Sun Harbor Manor

National Labor Relations Board - Board Decisions

Mar 21, 1977

228 N.L.R.B. 945 (N.L.R.B. 1977)

SUN HARBOR MANOR 945
Sun Harbor Manor and Local 1115, Joint Board,
Nursing Home and Hospital Employees Division.
Case 29-CA-5106
March 21, 1977
DECISION AND ORDER
BY CHAIRMAN MURPHY AND MEMBERS
FANNING AND JENKINS
were committed. After close of the hearing briefs were filed
by the Charging Party and Respondent.
Upon the entire record 1 in this proceeding, including my
observation of the witnesses while testifying, and after due
consideration of the posthearing briefs, I make the follow-
Fit-DINGS OF FACT
1. JURISDICTION
On November 24, 1976, Administrative Law Judge
Joel A. Harmatz issued the attached Decision in this
proceeding. Thereafter, Respondent filed exceptions
and a brief, the Charging Party filed cross-exceptions
and a supporting memorandum, and Respondent
filed an answering brief.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the
National Labor Relations Board has delegated its
authority in this proceeding to a three-member panel.
The Board has considered the record and the
attached Decision in light of the exceptions and briefs
and has decided to affirm the rulings, findings, and
conclusions 1 of the Administrative Law Judge and to
adopt his recommended Order.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor
Relations Board adopts as its Order the recommend-
ed Order of the Administrative Law Judge and
hereby orders that the Respondent, Sun Harbor
Manor, Roslyn Heights, Nassau County, New York,
its officers, agents, successors, and assigns, shall take
the action set forth in the said recommended Order.
I In adopting the Administrative Law Judge's Decision, we find it
unnecessary to pass upon , or adopt, his interpretation of Washington
Employers, Inc, 200 NLRB 825 (1972).
DECISION
STATEMENT OF THE CASE
JOEL A. HARMATZ, Administrative Law Judge: A hearing
in this proceeding was held in Brooklyn, New York, on
September 13, 1976, upon a charge filed on July 14, 1976,
and a complaint issued on August 10, 1976, alleging that
Respondent violated Section 8(a)(5) and (1) of the Act, by
failing to pay employees wage increases provided in
governing collective-bargaining contracts . In its duly filed
answer, Respondent denied that any unfair labor practices
i Certain errors in the transcript have been noted and are hereby
corrected.
2 See Fairfield Nursing Home, 228 NLRB 1208 (1977), issued by me
simultaneously herewith . See also Nassau County Health Facilities Associa-
tion, Inc., and its Employees Members, et al., 227 NLRB No . 249 (1977), issued
by Administrative Law Judge Herzel Plaine on November 18, 1976. In
addition a consolidated proceeding involving two additional nursing homes,
228 NLRB No. 118
Respondent is a sole proprietorship with a place of
business in the county of Nassau , the State of New York,
where it is engaged in the operation of a nursing home and
health related facility. During the 12-month period preced-
ing issuance of the complaint, a representative period,
Respondent derived gross revenues from said operation in
excess of $100,000. Also during said period, Respondent
purchased and caused to be transported and delivered to
said place of business , goods and materials valued in excess
of $50,000, which were transferred and delivered directly
from States of the United States other than the State of
New York.
The complaint alleges, the answer admits, and I fmd, that
Respondent is, and has been at all times material, an
employer engaged in commerce within the meaning of
Section 2(2), (6), and (7) of the Act.
II. THE LABOR ORGANIZATION INVOLVED
The complaint alleges, the answer admits , and I fmd that
Local 1115, Joint Board , Nursing Home and Hospital
Employees Division, is, and has been at all times material
herein, a labor organization within the meaning of Section
2(5) of the Act.
