Nursing Home Loses Recusal, Other Challenge of Board Ruling

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By Lawrence E. Dubé

A New Jersey nursing home couldn’t defeat two National Labor Relations Board orders based on alleged flaws in the agency’s procedures, a federal appeals court ruled.

The ruling ended a long-running challenge by 1621 West Operating Co., which runs the Somerset Valley Rehabilitation and Nursing Center. The NLRB had found that the home interfered with employee rights and unlawfully refused to bargain with a labor union, and the U.S. Court of Appeals for the Third Circuit upheld the board in its March 14 unpublished opinion.

Writing for the court, Judge Michael A. Chagares rejected the nursing home’s claim that the NLRB action was flawed by one board member’s failure to disqualify himself.

The Third Circuit also refused to set aside an order that arose from an administrative complaint authorized by former Acting General Counsel Lafe E. Solomon. The U.S. Supreme Court decided in 2017 that Solomon didn’t have authority to act as the agency’s chief legal officer after he was nominated for a four-year term as general counsel. But the appeals court said the agency saved its right to prosecute unfair labor practice allegations against the nursing home when Richard F. Griffin, a Senate-confirmed general counsel, reviewed and ratified Solomon’s actions.

Employer Challenged NLRB Process

The unfair labor practice allegations against Somerset Valley arose during an organizing campaign by 1199SEIU Healthcare Workers East, New Jersey Region, an affiliate of the Service Employees International Union.

The NLRB supervised an election that the union won 38-28. The employer objected to the results, citing some union campaign tactics and an alleged lack of privacy for voters marking their ballots.

Somerset Valley’s arguments came before the board in 2011. The proceeding was assigned to a three-member panel, but Member Mark Gaston Pearce recused himself, leaving two members, the minimum number required for a board decision. The board rejected the employer’s arguments, and ordered the company to bargain with the union.

One of the members, Craig Becker, was a former counsel to the SEIU international union. Somerset Valley argued that Becker shouldn’t have participated in a case involving an SEIU affiliate because his participation created an appearance of impropriety and violated ethical standards for administrative decision-makers, but the Third Circuit disagreed.

It said federal labor law has long recognized a distinction between national or international unions and local bodies. The employer made no claim that Becker had ever worked for the SEIU’s New Jersey affiliate, and Chagares said the nursing home didn’t explain how a financial arrangement between the union bodies created an appearance of impropriety for a board member who was no longer employed by the SEIU.

The court enforced the NLRB’s order for Somerset Valley to bargain with the union.

Milly Silva, executive vice president of 1199SEIU United Healthcare Workers East, told Bloomberg Law in an email that for “far too long, Somerset Valley has rejected their employees’ decision to bargain collectively—and wasted precious resources” in litigation. Silva said the union is eager to bargain with the nursing home.

Attorneys for 1621Route 22 West Operating Co. didn’t respond to a request for comment on the decision.

Judges Anthony J. Scirica and D. Michael Fisher joined in the opinion.

NLRB attorneys represented the board. Gladstein Reif & Meginniss LLP in New York represented 1199SEIU Healthcare Workers East, New Jersey Region. K & L Gates LLP in Newark, N.J., represented 1621 Route 22 West Operating Co.

The case is 1621 Route 22 W. Operating Co. v. NLRB, 3d Cir., No. 12-1031, unpublished 3/14/18.

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