Washington Watch

Physician Collective Bargaining and an Important United States Supreme Court Decision

by James L. Thorne, Esq.

Introduction
Physicians, whether they are: (1) residents or fellows employed by public hospitals, (2) medical doctors employed in private sector hospitals or (3) self-employed medical doctors, have increasingly considered whether they can successfully utilize collective bargaining principles and techniques in order to wrest control of the practice of medicine from others.

As AAEM members know, the recent "trend" of legislation and court decisions has been for increased use of collective bargaining principles. However, the United States Supreme Court recently dealt a significant blow to the collective bargaining hopes of physicians employed by private sector hospitals, with its decision in National Labor Relations Board v. Kentucky River Community Care, Inc., 532 U.S. (2001). The decision was issued on May 29, 2001.

The purpose of this article is to review the holding of this important court decision and its effect on the use of collective bargaining principles for physicians.

The Facts of the Case
The Kentucky River case involved a care facility for residents who suffer from mental retardation and mental illness. In 1997, the facility (the Caney Creek Development Complex), employed approximately 110 professional and nonprofessional employees plus approximately twelve employees in designated managerial or supervisory positions.

In 1997, The Kentucky State District Council of Carpenters (a labor union), petitioned the National Labor Relations Board (NLRB) to represent a single unit of all 110 employees at the Caney Creek facility.

At the representation hearing, respondent Kentucky River Community Care, Inc. (KRCC), objected to the union's inclusion of six registered nurse employees in the bargaining unit. The KRCC argued that the nurses were "supervisors" under Section 2(11) of the National Labor Relations Act and, therefore, the nurses could not be counted as "employees" subject to the Act's protections and includable in the bargaining unit.

The NLRB ultimately held for the union, asserting, among others, that the nurses were not supervisors because the practice of a nurse, in supervising a nurse's aide in administering patient care, is "routine" by virtue of their training and expertise not because of their connection to management.

On appeal, the United States Court of Appeals for the Sixth Circuit reversed the NLRB decision. The Sixth Circuit held, in essence, that "independent judgment" exercised by a trained medical professional nurse in administering patient care is not medical professional routine but is an act of supervision. The U.S. Supreme Court granted the NLRB's petition for a writ of certiorari.

The Issue before the U.S. Supreme Court and its Decision
According to the Court, the case presented two questions or issues: "which party in an unfair-labor-practice proceeding bears the burden of proving or disproving an employee's supervisory status; and whether judgment is not 'independent judgment' to the extent that it is informed by professional or technical training or experience." For the purpose of this article, the focus is on the second question or issue.

As stated, the issue before the Court was: "whether or not employed medical professionals, when they exercise their ordinary "professional or technical judgment" in directing less-skilled employees to deliver services, are exercising a supervisor's 'independent judgment" (as defined in the Federal Labor Relations Act), which would make them ineligible to unionize?"

The 5 to 4 majority of the Court held, in essence, that the nurses' "professional judgment" is the "independent judgment" of a supervisor, under the Act. Therefore, the employed nurses cannot be part of the employees' bargaining unit.

The Reasoning of the Court
In order to reach its decision, the Court first set out the Federal Labor Relation Act's definition of the term "supervisor" which is contained in Section 2(11) of the act as:

"The term 'supervisor' means any individual having authority, in the interest of the employer, to hire, transfer, suspend, lay off, recall, promote, discharge, assign, reward, or discipline other employees, or responsibly to direct them, or to adjust their grievances, or effectively to recommend such action, if in connection with the foregoing the exercise of such authority is not of a mere routine or clerical nature, but requires the use of independent judgment." 29 U.S.C. Section 152(11).

Drawing on a previous Court decision, the majority of the Court, stated that Section 2(11) of the National Labor Relations Act (NLRA) sets forth a three-part test for determining supervisory status. Employees are statutory supervisors if (1) they hold the authority to engage in any 1of 12 listed supervisory functions, (2) their "exercise of such authority is not of a merely routine or clerical nature, but requires the use of independent judgment, and (3) their authority is held "in the interest of the employer." NLRB v. Health Care & Retirement Corp. of America, 511 U.S. 571, 573-574 (1994).

