All we do is work SM. Is Sharing Wage Data Illegal? What the Union Is Doing
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1 Vol. 33 No. 1 Spring 2007 Inside... Safe Harbor Strategies for Hospitals Targeted by Antitrust Suits...2 Employment Policies Free Speech and Employee Message Buttons...3 Pending Legislation Unions Look to the Deceptively-named Employee Free Choice Act to Bypass Secret Ballot Elections...4 NLRB Notes Can an Employer Force a Union Election?...5 Safety Watch OSHA Recordkeeping: What You Leave Out Can Hurt You...5 Are You in the SEIU s Crosshairs?...6 In Brief CMS Issues New Guidance on Remote Access Security Measures for EPHI...6 SEIU Regional Leader Accepts National Post...7 Final HIPAA Nondiscrimination Regulations Require Review of Workplace Wellness Programs...7 Jackson Lewis Announces Opening of New Denver Office...8 An update on current labor, employment, benefits and immigration issues concerning the health care industry n less than one year, the Service Employees International Union (SEIU) has helped registered nurses file five class action antitrust lawsuits against their employers. The most recent, filed against six Detroit area health care employers last December, claims the employers conspired to depress nurses wages in violation of the federal Sherman Act. Similar lawsuits orchestrated by the SEIU were filed last year in Albany, Chicago, San Antonio, and Memphis. The suits allege that the hospitals and other health care employers engaged in a wage-fixing conspiracy by exchanging nonpublic information regarding their nursing wage rates with one another through telephone conversations, written surveys, and meetings; agreeing not to compete with one another in terms of nurses wages; and agreeing to pay nurses the same or similar wages, thereby artificially maintaining lower nurses wages in the metropolitan areas. What the Union Is Doing This type of lawsuit is the latest weapon in the union s corporate campaign against hospitals. In addition to costing employers money and time, the union portrays the hospitals in the press as conspiring to cheat employees. SEIU is widely regarded as the most successful and fastest-growing union representing health care workers in the United States. The Union has organized lower paid service workers, such as nurse aides, transporters, food service workers and janitors. Now it is targeting nurses with its new Nurse Alliance. The Nurse Alliance targeted 12 states for organizing. These also are All we do is work SM Service Employees Ramping Up Class Action Suits in Union s Campaign Against Hospitals Lawsuits alleging antitrust violations are the SEIU s latest weapon. Your best defense is to follow strict guidelines when sharing wage data. I states in which four of the class action lawsuits have been filed. We believe SEIU has been targeting these areas for some time because it previously commissioned research on nurse wages within these markets. Is Sharing Wage Data Illegal? SEIU clearly has done its homework. Now it is important for the industry to prepare to defend against such antitrust claims. While sharing wage data is not always illegal, it may be found unlawful if the employer does not follow the rules to the letter. The Department of Justice has issued antitrust enforcement policies that specifically address hospital participation in exchanges of price and cost information. These are the rules for sharing wage information with others in the industry in summary form: There cannot be any agreement, either explicit or implied, between the participating employers or members of a formal or informal association to use the exchanged data to fix prices or wages at their facilities. All price and wage data must be submitted to an independent third party for analysis. All data provided to the third party must be aggregated. In other words, it cannot be shared in a format that indicates who the data belongs to or in such a way that competitors could identify participating members, employers, or facilities. The information provided by the facilities must be at least three months old. Continued on next page 31
2 There must be at least five separate employers participating in the survey. None of the participants data may represent more than 25% of the aggregated data. All individual members of the formal or informal association remain free to unilaterally change their prices and wages as their business needs dictate. The decision by any individual employer to change prices and wages should be based upon market conditions, and the justification for the change must be properly documented. The shared information must not be accompanied by comments or recommendations concerning its future use. Caution: The exchange of future price and wage data is especially susceptible to antitrust charges. The exchanged data should appear in a public venue or subject to public display. For example, it could be published in a trade journal. All requests for reports of the aggregated data from outside organizations that are not participants must be