Jeff Clark
Kadlec Medical Center
ASHHRA's
Legislative & Labor Committee spent two days on Capital Hill the first
week of May. Our visit was the
week following the American Hospital Association Annual Conference.
Each year the AHA sends the CEO's and Board reps to meet with their
local congressional leaders. We happened to be there during National Hospital Week and the
day before National Nurses Day, in which a rally was staged on the steps of
the Capital with thousands of pairs of empty shoes to symbolize the growing
shortage of Registered Nurses. Our
timing was good and the visits were very productive.
The
Legislative & Labor Committee message was very simple, the nursing
shortage is much larger than RNs, it impacts all clinical staff.
The shortage of staff is driving labor costs up much faster than the
Medicare update. The long-term
solution to the shortage is to increase the pool of professionals trained.
We found a very responsive audience from both Republicans and
Democrats. Since the visits from
AHA, ASHHRA, and the nursing groups, including unions, we have seen numerous
bills introduced in both the House and Senate.
Most are focused on nursing education, primarily because of the size of
this group, the data they have available to them, and the organized effort
mounted by nursing groups. These
bills will be referred to committees where they will be "hammered
out". Given the significance
of this issue, it is very likely some legislation will pass this year to
increase funding for at least nursing education.
Legislation
has also been introduced to increase Medicare funding.
The most significant for Washington hospitals is a full update for FY
2002 and 2003.
Last
years Balance Budget Relief package includes a 1/2 percent holdback on full
update for next two years. Also
introduced is a 92.5% wage index floor. This
bill has no impact on Washington State hospitals, but it will make rural
hospitals primarily in the South and rural Intermountain West better able to
compete on wages.
The climate on Capital Hill was far different than in the
recent past. The delicate balance
in both House and Senate sure seems to have created a more cooperative spirit.
All of the "shortage" bills introduced thus far have had both
Republican and Democratic co-sponsors. A
very positive sign that some relief should be forthcoming.
Fred Lorenz
Washington
Employers
On
May 29, 2026 the Supreme Court of the United States decided a case that is
bound to have a major impact on healthcare labor relations throughout the
country. In a 5 to 4 decision the
Court ruled that registered nurses who 1) exercise independent judgment, in 2)
responsibly directing other employees, and 3) in the interest of the employer,
are deemed to be supervisors and therefore excluded from the protections of
the National Labor Relations Act.
The
case arose from a Carpenters Union organizing drive at Kentucky River
Community Care that operates a healthcare facility for residents who suffer
from mental retardation and mental illness.
The facility employs some 110 professional and para-professional
employees in addition to a dozen �concededly managerial or supervisory
employees.� At issue were six
RNs who, the employer claimed, were also supervisory employees.
The National Labor Relations Board's regional director based on prior
consistent holdings by the Board in similar cases rejected this claim.
The
Court focused on the definition off the term supervisor� in section 2(11) of
the Act: �The term
�supervisor� means any individual having authority, in the interest of the
employer, to hire, transfer, suspend, lay off, recall, promote, discharge,
assign, reward, or discipline other employees, or responsibly to direct them,
or to adjust their grievances, or effectively to recommend such action, if in
connection with the foregoing the exercise of such authority is not of a
merely routine or clerical nature, but requires the use of independent
judgment.�
It
was the Board�s position that the nurses in question do �not use
independent judgment when they exercise ordinary professional or technical
judgment in directing less-skilled employees to deliver services in accordance
with employer-specified standards.�
The
Court noted that: �The breadth of this exclusion (of the use of independent
judgment) is made all the more startling by virtue of the Board�s extension
of it to judgment based on greater �experience� as well as formal
training. What supervisory
judgment worth exercising, one must wonder, does not rest on �professional
or technical skill or experience�? If
the Board applied this aspect of its test to every exercise of a supervisory
function, it would virtually eliminate �supervisors� from the Act.�
The
Court concluded: �What is at issue is the Board�s contention that the
policy of covering professional employees under the Act justifies the
categorical exclusion of professional judgments from a term, independent
judgment,� that naturally includes them.
And further, that it justifies limiting this categorical exclusion to
the supervisory function of responsibly directing their employees.�
�These
contentions contradict both the text and structure of the statute, and they
contradict as well the rule that the test for supervisory status applies no
differently to professionals than to other employees. We therefore find the Board�s interpretation unlawful.�
Exactly
what this decision will mean in the long run is anybody�s guess.
It would appear certain that the American Nurses Association and its
state affiliates, as well as many other affected unions, will be anxiously
awaiting word from the NLRB as to how the Board will respond to this Supreme
Court decision, and what actions healthcare employers may or may not take in
those situations that involve RN (and possibly LPN) union-represented
employees.
