In SouthCoast Hospital Group, Inc. the NLRB originally found that the Hospital violated 8(a)(1) and (3) of the Act by maintaining and enforcing a hiring/transfer policy (HR 4.06) in which the Hospital gave preference to unrepresented employees over represented employees when filling positions at its non-union facilities. The Hospital, in responding to these allegations at hearing, stated that it was simply trying to make the playing field level, as under the collective bargaining agreement, those employees who were under its coverage had a preference over non-union employees in filling such positions. The Board supported the Administrative Law Judge’s finding that, under NLRB v. Great Dane Trailers, the Hospital failed to establish a legitimate and substantial business justification for the rule’s maintenance and enforcement. Member Miscimarra dissented over the reasoning of the other panel members in this matter and, on appeal, the First Circuit endorsed Miscimarra’s position in finding that the Hospital’s reasoning was legitimate and not unlawful. In particular, the First Circuit reminded the Board that “[I]t is neither our function nor the Board’s to second guess business decisions. While the Board remains free to reject that proper business justification on the grounds that it is illogical, or that it is not reasonably adapted to the achievement of a legitimate end, it may not invalidate an employment policy that accomplishes a legitimate goal in a non-discriminatory manner merely because the Board might see other ways to do it.” The Court then went on to state that, “SouthCoast adopted HR 4.06 in an effort to treat its union and non-union workers more evenhandedly when filling vacant positions. HR 4.06 achieves this goal by treating non-union employees more like union members than they otherwise would be treated. Because SouthCoast’s chosen method was reasonably adapted to achieve its stated goal, the Board lacked the power to reject HR 4.06 simply because it is not identical to the union hiring policy or because SouthCoast might have achieved its goals through alternative means that were more beneficial to its union employees.”
While the Board adopted the First Circuit’s decision as the law of the case, obviously it did so with great chagrin. Hence, others adopting this policy in jurisdictions outside the scope of the First Circuit should take heed, as the Board may press this issue once again.