Hospital Chain Uses Obama Court Loss to Justify Ignoring Labor Board

Friday, February 01, 2013
Prem Reddy, CEO of Prime Healthcare Services

It is open season on the National Labor Relations Board (NLRB), and California-based Prime Healthcare Services got off the first volley Wednesday.


The 21-hospital chain, citing a controversial court decision invalidating three recess appointments to the board by President Barack Obama, said it wouldn’t abide by two of the board’s recent decisions. One decision said that unions could collect dues even after a contract had expired and the other directed employers to provide unions with certain materials during an investigation.


A three-member panel of the U.S. Court of Appeals for the D.C. Circuit ruled last week that the president violated the Constitution when he appointed three new members of the NLRB during a Senate recess last year. At least, the president considered it a recess. Republicans who controlled the Senate argued that they were meeting in “pro forma” sessions, although only a few were physically in the building.


However, not much of this squabbling between the executive and legislative branches over “pro forma” sessions impressed the three Republican nominees on the court, who seemingly overturned two centuries of precedent by declaring that recess appointments could only occur between formal sessions of Congress. 


This reading of the original intent of the Founders in writing the Constitution prohibits a practice that has been used by the executive branch to get around the Senate since 1867. The last five presidents have made 659 recess appointments. George W. Bush used it 171 times, Bill Clinton 139 and Obama 32. It could, theoretically, invalidate a lot of decisions made by recess appointees.


Prime Healthcare Services thinks it invalidates at least two by the NLRB, and maybe the entire year’s 300 rulings, because the board didn’t have a quorum without the Obama appointees. Prime Healthcare wrote in an email to Reuters: “The D.C. Circuit's ruling from last Friday held all the Board's cases decided by the recess appointments are void.”


The NLRB disagrees with that interpretation of the court decision. Public Affairs Director Nancy Cleeland said the ruling applied only to the case’s dispute between a bottling company and the board. The NLRB chairman said the board would continue its activities.


The White House expressed disagreement with the court’s decision but did not indicate if it would appeal to the full D.C. circuit court or the U.S. Supreme Court.

Ken Broder


To Learn More:

Hospital Chain Defies NLRB Rulings after Court Decision (by Terry Baynes, Reuters)

Court Rejects Obama Move to Fill Posts (by Charlie Savage and Steven Greenhouse, New York Times)

Republican-Appointed Judges Reject Obama Recess Appointments to National Labor Relations Board because of “the” instead of “a” (by Matt Bewig, AllGov)

Prime Healthcare Hospital Chain Bills Medicare for Rare—and Expensive—Diseases (by Noel Brinkerhoff and David Wallechinsky, AllGov)


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