Mercy Health Partners

National Labor Relations Board - Administrative Judge Opinions

Oct 4, 2010

07-CA-052693 (N.L.R.B. Oct. 4, 2010)

JD(ATL)–21–10
Muskegon, MI
UNITED STATES OF AMERICA
BEFORE THE NATIONAL LABOR RELATIONS BOARD
DIVISION OF JUDGES
ATLANTA BRANCH OFFICE
MERCY HEALTH PARTNERS
and
SEIU HEALTHCARE MICHIGAN
Case 7–CA–52693
Joseph P. Canfield, Esq., for the General Counsel.
Michael A. Snapper and Keith J. Brodie, Esqs., for
the Respondent.
Brenda D. Robinson, Esq., for the Charging Party.
DECISION
Statement of the Case
GEORGE CARSON II, Administrative Law Judge. This case was tried in Grand Rapids,
Michigan, on August 3, 2010, pursuant to a second amended complaint that issued on July 20,
2010.1 The complaint, as amended at hearing, alleges that the Respondent violated Section
8(a)(5) of the National Labor Relations Act by eliminating the work of certain unit employees and
by direct dealing.2 The Respondent’s answer denies any violation of the Act. I find that the
Respondent did not violate the Act and shall recommend that the complaint be dismissed.
On the entire record, including my observation of the demeanor of the witnesses, and
after considering the briefs filed by the General Counsel and the Respondent I make the
following
Findings of Fact
I. Jurisdiction
The Respondent, Mercy Health Partners (Mercy), is a Michigan not-for-profit corporation
with facilities in Muskegon, Michigan, that include acute care hospitals. The Respondent
annually derives gross revenues in excess of $250,000 and purchases and receives goods and
materials valued in excess of $50,000 directly from points outside the State of Michigan. The
Respondent admits, and I find and conclude, that it is an employer engaged in commerce within
the meaning of Section 2(2), (6), and (7) of the Act, and is a health care institution within the
meaning of Section 2(14) of the Act.
The Respondent admits, and I find and conclude, that SEIU Healthcare Michigan, the
Union, is a labor organization within the meaning of Section 2(5) of the Act.

1 All dates are in 2009 unless otherwise indicated. The charge in Case 7–CA–52693 was filed
on January 27, 2010, and was amended on May 26, 2010, and July 14, 2010.
2 The General Counsel withdrew par. 12 of the second amended complaint.
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II. Alleged Unfair Labor Practices
A. Background
Mercy is a subsidiary of Trinity Health, a national healthcare provider created by the
merger of Mercy and Holy Cross Healthcare in 2000. Various hospitals that operate under the
Trinity umbrella have retained their historic names such as St. Joseph. Mercy operates multiple
hospitals named Mercy, many of which are in Iowa and Michigan, including a hospital in
Muskegon, Michigan. In 2008, Mercy, in Muskegon, merged with Hackley Hospital, which
continues to operate under that name. The hospitals and related buildings are referred to
respectively as the Mercy Campus and the Hackley Campus.
The Vice President of Patient Financial Services for Trinity is Linda Schaeffer, whose
office is in Farmington Hills, Michigan. She explained that, over the past several years, Trinity
began a transition from being a passive parent company “to an operating company for specific
functions.” In that regard, Trinity looked at business models, including Tenent Healthcare and
HCA, Inc., in an effort “to standardize and make our processes more efficient.” Schaeffer
pointed out that, previously, Trinity’s “hospitals were autonomous, decisions were made locally.”
In 2008, Trinity adopted an organizational model called the Unified Revenue Organization,
referred to throughout the hearing as the URO “that spans across the revenue cycle from
patient access all the way through managed care contracting.” Implementation of the model is
ongoing. It includes use of a standardized computer system platform, Genesis, which Trinity
began implementing in 2003. The platform utilizes different applications specific to various
functions such as clinical matters and financial information. Once fully implemented, Genesis,
with its specific applications, will be systemwide for all Trinity facilities.
One aspect of implementation of the UFO is the centralization of what Schaeffer called
“shared services” pursuant to which employees performing the same function are brought from
different locations and placed at one consolidated location.
