Supreme Court Returns Hospital Labor Dispute to DC Circuit

This week, the U.S. Supreme Court instructed a lower court to reevaluate a labor dispute in accordance with a ruling in June that dismantled a longstanding legal principle that favored federal agencies.

The Chevron precedent required judges to defer to the legal interpretations made by federal agency officials on ambiguous federal laws. The ruling in Loper Bright now suggests that courts should exercise their own judgment in interpreting such laws rather than relying on agency interpretations.

Hospital Menonita Guayama is situated in Guayama, Puerto Rico, approximately a one-hour drive south of San Juan.

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The hospital acknowledged the union in November 2017; however, it did not recognize it as the bargaining representative for four of the bargaining units, stating that it obtained documentation indicating that most employees in these units had withdrawn their support for the union.

In response, the union filed an unfair labor practice complaint under the National Labor Relations Act, but an administrative law judge did not accept the hospital’s evidence suggesting weak support for the union among employees, as stated in the petition.

The judge asserted that the National Labor Relations Board (NLRB) had established a presumption through the successor bar rule, indicating that a successor employer must negotiate with the incumbent union, rendering the documents presented by the hospital irrelevant.

The judge assumed that the union had majority support among the employees, concluding that the hospital “was not permitted to challenge that presumption.”

In June 2022, the NLRB upheld the judge’s ruling, determining that the hospital violated the National Labor Relations Act by failing to engage in good faith bargaining with the union for initial collective-bargaining agreements.

The circuit court ruled that “the Board is entitled to deference when it has thoroughly and reasonably justified a change in policy.”

Circuit Judge Gregory Katsas noted in a concurring opinion that “there is a plausible argument that the National Labor Relations Act prohibits a successor bar,” yet due to the necessity of adhering to the Chevron framework, the court had to rule that the NLRB’s successor bar rule “is within the scope of reasoned interpretation and thus subject to judicial deference under Chevron.”

In its petition, the hospital contended that “there is nothing within the [National Labor Relations Act] that supports the Board-created successor bar rule.”

The D.C. Circuit “should be granted the opportunity to consider the issue on its merits in light of” the Loper Bright decision, which was issued after the circuit court’s ruling. This new precedent requires courts to “independently interpret the statute and uphold the intent of Congress within constitutional limits.”

The D.C. Circuit “correctly determined … that the Board possesses statutory discretion to enforce the successor bar in its handling of unfair labor practice complaints,” according to the brief.

Prelogar emphasized that the Supreme Court “has consistently acknowledged” that Congress granted the board the discretion “to create presumptions that restrict an employer’s capacity to withdraw recognition of a union.”

The Epoch Times reached out to the hospital’s attorney, Patrick Muldowney of Baker and Hostetler in Orlando, Florida, as well as the U.S. Department of Justice, which represented the NLRB, but did not receive any responses by the time of publication.