honored. Following these guidelines and the strategies in the box on this page should provide a safe harbor for hospital or health care employers targeted by SEIU s latest ploy. The full text of the Department of Justice Antitrust Guidelines is available online at atr/public/guidelines/0000.htm. Should you have questions, please contact the Jackson Lewis attorney with whom you regularly work, Roger Gilson at GilsonR@jacksonlewis.com, or Ed Jeffrey at JeffreyE@jacksonlewis.com. Safe Harbor Strategies for Hospitals Targeted by Antitrust Suits These guidelines will help employers or provider associations respond effectively if they face an antitrust lawsuit: Adopt an explicit antitrust compliance statement. Open association meetings (or other meetings among competitors) with a statement of lawful purpose. Caution participants to avoid any discussion of prices, wages, or services that may imply anticompetitive behavior. Do not discuss or exchange information with competitors concerning current wages, pay plans, benefits, or prices, or plans for future wages, wage increases, pay plans, or benefits. Do not discuss or exchange information with competitors concerning current products or services, prices currently charged for such products or services, or information regarding plans to introduce to the market new products, services, packaging of existing products and services, and the prices to be charged. Do not discuss customers, business partners, or business plans or strategies with competitors. If price and wage surveys are conducted, ensure that they are planned and conducted consistent with the safe harbor as defined by the Department of Justice guidelines. To help hospitals and other employers educate themselves about the newest union tactics and the most effective responses, Jackson Lewis has organized a series of nationwide seminars on How to Stay Union Free. Go to and click on Events for a seminar in your area. 2
3 Employment Policies Free Speech and Employee Message Buttons Does banning your employees from wearing union message buttons violate their free speech rights? Recent rulings provide guidance for health care employers who want to restrict messages that disrupt the workplace. Under the National Labor Relations Act, employees have a protected right to wear union insignia such as buttons. The rules are modified slightly for healthcare: the National Labor Relations Board (NLRB) has held that button bans in immediate patient care areas are presumptively valid. Outside immediate patient care areas, a restriction on the wearing of buttons is presumptively invalid, and the employer must prove that there are special circumstances showing that the restriction is necessary to avoid disruption of health care operations or disruption of patients. Three cases decided in 2006 shed light on the NLRB s view of restrictions on the wearing of buttons in immediate patient care areas, in nonpatient care areas, and in service industries other than healthcare. In the case involving immediate patient care areas, the employer directed a certified nursing assistant (CNA) to remove a square button that measured approximately 2 1 /4 inches on each side. The employer expressed concern that the square edges of the pin could tear the fragile skin of the elderly patients handled by the CNA. The NLRB noted that although the edges of the button may not be sharp enough to injure a patient, the employer acted lawfully when it erred on the side of caution. While the NLRB s conclusion is a positive development, it confirms that healthcare employers cannot rely upon the presumptive validity of button bans in immediate patient care areas. The employer must be prepared to demonstrate that there is a legitimate reason for believing that the buttons could create a safety problem or other disruption in patient care. In the case involving nonpatient care areas, the employer prohibited nurses from wearing union buttons with the message RNs Demand Safe Staffing in any area where the nurses might encounter patients or their family members. The NLRB found that the employer had successfully demonstrated special circumstances justifying the restriction. Specifically, the employer established that the message conveyed by the button could be disturbing to patients or their families. This was based upon the message itself and the reports of the nurses supervisors, who expressed concern over the impact the button may have on patients. The NLRB also held that the employer was not required to show evidence of actual disturbance of patients. The NLRB emphasized that the message on the button would be construed by a reasonable person as a claim that staffing levels were unsafe. This would likely cause unease and worry among patients and their families, which would disturb the tranquil atmosphere necessary for successful patient care. This distinguished the case from other cases in which the button message was innocuous or merely publicized a labormanagement dispute. The NLRB also noted that the employer limited the restriction to areas