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Significant decisions in labor cases.

Significant decisions in labor cases

Hospital unions

The National Labor Relations Act grants workers the right to form, join, and be represented by a union for purposes of bargaining collectively with their employer. (1) However, before a union can be recognized as the workers' representative, it must win the support of a majority of workers in a "unit appropriate for [collective bargaining] purposes." (2) Often, labor and management cannot agree on what constitutes an "appropriate" bargaining unit, and the National Labor Relations Board is asked to decide what does. To guide the Board in making a decision, the National Labor Relations Act directs it to "decide in each case whether. . .the unit. . .shall be the employer unit, craft unit, plant unit, or subdivision thereof." (3)

Until recently, the National Labor Relations Board determined whether a bargaining unit was appropriate only in the context of a specific dispute and not through broad policy pronouncements. However, in 1989, the Board exercised its seldom-used statutory authority (4) to issue substantive regulations when it established rules defining the appropriate bargaining units in acute care hospitals. (5) These regulations provide that distinct bargaining units will be recognized only for registered nurses, physicians, professionals who are neither registered nurses nor physicians, technical employees, skilled maintenance workers, business office clerical employees, guards, and all other nonprofessional employees. (6)

The same day the Board issued its regulations, the American Hospital Association filed suit in Federal district court to prevent the regulations from taking effect. (7) The association claimed that the Board would violate its statutory duty to make decisions "in each case" if it made bargaining unit determinations on the basis of generally applicable regulations. The hospital group also claimed that the regulations are not consistent with the will of Congress, as expressed in the legislative history of the 1974 amendments to the National Labor Relations Act, because they allow undue proliferation of bargaining units. (8) Finally, the association argued that the rule itself should not be enforced because it is arbitrary.

The district court agreed with the association that the regulations permit too many bargaining units, and the court permanently enjoined the Board's regulations. (9) The Board appealed to the Court of Appeals for the Seventh Circuit, and on April 11, 1990, the circuit court, in American Hospital Association v. NLRB, (10) reversed the district court's decision. According to Judge Richard Posner, who wrote the court's unanimous opinion, Congress did not warn the Board against allowing bargaining units to proliferate out of concern for preventing situations in which eight units or fewer might be permitted. Instead, Congress was concerned about more egregious situations, such as one mentioned in the amendment's legislative history involving 21 separate bargaining units. "That," Judge Posner said, "is proliferation." (11)

The health care industry and unions that represent or want to represent its workers are following this issue closely. In general, the industry favors allowing fewer collective bargaining units with more employees because larger units are considered more difficult for unions to organize. In addition, many in the industry think that both negotiating costs and the likelihood of strikes can be minimized if only a few large bargaining units are permitted. On the other hand, unions usually prefer smaller, more numerous bargaining units because they are easier to organize. They also prefer clear guidelines that are easily understood and applied because such guidelines have the potential for minimizing disputes that may delay representation elections. (12)

Disabled seamen

A sailor who is injured or becomes ill during a voyage usually must be paid room and board while recovering on shore. The right to "maintenance," as these payments are known, is an ancient one, having originated during the Middle Ages. (13) An outgrowth of the maritime industry's practice of providing sailors with food, lodging, and care at no cost, maintenance ensures that the equivalent of these essential services will be provided even if a sailor becomes disabled during a voyage. (14)

Maintenance was recognized in the United States as early as 1823, when Justice Joseph Story wrote that "[i]f some provision be not made for [sailors] in sickness at the expense of the ship, they must often in foreign ports suffer the accumulated evils of disease, and poverty, and sometimes perish from the want of suitable nourishment." (15) Although both the maritime industry and seafarers' ways of life have changed considerably since Justice Story's time, courts have continued to recognize the fundamental right of sailors to receive maintenance payments during convalescence.

