3), and (4) of the Act.
While UPMC was continuing to contest its obligation to comply with the subpoenas pertaining to the singleemployer allegation before the Third Circuit Court of Appeals, it also sought to avoid litigating the issue altogether by filing a “Partial Motion to Dismiss” with the judge. In that motion, UPMC asserted that it would not effectuate the purposes of the Act to proceed with UPMC as a party since no remedy was sought from it. UPMC further argued that, in any event, dismissal was appropriate because it was willing to “guarantee the performance by Presbyterian Shadyside of any remedial aspects of the Decision and Order which survive the exceptions and appeal process.” The General Counsel and the Charging
1 Although Member McFerran and I write separately, I fully endorse the points raised in her dissent which persuasively demonstrate the majority’s erroneous decision.
Party strongly opposed the Respondent’s motion. They argued that dismissal was inappropriate because the General Counsel had not yet had the opportunity to present evidence in support of the single-employer allegation and that a litigated single-employer finding was necessary to achieve complete remedial relief and effectuate the policies of the Act.
Without holding a hearing on the single-employer allegation, the judge issued a supplemental decision granting UPMC’s motion. The judge found that UPMC’s guarantee was “as effective” as any remedy that would result from a single-employer finding, and ordered that “UPMC, its officers, agents, successors, and assigns, shall be the guarantor of any remedies that the Board may order” and, as the guarantor, UPMC “must ensure that . . . Presbyterian Shadyside takes all steps necessary to comply with any remedies that may be contained in the Board’s Order, including providing for any such remedies itself, if . . . Presbyterian Shadyside is unable to do so.”
UPMC excepts to the judge’s supplemental decision, arguing that the judge’s “officers, agents, successors, and assigns” language was not part of its guarantee, and must be struck. The General Counsel and the Charging Party also except, arguing that the judge erred in finding that “UPMC’s offer to serve as a guarantor of any Board Order issued in this matter constitutes a remedy as effective as any remedy resulting from a finding that . . . UPMC and . . . Presbyterian Shadyside constitute a single employer.” I agree with the General Counsel and Charging Party. Had the judge thoroughly analyzed and compared the remedies, he would have found the guarantee wholly inadequate.
UPMC’s guarantee is not as effective as the remedy that would result from a litigated single-employer finding.
Both the judge and the majority make the same error when they assert that UPMC’s guarantee is “as effective” as the remedy that would result from a single-employer finding. If UPMC and Presbyterian Shadyside were found to be a single employer, the Board’s Order would hold them both jointly and severally liable for the unfair labor practices committed by Presbyterian Shadyside. See Bolivar-Tees, Inc., 349 NLRB 720, 722 (2007) (because “single-employer status exists . . . we will hold all four businesses jointly and severally liable to remedy the unfair labor practices found”), enfd. 551 F.3d 722, 733 (8th Cir. 2008). This means that UPMC and Presbyterian Shadyside, and their officers, agents, successors, and assigns, would each be liable to remedy the unfair labor
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
practices from the outset and would be required to abide by all of the provisions in the Order, including both the cease-and-desist and affirmative order provisions. In contrast, under UPMC’s guarantee, it will not be liable for remedying the unfair labor practices from the outset.
Thus, the majority’s assertion that UPMC is liable to the same extent as its subsidiary, Presbyterian Shadyside, is simply incorrect. UPMC’s guarantee is a form of contingent liability, which will only take effect if Presbyterian Shadyside defaults on its remedial obligations. Under joint and several liability, each entity is individually responsible for the entire obligation at the outset, whereas the guarantee obligates UPMC to remedy the unfair labor practices only if Presbyterian Shadyside fails to do so. Furthermore, contingent liability is not equivalent to joint and several liability because the imposition of liability on UPMC as the guarantor can only be invoked after a determination...
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