St. Joseph's Hospital

National Labor Relations Board - Board Decisions

Apr 3, 1984

269 N.L.R.B. 862 (N.L.R.B. 1984)

DECISIONS OF NATIONAL LABOR RELATIONS BOARD
St. Joseph's Hospital and New York State Nurses
Association. Case 3-CA- 11364
3 April 1984
DECISION AND ORDER
BY MEMBERS ZIMMERMAN, HUNTER, AND
DENNIS
On 26 September 1983 Administrative Law
Judge Winifred D. Morio issued the attached deci-
sion. The Respondent filed exceptions and a sup-
porting brief, and both the General Counsel and
the Charging Party filed answering briefs.'
The National Labor Relations Board has delegat-
ed 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, and
conclusions and to adopt the recommended Order
as modified.
ORDER
The National Labor Relations Board adopts the
recommended Order of the administrative law
judge as modified below and orders that the Re-
spondent, St. Joseph's Hospital, Elmira, New York,
its officers, agents, successors, and assigns, shall
take the action set forth in the Order as modified.
1. Substitute the following for paragraph 2(a).
"(a) Furnish the Union, on request and within a
reasonable time, the financial information and
records relevant to Respondent's claim advanced in
November 1982 that it was unable to pay a wage
increase."
2. Substitute the attached notice for that of the
administrative law judge.
I We deny the Respondent's motion to reopen the record. The execu-
tion of a collective-bargaining agreement between the parties does not
moot the need to remedy an unlawful refusal to produce information
during negotiations for an agreement. E.g.. Latimer BroE, 242 NLRB 50,
52-53 (1979). We will, however, modify the recommended Order and
notice language to specify that the Union have access only to information
requested during negotiations.
APPENDIX
NOTICE To EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
The National Labor Relations Board has found
that we violated the National Labor Relations Act
and has ordered us to post and abide by this notice.
WE WILL NOT refuse to bargain in good faith
with New York State Nurses Association (the
Union) by denying the Union's request for an ex-
amination of our financial books and records by a
representative designated by the Union to investi-
gate our claim of an inability to pay a wage in-
crease.
WE WILL NOT in any like or related manner
interfere with, restrain, or coerce you in the exer-
cise of the rights guaranteed you by Section 7 of
the Act.
WE WILL furnish the Union, on request and
within a reasonable time, the financial information
and records relevant to our claim advanced in No-
vember 1982 that we were unable to pay a wage
increase.
ST. JOSEPH'S HOSPITAL
DECISION
STATEMENT OF THE CASE
WINIFRED D. MORIO, Administrative Law Judge. This
case was tried before me on May 26, 1983, in Elmira,
New York, pursuant to a complaint issued by the Re-
gional Director for Region 3 on January 17, 1983. The
complaint, based on a charge filed by New York State
Nurses Association (Association/Union) against St. Jo-
seph's Hospital (Respondent/Hospital) alleges, in sub-
stance, that Respondent violated Section 8(a)(1) and (5)
of the Act by refusing to permit an examination of its fi-
nancial records, although it claimed an inability to pay a
wage increase. The answer, basically, denies the commis-
sion of the alleged unfair labor practices.
All parties were given a full opportunity to participate
in the proceedings, to cross-examine witnesses, to argue
orally and to file briefs. Briefs were filed by all parties.
Based on the entire record in the case and my observa-
tion of the demeanor of the witnesses and after careful
consideration, I make the following
FINDINGS OF FACTS
I. JURISDICTION
St. Joseph's Hospital (Respondent/Hospital), a New
York corporation with its principal office and place of
business in Elmira, New York, is engaged in the business
of providing health care services on an in-patient and
out-patient basis. During the past year, a representative
period, Respondent, in the course and conduct of its
business operations, received gross revenues in excess of
$250,000 and during the same period of time purchased
and received goods and materials valued in excess of
$10,000, which goods and materials were shipped direct-
ly to Respondent from points located outside the State of
New York. The parties admit, and I find, that Respond-
ent is, and has been at all times material herein, an em-
ployer engaged in commerce within the meaning of Sec-
269 NLRB No. 147
862
ST. JOSEPH'S HOSPITAL
tion 2(6) and (7) of the Act and a health care institution
within the meaning of Section 2(14) of the Act.
