## Facts

- Mercy Health Partners (Mercy Health) operated several hospitals in Michigan, including Hackley Hospital and Mercy Hospital.
- A union represented a bargaining unit of employees at Hackley, while employees at Mercy were not represented by a union.
- Mercy Health’s parent company decided to begin performing administrative work for its subsidiary hospitals, which required changes to how certain administrative functions were handled.
- As part of that plan, certain work and positions associated with Hackley were slated to be relocated to Mercy.
- A Hackley employee learned that an office at Mercy was being prepared for a group of Hackley employees.
- The employee asked her supervisor about the situation; the supervisor confirmed that a relocation was planned and asked the employee not to tell the union steward because Mercy Health had not yet formally announced the plan.
- About a week later, Mercy Health’s director of labor relations and other supervisors met directly with five Hackley bargaining-unit employees whose positions would be affected by the relocation.
- Management told the employees they had two options:
  - Transfer to Mercy into nonunion positions with nearly the same employment benefits, or
  - Under the collective-bargaining agreement (CBA), within 72 hours elect layoff or “bump” a less senior bargaining-unit employee at Hackley.
- All five employees chose to transfer to Mercy into nonunion positions.
- Mercy Health notified the union shortly after the employees were informed and then negotiated with the union regarding the effects of the relocation on bargaining-unit employees.
- An unfair labor practice case was litigated; an administrative law judge found Mercy Health did not unlawfully bypass the union or deal directly with employees in violation of the NLRA, and the Board reviewed that decision.

## Issues

1. Whether Mercy Health violated NLRA § 8(a)(5) and (1) by bypassing the employees’ exclusive bargaining representative and dealing directly with bargaining-unit employees when it presented transfer versus CBA layoff/bumping options related to the relocation.
2. Whether Mercy Health satisfied its bargaining obligations by notifying the union after informing the employees and bargaining with the union over the effects of the relocation.

## Decision

- The NLRB upheld the judge’s conclusion that Mercy Health did not unlawfully bypass the union or engage in prohibited direct dealing by meeting with the five bargaining-unit employees and presenting the transfer/layoff/bumping options.
- The Board treated the employer’s communication as explaining the consequences of an already-made operational decision and describing choices available under the CBA (layoff/bumping) along with a transfer option to positions outside the bargaining unit.
- The Board noted that Mercy Health notified the union shortly after speaking with the employees and thereafter bargained with the union over the effects of the relocation.
- Member Hayes dissented.

## Legal Principles

- Under NLRA § 8(a)(5) and (1), an employer commits unlawful “direct dealing” when it bypasses the union as the exclusive representative and seeks to negotiate or obtain individual employee assent on mandatory subjects of bargaining in a way that substitutes for collective bargaining.
- An employer may communicate directly with represented employees to announce or explain decisions and to describe options or rights that follow from an employer decision and/or the existing CBA, so long as the employer is not bargaining with employees to set terms and conditions of employment.
- When an employer decision affects bargaining-unit employees, the employer generally has a duty to provide notice and bargain in good faith over the effects of the decision, even if the decision itself is not subject to bargaining.
- In assessing a bypass/direct-dealing claim, the Board considers the overall conduct and context, including whether the employer’s communication functioned as implementation/notification or as an effort to negotiate individually and weaken the union’s representational role.

## Conclusion

In *Mercy Health Partners*, the NLRB concluded that Mercy Health did not violate § 8(a)(5) and (1) by meeting directly with five bargaining-unit employees to explain that, following a parent-driven administrative reorganization and relocation of work, they could either transfer to nonunion positions at another facility with nearly the same benefits or exercise layoff/bumping rights under the CBA, particularly where the employer notified the union shortly thereafter and bargained with the union over the relocation’s effects.


Mercy Health Partners, 358 N.L.R.B. 566 (2012)