Ingham Regional Medical Center

National Labor Relations Board - Board Decisions

Sep 24, 2004

342 N.L.R.B. 1259 (N.L.R.B. 2004)

INGHAM REGIONAL MEDICAL CENTER
342 NLRB No. 129
1259
Ingham Regional Medical Center and Local 459, Of-
fice and Professional Employees International
Union, AFL–CIO. Cases 7–CA–46380 and 7–
CA–46549
September 24, 2004
DECISION AND ORDER
BY CHAIRMAN BATTISTA AND MEMBERS SCHAUMBER
AND WALSH
On April 7, 2004, Administrative Law Judge Jane
Vandeventer issued the attached decision. The General
Counsel filed exceptions and a supporting brief. The
Respondent filed an answering brief, and the General
Counsel filed a reply brief.
The National Labor Relations Board has delegated its
authority in this proceeding to a three-member panel.
The Board has considered the decision and the record
in light of the exceptions and briefs and has decided to
affirm the judge’s rulings, findings,1 and conclusions and
to adopt the recommended Order.
ORDER
The recommended Order of the administrative law
judge is adopted and the complaint is dismissed.

Richard F. Czubaj, Esq., for the General Counsel.
Rozlyn E. Kelly, Esq., for the Respondent.
Cynthia Jeffries, for the Charging Party.

DECISION
STATEMENT OF THE CASE
JANE VANDEVENTER, Administrative Law Judge. This case
was tried on January 28, 2004, in Lansing, Michigan. The
complaint alleges that Respondent violated Section 8(a)(5) of
the Act by failing and refusing to provide information to the
Charging Party Union, which information is necessary to carry
out the Union’s bargaining obligation. The complaint also
alleges that Respondent violated Section 8(a)(5) by subcon-
tracting bargaining unit work and laying off employees without
notice to the Union nor opportunity for bargaining over the
decision and its effects. The Respondent filed an answer deny-

1 The judge found that the Union waived its right to bargain about
the decision to subcontract the coding work by virtue of language in the
parties’ collective-bargaining agreement. In so finding, the judge ap-
plied the Board’s “clear and unmistakable” waiver standard. Metro-
politan Edison Co. v. NLRB, 460 U.S. 693, 708 (1983). In NLRB v.
Postal Service, 8 F.3d 832 (D.C. Cir. 1993), the D.C. Circuit set forth a
“contract coverage” analysis, finding appropriate that analysis rather
than a “clear and unmistakable” waiver analysis, where the contract
covers the issue in dispute. We find it unnecessary to pass on which
standard is appropriate, because the Respondent would have no obliga-
tion to bargain with the Union about the decision to subcontract the
coding work under either standard. Further, we observe that no party
has excepted to the judge’s finding that the “clear and unmistakable”
waiver analysis is applicable in this case.
ing the essential allegations in the complaint.1 After the con-
clusion of the presentation of evidence, the parties presented
oral arguments and later filed briefs, which I have considered.
Based on the testimony of the witnesses, including particu-
larly my observation of their demeanor while testifying, the
documentary evidence, and the entire record, I make the fol-
lowing
FINDINGS OF FACT
I. JURISDICTION
Respondent is a corporation with an office and place of busi-
ness in Lansing, Michigan, where it is engaged in the operation
of acute health care facilities. During a representative 1-year
period, Respondent derived gross revenue in excess of
$250,000 from the operation of said facilities, and during the
same period, has purchased and received at its Lansing facili-
ties, goods and materials valued in excess of $50,000 directly
from points outside the State of Michigan. Accordingly, I find,
as Respondent admits, that it is an employer engaged in com-
merce within the meaning of Section 2(2), (6), and (7) of the
Act.
The Charging Party (the Union) is a labor organization
within the meaning of Section 2(5) of the Act.
II. UNFAIR LABOR PRACTICES
A. The Facts
The Charging Party Union (Union) represents a unit of em-
ployees long recognized by Respondent. The bargaining unit
was agreed at trial to be as described in the parties’ current
collective-bargaining agreement covering these employees,
called the “Paraprofessional, Office and Skilled Trades Agree-
ment.” The collective-bargaining agreement was referred to at
trial and will be referred to herein as the POST agreement. The
current POST agreement covers approximately 700 employees
and is effective by its terms from June 22, 2000, through Sep-
tember 30, 2004. It is undisputed that the employees engaged
in the work of assigning numerical codes to various medical
diagnoses, treatments, and procedures in patients’ records for
the purposes of proper billing (coding) were a part of the POST
bargaining unit. These employees will be called coders.
The circumstance which gave rise to the controversy was a
decision by Respondent to subcontract the work of the coders
to a company called Providers Hospital Net Service (PHNS). It
is undisputed that Respondent first notified the Union’s repre-
sentative, Cindy Jeffries, that it was contemplating such action
on May 7, 2003.2 Respondent told Jeffries that if the coding
work were subcontracted, that it would be a corporatewide
subcontract, not confined to Respondent’s operations, which
are covered by the POST agreement. It is further undisputed
that Respondent notified the Union in writing on August 6 that
it had decided to subcontract the coding work to PHNS, that the