11. THE LABOR ORGANIZATION
The parties admit, and I find, that New York State
Nurses Association (the Association) is, and has been at
all times material herein, a labor organization within the
meaning of Section 2(5) of the Act.
III. THE UNFAIR LABOR PRACTICES
The Union has been the collective-bargaining repre-
sentative for the register nurses at the Hospital since
1972. During the years the parties have executed a series
a collective-bargaining agreements, the most recent one,
at the time of the events in this case, was effective from
January I to December 31, 1982. On November 2, 1982,
the parties met to begin negotiations for a new contract.
The Union's chief representative was Bart Minsky and
the Hospital's chief representative was Susan S. Robfo-
gel. The Union presented its proposals and the parties
agreed to meet on November 12, 1982. The second meet-
ing was held as scheduled with Minsky and Robfogel
continuing in their roles as chief representative for their
respective party. During this meeting, the administrator
for the Hospital, Sister Martha Gersbach announced that
the Hospital faced a serious financial problem due to the
insufficient reimbursement funds received from New
York State. She then outlined a 10-point cost-reduction
program which was to be implemented in 1983. Sister
Martha also stated that the Hospital would review its fi-
nancial situation on a monthly basis and would grant pay
increases when it was possible to do so.2 Minsky ques-
tioned Robfogel as to whether the Hospital was claiming
an inability to pay and Robfogel replied that that was the
situation. Robfogel also stated that since the Hospital
was claiming an inability to pay, it realized it had to
permit the Association to examine its financial records.
Kenneth Emery, the Hospital's director of human re-
sources, testified that Robfogel stated that the Hospital
would permit a mutally agreeable qualified public ac-
countant to check its records to verify Respondent's fi-
nancial condition. According to Emery, the Hospital's
representatives explained that the individual selected by
the Association should be someone who had a working
knowledge of and experience with the New York State
reimbursement system and "who would be knowledgea-
ble about the new law as well as the old law regarding
the reimbursement system." At this point the Associa-
tion's representatives had not indicated that they would
seek to examine the Hospital's records nor had they pro-
posed any individual to conduct an examination. Emery
testified that the Hospital did not question the right of
the Association to examine its records, that was not the
issue. The Hospital's only concern, according to Emery,
was that the individual selected by the Association "be
mutually agreeable and qualified" and it was the individ-
ual's qualifications that was of paramount importance.
i Robfogel is counsel to the Hospital.
2 The administrator was not part of the Hospital's negotiating team.
On November 13, 1982, Robfogel wrote to Minsky
outlining the criteria the Hospital considered necessary
for any CPA selected by the Association to have before
the Hospital would permit an examination of its records.
The criteria set forth in the letter were as follows:
1. Must be a member of AICPA.
2. Must be a member of the New York State So-
ciety of CPA's.
3. Must be a participating CPA in New York
State with the following qualifications:
(a) A minimum of five years audit experience at the
management level.
(b) A minimum of two of the preceding five years
with management audit engagement responsibil-
ities for voluntary community hospitals in New
York State with a least 150 beds.
(c) Demonstrated knowledge of the New York State
Hospital Reimbursement Regulations during the
period 1978-1982.
(d) Demonstrated knowledge of the Lombardi Leg-
islation (S526-D; A7303-B) and how rates will be
calculated.
(e) References of hospital clients.
Robfogel concluded the letter with the statement that
she awaited proof that the CPA selected by the Associa-
tion met the criteria outlined above. On November 17,
1982, Minsky wrote to Emery requesting specific records
and setting December 10, 1982, as the date the material
should be available for an examination by the Associa-
tion's representative, William J. Odendahl Jr., a certified
public accountant. The records requested were the fol-
lowing: s
1. A copy of the annual audit report for the 3 most
recent years, including:
(a) Statement of Earnings for the years ended;
(b) Statement of Financial Position (Balance Sheet)
as of the years ends;
(c) Statement of Equity for years ended;
(d) Statement of Fund Flows (Cash Flows) for years
ended;
(e) Notes to financial statements and auditors' opin-
ion letter.
2. Copies of internal financial operations, including all
statements listed as items 1 (a), (b), (c), (d), and (e) for
the current period to date and projected for the full year
and at the yearend.
3. Reimbursement rates from all third party payers for
the previous 3 years and the current year.
4. Bed census on a monthly basis for the previous 3
years and the current year.
