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Media Alerts - Grane Health Care v. National Labor Relations Board--Third Circuit
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April 8, 2013
  Grane Health Care v. National Labor Relations Board--Third Circuit
Headline: Health care company violates labor laws against discriminatory hiring and bargaining practices.

Area of Law: National Labor Relations Act, Successorship Doctrine

Issue(s) Presented: (1) Whether petitioner companies constituted a single employer under the National Labor Relations Act ("the Act"); (2) whether the successorship doctrine applied to new private employers where the predecessor employer was a government entity not covered under the Act; and (3) whether substantial evidence existed to support a finding that the company violated the Act by refusing to rehire certain employees due to anti-union animus.

Brief Summary: Grane Health Care purchased the Laurel Crest Nursing and Rehabilitation Center from the Cambria County, Pennsylvania. Grane then transferred the property to one of its subsidiary companies, Cambria Care Center. After the sale, employees had to reapply for their positions with Cambria Care. Although the majority of the previous employees were hired by Cambria Care, five union-affiliated workers were not rehired. Furthermore, the new management refused to bargain with the two incumbent unions. The unions then brought this action under the Act.

Extended Summary: In January 2010, Grane Health Care ("Grane") purchased the Laurel Crest Nursing and Rehabilitation Center ("Laurel Crest") from Cambria County, Pennsylvania. Before the purchase, labor relations between Laurel Crest and the Cambria County were governed by Pennsylvania's Public Employee Relations Act ("PERA"). Grane established a new entity to run the facility, i.e., Cambria Care Center ("Cambria Care"). Because Grane and Cambria Care (collectively, "the Company") were both private employers, labor relations at the facility became subject to the Act. This case arises from a decision by the National Labor Relations Board (the "Board"), which determined that the Company violated the Act with regard to the Laurel Crest takeover.

Prior to January 2010, Grane had attempted, unsuccessfully, to purchase Laurel Crest on two separate occasions. The two labor unions that represented Laurel Crest employees, Local 1305 and Service Employees International Union, opposed the sale. Despite the opposition, the County sold Laurel Crest to Grane on September 2009, which then subsequently transferred it to Cambria Care, a subsidiary, on January 2010. Between September 2009 and January 2010, Grane was responsible for all decisions regarding the facility's operations. After the sale, employees at Laurel Crest had to reapply for their positions under the new management. Most employees were rehired, but Grane refused to hire four union officers and a union-represented employee who had opposed the sale. In addition, Grane did not recognize the unions' collective bargaining rights.

The two unions filed unfair labor practice charges against the Company with the Board. The Administrative Law Judge held that the Company was subject to the Act, that it violated one of the union's bargaining rights, and that it violated the Act by not hiring workers based on their union affiliations. The Board affirmed the ALJ's findings, adopted its decision, and ordered the Company to recognize and bargain with the union and to hire the five employees it had previously refused to hire. The Company then appealed to the Third Circuit.

In affirming the decision of the Board, the Court noted that, under the Act, multiple-related entities can be treated as one employer and held jointly liable for violations of the Act. The Court rejected the Company's argument that it did not exercise control over labor relations at the facility. The Court explained that the Board's decision to treat Grane and Cambria Care as a single employer was based on detailed factual findings.

As to the Company's claim that the Board erred by concluding that it had a duty to bargain with the incumbent union, the Court again affirmed the decision of the Board and explained that under the successorship doctrine, new employers are required to bargain with incumbent unions. The Court rejected the Company's argument that the doctrine did not apply as a matter of law where the predecessor employer was a government entity. The Court held that because the doctrine's purpose is to encourage stability at a time of transition, and PERA provided similar requirements as the Act, the successorship doctrine applied. Therefore, the Company had a duty to bargain with the incumbent union representatives. Finally, the Court upheld the Board's determination that the Company had engaged in unfair labor practices by refusing to hire five union-affiliated employees.

To read the full opinion, click on the following link:

Panel: Ambro, Greenway, Jr., and Tashima, Circuit Judges

Argument Date: 9/18/2012

Argument Location:

Date of Issued Opinion: 4/5/2013

Docket Number: Nos.11-4345 & 11-4537

Decided: The Third Circuit granted the Board's cross petition to have the judgment enforced and denied the Company's petition for review.

Case Alert Author: Tien Cheng

Counsel: Richard J. Antonelli, Esquire; John A. McCreary, Jr., Esquire; Rebecca J. Dick-Hurwitz, Esquire, Babst, Calland, Clements & Zomnir, for Petitioners; Lafe E. Solomon, Acting General Counsel; Celeste J. Mattina, Deputy General Counsel; John H. Ferguson, Associate General Counsel; Linda Dreeben, Deputy Associate General Counsel; Jill A. Griffin, Esquire; Gregory P. Lauro, Esquire, National Labor Relations Board, for Respondent.

Author of Opinion: Judge Ambro

Circuit: Third Circuit

Case Alert Circuit Supervisor: Mary Levy

Edited: 04/10/2013 at 01:38 PM by Susan DeJarnatt

    Posted By: Susan DeJarnatt @ 04/08/2013 01:39 PM     3rd Circuit  

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