On November 2, 2012, in San Miguel Hospital Corp. v. National Labor Relations Board, No. 11-1198, the Court of Appeals for the D.C. Circuit rejected a New Mexico hospital’s contention that a “wall-to-wall” bargaining unit comprised of both professional and non-professional employees was an inappropriate unit for collective bargaining. Accordingly, the court found that the hospital violated Sections 8(a)(1) and (5) of the National Labor Relations Act (NLRA) when it refused to bargain with the National Union of Hospital and Healthcare Employees District 1199.

In 1989, the National Labor Relations Board promulgated its so-called “Health Care Rule,” which delineates the eight appropriate bargaining units for acute care hospitals, and expressly states that “various combinations of units may also be appropriate.” In determining the eight appropriate units, the Board considered several factors, including “uniqueness of function; training, education and licensing; wages, hours and working conditions; supervision; employee interaction; and factors relating to collective bargaining,” as well as the fact that unions routinely requested or organized each of the eight appropriate units.

In 2007, the union filed a representation petition, seeking an election for a single bargaining unit of all the hospital’s onsite professional and nonprofessional employees, except for guards and physicians. Because the union sought to represent both professionals and non-professionals, the Board’s regional director held a mandatory preliminary election among the professionals to determine whether they wanted to be included in the unit with non-professionals. After the professionals voted for inclusion, the combined unit voted 121 to 73 for union representation. The Board overruled all of the hospital’s 24 objections to the election, but the hospital refused to bargain with the union. The Board concluded that the refusal to bargain was unlawful. The hospital petitioned the court for review.

In a cutting opinion, the court found “zero merit” in the hospital’s argument that the Health Care Rule violated Section 9(c)(5) of the National Labor Relations Act, which prohibits the Board from using “the extent to which the employees have organized” as the controlling factor in determining whether a bargaining unit is appropriate. The court explained that regardless of the validity of the rule, there was “no reason to believe” that the wall-to-wall unit was inappropriate. Nevertheless, the court reaffirmed the rule’s validity, noting that NLRA Section 9(c)(5) requires only that the extent of organization not be the controlling factor in unit determination. Thus, the Board’s mere consideration of that factor, along with several others, was lawful.

The court also rejected the hospital’s contention that the Board violated the rule by combining professional and nonprofessional employees in a unit without finding “extraordinary circumstances” as “an obvious misreading of the Rule.” The court recognized that combined bargaining units are appropriate only if the individual units share a community of interest. The court concluded, however, that the hospital’s failure to raise this argument in its objections to the election – “probably because,” the court explained, “the argument was an obvious loser” – precluded it from advancing the argument on appeal.

The salient take-home point for healthcare employers is that successfully challenging a combined unit requires an employer to show that the two units lack a community of interest. Given the Board’s current pronounced union-friendly positions, such a showing may be an uphill battle. Employers should consult with experienced labor counsel to discuss the more complex ramifications of unionization among combined bargaining units and to devise strategies to minimize this risk.