5. Copies of the Institution Cost Reports and Statistical
Reports filed with New York State for the 3 most recent
years.
6. Copies of tax returns filed for the 3 most recent
years.
3 The records considered necessary were based on Odendahl's sugges-
tions.
863
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
7. Copies of Annual Charities Report for the 3 most
recent years.
Robfogel, on November 24, 1982, forwarded another
letter to Minsky wherein she stated that the suggested
date for the examination of the records was agreeable, al-
though if an earlier date was possible that would be pref-
erable. The letter also stated the following:
In accord with my letter to you of November 13,
1982 the Hospital will expect to receive proof that
Mr. Odendahl meet the criteria spelled out in that
letter prior to his arrival at the Hospital. If you dis-
agree with the reasonableness of any of those crite-
ria, please let me know that immediately.
Minsky, on December 1, 1982, advised Robfogel that in
absence of Odendahl's report the Association was cancel-
ing the bargaining sessions which had been set for De-
cember 9 and 10, 1982. In addition, Minsky informed
Robfogel that the Association considered Odendahl
"eminently qualified and fully authorized to act as the
Association's reprentative." Minsky also advised Robfo-
gel that the Association was prepared to discuss any
question the Hospital representatives might have regard-
ing Odendahl's analysis of the records when Odendahl
completed his audit. On December 6, 1982, Robfogel
sent a mailgram to Minsky reiterating the Hospital's posi-
tion that the CPA selected by the Association meet the
previously outlined criteria and stating that the Hospital
would be willing to discuss any of the criteria the Asso-
ciation considered unreasonable. The mailgram also con-
tained the following statement, "If it would be helpful to
you, any of the big eight national accounting firms
would be acceptable to the hospital." On December
1982, Robfogel wrote to Minsky urging him to contact
her concerning the scheduling of new bargaining ses-
sions. Thereafter, the parties met on January 17, 1983,
and Minsky informed Robfogel that it was the Associa-
tion's right to choose its representative and he stated that
he rejected all the criteria set by the Hospital on the
ground that they were unreasonable.
Emery testified that during this meeting on January
17, 1983, Robfogel expressed her concern that if the As-
sociation utilized someone to examine the records who
was unfamiliar with the State's reimbursement system, a
report could issue, which did not represent the Hospital's
true financial pricture and this could cause problems
with the employees in the bargaining unit. Minsky testi-
fied that at this meeting Robfogel also stated that an in-
accurate report could set off a volatile situation.
In January 1983 Minsky terminated his employment
with the Association. On January 28, 1983, Robfogel for-
warded a letter to Richard J. Silber, counsel for the As-
sociation, in which she set forth the background facts
and again stated that the Hospital did not question the
Association's right to examine the Hospital's records but
insisted, "that the independent CPA be someone with
demonstrated knowledge of the New York State hospital
reimbursement mechanism and in particular the new
Medicare Waiver." Robfogel explained that the Hospi-
tal's inability to pay was "inextricably" tied to and a
direct result of the New York State reimbursement
system and the new Medicare waiver and it was, there-
fore, necessary to have someone with knowledge in the
area. She expressed here willingness to discuss any of the
criteria set forth in her earlier letter.
On March 18, 1983, Silbers replied that the Associa-
tion considered that Odendahl possessed the necessary
experience and competence to audit hospital records and
that if the Hospital disagreed with his findings they
could challenge them. Robfogel replied on April 21,
1983, that the CPA selected by the Association should
be able to advise the Hospital of how he derived his
knowledge of Medicare, Medicaid, and charge control as
they apply in New York State; what experience he had
in analyzing financial statements in the health care indus-
try and outline the New York State health care provided
for whom he had provided professional services, the
dates of the services performed and the scope of the
services. Robfogel also stated that all other criteria set
forth in her letter of November 13, 1982, should be ig-
nored.
Respondent witnesses testified that New York State,
by virtue of its reimbursement system and certain regula-
tions and legislation, exerts extensive control over the
Hospital's revenue. Due to this control Respondent con-
tends that a proper assessment of its financial records can
only be made by a CPA with a demonstrated knowledge
in the area of the New York State reimbursement
system. In support of its position Respondent called as an
expert witness, Gerald J. Rotenberg.