This
case, National Labor relations Board v. Kentucky River Community Care, Inc.,
US Supreme Court, No. 99-1815, 5/29/01, may be found at http://www.supremecourtus.gov/opinions/00pdf/99-1815.pdf
SEBRIS
BUSTO, P.S.
Perhaps
now more than ever, healthcare employers are struggling to find new and
different recruiting incentives for attracting employee candidates.
Many interesting concepts are being explored.
An example is the �signing bonus.�
From the employer�s perspective, this bonus approach is very effective
since it does not raise the annual compensation in the long term and can be
adjusted or eliminated for future employees if the labor market situation
changes. Some employers have also
been experimenting with signing bonuses �on a string� (subject to repayment,
if the employee leaves before a set period).
There are also those employers who offer �bonuses� to their existing
employees for successful recruitment of a candidate for a hard to fill position.
Recent developments, however, call into question the legal and labor
relations ramifications of such practices.
Labor
Unions, Bargaining Duty & �Direct Dealing� Considerations. Signing
bonus agreements are often established for hard to fill professional or
technical positions. These
positions are also often covered by collective bargaining agreements (CBA�s).
This poses some labor law questions.
Where the union has been selected as the exclusive bargaining agent, the
union may claim that such individual bonus agreements engage in unlawful
�direct dealing� with individual workers and, therefore, an unfair labor
practice. Further, if a bonus
repayment agreement is used, unions have also challenged such understandings as
improper individual contracts and �direct dealing� with an employee.
Sometimes the focus will be on exactly when the candidate receives the
signing bonus. A pre-hire
signing bonus understanding (like pre-employment drug testing) is arguably not
mandatorily negotiable. Some
unions, however, take issue with that conclusion [especially depending upon the
timing and circumstances of payment (e.g.,
on their first day of employment)], and the NLRB or PERC might view such payment
as �direct dealing� and an unfair labor practice. Employers whose CBA�s allow management to unilaterally
exceed set wage and benefit levels often try to use this type of clause as a
safe haven from �direct dealing� charges.
To
avoid such issues and get the benefit of a retention inducement with the
employee, it is sometimes possible to negotiate a mutually acceptable framework
with the union. Yet, this poses
major strategic judgment questions on highlighting the issue to a union and the
likelihood of success with an outcome that an employer needs.
A typical union response is to argue that the shortage could really be
resolved by significantly raising wages. This
may be a classic �Pandora�s Box� situation.
An employer should carefully think through using this approach in the
context of their relationship with their particular unions.
Repayment
Agreement and Wage and Hour.
The U.S. Department of Labor very recently issued a Wage & Hour
Opinion Letter that relates to this matter. In a letter pertaining to tuition repayment agreements, the
DOL stated that agreements which require repayment of tuition by an employee are
unlawful should this drive an employee�s compensation below the minimum wage.
So keep this in mind if you are exploring creative alternatives involving
repayment bonuses.
Gradual
Bonus Payment.
A possible way around this morass involves a slight redesign of the bonus
concept. While a CBA would still
have to authorize exceeding the wage and benefit minimums for a bargaining unit
position, a healthcare employer could create the incentive to be hired and
disincentive to leave employment prematurely in another way -- without the
individual agreement or repayment problem.
The employer could simply create a gradual payment of a bonus over a
reasonable period of time. For example, instead of a
$3,000 signing bonus payable at the start of work on the new job, the
employer and candidate could agree that the employee would be paid $1,000 every
two (2) months, or on another periodic basis.
Should this concept be experimented with, do not forget that if this
approach is used for nonexempt staff, such nondiscretionary bonuses require a
recalculation of the �regular rate� for overtime purposes.
Under federal regulations the Department of Labor has approved payments
based upon a set percentage (e.g., 10%) over the employee�s wages (normal and
overtime wages) at the end of agreed service periods.
Washington state law may not afford such an exception and it would be
best to review the most recent State law developments with your employment law
counsel before implementing such a proposal.
Conclusion.
To succeed in today�s scarce labor market, healthcare employers
inevitably must continue experimenting in recruiting compensation.
Hopefully, this brief note on the signing bonus phenomenon will help in
assessing some of the possible labor and employment law pitfalls.
SEBRIS
BUSTO, P.S.
is a Washington Law firm representing health care employers in labor and
employment law matters, and a member of WSHHRA. Emphasizing problem resolution and prevention, some of its
practice areas include: labor law
and collective bargaining, wage and hour, FMLA,
discrimination, and discharge litigation.
This is a courtesy article to help provide practical considerations under labor and employment
law and is not legal advice.
For
any questions or comments, Bob Sebris can be reached at (425) 450-0300 (or by
email to: [email protected]).
�2001
SEBRIS BUSTO, P.S.