III. THE ALLEGED UNFAIR LABOR PRACTICES
This is another in a series of cases involving the failure by
a nursing facility to pay wage increases when due under the
terms of an applicable collective -bargaining agreement,
following the imposition of a freeze by the State of New
York on the reimbursement rate paid to such facilities by
various governmental agencies to cover the cost of care for
medicaid patients.2 The General Counsel asserts that said
failure to observe the contract violated Section 8(a)(5) and
(1) of the Act under the Board's decision in Oak Cliff-
GoIntan Baking Company, 207 NLRB 1063 (1973).
Respondent is a sole proprietorship owned and operated
by Jerald Osinoff. The nursing care facility in question was
opened on October 17, 1974.
On March 10, 1975, Respondent executed collective-
bargaining agreements with the Union covering separate
units of its blue collar employees and licensed practical
nurses, respectively,3 which provided for general wage
Rego Park Nursing Home, {230 NLRB No.105 ( 1977)1, and Van Doren Nursing
Home (Case 29-CA-5030) is presently pending before Administrative Law
Judge Sidney Barban.
3 Those agreements incorporated by reference the provisions of master
contract between the Union and the Nassau County Health Facilities
Association, Inc., which has a 4-year term commencing on January 1, 1975.
946 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
increases due on the following dates: April 1 and October 1,
1975; April 1 and July 1, 1976.
Respondent paid the wage increases called for by the
contract on April 1 and October 1, 1975, and April 1, 1976.
The complaint herein relates solely to Respondent's
admitted failure to pay the wage increases due on July 1,
1976, in both units.
Osinoff attributed his failure to pay the increase to the
freeze imposed by the State of New York upon medicaid
reimbursement rate levels , which was implemented in the
late fall of 1975. The importance of such reimbursements to
Respondent's financial position is evident from the fact that
85 to 90 percent of Respondent's patients are covered by
medicaid. Respondent, by law, is precluded from retaining
any fees whatever from such patients, and its revenues from
providing care to this group are derived from medicaid
reimbursements in their entirety.
The reimbursement rate is established by the State of
New York. The cost of the reimbursement is financed on a
shared basis with the Federal government paying 50
percent of the cost and the state and local governments
each contributing 25 percent thereof. Prior to 1975, the
operators of skilled nursing facilities were able to obtain
upward adjustments in the rate of reimbursement to cover
increases in labor cost through an appeals procedure
pursuant to regulations of the State of New York and the
medicaid program, which are and have been administered
by the commissioner of health for the State of New York.
In the fall of 1975, because of the fiscal plight of the State
of New York, New York City, and other local governments
within the State , the commissioner of health took unprece-
dented action by, in effect, imposing a freeze on reimburse-
ment rate levels . In consequence, the operators of nursing
facilities were precluded from obtaining upward adjust-
ments in their reimbursement rates.'
On July 7, 1976, Osinoff admittedly informed Alex
DeLaurentis, vice president of the Union, that it would be
impossible to provide the general increases scheduled under
the contracts for July 1, 1976, at then present reimburse-
ment rate levels. Without passing on his credibility in this
respect, it is noted that Osinoff testified that the cost of the
increases due on that date would be $400,000 and that his
operation could not survive by expenditure of such sums
without an upward revision in the reimbursement rate.
The General Counsel's case draws force from the Board's
decision in Oak Cl Golman Baking Company, supra. There
the Board found that an employer violated Section 8(aX5)
4 The action by the commissioner of health in establishing the freeze on
reimbursement levels has been the object of a thus far successful challenge in
the courts . Thus, on September 14, 1976, Justice Ellis J. Stalur, Jr., on behalf
of the New York State Supreme Court, ruled unlawful the action by the
comnussioner of health and budget director of the State of New York in
freezing the medicaid reimbursement rate levels.
5 207 NLRB at 1064 The fact that an employer's failure to abide by
contractual wage standards is only intended to relieve a temporary condi-
tion, does not remove such action from the intended scope of Sec . 8(d) of the
Act. See Washington Employers, Inc., 200 NLRB 825 (1972).