Rotenberg, a certified public accountant, testified that
his firm, consisting of about 24 to 25 professional em-
ployees, provides broad-based accounting services for its
clients. The firm includes among its clients, approximate-
ly 22 health care institutions, 20 of these institutions are
located in New York State. It was Rotenberg's opinion
that auditors who examine records in order to verify an
employer's claim of an inability to pay investigate the sit-
uation in two stages. The first stage involves an examina-
tion to ascertain whether the records of the employer
were proper and accurate; whether they were kept in ac-
cordance with sound accounting principles, and whether
the requisite submissions made to various Government
agencies were correct. Rotenberg testified that any certi-
fied public accountant would be competent to perform
this type of examination. However, when an auditor
seeks to verify an employer's claim of inability to pay,
Rotenberg stated that "a single day's snapshot of the fi-
nancial condition of the company does not give you
what you are looking for." It is the next level of investi-
gation that is the crucial one. At this level, according to
Rotenberg, the auditor seeks to evaluate the employer's
future operations and "the rules and regulations that
govern us as an auditor, no longer govern us as analysts
of future data." Rotenberg stated that in order to analyze
records of an employer to determine the prospective pic-
ture, a CPA must have practical experience in the field.
This is particularly true, he claimed, when the records
being examined are those of an industry subject to Gov-
ernment regulations, such as public utility companies, the
insurance companies, and institutions in the health care
field.
864
ST. JOSEPH'S HOSPITAL
In the health care field Government regulations con-
trol the reimbursement procedure. In New York State,
contrary to the prior Federal system of reimbursement
and the system that exists in many States, the reimburse-
ment system is based on the concept of prospective reim-
bursement rather than retroactive reimbursement. In his
prospective reimbursement system the state predeter-
mines the rate the health care institution will receive.4
Rates are based by the State on the costs incurred by the
institution in prior years and then are adjusted by a trend
factor to allow for inflation.5 The Hospital's costs are di-
vided into various categories and each category can be
affected by a different trend factor. Rotenberg claimed
that an auditor, in order to evaluate the Hospital's pro-
jections, must be knowledgeable about the trend factors
and be able to anticipate how those factors can change.
In addition, the rates set by the State usually are ap-
pealed by the health care provider and an in-depth
knowledge of this appeal process is necessary if the
appeal is to be successful.
In Rotenberg's opinion, in order for a CPA to ade-
quately understand the complexities of the reimburse-
ment system in the health care field, the CPA should be
knowledgeable about statistics and economics, the New
York State Health Department Code (part 86), the Medi-
care Manual relating to cost reimbursement, the New
York State Health Department regulations and memoran-
da, the Social Services' regulations and memoranda, the
Blue Cross/Blue Shield reimbursement system, the
Charge Control System in the State of New York, 'and
the 1983 Medicare waiver. Rotenberg was doubtful that
a CPA, unfamiliar with the health care field, could gain
the requisite knowledge from reading the laws and regu-
lations in the particular areas set forth above. In his opin-
ion, knowledge could be gained only from working with
the system, he was unaware of courses offered by
schools on this subject matter. He also stated that a CPA
who had worked for a governmental agency in the
health care field or for one of the major accounting firms
with basic operations in New York might have the nec-
essary expertise.
On cross-examination Rotenberg testified that all
CPA's are eligible for membership in the American Insti-
tute of Certified Public Accountants (AICPA) and any
CPA certified by the State of New York could join the
New York Society of CPAs. He did not consider man-
agement auditing experience as a necessary criteria for
an auditor to have in order to verify an employer's claim
of an inability to pay. While he personally could not
conceive of anyone being able to comprehend the reim-
bursement system through research and reading only, he
would not say that it could not be done. Rotenberg
stated that an individual could demonstrate his knowl-
edge of the reimbursement system by identifying the cli-
4 In the retroactive reimbursement system the health care provider
submits its actual costs for reimbursement and the Federal or state gov-
ernment will pay the actual costs.
i Roger Burns, the Hospital's director of fiscal services, testified that
the initial rates set for Medicaid and Medicare came out in November
1982. However, the final rates for Medicaid were set in either December
1982 or January 1983 while the final rate for Medicare was not available
until March 27, 1983.
ents he worked with, the type of work he performed, re-
sponding to independent questioning as to his knowledge
of the system, or by reference to third party sources,
such as other accountants, attorneys, or health depart-
ment officials. However, he admitted that under the pro-
fessional standards of AICPA, a CPA should not reveal
the name of the client for whom he has performed serv-
ices without the client's permission. He stated that he
was unaware if there was a prohibition on revealing to
third parties the nature of the services an auditor per-
formed for a client, but he considered it "highly unethi-
cal" to do so unless the service related to a normal ac-
counting or auditing function. He recognized that under
the AICPA code a CPA should not undertake an assign-
ment unless he was of the opinion that he could compe-
tently perform the work. Rotenberg further testified that
AICPA does not recognize any field of specialities.
