The National Labor Relations Board’s Massachusetts office has filed contempt of court charges against a nursing home company to prevent it from altering union contracts in bankruptcy court.
HealthBridge Management entered five of its union-controlled senior facilities into bankruptcy in February after it was unable to renegotiate contracts with the politically powerful Service Employees International Union Local 1199. A New Jersey bankruptcy court allowed the company to alter several of the contract terms that had caused the company to lose $1.3 million per month.
NLRB regional director Jonathan Kreisberg filed the contempt charges with a U.S. District Court in Hartford, Conn. to stop the company from instituting the contract changes. His motion contended that the company "violated and disobeyed … an injunctive order" issued by Democratic Judge Robert Chatigny.
Kreisberg asked the district court to disregard the bankruptcy court and "reinstate and maintain the previous wages, benefits and other terms and conditions for the employees … and rescind any or all implemented unilateral changes."
HealthBridge said in a statement that Kreisberg was interfering in a judicial process aimed at keeping the nursing home doors open. It also pointed out the string of Appeals Court rulings that declared the NLRB’s top judicial body unconstitutional.
"We believe the NLRB’s contempt petition is without merit, and another example of the overreaching actions of this agency," the company said in a statement. "Two United States Courts of Appeals recently decided that the NLRB does not even have the authority to act because it lacks the minimum number of properly confirmed or appointed members."
The Massachusetts office, which operates independently of the D.C. board, also asked the court to force HealthBridge to pay $15,000 in fines, as well as interest and backpay to the 600 union employees who walked out of their jobs in July 2012.
The backpay "could run into the millions of dollars," SEIU 1199 said in a release celebrating Kreisberg’s motion.
The union members’ actions during that walkout are at the center of an investigation by Connecticut’s chief state’s attorney. HealthBridge reported that medical records and identification tags for elderly patients, some of whom suffered from Alzheimer’s disease and dementia, were altered.
Veteran nurse Lorraine Mulligan filed legal briefs with the NLRB and Chatigny saying that it would be irresponsible to allow the union members to return to work.
"The nature and severity of the … incidents … put the safety, health, and well-being of the residents of those facilities in immediate jeopardy," she said. "A court order requiring the reinstatement of any of them or additionally those who had knowledge of sabotage and failed to act would expose the residents to immediate danger and put them at risk of suffering serious harm or death."
Chatigny ignored those requests, ruling that the company had to reinstate the members. The NLRB, which continued to investigate union allegations that the company bargained in bad faith, told the U.S. Court to enforce the judge’s orders instead of the bankruptcy court.
One legal observer familiar with the situation said that the NLRB is taking dramatic steps to preserve the union contracts.
"The NLRB is being invasive in its proceedings that it won’t let the company go through bankruptcy," the source, who requested anonymity, said. "They’re saying ‘you have to pay this contract that a bankruptcy court has already found is an undue burden.’ Nobody’s ever heard of this kind of contempt situation."
The NLRB and the union have argued that they are not forcing the five nursing homes that are in bankruptcy court to pay, but are asking the non-bankrupt HealthBridge to cover the costs as a "joint employer."
"The five nursing homes, but not HealthBridge, filed for bankruptcy in New Jersey claiming irreparable financial harm—a claim that had already been considered and rejected by Judge Chatigny," the union said in a release.
HealthBridge dismissed the union and the NLRB’s logic, pointing out that the individual homes, rather than the company, signed the union contracts.
"The Centers lawfully exercised their legal rights to seek protection from the Bankruptcy Court in order to save their businesses from having to close, and to obtain interim relief from the Bankruptcy Court allowing them to modify the contract terms that had been reinstated," the company said in the release. "HealthBridge is not a party to any of the expired union contracts that the District Court ordered to be reinstated, and it is not the employer of any of the Centers’ employees."
HealthBridge is working on a response to the NLRB motion and is expected to file it with the court in the coming weeks.