SOUTHCOAST HOSPITALS GROUP, INC.

National Labor Relations Board - Board Decisions

Oct 6, 2017

365 NLRB No. 140 (N.L.R.B. 2017)

365 NLRB No. 140
NOTICE: This opinion is subject to formal revision before publication in the
bound volumes of NLRB decisions. Readers are requested to notify the Ex-
ecutive Secretary, National Labor Relations Board, Washington, D.C.
20570, of any typographical or other formal errors so that corrections can
be included in the bound volumes.
Southcoast Hospitals Group, Inc. and 1199 SEIU,
United Healthcare Workers East. Case 01–CA–
067303
October 6, 2017
SUPPLEMENTAL DECISION AND ORDER
BY CHAIRMAN MISCIMARRA AND MEMBERS
PEARCE AND MCFERRAN
This case is on remand from the United States Court of
Appeals for the First Circuit. The issue is whether the
Respondent violated Section 8(a)(3) and (1) of the Act
by maintaining and enforcing HR 4.06, a hiring/transfer
policy under which the Respondent gives preference to
unrepresented employees over represented employees
when filling positions at its nonunion facilities. In light
of the First Circuit’s decision, which we accept as the
law of the case, we now answer that question in the nega-
tive.
On September 16, 2015, the National Labor Relations
Board issued a Decision and Order in this proceeding.1
Applying the analytical framework established by the
Supreme Court in NLRB v. Great Dane Trailers,2 the
Board found that the Respondent violated Section 8(a)(3)
and (1) by maintaining HR 4.06. The Board found that
HR 4.06 has at least a “comparatively slight” impact on
represented employees’ Section 7 rights under Great
Dane because “it discriminates against the Respondent’s
represented employees based on their representational
status and their having obtained a contractual benefit
through collective bargaining—both of which are pro-
tected by Section 7.”3 The Board then found that the
Respondent failed to meet its burden under Great Dane
to prove that HR 4.06 serves a “legitimate and substantial
business justification.” Specifically, the Board rejected
the Respondent’s two proffered business justifications
for the policy: (1) that it prevents complaints by unrep-
resented employees about being shut out of bargaining-
unit positions, and (2) that it helps “level the playing
field” between represented and unrepresented workers.4
Finally, the Board found that the Respondent violated
Section 8(a)(3) and (1) by enforcing HR 4.06, namely, by

1 363 NLRB No. 9.
2 388 U.S. 26 (1967).
3 363 NLRB No. 9, slip op. at 2.
4 Id. After “[h]aving determined that the Respondent ha[d] failed to
establish a business justification defense,” the Board found it unneces-
sary to decide whether HR 4.06 was motivated by antiunion concerns
or was inherently destructive under Great Dane. Id., slip op. at 2–3 fn.
7.
refusing, based on its application of the unlawful policy,
to consider and/or hire employees, and by delaying, on
the same basis, the hire of an employee.5
Subsequently, the Respondent petitioned the United
States Court of Appeals for the First Circuit for review of
the Board’s Order, and the Board cross-applied for en-
forcement.
On January 20, 2017, the court granted the Respond-
ent’s petition and vacated the Board’s Order.6 The court,
also applying the Great Dane analytical framework, held
that substantial evidence did not support the Board’s re-
jection of the Respondent’s argument that HR 4.06
served the legitimate and substantial business interest of
leveling the playing field between represented and unrep-
resented employees.7 The court vacated the Board’s Or-
der and remanded the case “for further proceedings con-
sistent with [its] opinion.”8
On April 18, 2017, the Board notified the parties that it
had decided to accept the court’s remand and invited
them to file statements of position with respect to the
issues raised by the court’s opinion. Only the Respond-
ent filed a position statement.
The National Labor Relations Board has delegated its
authority in this proceeding to a three-member panel.9
The court’s opinion, which we have accepted as the
law of the case, held that substantial evidence did not
support the Board’s determination that the Respondent
failed to meet its burden to establish a legitimate and
substantial business justification for HR 4.06. Accord-
ingly, consistent with the court’s opinion, we now con-
clude that the Respondent has established that HR 4.06
serves the legitimate and substantial business justifica-
tion of leveling the playing field between represented and
unrepresented employees.10

5 Dissenting in relevant part, then-Member Miscimarra would have
found that although HR 4.06 has a comparatively slight impact on
employees’ Sec. 7 rights, the Respondent established a legitimate and
substantial business justification for the policy, and the General Coun-
sel introduced no evidence that HR 4.06 was motivated by antiunion
animus. 363 NLRB No. 9, slip op. at 5–8. Accordingly, then-Member
Miscimarra would have found that the Respondent did not violate the
Act by maintaining and enforcing HR 4.06.
6 Southcoast Hospitals Group, Inc. v. NLRB, 846 F.3d 448, 458 (1st
Cir. 2017).
7 Id. at 455. In light of this finding, the court found it unnecessary to
evaluate the Board’s rejection of the Respondent’s other proffered
reason. Id. at fn. 3.
8 Id. at 458 (internal quotations omitted).
9 Member Emanuel is recused and took no part in the consideration
of this case.
10 Chairman Miscimarra agrees that under the law of the case, the
Board must find that HR 4.06 serves the legitimate and substantial
business justification of leveling the playing field between represented
and unrepresented employees. As indicated above in fn. 5, Chairman
Miscimarra also agrees with this finding on the merits.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD2
Under Great Dane, “when the resulting harm to em-
ployee rights is comparatively slight, and a substantial
and legitimate business end is served,” as the Circuit
found here, the employer’s conduct is lawful unless the
General Counsel makes an affirmative showing of im-
proper motivation.11 The General Counsel has not made
that showing. Indeed, the General Counsel’s only litigat-
ed theory of violation in this case—before the adminis-
trative law judge and the Board—was that the Respond-
ent lacked a business justification for HR 4.06; he did not
allege or attempt to prove that HR 4.06 was the product
of antiunion motivation.
Nor is there any basis to find a violation on other
grounds. The General Counsel has conceded that HR
4.06 is not “inherently destructive” of employees’ Sec-
tion 7 rights under Great Dane.12 Moreover, neither the
General Counsel nor the Charging Party filed a position
statement on remand arguing that HR 4.06 should be
found unlawful on other grounds. Accordingly, we con-
clude that the Respondent did not violate Section 8(a)(3)
and (1) by maintaining HR 4.06.
Based on the above, we further conclude that the Re-
spondent did not violate Section 8(a)(3) and (1) by en-
forcing HR 4.06, namely, by refusing, based on its appli-

11 388 U.S. at 34.
12 Under Great Dane, if the employer’s conduct is “inherently de-
structive” of employees’ rights, a violation may be proved without
evidence of improper motive. Id. at 33.
cation of the policy, to consider and/or hire employees,
and by delaying, on the same basis, the hire of an em-
ployee.13
Accordingly, we shall vacate the Board’s Decision and
Order in Case 01–CA–067303 and dismiss the com-
plaint.
ORDER
The complaint is dismissed.
Dated, Washington, D.C. October 6, 2017
______________________________________
Philip A. Miscimarra, Chairman
______________________________________
Mark Gaston Pearce, Member
______________________________________
Lauren McFerran, Member
(SEAL) NATIONAL LABOR RELATIONS BOARD

13 The General Counsel did not allege or argue any other theory of
violation with respect to these allegations.