1 At the hearing, I granted the General Counsel’s motion to amend
the complaint by withdrawing one allegation of failure to provide in-
formation.
2 All dates hereafter are in 2003, except where specifically noted.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1260
affected employees received layoff notices on September 30,
and the layoff was effective on October 6.
The POST agreement contains pertinent language in Section
3: Management Rights and in Section 15: Subcontracting. Both
sections are set forth below:

Section 3: Management Rights
Section 3.1. Management’s Reserved Rights.
(a) Except as expressly limited by the terms of this
Agreement, the Employer retains and shall have the sole
and exclusive right to manage and operate the Medical
Center in all of its operations and activities. Among the
rights of management, included only by way of illustration
and not by way of limitation, is the right to determine all
matters pertaining to the services to be furnished and the
methods, procedure, means, equipment and machines re-
quired to provide such service; to determine the nature and
number of facilities and departments to be operated and
their location; to establish classification of work and the
number of personnel required, to direct and control opera-
tions; to discontinue, combine or reorganize any part or all
of its operations; to maintain order and efficiency; to make
judgments as to the ability and skill of its employees; to
continue and maintain its operations as in the past; to
study and use improved methods and equipment; use out-
side assistance or engage independent contractors to per-
form any of the Employer’s operations or phases thereof
(subcontracting); and in all respects to carry out the ordi-
nary and customary functions of management. All such
rights are vested exclusively in the Employer and shall not
be subject to arbitration procedure established in this
Agreement.
(b) The Employer shall also have the right to hire,
promote, assign, transfer, suspend, discipline, discharge
for just cause, layoff and recall personnel; to establish rea-
sonable work ruled; to determine work loads; to establish
and change work schedules; to provide and assign relief
personnel; provided, however, that these rights shall not be
exercised in violation of any specific provision of this
Agreement and as such, they shall be subject to the Griev-
ance and Arbitration Procedure established herein.
(c) The Union hereby agrees that the Employer retains
the sole and exclusive right to establish and administer
without limitation, implied or otherwise, all matters not
specifically and expressly limited by this Agreement.
Section 15: Subcontracting
Section 15.1. Subcontracting, Affiliation and Mergers.
The Employer reserves the right to enter into affiliation
and merger agreements and to subcontract work normally
performed by bargaining unit employees. However, if
such merger, affiliation, or subcontracting causes a layoff
of bargaining unit employees, the Employer agrees to first
discuss the decision and impact of the merger, affiliation
or subcontracting and layoff with the Union and give sixty
(60) days advance notice, or in lieu thereof, wages the
laid-off employees would have earned during the sixty
(60) day notice period but for the layoff.
Interpretive Statement: The discussion of the decision
and impact of the merger, affiliation or subcontracting,
which causes a layoff of bargaining unit employees, shall
occur prior to the Employer actually deciding whether or
not to enter into such agreement or to subcontract the
work. The parties shall meet to discuss ways that the work
environment can be changed to prevent layoffs. The Un-
ion will be given at least a sixty (60) day period after that
initial discussion to work with the Employer to illustrate
that the work can be performed by bargaining unit em-
ployees within the employer’s identified parameters. The
Employer shall not give the sixty (60) day advance layoff
notice, or in lieu thereof, wages the laid off employees
would have earned but for the layoff, until the end of the
initial sixty (60) day discussion period.

