Submitted: March 15, 2016
Labor Relations Board
MURPHY, BEAM, and GRUENDER, Circuit Judges.
Finley Hospital (the Hospital) appeals the National Labor
Relation Board's (the Board's) decision affirming an
administrative law judge's (ALJ's) finding that the
Hospital violated §§ 8(a)(5) and (1) of the
National Labor Relations Act (NLRA) by (1) unilaterally
discontinuing annual pay raises negotiated in a one-year
collective bargaining agreement (CBA) without bargaining with
the Service Employees' International Union, Local 199
(the Union) on behalf of the nurses, and (2) by informing the
Union it was discontinuing the pay raises. For the reasons
discussed below, we reverse.
Hospital is an acute-care hospital with three facilities in
Iowa. The Board certified the Union as the exclusive
bargaining representative of full-time and regular part-time
nurses. On June 20, 2005, the Hospital entered into a
one-year CBA with the Union. Article 20.3 of the CBA states
the Hospital's policy regarding pay raises: "Base
Rate Increases During Term of Agreement. For the duration of
this Agreement, the Hospital will adjust the pay of Nurses on
his/her anniversary date. Such pay increases for Nurses not
on probation, during the term of this Agreement will be three
(3) percent." The CBA expired by its own terms one year
after the initial effective date. Pursuant to the agreement,
the Hospital gave a single raise to each of its nurses on his
or her anniversary date during the one-year term.
for a new agreement began on March 28, 2006, but a new
agreement had not been reached when the CBA expired on June
20, 2006. The Hospital sent a letter to all Union employees
stating that it would not provide raises to nurses whose
anniversary date fell after the date of contract expiration
until the parties reached a new agreement. On June 29, 2006,
the Hospital submitted a proposal that would provide a 3%
increase in wages. The Union voted to strike on July 6, 7,
and 8. The Hospital then told the Union it would not make
wage increases in the new CBA retroactive to June 21, 2006.
The Union filed a complaint arguing that the Hospital's
refusal to give automatic 3% raises after the expiration of
the CBA amounted to a refusal to bargain in violation of 29
U.S.C. § 158(a)(5) and (1).
3, 2015, the Board found, in agreement with the ALJ, that the
Hospital violated 29 U.S.C. § 158(a)(5) and (1) by
declining to give its nurses additional raises after the CBA
expired. The Board conceded that the Hospital's
contractual obligation to provide annual raises expired at
the end of the one-year term. However, because it found that
the one-year CBA created a status quo of annual pay raises,
it held that the Hospital had a statutory obligation under
the NLRA to continue annual pay raises until a new CBA was
reached or the parties bargained to an impasse. The Board
also found nothing in Article 20.3 of the CBA or in the CBA
in general that clearly and unmistakably waived the
employer's statutory duty to continue granting annual
raises after the expiration of the CBA. Member Harry Johnson
Hospital now appeals the Board's decision, arguing that
the one-year-long CBA did not establish a status quo of
annual, compounded raises after the agreement expired.
Alternatively, the Hospital argues that the Union waived its
statutory right to post-expiration raises.
Standard of Review
review factual findings for substantial evidence. NLRB v.
Am. Firestop Solutions, Inc., 673 F.3d 766, 767 (8th
Cir. 2012). "'Substantial evidence' is evidence
that 'a reasonable mind might accept as adequate to
support' a finding." Id. at 768 (quoting
Universal Camera Corp. v. NLRB, 340 U.S. 474, 477
(1951)). We review legal questions to ensure the Board
"correctly applied the law." Id. Under
this standard, "the NLRB must be sustained if: (1) it
started with the currently controlling law; (2) it correctly
applied this law; and (3) substantial evidence supports its
finding." Cedar Valley Corp. v. NLRB, 977 F.2d
1211, 1215 (8th Cir. 1992). For contractual questions not
based on policy under the NLRA, we review the Board's
decision de novo. Am. Firestop Solutions, 673 F.3d
at 768. Although the Board has authority to interpret CBAs in
regards to unfair labor practices, "courts are still the
principal sources of contract interpretation."
Litton Fin. Printing Div. v. NLRB, 501 U.S. 190, 202
(1991) [hereinafter Litton Fin.] (quoting NLRB
v. Strong, 393 U.S. 357, 360-61 (1969)). If the Board
were given authority to interpret contracts, "[w]e would
risk the development of conflicting principles."
Id. at 203.
Hospital argues that the Board erred in holding that the
one-year-long CBA with the Union established a status quo of
annual, compounded raises that, under the NLRA, must be
continued after the agreement's expiration. We agree. It
is an unfair labor practice under the NLRA for an employer
"to refuse to bargain collectively with the
representatives of his employees." 29 U.S.C. §
158(a)(5). The obligation to bargain collectively means that
the employer must "meet at reasonable times and ...