6 Aside from Respondent 's position in this regard it urges the Board to
decline to assert jurisdiction because the Umon has already invoked the
processes of the New York State Department of Labor . That agency is
authorized to proceed in the courts against employers who fail to pay wages
due their employees. The short answer to this view is that there is no evidence
whatever that the Umon has elected to pursue such a course against the
instant Respondent . Furthermore , the Board expressed its position in Oak
and (1) of the Act solely by virtue of its unilateral
downward revision of wage standards called for by a
subsisting collective-bargaining agreement . In that case, the
operative conduct giving rise to the unfair labor practice
charge consisted of a breach of contract. In addition, the
Board acknowledged that said breach stemmed from an
economic crisis and was not discriminatorily motivated.
Nonetheless, the Board in finding the violation viewed the
dishonor of the contractual wage provisions as striking at
the heart of the statutory process of collective bargaining,
stating: " [it] is not just a mere breach of the contract, but
amounts, as a practical matter, to the striking of a death
blow to the contract as a whole, and is thus, in reality, a
basic repudiation of the bargaining relationship." 5
Respondent, in recognizing the impact of Oak Cl
Golman, seeks to distinguish that decision on a number of
grounds .6 First, Respondent contends that the bargaining
history reflects an understanding of the parties that
implementation of the wage increases were contingent upon
upward revision of the medicaid rates. Additionally,
Respondent contends that the health care industry is
different from "ordinary mercantile establishments," and
that these differences render Oak Cliff-Golman inapposite
herein.
Upon consideration of Respondent's defenses, I find Oak
Cl Golman controlling. Firstly, with respect to the negoti-
ation history, the evidence does not substantiate the
existence of conditions on the contractual requirement that
wage increases be paid when due. None of the contracts
here, or in the record in other cases considered in
conjunction with this proceeding, include language sup-
porting Respondent's contention. Furthermore, the bar-
gaining history relevant to this proceeding included no
reference to any such condition, or expression by Respon-
dent as to the need for such a condition. Osinoff simply
executed the agreements without demanding, or obtaining
a concession , conditioning the general increases on in-
creased reimbursement rates . Indeed , Respondent's conten-
tion in this regard carries the earmark of afterthought when
considered against Osinoti's own conduct. Thus, Osinoff
some 5 months after imposition of the wage freeze, granted
the increase due under the contract on April 1, 1976. This,
despite the fact that Osinoff had been denied an adjustment
in his reimbursement rate to cover the two separate
increases given employees in April and October 1975.7 It is
difficult to imagine that Osinoff would have met his
obligation in April 1976, if an understanding had existed
CliGolman, fully mindful of the existence of alternative forums for
enforcement of collective-bargaining agreements . This contention is rejected
as lacking in merit.
Also unpersuasive is the claim that the Board should not assert jurisdic-
tion in this case because the Federal government, through the Department of
Health, Education and Welfare, has a pecuniary interest in imposition of the
freeze. This gives rise to no perceptible conflict which could be viewed as a
bar to an assertion of jurisdiction in this proceeding . At best, the conflict
between the State of New York and the operators of nursing care facilities,
though related , is collateral to the issues presented herein . In any event,
contrary to Respondent , the Federal government's financial interest in the
freeze would be prejudiced, rather than aided , were the Board to assert
jurisdiction and sustain the complaint, a result which would serve to increase
the potential liability of HEW for its share of the cost of reimbursement.
7 The testimony of Burtell Cutler, the principal negotiator for the Nassau
County Health Facilities Association, and its Members, et al., 227 NLRB No.
249, is of no avail to the Respondent in the instant proceeding. Based on that
SUN HARBOR MANOR
relieving payment of that increase. Accordingly, the evi-
dence fails to substantiate that the agreements , or the prior
dealings between the Union and Osinoff reflected an
understanding, whereby Osinoff's obligations under the
contract were conditional. It is true that the freeze imposed
in the fall of 1975 involved a change in past practice on the
part of the State, and that theretofore, employers were in a
position to obtain relief from climbing wage levels through
increased reimbursement rates. Nonetheless, absent ex-
pressed or implied contractual protection against such a
risk, it is one that must be taken to have been assumed. The
fact that the unanticipated freeze made it difficult for
Respondent to fulfill its cost obligations under the contract,
warrants no different treatment than that accorded employ-
ers in other industries whose ability to finance periodic
increases is seriously compromised or precluded by an
unexpected decline in revenues. The policy expressed in
Oak CIfGolman is applicable in either case.