Rotenberg stated that until some weeks prior to the
hearing the Hospital had not requested his opinion about
the criteria necessary for a CPA to properly perform an
examination of the records of an employer in the health
care field who claimed an inability to pay. He was un-
aware of how the Hospital's representatives determined
the criteria they required the Association's auditors to
have before they would permit an examination of their
financial records. He stated that the request set forth in
the April 23 letter was more complex than necessary, al-
though he thought the request was a reasonable one.
However, he also testified that an in-depth examination
under points two and three of that letter would be em-
barrassing, if not impossible.
Rotenberg admitted that a competent CPA would be
able to determine if there was in fact an inability to pay,
if he had the information given by the state to the em-
ployer, and additional information given by the employer
to the accountant. However, while admitting that fact
Rotenberg stressed that this would be true only if the
rate set by the State was accepted by the employer as
the correct rate and this rarely occurred. Employers usu-
ally appeal the rate set by the State and the CPA would
need to be familiar with the appeal process to determine
whether the appeal would be successful. Further, in
those situations where the rate had not been set by the
State, the CPA would be unable to make any computa-
tions because the starting base for his computations was
the rate. In the absence of this set rate a CPA would
need to reconstruct a rate and to do this he would have
to have the type of knowledge which could be gained
only by working in the area of the reimbursement system
in the health care field.
IV. DISCUSSION
It is undisputed that at the commencement of negotia-
tions the Hospital through its representative, Robfogel,
claimed that it was unable to offer a wage increase due
to its financial situation. Robfogel also stated at the same
time that the Hospital recognized that it was legally obli-
gated to permit an examination of its financial records by
the Union. That such an obligation exists is well settled. 6
5
NLRB v. Truitt Mfg. Co., 351 U.S. 149.
865
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
However, notwithstanding its recognition of this obliga-
tion the Hospital placed restrictions on the Union's
access to their financial records. The restrictions did not
relate to the records, the Hospital did not refuse to dis-
close any particular record or records because they were
confidential or were related to trade secrets. Nor did the
Hospital contend that it would be burdensome to
produce the records. As Respondent stated, "No evi-
dence was introduced at the hearing to show that the
Hospital placed any restrictions whatsoever on the infor-
mation the CPA could review or communicate to Asso-
ciation representatives." The issue, therefore, is not
whether Respondent violated the Act by refusing to dis-
close its records because they were confidential, con-
tained trade secrets, or because it would be burdensome
to produce them. The issue is whether the Hospital can
require the Union's representative to meet certain crite-
ria, determined by it, before permitting the representative
selected by the Association to examine admittedly rele-
vant material.
Respondent contends that it has the right to require
the Union's representative to meet its qualifications
before permitting an examination of its books. In support
of this position it cites both Supreme Court decisions and
Board cases in which it claims that the Court and the
Board have recognized instances when an employer was
entitled to make a conditional offer of disclosure, al-
though the employer had claimed an inability to pay a
wage increase. Such a situation exists in the present case,
according to Respondent.
Further, the Respondent argues that the qualifications
it required the Association's representative to possess
were not "per se" unreasonable and it was willing to dis-
cuss, with the union representatives, any changes in the
requested criteria. Finally, Respondent argues that the
record discloses that Respondent acted in good faith in
requiring the Union's representative to meet certain crite-
ria and, therefore, it cannot be found to have violated
the Act.
Counsel for the General Counsel and the Charging
Party argue that the Hospital cannot place restrictions on
the right of the Union to select a representative of its
choice. Moreover, they maintain that the qualifications
required by Respondent before it will permit an examina-
tion of its records are unreasonable on their face and es-
tablish that Respondent is bargaining in bad faith.