The Union herein represents clerical employees, including registration/admit assistants
at the Hackley Hospital.3 It also represents employees in six other units, some at Hackley and
others at Mercy Hospital. Registered nurses at Mercy, represented by the Michigan Nurses
Association, constitute an eighth unit. Registration clerks at Mercy are not unionized.
The issues in this proceeding are whether the Respondent violated the Act by failing to
bargain with the Union before eliminating the jobs of four registration/admit assistants and two
insurance verification clerks at the Hackley Campus and engaged in direct dealing by explaining
to those employees their options, which included accepting a nonunion position performing the
same job at a location on the Mercy Campus.

3 The collective-bargaining agreement recognizes the Union as the exclusive collective-
bargaining representative of employees in various departments and classifications at the
Hackley Campus including, insofar as relevant to this proceeding, the following:
Patient Access: courtesy representative, insurance verification clerk, registration/admit
assistant, denial specialist, central scheduling clerk I, central scheduling clerk II, bed
assigner, financial counselor, ER admitting clerk, material handling, par management
attendant, materials specialist, mailroom assistant.
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B. Facts
Employees classified as registration/admit assistants perform different functions. Some
meet face-to-face with patients who come directly to the hospital such as those who present
themselves at the emergency room. Others, including the employees involved in this
proceeding, perform preregistration for patients who are scheduled for testing, such as CT and
MRI scans. As explained by shop steward Anna Winters, “[w]e call the patient, get insurance
information, demographics, their name, date of birth, that type of thing,” and verify it prior to the
patient coming to the hospital. Similarly, some insurance verification clerks do not deal directly
with patients. They confirm insurance information prior to the patient coming to the hospital.
Vice President Schaeffer pointed out that the employees performing the preregistration
and insurance verification functions prior to patients coming to the hospital do not see the
patient and do “not need to be located at the hospital.” She noted that “[h]ospital real estate is
prime real estate, and we need to reserve that space for our physicians and our patients.” She
explained that Trinity considered preregistration to be a “shared service,” and, consistent with
implementation of the URO, Trinity was centralizing that service so that it was provided “in a
very uniform, standardized manner.” The work of the registration/admit assistants and insurance
verification clerks who meet face-to-face with patients at the time they come into the hospital
were unaffected by the centralization of the preregistration function.
Employees at the Mercy Campus who perform the preregistration function do so for
patients who are to be treated at the Mercy hospital. They use an application on the Genesis
computer system. The preregistration employees at the Hackley Campus use a computer
system referred to as “Star,” and for that reason only preregistered patients who were to be
treated at the Hackley hospital. The employees who performed the preregistration function at
the Hackley Campus heard rumors that their jobs might be moved throughout 2009. Shortly
after Mercy and Hackley merged in 2008, scheduling was centralized and the employees at
Hackley involved in scheduling moved to the Mercy Campus. In March 2009, Michael Grant,
Trinity’s regional director for West Michigan, came to Hackley and made a powerpoint
presentation explaining the URO. The powerpoint presentation twice notes that "[s]ome
preregistration and financial clearance functions will also migrate to shared services center over
three to four years." Shop steward Winters did not deny having seen that presentation and
recalled that Grant, consistent with the presentation, mentioned moving preregistration “that
they were looking at different buildings, they were looking at different places.”
Following the merger of Mercy and Hackley, employees performing the preregistration
function at both Hackley and Mercy were supervised by Linda Churchill. Employee Mary
Erickson recalled that, a couple of weeks before the preregistration employees were formally
told of the elimination of their jobs at Hackley, a preregistration employee at Mercy asked her
when they would be moving, that “they were preparing a place for us.” Erickson reported the
conversation to fellow employee Amber Grainer, and they informed Supervisor Churchill of the
conversation. Churchill confirmed the report and asked that they “not tell a lot of people because
it hasn't been announced yet and . . . not to say anything to Anna [Winters] [b]ecause she was a
union steward.” Notwithstanding that instruction, Erickson and Grainer informed Winters that
“there was going to be a move and that Linda Churchill validated that.” Winters did not deny
being told of the move by Erickson and Grainer. I credit Erickson. Having received the foregoing
hearsay report from her coworkers, I do not credit the denial of Winters that she was unaware of
the upcoming move until November 23. I note, however, that the Union did not receive clear and
unequivocal notice until the formal announcement on November 23 that the jobs at Hackley
were to be eliminated. See Dedicated Services, 352 NLRB 753,759 (2008).