Since early 1986, at least four courts of appeals have been asked to decide the issue of whether maintenance payments to disabled sailors can be limited by collective bargaining agreement provisions. (16) In each of the four cases, the collective bargaining agreement permitted the shipowner to make maintenance payments in amounts that were not sufficient to reimburse sailors for all maintenance expenses. While acknowledging that parties to a collective bargaining agreement cannot abolish, by contract, a sailor's right to maintenance, three of the four courts concluded that the amount of maintenance payments can be a proper subject for negotiation. (17) Thus, the three courts agreed with the shipowners that a bargained-for maintenance rate is part of a package of benefits that union members accept as being adequate when they ratify a contract, and this decision means that an agreement to limit maintenance payments is proper. (18)

In the fourth, and most recent, case, Barnes v. Andover Co., (19) the Court of Appeals for the Third Circuit reached a different conclusion. The injured seaman in Barnes sought maintenance payments substantially higher than the $8 per day he was entitled to receive under the collective bargaining agreement. (20) He argued that he should be paid a higher amount reflecting his actual living expenses, which, he said, the common-law right to maintenance is designed to cover.

Judge Dolores Sloviter, writing for the Third Circuit panel, agreed with the seaman and rejected the approaches taken by the three courts of appeals that had ruled on the issue in the earlier cases. (21) The common-law right to maintenance, she held, is no less important than the policies embodied in Federal labor laws, which the earlier courts had relied upon in concluding that the collective bargaining agreement provisions should be enforced. In her view, "unless Congress determines that the circumstances giving rise to the need for maintenance have changed and that collective bargaining is now a more appropriate way to deal with the issue of the ill or injured seaman, the common law remedy must remain in full force." (22) The only way to give the remedy full force, she concluded, is to award maintenance based on living expenses actually incurred when those expenses are greater than the amount of maintenance that is payable under the collective bargaining agreement.

The court's decision in Barnes is important for several reasons. First, if followed, it will impose an additional labor cost on maritime employers. Second, under this decision, the existence of a collective bargaining agreement provision setting the amount of maintenance will be of little consequence. As a result, union and nonunion seamen will be treated in a more uniform manner. Finally, because the Barnes decision conflicts with the decisions of other courts of appeals, the Supreme Court might now consider reviewing the issue.

Polygraph tests

A Federal district court in Texas has ruled that polygraph tests given to job applicants by the City of Houston violate applicants' privacy rights under the United States and Texas Constitutions. As a result, the court in this case, Woodland v. City of Houston, (23) prohibited the city from continuing to use the offensive parts of the tests, awarded nearly $500,000 in damages, attorneys' fees, and costs, and allowed individuals who had failed the tests to reapply for the sought-after positions.

The job applicants in Woodland were three men, each of whom had sought a job with a different Houston agency--the police department, fire department, or airport police department. Believing that the city had refused to hire them because of the results of their polygraph tests, the three men filed a class-action suit in Federal court. This suit was heard by a jury, which reviewed the evidence and concluded that the challenged polygraph tests included questions that were "unreasonably intrusive." (24)

As a result of the jury's verdict, the court granted monetary relief to the three men and issued an order permanently enjoining the city from asking questions in its hiring process that "do not have an articulable rational basis for discovering whether an applicant possesses actual qualifications reasonably related to the particular job." (25) More specifically, the court's order prohibits the city from inquiring into future applicants' religious practices, sexual activity, (26) criminal activities, (27) marijuana and certain other drug use, (28) membership in organizations, and confidential medical information.

Because the employer in Woodland is a local government, its ability to administer polygraph tests is not subject to the Employee Polygraph Protection Act of 1988, (29) which severely limited many private employers' use of such tests. The Woodland court's decision, however, demonstrates that even in cases in which the Federal law does not apply, the ability of a public employer to administer such tests is not without limits.


(1) 29 U.S.C. $S 157 (1988). Workers also have the right to refrain from joining a union or engaging in union activities "except to the extent that such right may be affected by an agreement requiring membership in a labor organization as a condition of employment." Id. In the event that the collective bargaining agreement contains a union security agreement, workers who decline to join the union may be charged a fee for collective bargaining activities undertaken on their behalf by the union. See Communication Workers v. Beck, 487 U.S. 735 (1988).