Section 7 of the Act states as follows:
Employees shall have the right to self-organization,
to form, join, or assist labor organizations, to bar-
gain collectively through representatives of their own
choosing. [Emphasis added.]
The language cited above demonstrates that Congress
believed that effective collective bargaining could be
conducted only if employees were free to choose their
own representative. The instant case arose in the context
of collective bargaining and the employees, through their
union representative, designated a certified public ac-
countant considered by them to be "eminently qualified"
to conduct, on their behalf, an examination of Respond-
ent's records. Respondent, however, was concerned that
this representative, although a certified public account-
ant, would not arrive at the same conclusion that their
representative had arrived at and they, therefore, refused
to permit their books and records to be examined. In
effect, Respondent wants to sit on both sides of the bar-
gaining table. The type of control which Respondent
seeks to exercise over the Union's representative is in
conflict with the purposes of Congress as set forth in
Section 7 of the Act.
In Oates Bros., Inc., 135 NLRB 1295, 1297 (1962), an
employer insisted that the steward selected by the union
be subject to its approval. The Board, in finding that
such insistence constituted a violation stated, "It is well
established that, in the absence of special circumstances,
an employer does not have a right of choice either af-
firmative or negative as to who is to represent employees
for any of the purposes of collective bargaining." Simi-
larly, in Sears, Roebuck & Co., 139 NLRB 471, 475
(1962), when a company refused to meet with the repre-
sentative chosen by the union because of its belief that he
would inject national issues into local bargaining, the
Board adopted the Trial Examiner's position that an em-
ployer could not dictate to a labor organization the
choice of its representative. The concept that the Union
is entitled to choose its representative was stated again in
Proctor & Gamble Mfg. Co., 237 NLRB 747, 751 (1978).
Thus, the administrative law judge, with Board approval,
stated, "It is the Union which is entitled to the informa-
tion and for the Union, not the Respondent, to decide
who in its organization is to receive the documents, who
is to be consulted and who is to decide whether to take
the grievance to arbitration."
The Board did not find that the company violated the
act when it refused to bargain with the union's represent-
ative in Fitzsimons Mfg. Co., 251 NLRB 375, 379 (1980).
However, in that case the Board based its decision on
the fact that the union representative in question previ-
ously had engaged in misconduct. The Board, in Fitzsim-
mons, did state, however, the following, "It is well estab-
lished that each party to a collective-bargaining relation-
ship has both the right to select its own representative
for bargaining and negotiations and the duty to deal with
the chosen representative of the other party." In Winona
Industries, 257 NLRB 695, 698 (1981), the Board also
found a violation of Section 8(a)(5) and (1) of the Act
when a company refused to allow an inplant inspection
by an industrial hygienist designated by the Union. Thus,
both the language of the Act and Board decisions estab-
lish that the selection of the union representative is an in-
ternal matter, over which an employer, generally, has no
control. 7
Respondent argues, however, as noted, that Supreme
Court decisions and Board law recognize that there are
situations when a union's interest in arguably relevant in-
formation must give way to other legitimate interests.
The majority of the cases cited by Respondent in sup-
port of its proposition deal with circumstances where an
employer has refused to disclose material because it was
confidential, involved trade secrets, or would be burden-
Howland Hook Marine Terminal Corp., 263 NLRB 453, 454 (1982).
866
ST. JOSEPH'S HOSPITAL
some to produce. The Courts and the Board always have
been concerned with balancing the Section 7 rights of
employees to have relevant information with the legiti-
mate concerns of employers that the production of such
information would be detrimental. We are not dealing
with that type of legitimate concern in the instant case.
Here, Respondent refused to permit the examination of
its records because it claims that an individual not versed
in the New York State reimbursement system might
reach incorrect conclusions as to the financial health of
the Hospital and such erroneous conclusions could seri-
ously damage collective-bargaining process. The difficul-
ty with this argument is that the record fails to disclose
evidence to support it. It is true that at several points
during the hearing counsel for Respondent expressed
such a concern and a Respondent witness attributed such
remarks to respondent counsel during the January 1983
negotiation session. However, other than these comments
this record fails to disclose what impact, if any, there
would have been on the negotiations if Union's repre-
sentative reached conclusions different from those
reached by respondent representatives. Further, the
record fails to disclose that the Union refused to discuss
with Respondent whatever conclusions Odendahl might
arrive at prior to the disclosure of this information to
bargaining unit employees. In fact, the Union's letter of
December 1982 stated that the Union was prepared to
discuss any question the Hospital representative might
have regarding Odendahl's report when he completed his
audit. There is no evidence in this record to warrant the
conclusion that the Union was prepared to act recklessly,
or without affording the Respondent an opportunity to
explain the differences, if any in fact existed, before com-
munication with unit employees. Nor does the record es-
tablish that the registered nurses involved herein were
prepared to act recklessly.