Equally unpersuasive is Respondent's plea that the health
care industry be exempted from Board policy in this area.
In support of this contention, Respondent cites the special
consideration given that industry in the 1974 amendments
to the Act. Respondent also cites the degree to which
proprietory nursing homes and other health related institu-
tions are regulated. Contrary to Respondent, the protection
of the collective-bargaining process is no less a priority in
the health care field than other industries. The primary
thrust of the amendments extending jurisdiction over the
former was to mitigate the adverse effects of labor strife on
such institutions. An employer' s unilateral frustration of
negotiated wage gains is hardly conducive to industrial
peace. Application of the Board's established policy to the
conduct involved here is more consistent with, than
offensive to, the objectives of the 1974 amendments. Nor
may Respondent gain solace from the highly regulated
nature of institutions dealing essentially with medicaid
patients. In this respect Respondent points to the fact that
(1) reimbursement from the State is the sole source of
income for medicaid patients; (2) such institutions are
forbidden from requiring supplementary payments from
medicaid patients; (3) such institutions are precluded by
law from selectively denying their services to medicaid
patients; and (4) the staffing and standard of care provided
is closely regulated by Federal and state authority, with
penalties up to $10,000 a day for failure to conform with
established standards. Here again , Respondent's arguments
furnish no rational basis for an exception to Board policy.
testimony, Respondent asserts that the bargaining history relative to the
multiemployer contract , evidences union assent to the view held by the
operators that wage increases were contingent on revision of the medicaid
rates . This contention rests essentially on representations made by DeLau-
rentis at the bargaining table in the course of the multiemployer negotiations.
Without passing on whether the Union's conduct in those negotiations raised
an estoppel against its denial of such a condition , I fail to see how this could
be taken as relieving the instant Respondent. The contracts to which
Respondent is bound are a product of separate negotiations in separate
collective-bargaining units. While Osinoffs own conduct indicates that he
understood his commitment to be unconditional, there is no evidence that
his assumption of those obligations , upon execution of the contracts with the
Union, occurred with knowledge or in reliance upon what had transpired
during the multiemployer negotiations . In the circumstances, the multiem-
ployer negotiations are deemed extraneous to an assessment of the bargain
struck between Osinoff and the Union.
8 1 do not pass on the claim by Osinoff that his facility could not survive
947
Once the bargaining process has ended, employees in this
industry too are entitled to look forward to timely payment
of unconditional and duly negotiated periodic increases.
The anticipation and ultimate enjoyment of those benefits,
absent agreement from their bargaining agent, ought not be
subject to compromise by a health care center which acts
out of either an intent to increase profit margins, or to
hedge against declining profits, or to survive. In sum, any
finding that nurse care facilities are to be the beneficiaries
of a special limitation on Section 8(d) would turn upon
irrelevancies and, as such, would constitute arbitrary
administrative action.
Based on the foregoing, I find that Respondent, by failing
to pay employees the general wage increases due on July 1,
1976, under the terms of subsisting contracts, violated
Section 8(a)(5) and (1) of the Act .8
Upon the basis of the foregoing findings of fact and the
entire record in this case, I make the following:
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 following constitute units appropriate for the
purposes of collective bargaining within the meaning of
Section 9(b) of the Act:
(a) All license practical nurses employed by the Employ-
er, excluding all other employees, registered nurses, confi-
dential employees, office clerical employees, guards, watch-
men, and supervisors as defined in the Act.
(b) All employees (blue collar) workers employed by the
Employer, excluding all license practical nurses, registered
nurses, confidential employees, office clerical employees,
guards, watchmen and supervisors as defined in the Act.