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On November 23, the four Hackley registration/admit assistants performing the
preregistration function, Winters, Erickson, Grainer, and Jodi Pallas, and one of the two clerks
performing preregistration insurance verification, Barbara Hoffman, were called to a meeting.
Insurance verification clerk Tanna Lock was absent on medical leave. Supervisor Churchill,
Manager Connie Hasenbank, URO Regional Manager Julie Champayne, Muskegon Site
Director Deana Richter, and Director of Labor Relations Robin Belcourt were present for
management. Belcourt conducted the meeting. She informed the employees their jobs at
Hackley had been eliminated and the jobs “were going to be placed over at the Mercy Campus.”
Belcourt told the employees that they would be given 72 hours to decide whether, pursuant to
the collective-bargaining agreement, they wanted to bump at Hackley or take a layoff, or
whether they wanted take one of the preregistration jobs being moved to Mercy. She explained
that the position at Mercy was nonunion, but the employees’ pay and benefits would remain the
same and, as Winters recalled, “we would not lose any of our benefits.”
All employees present except Winters elected, at that time, to move. Winters did so a
few days later. The absent employee, Tanna Lock ultimately decided to accept a layoff.
Immediately following the meeting, Winters informed Loretta Briggs, member
representative for the Union, of what had occurred. Belcourt sent Briggs the following email:
MHP [Mercy Health Partners] is consolidating the pre-registration component of the
patient registration process. Effective December 7, 2009, the first phase of consolidation
will take place and work of the pre-registration process will be completed at the Mercy
Campus. As SEIU does not represent the employees conducting the registration process
at the Mercy Campus any open positions will be considered non-union. The move
involves a total of 6 union employees at the Hackley Campus. Today we met with the
pre-registration clerks affected and these employees were issued position elimination
notices giving them the rights afforded under the SEIU Service and Maintenance
Collective Bargaining Agreement.
Later on the afternoon of November 23, Attorney Brenda Robinson, on behalf of the
Union, replied to Belcourt by email as follows:
As exclusive bargaining representative for the Registration Clerks at the Hackley
campus of Mercy Health Partners, please consider this SEIU HealthCare Michigan’s
formal demand to bargain the effects of the employer’s anticipated December 7, 2009,
move of these members to the Sherman [Mercy] Campus. Please notify myself and
Loretta Briggs of your available dates for bargaining these effects as soon as possible.
The affected employees moved their computers, office chairs, and other office materials
to the Mercy Campus on December 4 and began working at that location on December 7.
Also on December 7, Attorney Robinson and member representative Briggs met with
Robin Belcourt. Supervisor Churchill, Manager Connie Hasenbank, and Site Manager Deana
Richter were also present. The Union asked whether the Employer would “move the clerks back
from Mercy to Hackley.” Belcourt answered, “No.” The Union asked whether the employer would
apply the Hackley collective-bargaining agreement to the employees who had been moved.
Belcourt explained that would not be possible because the “employees that do this function over
at the Mercy Campus were non-union.” The Union asked whether the Employer would agree to
a card check if a sufficient number of employees signed authorization cards. Belcourt effectively
denied that request by responding that the Employer would follow whatever directive it received
from the National Labor Relations Board.
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Attorney Robinson represented the Charging Party Union in this proceeding but did not
testify. Member representative Briggs, when asked why the Union did not request to bargain
regarding the decision, answered, “Because the decision had already been made.” The formal
notification of the move was given 2 weeks prior to its actual occurrence. The Union did not
assert that the Company had violated the collective-bargaining agreement, and the complaint
alleges no contractual violation. The Union did not file a grievance.