where the button might be seen by patients and their families, and explained the reason for the restriction, in writing, to the nurses. Finally, the NLRB found that the employer s tolerance of other buttons, including other union buttons, did not prevent the employer from banning the Safe Staffing button. Rather, the employer s history proved that it was not the union message, but the message raising safety concerns, that the employer sought to restrict. Finally, in the non-health care case, the NLRB deferred to the employer s business judgment by upholding a ban on colorful buttons worn by room delivery servers in all public areas of a hotel. The hotel argued that the buttons conflicted with its professionally designed black staff uniforms, which were intended to create a special atmosphere for customers. The NLRB agreed, and relied upon the size of the button (2 inches square) and the relatively controversial message ( Justice Now! ). This made the case sufficiently different from cases in which the NLRB has rejected the argument that a small button with a non-controversial message conflicts with the employer s image. Policy Pointers. Want to avoid the disruption caused by employees wearing controversial union buttons? Consider developing a policy prohibiting the wearing of message buttons in public areas frequented by patients and their families where the message could be reasonably viewed as disturbing to patients or their families. Consider also a general prohibition of any buttons and/or insignia within immediate patient care areas which could reasonably cause a safety hazard. However, consult with your legal counsel in drafting such policies, as the NLRB has yet to endorse specific button ban language. 3
4 Pending Legislation Unions Look to the Deceptively-named Employee Free Choice Act to Bypass Secret Ballot Elections This fast-track bill could permanently deny employees their right to vote by secret ballot in a governmentsupervised election to decide whether they desire union representation. The new Congress was barely seated when union leaders and lobbyists formed a coalition named They Work for Us. One of its goals is to lobby Democrats relentlessly until the Employee Free Choice Act becomes law. This paradoxically named act virtually would end 70 years of NLRB-supervised secret ballot representation elections, and replace them with card checks. Many representatives are not aware of the negative provisions of the Act for employers or employees. It does not allow employees a truly free choice, as its name suggests. It actually eliminates their right to a secret ballot vote and would permit unions to establish bargaining rights through the submission of petitions or union authorization cards signed by a majority of employees. The Labor Board and the courts have long recognized the existence of peer pressure and the inherent unreliability of union card solicitation and so-called card check procedures when compared to secret ballot elections. In a secret ballot election, employees cast their ballot in the privacy of a voting booth. No representative from management or the union is permitted in the voting area while votes are being cast. Neither side can pressure or influence the voter during the election. Except in extraordinary circumstances, no one knows how an individual employee has voted unless the voter chooses to tell them. By contrast, union cards often are signed in public, and unions are not required to inform employees that their signatures may be used to deprive them of a secret ballot election. Employees are often pressured to sign the union card, and some courts have acknowledged that employees may sign a union card simply to appease co-workers or get union organizers off their necks. Under these circumstances, it is easy for a union to collect signatures from a majority of the affected employees. Why do unions want to bypass secret ballot elections? While unions win rates in NLRB elections increased steadily in the last 10 years, and while unions won more than 60% of NLRB elections in 2005, unions find it expensive and time consuming to engage in grassroots campaigning to win the hearts and minds of rank-and-file employees. In exchange for the time and expense, they lose 40% of the time. Unions are far more successful and expend fewer resources when card checks are used to determine majority status. Other provisions of the Act are just as troubling for health care employers. The most significant is mandatory interest arbitration if an employer and newly certified union are not able to reach agreement on a first contract within 90 days. This means an outside arbitrator will have the authority to decide wages, hours, benefits, and the other terms and conditions of employment for your organization. In other words, the arbitrator will write the contract. The arbitrator, of course, won t have to live with the results. You will. In effect, unions will be given a powerful negotiating tool: accept our demands now, or we ll ask an arbitrator for even more. The bill was passed by the House on March 1, Nonetheless, the President is likely to veto the legislation if passed by Congress. It is uncertain, however, whether enough support in Congress could be mustered to override a veto or if the Administration would change its position based on further developments. Action Item. If you have any questions regarding the potential effects of this legislation, please contact Roger Gilson at GilsonR@jacksonlewis.com, or Ed Jeffrey at JeffreyE@jacksonlewis.com or any member of Jackson Lewis Labor Practice Group. Full text of the bill is available online at HR800.pdf. A summary of the bill is posted at SummaryOfEmployeeFreeChoiceAct.pdf. 4