(2) 29 U.S.C. $S 159(a) (1988).

(3) 29 U.S.C. $S 159(b) (1988); see also 29 CFR $Z 101.17-101.21 (1989). The Board's broad mandate to determine the appropriate bargaining unit is subject to three statutory limitations: (1) a bargaining unit may not include both professional and nonprofessional employees, unless a majority of professionals agree to be included with nonprofessionals; (2) a craft unit may not be rejected on the basis of an earlier Board determination, unless a majority of workers in the proposed craft unit vote against separate representation; and (3) guards may not be included in a bargaining unit that includes employees who are not guards. 29 U.S.C. $Z 159(b)(1)-(b)(3) (1988).

(4) 29 U.S.C. $S 156 (1988).

(5) 54 Fed. Reg. 16,336 (1989) (codified at 29 CFR $S 103.31 (1989)). In general, an acute care hospital is one in which most patients are hospitalized for fewer than 30 days. 29 CFR $S 103.30(f)(2) (1989). The Board's regulations provide that it will continue to determine, on a case-by-case basis, the appropriateness of bargaining units in all other health care facilities. 29 CFR $S 103.30(g) (1989).

(6) Additional bargaining units may be appropriate only in "extraordinary circumstances" or where nonconforming bargaining units already exist. 29 CFR $S 103.30 (1989). The regulations require the Board to resolve disputes that present "extraordinary circumstances" on a case-by-case basis. 29 CRF $S 103.30(b) (1989). According to the regulations, one such extraordinary circumstance arises when a unit includes five or fewer employees. 29 CFR $S 103.30(a) (1989).

(7) The regulations were issued on April 21, 1989. 54 Fed. Reg. 16,347 (1989). By their terms, the regulations were to take effect May 22, 1989. 29 CFR $S 103.30(e) (1989). However, on that day, the district court issued a preliminary injunction barring their enforcement. American Hosp. Ass'n v. NLRB, 718 F. Supp. 704, 705 n.1 (N.D. Ill. 1989).

(8) In 1974, Congress amended the National Labor Relations Act to bring nonprofit hospitals within the jurisdiction of the National Labor Relations Board. Act of July 26, 1974, Pub. L. No. 93-360, 88 Stat. 395 (1974). The amendment did not address or change the Board's authority to determine the appropriateness of bargaining units. Nevertheless, the law's legislative history states that "[d]ue consideration should be given by the Board to preventing proliferation of bargaining units in the health care industry." S. Rep. No. 93-766, 93d Cong., 2d Sess., reprinted in 1974 U.S. Code Cong. & Admin. News 3946, 3950. This relatively sparse legislative history does not define "proliferation."

(9) American Hosp. Ass'n v. NLRB, 718 F. Supp. 704 (N.D. Ill. 1989).

(10) 899 F.2d 651 (7th Cir. 1990).

(11) Id. at 658. Judge Posner ruled on two other issues raised by the hospital group. First, he held that the Board's statutory duty to determine the appropriate bargaining unit "in each case" does not prohibit the Board from issuing the regulations in question. In his view, "in each case" does not necessarily refer to a dispute between a particular employer and a union at a specific plant. Instead, "case" can be construed to mean "in the case of an entire industry." Even if the limitation is construed more narrowly, he said, the Board can apply the regulation in each case and thereby comply with the law.

Judge Posner also ruled that the challenged regulations are not arbitrary. The court should not, he said, "fine-tune the regulatory process by telling the Labor Board that its rule should make slightly more distinctions than it does, or slightly fewer." Id. at 660. As a result, he concluded, "[t]he Board did a responsible job of weighing the conflicting arguments and we therefore uphold its rule without pretending that we consider it Utopia." Id.

(12) See generally American Hosp. Ass'n v. NLRB, 899 F.2d 651, 654 (7th Cir. 1990); and Note, The National Labor Relations Board's Proposed Rules on Health Care Bargaining Units, 76 Va. L. Rev. 115, 121-22 (1990).