Although Belcourt’s email does not mention the URO, the consolidation was part of the
implementation of the “shared services” concept in the URO. Initially the Hackley Campus was
to be converted to the Genesis system in October 2010 pursuant to implementation of the
Genesis system at all Trinity facilities, but implementation of Genesis has been delayed until
February 2011 because of a delay in implementation at another Trinity location. The employees
who worked at Hackley must be trained to use Genesis prior to the actual implementation. Shop
steward Winters acknowledged that Supervisor Churchill had informed the employees that, if
they were moved, they would have to be trained on the Genesis computer system. Because
Hackley uses the Star system and the employees who were moved use only the Star system,
they have continued to preregister patients only for Hackley.
C. Analysis and Concluding Findings
1. The transfer of work
The complaint alleges that the Respondent eliminated the unit work of registration/admit
assistants and insurance verification clerks engaged in preregistration duties at Hackley by
assigning that work to nonunion positions at the Mercy Campus without notice to or bargaining
with the Union.
The threshold issue herein is whether this case should be analyzed under the multistep
burden-shifting test set out in Dubuque Packing Co., 303 NLRB 386 (1991), enfd. 1 F.3d 24
(D.C. Cir. 1993), cert. denied 511 U.S. 1138 (1994), or as a subcontracting case under
Fiberboard Corp. v. NLRB, 379 U.S. 203 (1964).
The General Counsel contends that the relocation of the work of the affected employees
constituted substitution of “the union workers at Hackley with the non-union workers at Mercy.”
Citing Torrington Industries, 307 NLRB 809 (1992), and Geiger Ready-Mix Co. of Kansas City,
315 NLRB1021 (1994), the General Counsel argues that “virtually the only . . . circumstance the
employer has changed is the identity of the employees doing the work” and that the
Respondent’s decision is “closer to the subcontracting of the work found in Fiberboard rather
than to a movement of the work found in Dubuque” and that, therefore, the Respondent was
obligated to bargain “regardless of whether the decision was based on labor costs.”
The Respondent argues that the decision to relocate the work of the registration/admit
assistants and insurance verification clerks engaged in preregistration duties is properly
analyzed under the multistep burden-shifting test set out in Dubuque Packing Co. Citing First
National Maintenance Corp. v. NLRB, 452 U.S. 666, 677 (1981), the Respondent argues that
the URO was a business decision that represented a change in ”the scope and direction of the
enterprise” and, even if that argument be rejected, that labor costs played no part in its decision
and the Union could offer no concessions that would alter its decision.
I agree with the Respondent that this case is properly analyzed as a relocation decision
under the multistep burden-shifting test set out in Dubuque Packing Co. There was no
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subcontracting. Unlike Fiberboard, there was no “replacement of employees in the existing
bargaining unit with those of an independent contractor.” 379 U.S. at 215. There was
consolidation of the preregistration function pursuant to implementation of the URO “shared
services” concept. Implementation of the URO resulted in the transfer of the Hackley unit work.
The Board, in El Paso Electric, 355 NLRB No. 71 (2010), recently reiterated the
Dubuque Packing test:
Under this test, the General Counsel must initially show that the decision involved a
relocation of unit work unaccompanied by a basic change in the nature of the employer’s
operation. Satisfaction of that burden establishes a prima facie case that the relocation
decision is a mandatory subject of bargaining. The employer may rebut the prima facie
case by establishing that the work performed at the new location varies significantly from
that performed at the old facility, that the work performed at the old facility is to be
discontinued entirely rather than moved, or that the employer’s decision involves a
change in the scope and direction of the enterprise. Alternatively, the employer may
proffer an affirmative defense and “show by a preponderance of the evidence: (1) that
labor costs (direct and/or indirect) were not a factor in the decision or (2) that even if
labor costs were a factor in the decision, the union could not have offered labor cost
concessions that could have changed the employer’s decision to relocate.” Dubuque
Packing, 303 NLRB at 391.
