This article just in from: Modern Healthcare Magazine http://www.modernhealthcare.com/curr...ished=20010604
Split decision: Nurses lose crucial ruling on union representation, but win right to sue
By: Jeff Tieman and Mark Taylor
Attention healthcare administrators: Nurses can sue your institution for fraud, but they can't join unions if they are assigned even minor supervisory functions.
Those are the conclusions of two precedent-setting rulings last week by the federal courts, with healthcare employers winning one and nurses winning the other.
The disparate rulings were indicative of the growing rift between cost-conscious healthcare employers and an increasingly militant nursing workforce.
For example, 12 hospitals in the Minneapolis-St. Paul area faced a June 1 strike by about 7,700 registered nurses represented by the Minnesota Nurses Association. Three of the 12 hospitals avoided the strike by reaching a contract agreement with nurses on May 31, and the remaining nine reached tentative agreements with their nurses, who were to vote on the contracts over the weekend. The strike would have been the largest work stoppage ever by U.S. nurses.
In the more important of the two federal court rulings, the U.S. Supreme Court, by a 5-4 vote, said nurses who perform even the most basic supervisory functions are ineligible to join unions because they aren't protected by the National Labor Relations Act. The 66-year-old law allows nonsupervisory employees to collectively bargain with their employers.
In the second ruling, by the 5th U.S. Circuit Court of Appeals in New Orleans, nurses and individuals were granted the right to file whistleblower fraud lawsuits on behalf of the federal government even though they were not personally injured by the alleged fraud.
Ohio Hospital Association spokeswoman Mary Yost said the two lawsuits reflect a trend hospitals would like to reverse. ``With growing nurse shortages, we need to focus on improving the workplace environment of hospitals to minimize the need for involvement by labor unions and the courts,'' she said.
The industry also may face a growing rift regarding the severity of the nursing shortage after the release of a federal report last week that said no widespread shortage exists (See story, p. 13).
Defining a supervisor
The Supreme Court ruling fueled fears by the American Nurses Association that hospitals will begin assigning basic ``supervisory'' tasks to nurses to prevent them from seeking union representation.
In its ruling, the court determined that nurses use independent judgment and act as supervisors even when they call only on professional or technical training-not hierarchical authority-to direct the activities of other employees. The nursing community responded to the court's decision by saying the justices had denied registered nurses basic workplace protections.
The case grew out of a union dispute at Caney Creek, a residential treatment center for mental illness and retardation operated by Kentucky River Community Care, based in Hazard, Ky. In 1997, Caney Creek objected to allowing six of its nurses to join the Kentucky State District Council of Carpenters, a labor union that petitioned the National Labor Relations Board to represent 110 Caney Creek employees, a combination of nurses, other caregivers and maintenance and clerical workers. Kentucky River argued that as supervisors, the nurses were not entitled to union representation.
The NLRB disagreed and ordered Caney Creek to accept the nurses' union membership. Kentucky River then appealed that order to the 6th U.S. Circuit Court of Appeals in Cincinnati, which found that the nurses' duties did make them supervisors.
The National Labor Relations Act defines a supervisor as anyone who acts in the interest of the employer and has the authority to make decisions relative to hiring, promoting, discharging, rewarding or disciplining employees. Supervisory activities, the law says, must ``not (be) of a merely routine or clerical nature, but require the use of independent judgment.''
Following the 6th Circuit's ruling that the six Kentucky River nurses fit that bill, the NLRB appealed to the Supreme Court, which upheld the lower court's decision.
The ANA quickly denounced the high court's decision.
``Some hospitals may attempt to interpret the Supreme Court decision too broadly and would claim that the daily and routine delegation of certain work to other employees is supervisory, and I think that would be a mistake,'' said Alice Bodley, the ANA's general counsel.
The NLRB had argued to the Supreme Court in February that the Kentucky River nurses weren't supervisors, because they exercised ``ordinary professional or technical judgment'' and not ``independent judgment'' when they directed other employees.
In the court's majority opinion, Justice Antonin Scalia wrote, ``The Court of Appeals rejected that interpretation, and so do we . . . What supervisory judgment worth exercising, one must wonder, does not rest on professional or technical skill or experience?''
Nursing association representatives called the ruling unfair and even harmful to patients.
``The decision will have a chilling effect on the ability of nurses to form unions and gain valuable workplace protections under the National Labor Relations Act because employers may now try to claim that many more registered nurses are supervisors,'' said Cheryl Johnson, chair of the United American Nurses, a labor arm of the ANA which represents about 100,000 nurses for collective-bargaining purposes. ``The justices have confused what nurses do as a routine part of their job with who the employer claims they are in the organizational hierarchy.''
Maureen Mudron, Washington counsel for the American Hospital Association, would not say if she thinks hospitals will attempt to dodge the union bullet by changing nurses' supervisory status. She said the Supreme Court decision allows hospitals ``to fully utilize their resources'' and gives them the latitude to designate supervisors as necessary to provide high-quality care.
All nine justices agreed that the burden of proving supervisory status in labor disputes rests on the party asserting such status. But they split 5-4 on whether the NLRB properly assessed the roles of the Kentucky River nurses.
Right to blow the whistle
Although nurses with supervisory functions may not be able to participate in collective bargaining with their employer, they can sue them for Medicare fraud.
By an 11-2 margin, the full 5th U.S. Circuit Court of Appeals ruled in a pending healthcare fraud case that individuals have standing to file whistleblower lawsuits on behalf of the federal government even if they were not injured personally by the alleged fraud.
The court's decision is a major victory for whistleblowing plaintiffs and a major defeat for institutional healthcare providers.
In asserting the standing of individuals, the full appeals court overturned an earlier ruling by a three-judge panel of the same court. The panel, in turn, had upheld a federal district court that said the plaintiff in the case, a nurse, had no standing to sue.
``It's clearly an important decision because had the defendants prevailed, whistleblower actions would be pretty much a thing of the past,'' said Daniel Mulholland, an attorney with the Pittsburgh office of Horty, Springer & Mattern. ``(The decision is) an unfortunate thing from the perspective of providers. It will encourage people who have no standing in the affair to sue; opening the doors to anybody who wants to sue can't be a good thing for the provider community.''
The case involves a whistleblower fraud lawsuit filed in 1994 against Houston's St. Luke's Episcopal Hospital, two doctors and several other institutions of the Texas Heart Institute. In her suit, Joyce Riley, a former nurse at St. Luke's, accused the hospital and the other providers of defrauding Medicare by unnecessarily admitting patients, upgrading services to patients who didn't require the higher and costlier level of care, and hiring an unlicensed physician to practice medicine.
In October 1997, U.S. District Judge Kenneth Hoyt in Houston ruled that Riley had no standing to sue, because the federal government declined to intervene. Hoyt's 21-page opinion-affirmed in 1999 by the 5th Circuit's three-judge panel-asserted that the False Claims Act violated the ``take care clause'' of the U.S. Constitution, which suggests the government may not confer to private parties powers that belong to the executive branch.
In reversing the panel, the majority of the full appellate court found little cause for concern, saying enough protections were built into the act to prevent it from becoming an ``impermissible delegation of power'' to private parties. The appellate court remanded the case to the district court for trial, although the defendants still have the option of appealing to the U.S. Supreme Court. A St. Luke's spokesman said the hospital is reviewing the opinion and its options.
[Modern Healthcare Magazine]