(13) See 2 M. Norris, The Law of Seamen, $S 26:3-26:4 (4th ed. 1989).

(14) See Cox v. Dravo Corp., 517 F.2d 620, 623 (3d Cir. 1975). Closely related to the disabled sailor's right to receive maintenance are two other important rights. First, the sailor is entitled to receive "cure" payments, which are reimbursements for medical and related care. See Calmar S.S. Corp. v. Taylor, 303 U.S. 525, 528 (1938). Payments for both maintenance and cure must be made until the sailor's condition cannot be improved, which is known as the point of maximum medical recovery. See Farrell v. United States, 336 U.S. 511, 517-19 (1949). Second, a sick or injured sailor is entitled to receive wages during recuperation. See Jones v. Waterman S.S. Corp., 155 F.2d 992 (3d Cir. 1946). In contrast with payments for maintenance and cure, wage payments do not extend beyond the end of the voyage. Id.

(15) Harden v. Gordon, 11 F. Cas. 480 (C.C.D. Me. 1823) (No. 6,047).

(16) See Gardner v. Sea-Land Serv., Inc., 786 F.2d 943 (9th Cir. 1986); Macedo v. F/V Paul & Michelle, 868 F.2d 519 (1st Cir. 1989); Al-Zawkari v. American S.S. Co., 871 F.2d 585 (6th Cir. 1989); and Barnes v. Andover Co., 900 F.2d 630 (3d Cir. Mar. 30, 1990).

(17) See Gardner, 786 F.2d 943; Macedo, 868 F.2d 519; and Al-Zawkari, 871 F.2d 585.

(18) As the court in Gardner stated, "[t]he adequacy of the maintenance rate should not be examined in isolation. . .because the determination of its adequacy in relation to the whole scheme of benefits has already been made by the union and the seamen who voted for the contract." 786 F.2d at 949.

(19) 900 F.2d 630 (3d Cir. 1990).

(20) According to the court, $8 per day is the amount of maintenance that is provided in most collective bargaining agreements in the maritime industry. Id. at 635. At least one commentator has noted that even in cases in which collective bargaining agreements have not governed the employment relationship, such as in the offshore oil drilling industry, courts in the past often set the maintenance rate at the union rate of $8 per day. See Comment, Maintenance and Cure: Contract Right or Legal Obligation, 62 Tulane L. Rev. 625 (1988). However, as inflation eroded the buying power of $8, courts tended to increase the maintenance rate for nonunion seamen. Id.

(21) Judge Sloviter disagreed with the seaman on two minor points, ruling that certain transportation and toiletry expenses are not reimbursable maintenance expenses. Barnes at 644.

(22) Id. at 640.

(23) 731 F. Supp. 1304 (S.D. Tex. 1990).

(24) Id.

(25) Id. at 1306.

(26) The injunction does not bar the city from asking questions about an applicant's consensual sexual activity if the activity occurred within the previous 3 years, involved a minor, and was unlawful in the jurisdiction where it occurred. Id. at 1307.

(27) The city is allowed to ask questions about childhood crimes that involved a felony, a physical injury, or a sexual assault and questions about adult crimes that involved a felony, sexual assault, serious injury, or certain misdemeanors or thefts. Id.

(28) Questions about unlawful marijuana use during the 6 months prior to the test are permissible, although such use cannot be the basis for disqualification unless similar offenses, such as hunting violations and intoxication, are treated in the same way. Questions about the use of certain drugs, such as cocaine and heroin, are also permissible if such use occurred within the timeframes set forth in the injunction. Id.

(29) 29 U.S.C. $Z 2001, 2006(a) (1988). The Employee Polygraph Protection Act did not take effect until December 27, 1988. Employee Polygraph Protection Act of 1988, Pub. L. No. 100-347, $S 11(a), 102 Stat. 653 (1988).
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Author:Hukill, Craig
Publication:Monthly Labor Review
Date:Aug 1, 1990
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