Focusing on part one of the above three-part test, the National Labor Relations Board asserted that the judgment of employees who are permitted by their employers to exercise discretion in their job, namely ordinary "professional or technical judgment" in directing less-skilled employees to deliver services, is not an exercise of "independent judgment" which would make them a supervisor under the National Labor Relations Act. To the National Labor Relations Board this interpretation was necessary to preserve Congress' previous inclusion of "professional employees" within the coverage of the NLRA. See Section 2(12), 29 U.S.C. Section 152 (12).

The Court's 5 to 4 majority, however, disagreed with the NLRB's effort to exclude "professional judgment" (as exercised by lawyers, doctors and nurses in their professional job functions) from being deemed a supervisor's "independent judgment" under the National Labor Relations Act. To the Court's majority, there is no justification for this "asymmetrical limitation" (or exception) to just one of the twelve listed functions of a supervisor.

The Court majority opined that the problem with the NLRB's argument was not the soundness of its labor policy. It is that the policy cannot be given effect through the statutory text. See Health Care, supra, at 581. ["There may be some tension between the Act's exclusion of (supervisory and) managerial employees and its inclusion of professionals, but we find no authority for suggesting that that tension can be resolved by distorting the statutory language in the manner proposed by the Board."] According to the Court, the rule of Health Care continues to apply: "the test for supervisory status applies no differently to professionals than to other employees."

Interestingly, at least to this writer, is the Court majority's apparent effort to offer an opening for the NLRB to find that medical professionals are not supervisors under the National Labor Relations Act. The apparent opening, as stated on page 14 of the Court's opinion, is: "Perhaps the Board could offer a limiting interpretation of the supervisory function (of a professional's) responsible direction (of less-skilled employees) by distinguishing employees who direct tasks from employees who direct other employees, as Section 152 (11) requires."

Could the Minority Opinion Become the Majority Opinion?
As you would surmise, the four member minority of the Court would have held that the involved employed nurses were not "supervisors" under the National Labor Relations Act and, therefore, the nurses could be included in the bargaining unit.

With respect to the involved nurses' regular duties, the minority concluded that the nurses "might occasionally request other employees to perform routine tasks," (however) "they had no authority to take any action if the employee refused their directives." They had no "authority to hire, fire, reward, promote, or independently discipline employees or to effectively recommend such action.

To the Court's minority, the term "independent judgment" is indisputably ambiguous and it is settled law that the NLRB's interpretation of ambiguous language in the National Labor Relations Act is entitled to deference. See NLRB v. Health Care and Retirement Corporation (HCR), 511 U.S. 571, 579 (1994).

Moreover, according to the Court's four-member minority, "since Congress has expressly provided that professional employees are entitled to the protection of the Act, there is good reason to resolve the ambiguities consistently with the Board's interpretation." To the minority, the Court's majority erroneously concluded that no deference is due the Board's evaluation of the "kind of judgment" that professional employees exercise. Yet, unless the Court's membership changes, the Court minority's dissent is not likely to become the majority opinion any time soon.

What Do Others Say About the Court's Decision?
As you may recall, the Physicians for Responsible Negotiation (PRN) was established in 1999 by the American Medical Association to represent employed physicians in their collective bargaining efforts with their employers. See the December 2000 issue of the ABA's Health Lawyer.

The PRN, in its June 5, 2001 press release, concluded that the Court's ruling "severely curtails the collective bargaining rights of physicians employed in the private sector." Further, according to the PRN, "this holding is in direct contrast to a series of decisions issued by the National Labor Relations Board (NLRB) since 1994 whereby healthcare professionals who exercised 'ordinary professional or technical judgment" in directing less-skilled employees were not exercising the type of "independent judgment" needed to make them supervisors."

Last, the PRN predicted that "the narrow opening suggested by the Court for finding a non-supervisory private sector healthcare professional, ie., those who direct only the "manner" of others' performance of discreet tasks, will become the battleground for future determinations of physicians' "supervisory status."

Conclusion
The Supreme Court's Kentucky River Community Care decision does indeed adversely affect the collective bargaining rights of physicians employed in the private sector. However, it does not affect the definition of "supervisor" for public sector physicians nor does the decision affect the limited collective negotiation rights of self-employed physicians. Therefore, so long as unaffected physicians feel the need to utilize collective bargaining principles when dealing with hospitals and HMOs, the effort is alive and well.

James L. Thorne is a Washington government relations counsel for AAEM. He can be reached jnlt@erols.com.