The Respondent remains in the business of providing health care at its Hackley and
Mercy facilities in Muskegon. The preregistration work performed at the consolidated location on
the Mercy Campus pursuant to the “shared services” concept of the URO does not differ
significantly from the work formerly performed at Hackley. The preregistration work formerly
performed at Hackley that does not involve face-to-face dealing with patients has not been
discontinued; it has been moved. The employees performing the preregistration function
continue to do so. The basic nature of the Respondent’s operations remains the same.
I am mindful that the employees from Hackley who use the Star system have continued
to preregister patients only for Hackley because implementation of the Genesis system was
delayed. The record does not establish whether the move of the work would have been
premature if the original schedule, which contemplated training and actual implementation of the
Genesis system in October, had been successfully followed. Pursuant to the centralization of
this “shared service” and introduction of the Genesis computer system, both the former Hackley
employees and the Mercy employees will preregister patients for both Hackley and Mercy. The
only reason they were not doing so at the time of the hearing was the delay in implementation of
the Genesis system.
I reject the argument of the Respondent that implementation of the URO constituted a
business decision relating to the “scope and direction of the enterprise.” The URO changed the
manner in which the Respondent sought to carry out the same mission that it has always had,
providing health care. I find that the basic nature of the Respondent’s operations remains the
same as does the work that was moved to the Mercy Campus. Therefore, I must address the
issue of labor costs or whether the Union could have offered concessions that would have
affected the Respondent’s decision.
Vice President Linda Schaeffer credibly denied that labor costs were a factor in the
Respondent’s decision, and there is not a scintilla of evidence to the contrary. The employees
who accepted the positions at Mercy continued to receive their former wages and benefits. The
number of employees remained the same. Tanna Lock was replaced by a new hire and another
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employee was hired when Amber Grainer left. Labor costs were not a factor in the
Respondent’s decision.
The relocation decision was part and parcel of the URO adopted by Trinity in 2008
pursuant to which “shared services” were to be consolidated. No concession by the Union could
alter the business model the Respondent had adopted. The powerpoint presentation made to
the Hackley employees in March 2009 twice notes that "[s]ome preregistration and financial
clearance functions will also migrate to shared services center over three to four years." Vice
President Schaeffer confirmed that there was “no way to reverse” the changes called for by the
URO. The transfer of work occurred pursuant to the “shared services” concept of the URO and
standardization resulting in the elimination of local autonomy. In short, the decision herein was
not an issue “amenable to resolution through the bargaining process.” First National
Maintenance Corp., supra at 678. The Union could offer no concession “that could have
changed the employer’s decision to relocate” the preregistration work that did not involve face-
to-fact contact with patients insofar as that decision was mandated by the URO.
In view of the foregoing, I need not address the argument of the Respondent that the
failure of the Union to request bargaining over the decision that was not to be implemented until
2 weeks after the formal announcement to the employees on November 23 constituted a waiver,
or the argument of the Union that it was presented with a fait accompli.
Consistent with the analysis prescribed in Dubuque, I find that the General Counsel
presented a prima facie case that the relocation of the preregistration work was a mandatory
subject of bargaining but that the Respondent has established that labor costs were not a factor
and that no concession by the Union would or could have affected its decision. Thus, I shall
recommend that the allegation that the Respondent violated the Act by eliminating the unit work
of registration/admit assistants and insurance verification clerks engaged in preregistration
duties at Hackley by assigning that work to nonunion positions at the Mercy Campus without
notice to and bargaining with the Union be dismissed.
2. Direct dealing
The complaint alleges that the Respondent unlawfully bypassed the Union and dealt
directly with the employees whose work was transferred by offering the options of applying for
another unit position, accepting a layoff, or taking a nonunit position at the Mercy Campus.
The General Counsel, citing cases, argues that “[p]resenting employees with options
and asking employees to make a choice between the options amounts to direct dealing.” I am
unaware of any case stating that proposition, and the cases the General Counsel cites do not
stand for that proposition. Paul Muellan Co., 332 NLRB 332, 334 (2000), and Harris-Teeter
Super Markets, 293 NLRB 332, 334 (1989), involved polling employees regarding their
preferences. JRR Realty Co., 273 NLRB 1523, 1528 (1985) related to negotiating individual
settlements. In this case there was no polling or negotiation. The Respondent informed the
employees of its decision, advised them of their rights under the contract, and informed them of
the availability of the nonunit positions. There was no polling and there was no negotiation.