The “Interpretive Statement” was added to the collective-
bargaining agreement during contract negotiations in 2000. It
appears from the language in section 15, as well as from the
testimony of witnesses, that two 60-day periods are contem-
plated. Under the contract’s language, prior to any layoff, the
Union is to be given notice 60 days in advance. An additional
60-day period prior to the notice period is prescribed for “dis-
cussions” between the parties.
Following Respondent’s telephone call to the Union in early
May, Cindy Jeffries and employee Pam Dragisic met with Re-
spondent, including JoAnne Fredericks, corporate vice presi-
dent for human resources, about the subcontracting on May 20.
Fredericks informed the Union that Respondent was contem-
plating subcontracting the coders’ work to PHNS, and that the
current employees could go to work for PHNS and could do the
work at their homes. The same day, the Union made a written
request for information, such as many of the costs involved, the
equipment to be used, and the expected savings to Respondent
from subcontracting the work. A week later, on May 27, the
Union submitted a two and a half page list of questions about
the proposed subcontracting, including questions about the
anticipated wages, hours, and working conditions of the coders
should they become employees of PHNS.
In June, Respondent informed the Union that it did not know
the answers to many of the questions involving PHNS, but set up
a meeting for employees in order to try to answer some of the
questions about employment conditions with the proposed sub-
contractor. Jeffries was not present at this informational meeting
for employees. Employee Pam Dragisic testified that certain of
the employees’ questions concerning benefits and working condi-
tions at PHNS were not answered at this meeting.
On June 27, the Union again met with Respondent about the
issue. Respondent presented some cost figures to the Union at
that time, including cost savings which it expected to realize
assuming that the coding work were to be subcontracted. On
the same date, the Union presented a grievance concerning the
subcontracting issue, claiming that Respondent had made the
decision to subcontract without giving the Union the required
60-day notice, as called for in the contract, and that it made the
decision without properly bargaining with the Union. Three
days later, on June 30, the Union made another information
request to Respondent in writing. The June 30 request reiter-
INGHAM REGIONAL MEDICAL CENTER 1261
ated requests for wages and working conditions, which would
apply to employees of PHNS if the work were subcontracted.
Jeffries testified the Union also notified Respondent that it
was available for bargaining, and suggested three dates in July.
Fredericks was on vacation during July, but her subordinate,
Linda Gardner, responded in writing to the Union’s grievance
on July 3, taking the position that the decision regarding sub-
contracting had not yet been made, that Respondent had sup-
plied all information necessary for the parties to discuss the
issue as contemplated in the collective-bargaining agreement,
and setting forth the three “parameters” Respondent had identi-
fied and was going to use to make the subcontracting decision.
The three parameters were:

• “The total expense of operating the coding function at
IRMC must be reduced by at least $90,000.00 in fis-
cal year 2004. In future years, we expect the cost to
decrease further.
• The employees must be prepared to work off-site,
eventually, freeing prime hospital space for clinical
functions. They will be placed either in a non-
hospital setting (such as the old BCN building on S.
Cedar) or at home.
• The expense associated with equipping coders to
work from their homes must be included in cost pro-
jections for [FY] 2005 and beyond.”

