Supreme Court Sends Hospital’s Labor Dispute Back to DC Circuit

The U.S. Supreme Court in Washington on Dec. 2, 2024. Madalina Vasiliu/The Epoch Times

The U.S. Supreme Court ordered a lower court this week to reconsider a labor dispute in light of a June ruling that overturned a longstanding legal doctrine favoring federal agencies.

The Supreme Court’s new decision took the form of an unsigned order in Hospital Menonita Guayama, Inc. v. National Labor Relations Board that was issued on Dec. 16. No justices dissented.

Earlier this year, the nation’s highest court overturned Chevron v. Natural Resources Defense Council (1984) in Loper Bright Enterprises v. Raimondo.

Under Chevron, judges were required to defer to the legal interpretations of federal agency officials who enforced federal laws they deemed ambiguous. The Loper Bright ruling means courts should use their own judgment to interpret laws instead of deferring to agencies.

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

Current management took over the hospital in September 2017. The labor union asked the new owners to accept it as the representative of the five collective bargaining units already in place there, according to the hospital’s petition filed with the Supreme Court on Aug. 5.

The hospital recognized the union in November 2017 but would not recognize it as the bargaining representative for four of the bargaining units. It said it received documentation showing most employees in each of the four units had stopped supporting the union.

The union lodged an unfair labor practice complaint under the National Labor Relations Act, but an administrative law judge declined to accept the hospital’s evidence showing the union had weak support among employees, the petition said.

The judge held that because the National Labor Relations Board (NLRB) created a presumption known as the successor bar rule that held a successor employer is obligated to bargain with an incumbent union, the documents were not relevant.

The judge presumed the union enjoyed majority support among the employees and that the hospital was “not permitted to rebut that presumption.”

The NLRB accepted the judge’s ruling in June 2022, finding that the hospital violated the National Labor Relations Act “by failing to bargain initial collective-bargaining agreements in good faith with the union.”

The hospital appealed, but the U.S. Court of Appeals for the District of Columbia Circuit affirmed in February 2024, finding that the NLRB’s decision was consistent with its successor bar rule precedent.

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

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

In the petition, the hospital argued that “nothing in the [National Labor Relations Act] justifies the Board-created successor bar rule.”

The D.C. Circuit “should be given the opportunity to consider the issue on the merits in light of” the Loper Bright decision that was handed down months after the circuit court ruled. That precedent requires courts to “independently interpret the statute and effectuate the will of Congress subject to constitutional limits.”

U.S. Solicitor General Elizabeth Prelogar argued in a Nov. 6 brief that the petition should be denied because the hospital “fails to show that Loper Bright would have affected the disposition below.”

The D.C. Circuit “correctly concluded ... that the Board has statutory discretion to apply the successor bar in its adjudication of unfair labor practice complaints,” the brief said.

Prelogar said the Supreme Court “has consistently recognized” that Congress gave the board discretion “to promulgate presumptions that limit an employer’s ability to withdraw its recognition of a union.”

The Epoch Times reached out to the hospital’s attorney, Patrick Muldowney of Baker and Hostetler in Orlando, Florida, and the U.S. Department of Justice, which represented the NLRB, but no replies were received by publication time.