However, assuming that both of the problems envis-
aged by Respondent were to occurr, i.e., that Odendahl
would reach erroneous conclusions and this would
hamper the collective-bargaining process, this record
does not establish that the criteria set by Respondent in
its letter of November 13, 1982, were reasonable. In the
first instance, it should be noted that Respondent, failed
to establish how it arrived at the criteria it set forth in its
letter of November 13, 1982.8 Rotenberg, Respondent's
witness, testified that he was not approached by Re-
spondent about what qualifications were necessary until
a few weeks before the hearing.
In Yakima Frozen Foods, 130 NLRB 1269 (1961), cited
by Respondent, the employer claimed an inability to pay
and offered to disclose its records under certain condi-
tions. The Board in that case stated the issue to be
whether an employer violates the Act when it refuses to
permit a union to make a general inspection of its books
and records and by insisting instead that the books and
records be audited by a qualified accountant not in the
union's employ. The Board stated that it did not find
s The record does not disclose whether the Respondent's representa-
tive who made the decision about the institution's inability to pay pos-
sessed any of the criteria Respondent sought to impose on the Union's
representative.
these criteria to be unduly restrictive. In this case the
Union did not seek a general inspection of the Hospital's
books but outlined the specific documents it sought to
examine. Moreover, the Union stated that it was pre-
pared to have Respondent's financial records examined
by a certified public accountant, not in its employ. Thus,
the Union has met the criteria found permissible in
Yakima. In Manitowoc Co., 186 NLRB 994, 1006 (1970),
the Board found that the employer did not violate the
Act when it stated that it would permit an examination
of its books by an independent accountant after a casual
request by the union for such an examination. However,
it should be noted that the trial examiner was not faced
there with an admitted claim of inability to pay. Thus, he
stated, "Assuming arguendo that the Respondent's posi-
tion with respect to its economic conditions was such
that it had the legal obligation to supply financial data
upon appropiate request, I find that its action in this
regard fulfilled that obligation." In this case, there is an
admitted claim of inability to pay and the Union has of-
fered to have the books examined by an independent ac-
countant.
Respondent, however, was not satisfied with the
Union's representative, although he was an independent
certified public accountant. It sought additional qualifica-
tions which it contends were necessary before its records
could be examined. The fact that these additional qualifi-
cations were unnecessary is demonstrated by Respond-
ent's own actions. In April 1983 after the parties had
been at odds over the issue for several months Respond-
ent abandoned the criteria set out in its letter of Novem-
ber 1982. More specifically, Respondent, in its April
1983 letter, advised the Union that it could "ignore" the
various criteria contained in the November 1982 letter.
It is extremely unlikely that the Respondent would have
stated that the criteria could be "ignored" if, in fact, they
had been necessary in the first place.10 Further, with re-
spect to the actual criteria contained in the November
1982 letter, Rotenberg testified that all CPAs are eligible
for membership in the AICPA and that any CPA certi-
fied by the State of New York can join the New York
Society of CPAs. He also testified that he did not consid-
er management auditing experience a necessary qualifica-
tion for an auditor to possess in order to verify an em-
ployer's claim of an inability to pay. He further testified
that while he considered practical experience in the reim-
bursement field to be the best method to secure the nec-
essary knowledge to audit the Hospital's financial
records, he would not say that such knowledge could
not be gained by research and reading. Basically, Roten-
berg did not believe that a CPA should reveal the name
of the clients for whom he provided services without the
clients' authorization, nor did he believe that the nature
I It is unclear whether the retention of Rotenberg had an impact on
this decision.
i' Moreover, the possession of the criteria set forth in the November
1982 letter was not a guarantee that future predication made by the pos-
sessor of such qualifications would be accurate. Assuming that the Re-
spondent's representative who made the decision, about the inability to
pay, possessed the criteria, the record reveals that his predications were
not correct. In May 1983 the Respondent offered a pay increase, notwith-
standing the earlier predictions.