The parties did not meet again concerning the subcontracting
issue. Jeffries testified that the Union did not make a proposal
to Respondent to retain the work in-house because it needed the
requested information in order to formulate such a proposal.
Jeffries testified that the “parameters” identified by Respondent
were not sufficient. Jeffries further testified that although the
Union and the employees did come up with a few cost-saving
ideas internally, the Union did not divulge these ideas to Re-
spondent.
Joanne Fredericks testified that Respondent believed and had
consistently behaved in conformity with the position that it had
the right to make the decision to subcontract. Respondent be-
lieved that the only constraints upon it were the requirement
that it notify the Union 60 days in advance of any subcontract-
ing that would involve layoffs of employees, and that it discuss
with the Union its reasons for subcontracting and consider any
proposals by the Union which would address those reasons.
B. Discussion and Analysis
1. Bargaining
The General Counsel takes the position that Respondent’s
decision to subcontract the work of the coders was a mandatory
subject of bargaining which was not waived by contract, and
that Respondent therefore had an obligation to provide the Un-
ion with information which would enable it to bargain about the
decision to subcontract as well as the effects of such a decision.
The General Counsel contends that the language of the collec-
tive-bargaining agreement does not clearly establish a waiver of
the Union’s right to bargain about subcontracting, largely on
the ground that the words “bargain” and “discuss” are synony-
mous. Therefore, the General Counsel contends that Respon-
dent was obligated to supply information about the subcontract-
ing, to bargain about the decision to subcontract and its effects
prior to making and implementing that decision.
Respondent takes the contrary position that, under the par-
ties’ collective-bargaining agreement, the decision to subcon-
tract bargaining unit work is reserved exclusively to Respon-
dent, and that while the Union has the right to certain proce-
dures prior to the implementation of the decision, and the right
to discuss the decision and its implications, it does not have the
right to bargain about it. Respondent therefore contends that it
had no duty to furnish the requested information, and that it did
not violate the Act.
The General Counsel is correct that under Board law, the de-
cision to subcontract bargaining unit work is a mandatory sub-
ject of bargaining. Fibreboard Paper Products Corp. v. NLRB,
379 U. S. 203 (1964). In his brief, the General Counsel con-
cedes, as Respondent contends, that a union may waive its
statutory right to bargain about a particular subject by contract,
and correctly notes that the Board requires the party asserting
the waiver to bear the burden of proof, and also requires that
contract language asserted to waive such rights be “explicitly
stated,” and “clear and unmistakable.” Metropolitan Edison
Co. v. NLRB, 460 U. S. 693, 708 (1983).
The Board has recently held, in Allison Corp., 330 NLRB
1363 (2000), that where the decision to subcontract is explicitly
reserved to the employer by contractual agreement, there is no
requirement that the employer bargain about a decision to sub-
contract. The language in that case which was found to be a
‘“clear and unmistakable waiver’ of the union’s right to bargain
was as follows: The Company shall have the exclusive right to
manage the business and operation of its facilities; . . . to sub-
contract; . . . and generally to control and direct the Company in
all of its operations and affairs.” The Board held that this lan-
guage “plainly grants the Respondent the right ‘to subcontract’
without restriction.” 330 NLRB at 1365.
More recently, Allison Corp. was followed in California Pa-
cific Medical Center, 337 NLRB 910 (2002). The Board af-
firmed an administrative law judge’s dismissal of a complaint
against the respondent, despite differing legal analyses. The
Board found it unnecessary to resolve the differing legal analy-
ses because both resulted in a dismissal of the case. The con-
tract language found by the judge to constitute a waiver ap-
peared in the section dealing with layoffs. There was no typical
management rights clause in the contract, but in the section
called “Staffing and Seniority,” the collective-bargaining
agreement stated that the employer “has the right to determine
its staffing (including the number of jobs, the hours assigned to
such jobs, and the changes to be made, if any).” Relying upon
this language, the judge found that the employer had the right
to reduce the number of jobs by layoffs. Further, he found that
the employer had historically exercised the right to layoff em-
ployees without prior bargaining about the decision to do so. In
California Pacific, the information requested by the Union in
order to enable it to bargain over the decision was deemed not
to be relevant, since there was no right to bargain about the
decision.
The language in the instant case specifically states “The Em-
ployer reserves the right to enter into affiliation and merger
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1262
agreements and to subcontract work normally performed by
bargaining unit employees.” In arguing that this language does
not constitute a waiver of the Union’s right to bargain about
these decisions, the General Counsel relies on the succeeding
language requiring at least 60 days’ notice to the Union and
Respondent’s undertaking to “discuss” the decision for another
60-day period. In essence, as the General Counsel concedes,
the nub of this argument is that the words “bargain” and “dis-
cuss” must be found to have the same meaning. Respondent
argues that the words have different meanings, and in support
of this position quotes examples from other portions of the
contract where the parties use the word “negotiate” to describe
a bargaining obligation, and the word “discuss” to describe
talks which are not contemplated to involve “negotiations.”
Furthermore, Respondent argues, both the management rights
section and Section 29 contain “zipper clause” language.
Both parties rely on two instances of subcontracting which oc-
curred. One was the subcontracting of the work of transcribing
medical records, and the second involved the work of histology
technicians. While in one case the Union requested and received