5 NLRB Notes Can an Employer Force a Union Election? The Labor Board is in the process of considering whether an employer can petition for a secret ballot election in the face of a union s damaging corporate campaign to force recognition without a secret ballot vote. Employers facing union corporate campaigns often are frustrated by a union s failure to seek an NLRB election while it claims the employees want union representation. When a drawn out union campaign is in progress, members of the public begin to ask why the employer won t let the employees have a union. Employees themselves are faced with the distractions and negativity that accompany such campaigns. Confronted with this situation, employers have asked whether they can force the union to put it to a vote. Presently, an employer can file a petition for an NLRB election (called an RM petition) only when one or more individuals or unions have sought recognition as the bargaining representative because a majority of employees have authorized union representation, or the employer has a reasonable belief (supported by objective considerations) that a currently recognized union has lost its majority status. Depending upon the NLRB s decision in a pending case, however, employers may be able to request an election even where the union does not make an explicit demand for recognition based upon claimed majority support. The case (Marriott Hartford Downtown Hotel and UNITE HERE Local 217, Case 34 RM 88) involves the Downtown Marriott at Adriaen s Landing in Hartford, Conn. The hotel has been targeted by UNITE-HERE, which is working to unionize the hotel s 360 workers. It has conducted an aggressive corporate campaign designed to get the hotel s owner to agree to a card check. The union s tactics include pressuring potential hotel guests and conference organizers to go elsewhere, and enlisting state and local politicians to threaten the hotel with loss of city tax breaks it now receives. Faced with this aggressive corporate campaign, the hotel s owner filed a petition for an election. The local office of the NLRB dismissed the petition and refused to schedule an election, noting that the union had never made a formal demand for recognition, as required by law. The NLRB in Washington has agreed to hear the employer s request for review. It will decide whether a union request to begin discussions about a Labor Peace agreement with the employer, combined with corporate campaign tactics, constitutes a request for a card-check recognition agreement and, if so, whether such a request was a request for recognition which would permit the employer to successfully file an election petition. Safety Watch OSHA Recordkeeping: What You Leave Out Can Hurt You How can you be sure that your safety records pass OSHA s inspection? By being accurate and thorough, and following the recordkeeping standard to the letter. It sounds simple to follow OSHA s recordkeeping standard: Just enter all recordable injuries and illnesses on the OSHA 300 Log and complete an OSHA 301 Form within seven calendar days of learning of a recordable incident. Yet, every year, health care employers are fined for omissions of required information or for out-of-date logs. And if an OSHA compliance officer spots problems with your recordkeeping, he or she may go through your Logs and Forms line by line and issue you with separate citations for every problem found. The biggest problem we see when auditing our health care clients recordkeeping is incomplete information, says Roger Kaplan, a partner based in Jackson Lewis Long Island, N.Y., office. It s important to realize that the 300 and 301 records require more comprehensive information than the OSHA 200 records. Kaplan gives this example: I ll see a notation of pain in wrist. But that doesn t have all the information OSHA requires. What wrist is it? What caused the pain? What was the diagnosis? What kind of treatment was prescribed? This type of vague recordkeeping is a trap for the unwary. While OSHA is not likely to make a random recordkeeping check, they will begin almost all Continued on next page 5
