Workplace Labor Update - Nurses' Committee is not Labor Organization – January 1995

Under the National Labor Relations Act (“Act”), it is an unfair labor practice for an employer to dominate or interfere with the formation or administration of a labor organization. This law prevents employers from exerting influence on the representatives of employees in the collective bargaining context. A murky area for employers is whether an employee committee has crossed the line and become an employer- dominated labor organization. The federal appeals court with jurisdiction over Maryland and other mid-Atlantic states recently refused to enforce an order of the National Labor Relations Board (“Board”) requiring a Maryland hospital to disband an employee participation committee formed by the hospital. The court ruled that the committee was not an illegal employer-dominated labor organization because it did not exist principally to deal with hospital management on employment matters. National Labor Relations Board v. Peninsula General Hosp. Medical Center, 36 F.3d 1262 (4th Cir. 1994). In 1968, Peninsula Hospital formed an employee committee known as the Nursing Services Organization (NSO) whose purpose was to discuss, consider and evaluate issues concerning professional nurse practice at the Hospital and for continuing nursing education. Karen Poisker, the Hospital’s Vice President of Nursing, was a member of the NSO and served on its Executive Committee. In January 1990, a group of nurses staged a “job action” to bring to the attention of Hospital management their complaints about wages, overtime and staffing. At the next NSO meeting the discussion shifted to what had occurred during the job action, and the members questioned Poisker about wages, benefits and scheduling. Later in the month, the Maryland Nurses Association (“Union”) began an organizational drive at the Hospital and filed a petition for election. The nurses voted against representation. In January 1991, the Union filed a charge with the Board alleging that the Hospital had violated the Act by “dominating, interfering, and supporting the NSO,” which it claimed was a labor organization. The Board ordered the Hospital to disband the NSO and appealed to the Fourth Circuit for enforcement of its order. The Hospital likewise appealed, arguing that the enforcement should be set aside. At the outset, the court explained that the crucial inquiry was whether the NSO existed to deal with Hospital management over matters concerning the nurses’ employment. The court remarked that the term “dealing with” involves receiving proposals from the employee committee on matters affecting employment, coupled with management’s consideration of those proposals. The court noted that to find that an employee committee is a labor organization, there must be a “pattern or practice” in which the group of employees makes proposals to management on employment issues to which management responds. The Hospital argued that the NSO is not a labor organization because its purpose was not to deal with the Hospital on matters affecting employment and did not in fact deal with the Hospital over such matters. The Board argued that the NSO is a labor organization, relying on several statements by Poisker which it claimed established that the NSO was involved in issues concerning employment of the nurses. Specifically, the Board relied upon Poisker’s letter to all Hospital nurses stating that the NSO had been reorganized to deal with problem-solving procedures. The court rejected the significance the Board placed on this letter, noting that it was undisputed that NSO did not have any involvement in the Hospital’s budget process which included compensation issues. The Board also pointed out that at a January NSO meeting, some of the nurses directed inquiries concerning employment matters to Poisker. The court discounted this fact as well, noting that the questioning of Poisker was entirely spontaneous and was not on the meeting’s agenda. The court explained that this unplanned, isolated incident where employment matters were discussed did not create an inference that the NSO had changed its purpose to that of dealing with management on employment issues. The court concluded that the overall evidence did not establish a “pattern or practice” under which the NSO dealt with the Hospital on employment issues. Consequently, since the NSO was not a labor organization, the court refused to enforce the Board’s order. This case is important because it outlines some of the risks employers face when dealing with an employee committee. Although the employer prevailed here, the court’s opinion leaves ample room for potential liability if the employee committee begins to resemble a labor organization. To ensure that an employee committee does not become a labor organization, the bylaws of the committee should emphasize that its purpose is educational or social and that it does not have any authority to deal with employment matters such as wages, working conditions or scheduling. Moreover, employers should make sure that these employee committees do not in fact deal with such employment matters either on their own or in concert with management.