4. At all times material herein the Union has been the
exclusive bargaining representative of the employees in the
aforesaid units within the meaning of Section 9(a) of the
Act.
5. By refusing to pay general wage increases at the time
required by the terms of collective-bargaining agreements
in said units, Respondent has engaged in, and is engaging
in, unfair labor practices within the meaning of Section
8(ax5) and (1) of the Act.
6. The aforesaid unfair labor practices affect commerce
within the meaning of Section 2(6) and (7) of the Act.
and pay the increase due on July 1, 1976, without a further adjustment in his
reimbursement rate . It need not be gainsaid that if this proves to be the case,
subsequent negotiation, rather than strict enforcement of the instant remedy,
leading to a reformation of the agreements might well be the only salutary
basis for vindicating the interests of the affected employees. It is entirely
possible that presentation of documented financial data to the Union rather
than shotgun, self-serving claims of distress, would encourage the Union to
make a concerned judgment as to the manner in which the interests of
representated employees are best served. The problems confronting Respon-
dent are not isolated, as is evident from the vanous cases attributing similar
violations to other nurse care facilities in the Greater New York City area.
Absent a change in reimbursement policy on the part of the State, the
economic problems underlying Respondent 's dilemma, if genuine, must be
left to resolution through open and frank communication of facts, reasonable
interpretation of them, and remedial action effected within the framework of
the bargaining process.
948 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
THE REMEDY
Having found that Respondent has engaged in certain
unfair labor practices, I shall recommend that it cease and
desist therefrom and take certain affirmative action de-
signed to effectuate the purposes of the Act, including the
posting of the notice attached to this decision.
Having found that Respondent failed to make timely
payment of wage increases under the terms of the collec-
tive-bargaining agreement, it shall be recommended that
Respondent be directed to restore wage rates as required by
the collective-bargaining agreements, and to refrain from
refusing to comply with the terms thereof, without first
reaching an agreement with the Union . Further, it shall be
recommended that Respondent make whole the employees
in the above-described appropriate units for any losses
suffered as a result of the unilateral refusal to pay benefits
when due, with interest at the rate of 6 percent per annum,
as set forth in Isis Plumbing & Heating Co., 138 NLRB 716
(1962), subject of course to any other accommodation that
might be reached through further collective-bargaining
negotiations.
For the reasons stated in Fair.fleld Nursing Home, supra,
issued simultaneously herewith, the Charging Party's re-
quest for remedial provisions patterned after those in
Mackie's Roofing and Sheet Metal Co. Inc., and Mackie's
Roofing and Sheet Metal Works, 221 NLRB 277 (1975), and
Tiidee Products, Inc., 194 NLRB 1234, 1236 (1972), is
denied.
Upon the basis of the foregoing findings of fact, conclu-
sions of law, and the entire record in this proceeding, and
pursuant to Section 10(c) of the Act, I hereby issue the
following recommended:
ORDERS
The Respondent, Sun Harbor Manor, county of Nassau,
New York, its officers, agents, successors , and assigns,
shall:
1. Cease and desist from:
(a) Refusing to bargain collectively with Local 1115, Joint
Board, Nursing Home and Hospital Employees Division,
as the exclusive representative of its employees in the
following units with respect to rates of pay, wages, hours of
employment, and other terms and conditions of employ-
ment:
(1) All license practical nurses employed by the
Employer, excluding all other employees, registered
nurses, confidential employees, office clerical employ-
ees, guards , watchmen, and supervisors as defined in the
Act.
(ii) All employees (blue collar), excluding licensed
practical nurses, registered nurses, confidential employ-
ees, office clerical employees, guards watchmen, and
supervisors as defined in the Act.
(b) Refusing to comply with the terms of existing
bargaining agreements by failing to pay general wage
increases on a timely basis, or by refusing to pay other
negotiated terms and conditions of employment to employ-
ees in the above-described appropriate units, during the
effective terms of the contracts covering said employees,
without first reaching agreement with the Union concern-
ing such modifications.