6 Continued from page 5 inspections with a look at your 300 Logs and 301 Forms. And if they see poor recordkeeping, it s likely to make them wonder what other OSHA violations your facility might have. A second problem Kaplan finds is that the annual 300A summary of injuries and illnesses lacks the proper signature. The annual summary must be signed by a high official the owner of a sole proprietorship or partnership, officer of the corporation, highest ranking company official working at the establishment, or his or her immediate supervisor who has checked that the figures are accurate, he says. In the past, lower-level employees might have signed the form, or it was not signed. OSHA is cracking down on this, however. Finally, Kaplan finds that health care employers may fail to return the annual summary OSHA sends. It s not intentional, he says, just like problems with the Logs and Forms are not intentional. Often, especially at smaller facilities, the person in charge of safety wears many hats. It gets overlooked. But he stresses that those in charge of the safety function need to give recordkeeping the priority that OSHA gives it. These problems are all relatively easy to fix, he reminds employers. Safety Tips: Set up a recordkeeping system that will work for your facility. Make sure that your safety policy states clearly how, when, and to whom recordable injuries and illnesses are reported. Record incidents accurately, thoroughly, and immediately. Follow the directions in the OSHA Forms to the letter. Your Jackson Lewis attorney can help audit your recordkeeping practices to be sure that you are in compliance. You can contact Attorney Kaplan at (631) or kaplanr@jacksonlewis.com. Are You in the SEIU s Crosshairs? T here are warning signs some subtle, some more overt that signal whether your workforce likely has become the target of the SEIU or a similar union. Here are 10 warning signs that, according to the Assisted Living Federation of America, may signal internal union activity in any organization. 1. Employees who usually talk to supervisors and managers no longer do so. Employees in a group immediately halt their discussion when a supervisor approaches. 2. Employees challenge supervisory authority and ask argumentative questions in meetings. 3. The nature or frequency of employees complaints changes. 4. Employees begin acting in groups and making complaints en masse or by petition. 5. Employees visit areas they do not normally visit and/or associate with employees with whom they do not usually socialize; strange alliances form and new leaders emerge. 6. Employees spend more than their normal time on breaks, in the cafeteria, or out of the building, and delay their return to the workplace. 7. Employee conversation about weekend activities, social engagements, and athletic events is replaced with talk of health insurance, pension plans, job security, and similar job-related issues. 8. Employees begin using union jargon, such as seniority, grievances, unfair practices, and protected concerted activity. 9. The company receives an unusual number of exploratory questions about policies and benefits, or critical and probing questions concerning specific policies and benefits. 10. There is a significant and sudden change in the rate of employee turnover (up or down). Exit interview data suggest that there are problems in the workplace. 6
7 In Brief CMS Issues New Guidance on Remote Access Security Measures for EPHI The HIPAA Security Rules require all covered entities to implement reasonable safeguards to protect electronic protected health information (EPHI) against such security incidents as stolen or lost laptops, PDAs, and CDs that contain enrollment information; intercepted s that contain claim information; and health data retrieved from improperly discarded obsolete hard-drives or disks. The Centers for Medicare and Medicaid Services (CMS) recently issued guidance outlining strategies for safeguarding EPHI that is accessed, stored, and transmitted by covered entities. Offsite use of and access to EPHI should be limited only to those circumstances where it is necessary. CMS offers these examples of when offsite access might be necessary: a home health nurse collecting patient data through a laptop or PDA during a home health visit; a doctor, while out of the office, ordering a patient s prescription refill over a PDA; or a health plan employee transporting backup enrollment information on tape or disk to an offsite storage facility. According to the guidance, a covered entity must conduct a risk analysis and develop risk management measures to reduce risks and vulnerabilities associated with the contemplated remote access. The analysis should consider potential risks associated with accessing, storing, and transmitting EPHI. The results of the analysis should be used to develop policies (or enhance existing policies) to minimize those risks. The guidance includes a table with examples of specific policy and procedure provisions to minimize specific risks under each of the three activities. See Standard/Downloads/SecurityGuidanceforRemote UseFinal pdf. SEIU Regional Leader Accepts National Post D ennis Rivera, leader of the nation s largest local union of healthcare workers, the New York-based 1199 SEIU United Healthcare Workers East, will leave that post this