some information from Respondent, in neither case did the Union
advance a proposal to retain the work within the bargaining unit.
In both instances, Respondent behaved in conformity with its
position that it had no obligation to bargain about the decision to
subcontract, and the Union did not test this position by requesting
any bargaining over the decision. Therefore the parties them-
selves have never tested the issue of whether the contractual
words “bargain” and “discuss” have the same meaning, nor the
issue of whether the Respondent’s subcontracting decisions are
subject to bargaining with the Union. I cannot find that this lim-
ited bargaining history has any usefulness in illuminating the
parties’ past practice with regard to section 15 of the collective-
bargaining agreement. It supports neither the General Counsel’s
position nor Respondent’s position.
Instead, I find that the language of the collective-bargaining
agreement itself must be the determining factor. I find that the
contract’s reservation of the right to subcontract to Respondent
is clear and unmistakable, as required by Board law. In fact, it
is far clearer and more “unmistakable” than the waiver lan-
guage in either Allison Corp. or California Pacific, supra.
First, the management rights clause includes “subcontracting”
as one of the rights reserved to the Employer. Second, the sec-
tion dealing specifically with subcontracting reserves the right
to subcontract bargaining unit work to the Employer. The en-
suing language states only a procedural requirement that 60
days notice will be provided. It was provided here. The “In-
terpretive Statement” adds an additional period for discussion
of any alternatives the Union can propose which would satisfy
the Employer’s reasons for considering subcontracting as set
forth in its “parameters.” In this case, the Employer did inform
the union of its “parameters,” to wit, to save money, and to
relocate the work site, possibly even to employees’ homes,
while still saving money. After this discussion, the Employer
remains free to make its decision to subcontract or not to sub-
contract, as stated clearly in the first sentence of the section.
I specifically decline to find the words “bargain” and “dis-
cuss” to be synonymous in this collective-bargaining agree-
ment, as urged by the General Counsel. The only authority in
support of this position cited by the General Counsel is the
dictionary, not Board law. It is true that both words involve the
activity of talking back and forth between at least two parties.
As pointed out by Respondent, however, internal evidence in
the contract points to the use of the word “negotiate” by the
parties where bargaining was contemplated. The deliberate use
of a different word in the subcontracting clause leads to the
conclusion that a different kind of talking was contemplated by
the parties in the subcontracting clause. I find that the language
of section 15 to the effect that the parties will discuss alterna-
tive means of achieving the Employer’s goals does not amount
to a limitation on the Employer’s clearly stated right to decide
to subcontract work. Rather, it is simply a procedure to enable
the Employer to gain the benefit of the Union’s ideas if they are
good ones, and to enable the Union to preserve the jobs of em-
ployees if the Employer accepts the Union’s ideas. The fact
that the discussion is defined in “interpretive” language rather
than in the body of the subcontracting clause is a further indica-
tion that the parties did not contemplate actual bargaining over
the decision, but a less formal interchange of ideas.
I find that Respondent fulfilled the procedural and discussion
requirements spelled out in the parties’ collective-bargaining
agreement, and that it had no duty to bargain over the decision
to subcontract the coders’ work.
Both parties agree that Respondent had a duty to bargain
over the effects of its decision to subcontract. It is clear from
the record evidence that the Union never requested effects bar-
gaining explicitly, as distinct from bargaining over the decision
to subcontract. After the August announcement by Respondent
that the decision to subcontract the coding work had been
made, the Union did not request bargaining specifically on the
subject of the effects of the subcontracting. Much of the infor-
mation requested by the Union related to the decision to sub-
contract, and was intended, according to the testimony of
Jeffries, to enable the Union to formulate an alternative pro-
posal concerning the decision to subcontract. Apparently, since
it did not have this information, the Union did not follow up
separately on effects bargaining. Should the Union make such a
request, Respondent would, of course, be obligated to bargain
over effects to the extent it has not done so. Allison Corp.,
supra.
2. Information
The Board has held that subcontracting information like that
requested by the Union is not presumptively relevant and there-
fore a union seeking such information must demonstrate its
relevance. Sunrise Health & Rehabilitation Center, 332 NLRB
1304 (2000); Associated Ready Mixed Concrete, 318 NLRB
318 (1995), enfd. 108 F.3d 1182 (9th Cir. 1997). The finding
made above that Respondent had no duty to bargain about the
decision to subcontract means that the Union cannot demon-
strate the relevance of the requested information. I find, there-
fore, that the Respondent’s failure to provide all the requested
information is not a violation of the Act. California Pacific,
supra. Accord, Detroit Edison Co., 314 NLRB 1273 (1994).
On the basis of the foregoing, I shall dismiss the complaint
in its entirety.
INGHAM REGIONAL MEDICAL CENTER 1263
CONCLUSIONS OF LAW
1. The Respondent is an employer engaged in commerce
within the meaning of Section 2(2), (6), and (7) of the Act.
2. The Union is a labor organization within the meaning of
Section 2(5) of the Act.
3. The Respondent has not violated the Act as alleged in the
complaint.
On these findings of fact and conclusions of law and on the
entire record, I issue the following recommended3
ORDER
The complaint is dismissed in its entirety.

3 If no exceptions are filed as provided by Sec. 102.46 of the Board’s
Rules and Regulations, the findings, conclusions, and recommended
Order shall, as provided in Sec. 102.48 of the Rules, be adopted by the
Board and all objections to them shall be deemed waived for all pur-
poses.