The Respondent contends that announcement of a predetermined decision without
seeking employee input negates any basis for finding an unlawful instance of direct dealing. I
agree.
When addressing direct dealing allegations, the Board considers whether “(1) . . . the
[employer] was communicating directly with union-represented employees; (2) the discussion
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was for the purpose of establishing or changing wages, hours, and terms and conditions of
employment or undercutting the Union’s role in bargaining; and (3) such communication was
made to the exclusion of the Union.” Permanente Medical Group, 332 NLRB 1143, 1144 (2000),
citing Southern California Gas Co., 316 NLRB 979 (1995).
Although the Respondent communicated directly with the employees when it announced
the elimination of unit work at Hackley, there was no discussion or negotiation. Announcement
to affected employees of an employer’s predetermined course of action, even if that action
constitutes a unilateral change, does not constitute direct dealing. Capitol Ford, 343 NLRB
1058, 1067 (2004), citing Johnson’s Industrial Caterers, 197 NLRB 352, 356 (1972). The
Respondent “did not invite any feedback from employees.” It announced a predetermined
decision. Windstream Corp., 355 NLRB No. 119 (2010), adopting the decision of the two-
member Board panel in 352 NLRB 44, 51 (2008).
The first two options given to the employees related to their rights under the collective-
bargaining agreement with regard to a layoff. Article X of the contract sets out those rights:
exercise bumping rights or take the layoff. Shop steward Winters did not contradict Belcourt’s
correct statement of the employees’ contractual rights. The Respondent is a party to the
contract. I am aware of no case holding that an employer engages in direct dealing by stating
the rights of employees as set out in a contract that binds both the employer and Union.
In Spurlino Materials, LLC, 355 NLRB No. 77 (2010), adopting the decision of the two-
member Board panel in 353 NLRB 1198 (2009), the Respondent offered a position, a newly
created unit position, to certain employees. Notwithstanding the unilateral change, the
administrative law judge dismissed a related direct dealing allegation because the Respondent
“did not solicit . . . [employees’] input on the terms and conditions of employment . . . or
otherwise engage in any kind of ‘bargaining’ with them. Instead, . . . [the Respondent] conveyed
to them as a fait accompli a predetermined company decision that there would be such a
position and what it would entail. This did not amount to unlawful ‘bypassing’ of the Union and
direct dealing with employees.” 353 NLRB at 1218.
The Mercy Campus position was not a unit position. The Respondent advised the
affected Hackley employees that there would be the nonunit positions at the Mercy Campus and
requested that anyone who wished to take those positions elect to do so within 72 hours. As the
brief of the Respondent points out, that is the same time period that the collective-bargaining
agreement, article X, sec. 10.2 F, provides for employees to elect whether they desire to bump
or take a layoff. The Respondent did not engage in any bargaining. It simply announced its
predetermined decision that the nonunit position was available.
The Board, in Preterm, Inc., 240 NLRB 654, 656 (1979), recognized that healthcare
institutions need to know what their staffing demands will be in the event of a strike and held
that a healthcare institution could noncoercively inquire regarding which unit employees
intended to strike. The same rationale applies herein. The Respondent needed to know what
staffing actions it needed to take to assure that patients were preregistered. The Union had no
representational rights regarding the nonunit positions. The affected Hackley employees were
asked to state whether they intended to accept the offered nonunit positions within the same
time period that, under the collective-bargaining agreement, they were required to state whether
they desired to bump or take a layoff. There is no allegation or evidence of coercion. The
request that the affected employees advise whether they wanted to accept the nonunit positions
did not undercut the Union and did not constitute direct dealing. I shall recommend that the
allegation of direct dealing be dismissed.
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Conclusions of Law
The Respondent has not violated Section 8(a)(5) of 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 recommended 4
ORDER
The complaint is dismissed.
Dated, Washington, D.C., October 4, 2010.
_____________________
George Carson II
Administrative Law Judge

4 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
purposes.