867
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
of service performed should be disclosed, unless the serv-
ice was of a routine type. Rotenberg acknowledged that
under the code of AICPA a CPA was not to undertake
an assignment unless he was of the opinion that he could
perform the work competently. In sum, many of the
qualifications contained in the November 1982 letter, ac-
cording to Rotenberg, were either not necessary or re-
quired the disclosure of information that could not be
disclosed. It should be noted that the criteria Rotenberg
thought necessary for a proper audit of the Hospital's
books and records were not the same, in many respects,
as those contained in the November 1982 letter.
With respect to the revised criteria in the April 1983
letter Rotenberg described the request as more complex
than necessary, although not unreasonable. He also
termed the request for the disclosure of the basis of the
auditor's knowledge as requiring information that was
embarrassing, if not impossible to produce.
The statute and Board decisions make clear that the
selection of a representative is a matter within the con-
trol of the Union, absent unusual circumstances. I do not
find such circumstances present in the instant case. Fur-
ther, assuming that circumstances did exist which would
permit the Respondent to impose certain conditions
before permitting an examination of its books, it is evi-
dent from Respondent's conduct and the testimony of its
witnesses that the criteria contained in the November
1982 letter and the April 1983 were neither necessary
nor reasonable. In these circumstances, I find that Re-
spondent by denying the Union's request for an examina-
tion of its books and records by the certified public ac-
countant selected by the Union has bargained in bad
faith and has violated Section 8(a)(5) and (1) of the Act.
CONCLUSIONS OF LAW
1. Respondent is an employer engaged in commerce
within the meaning of Section 2(6) and (7) of the Act.
2. The Union is a labor organization within the mean-
ing of Section 2(5) of the Act.
3. The Respondent has refused to bargain in good faith
and has violated Section 8(a)(5) and (1) of the Act by re-
fusing to permit the Union's representative an opportuni-
ty to examine its books and records although it has
claimed an inability to pay a wage increase.
4. The aforesaid unfair labor practice is an unfair labor
practice affecting commerce within the meaning of Sec-
tion 2(6) and (7) of the Act.
REMEDY
Having found that Respondent violated Section 8(a)(5)
and (1) of the Act, I recommend that it be ordered to
cease and desist therefrom and from in any like or relat-
ed manner interfering with, restraining, or coercing em-
ployees in the exercise of the rights guaranteed them in
Section 7 of the Act. I also recommend that Respondent
be ordered to take certain affirmative action necessary to
effectuate the policies of the Act.
On the basis of the foregoing findings of fact and con-
clusions of law and on the entire record, I issue the fol-
lowing recommended I
ORDER
The Respondent, St. Joseph's Hospital, Elmira, New
York, its officers, agents, successors, and assigns, shall
1. Cease and desist from
(a) Refusing to bargain in good faith with new York
State Nurses Association (Union) by denying the Union's
request for an examination of the Hospital's financial
books and records by a representative designated by the
Union to investigate the claim of an inability to pay a
wage increase.
(b) In any like or related manner interfering with, re-
straining, or coercing employees in the exercise of the
rights guaranteed them in Section 7 of the National
Labor Relations Act.
2. Take the following affirmative action which is nec-
essary to effectuate the policies of the Act.
(a) On request, permit an exmaination of its financial
books and records by the Union's representative.
(b) Post at the Hospital, Elmira, New York, copies of
the attached notice marked "Appendix."' 2 Copies of the
notice, on forms provided by the Regional Director for
Region 3, after being signed by the Respondent's author-
ized representative, shall be posted by the Respondent
immediately upon receipt and maintained for 60 consecu-
tive days in conspicuous places including all places
where notices to employees are customarily posted. Rea-
sonable steps shall be taken by the Respondent to ensure
that the notices are not altered, defaced, or covered by
any other material.
(c) Notify the Regional Director in writing within 20
days from the date of this Order what steps the Re-
spondent has taken to comply.
I 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.
II If this Order is enforced by a Judgment of a United States Court of
Appeals, the words in the notice reading "Posted by Order of the Na-
tional Labor Relations Board" shall read "Posted Pursuant to a Judgment
of the United States Court of Appeals Enforcing an Order of the Nation-
al Labor Relations Board."
868