(c) In any like or related manner interfering with,
restraining, or coercing employees in the exercise of rights
guaranteed by Section 7 of the Act.
2. Take the following affirmative action which I find
necessary to effectuate the policies of the Act:
(a) Immediately put into effect wage rates called for by
the terms of the collective-bargaining agreements covering
employees in the above-described units, and make said
employees whole for any loss of pay that they may have
suffered by failure to provide such benefits on a timely
basis, with interest at the rate of 6 percent per annum, as set
forth in Isis Plumbing & Heating Co., 138 NLRB 716 (1962),
unless through good-faith negotiations Respondent and the
Union reach some other final accommodation.
(b) Preserve and, upon request, make available to the
Board or its agents, for examination and copying, all
payroll records, social security payments records, time-
cards, personnel records and reports, and other records
necessary to analyze the backpay due under the terms of
this recommended Order.
(c) Post at its health facility in Roslyn Heights, county of
Nassau, State of New York, copies of the attached notice
marked "Appendix." 10 Copies of said notice, on forms
provided by the Regional Director for Region 29, after
being duly signed by Respondent's authorized representa-
tives, shall be posted immediately upon receipt thereof and
be maintained by Respondent for 60 consecutive days
thereafter, in conspicuous places, including all places where
notices to employees are customarily posted. Reasonable
steps shall be taken by Respondent to insure that said
notices are not altered, defaced, or covered by any other
material.
(d) Notify the Regional Director for Region 29, in
writing, within 20 days from the date of this Order, what
steps Respondent has taken to comply herewith.
s In the event no exceptions are filed as provided by Sec. 102.46 of the
Rules and Regulations of the National Labor Relations Board, the findings,
conclusions , and recommended Order herein shall, as provided in Sec . 102.48
of the Rules and Regulations, be adopted by the Board and become its
findings, conclusions , and Order, and all objections thereto shall be deemed
waived for all purposes.
10 In the event the Board 's Order is enforced by a Judgment of the United
States Court of Appeals, the words in the notice reading "Posted by Order of
the National Labor Relations Board" shall read "Posted Pursuant to a
Judgment of the United States Court of Appeals Enforcing an Order of the
National Labor Relations Board."
APPENDIX
NOTICE To EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
After a hearing at which all sides had a chance to give
evidence, an Administrative Law Judge of the National
Labor Relations Board has found that we violated the
National Labor Relations Act, and has ordered us to post
this notice.
SUN HARBOR MANOR
The National Labor Relations Act, as amended, gives
you, as employees, certain rights, including the right:
To engage in self-organization
To form, join, or help a union
To bargain collectively through a representa-
tive of their own choosing
To act together for collective bargaining or
other mutual aid or protection
To refrain from any or all of these things.
Accordingly, we give you these assurances.
WE WILL NOT refuse to bargain collectively with
Local 1115, Joint Board, Nursing Home and Hospital
Employees Division, as exclusive representative of
employees in the units described below, concerning
rates of pay, wages, and hours of employment and other
conditions of employment. The units are:
All license practical nurses employed by the
Employer, excluding all other employees, regis-
tered nurses, confidential employees, office cleri-
949
cal employees, guards, watchmen, and supervisors
as defined in the Act.
All employees (blue collar) workers employed by
the Employer, excluding all license practical
nurses, registered nurses , confidential employees,
office clerical employees, guards, watchmen and
supervisors as defined in the Act.
WE WILL NOT refuse to pay wages or refuse any other
terms and conditions of employment due under the
terms of collective-bargaining agreements covering
employees in the above-described units, without first
reaching agreement with the Union.
WE wiLL immediately provide employees in the
above-described units the wages called for by the
contracts and make them whole for any loss of pay they
may have suffered as a result of our failure to on a
timely basis provide such benefits, unless through good-
faith negotiation, the Union agrees to some other
accommodation.
SUN HARBOR MANOR