spring to become chair of SEIU Healthcare, a new national union of nearly one million health care workers inside the Service Employees International Union (SEIU). Under Rivera s leadership, SEIU Local 1199 has made significant inroads in organizing hospitals, nursing homes, and homecare agencies and has become a potent force in New York politics. The national union welcomes Rivera because of the importance of fixing the nation s broken health care system for patients and workers. The new national union s stated goal is to organize the nation s 10 million health care workers. Final HIPAA Nondiscrimination Regulations Require Review of Workplace Wellness Programs L ong awaited final regulations addressing, among other things, the bona fide wellness program exception to the HIPAA non-discrimination requirements were released on December 13, 2006, by three federal agencies. The non-discrimination requirements generally prohibit plan sponsors from using a health factor as a basis for discrimination with regard either to eligibility to enroll or for determining premium contributions under a group health plan. Employers have until July 1, 2007, at the earliest, to comply with the final standards (for calendar year plans, January 1, 2008). Failure to comply with the regulations is expensive: up to $100 per member per day for each day the plan is not compliant. Programs are subject to the HIPAA non-discrimination requirements only if they offer rewards for participating in the wellness program or for satisfying a healthrelated standard. Programs that are covered under the HIPAA non-discrimination standards must meet five requirements: 1. There must be limitations on the size of the reward. 2. The program must be reasonably designed to promote good health or prevent disease. Continued on next page 7
8 Continued from previous page 3. The program must give individuals eligible for the program the opportunity to qualify for the reward at least once a year. 4. The reward must be available to all similarlysituated individuals unless the program provides for a reasonable alternative standard or waiver for individuals who have difficulty meeting the standard due to a medical condition. 5. All plan materials describing the program must disclose the existence of a reasonable alternative standard or possibility of a waiver. The regulations also include limitations on the size and makeup of the reward. In addition, the regulations warn plan sponsors that their compliance efforts may cause them to run afoul of other federal or state laws, such as the Americans with Disabilities Act s provisions governing disability-related inquiries and medical examinations. Employers sponsoring wellness programs should review those programs carefully. For more information, please contact your regular Jackson Lewis attorney; Francis P. Alvarez (alvarezf@jacksonlewis.com) or Joseph J. Lazzarotti (lazzarottij@jacksonlewis.com) in the White Plains office at , or Michael J. Soltis (soltism@jacksonlewis.com) in the Stamford office at Jackson Lewis Announces Opening of New Denver Office J ackson Lewis is pleased to announce the opening of its new Denver office, located at Independence Plaza, th Street, Suite 2450, Denver CO 80265; telephone (303) ; fax (303) Jackson Lewis partners Mickey Silberman (admitted in New York only), a senior member of our Affirmative Action Practice Group, who will become managing partner, and Shawn Kee (admitted in Illlinois and Connecticut only), co-chair of our Trade Secret and Non-compete Practice Group, an experienced litigator, will be relocating to Denver and will be joined by two Denver employment litigators. JACKSON LEWIS OFFICES Editors: Roger P. Gilson, Esq. Roger S. Kaplan, Esq. Mei Fung So, Esq. Jackson Lewis LLP Atlanta, GA (404) Boston, MA (617) Hartford, CT (860) Houston, TX (713) New York, NY (212) Orange County, CA (949) Richmond, VA (804) Sacramento, CA (916) The articles in this Update are designed to give general and timely information on the subjects covered. They are not intended as advice or assistance with respect to individual problems. This Update is provided with the understanding that the publisher, editor or authors are not engaged in rendering legal or other professional services. Readers should consult competent counsel or other professional services of their own choosing as to how the matters discussed relate to their own affairs or to resolve specific problems or questions. This Update may be considered attorney advertising in some states. Furthermore, prior results do not guarantee a similar outcome Jackson Lewis LLP Chicago, IL (312) Cleveland, OH (216) Dallas, TX (214) Denver, CO (303) Greenville, SC (864) Long Island, NY (631) Los Angeles, CA (213) Miami, FL (305) Minneapolis, MN (612) Morristown, NJ (973) Orlando, FL (407) Pittsburgh, PA (412) Portland, OR (503) Providence, RI (401) Raleigh-Durham, NC (919) San Francisco, CA (415) Seattle, WA (206) Stamford, CT (203) Washington DC Region (703) White Plains, NY (914)
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