American Hospital Ass'n v. National Labor Relations Board

Background

The National Labor Relations Board adopted a rule saying that, with three narrow exceptions, acute care hospitals should have eight specific bargaining units. The American Hospital Association sued, arguing the Board lacked authority, Congress warned against proliferation of units in hospitals, and the rule was arbitrary. A federal trial court blocked the rule, the Court of Appeals reversed, and the Supreme Court agreed to decide the legal questions and now affirms the Board’s rule.

Reasoning

The Court examined three main challenges: whether a statutory phrase requiring the Board to decide the appropriate unit “in each case” forbids general rules; whether congressional comments about avoiding many small hospital units limited the Board; and whether the rule was arbitrary. The Court read the statute to permit the Board to make general rules to guide case-by-case decisions, stressed that the Board acted under its rulemaking power, and explained that the Board relied on a substantial record and reasonable analysis. The Court also noted the rule contains exceptions (including for very small units) and deferred to the Board’s judgment where Congress had not clearly forbidden rulemaking.

Real world impact

The decision lets the Board apply an industry-wide approach for acute care hospitals and reduces the chance of many tiny bargaining units. Hospital employers, unions, and workers will now use the eight-unit framework unless the Board applies an exception or Congress changes the law. The ruling affirms the Board’s capacity to make broad rules to bring order to recurring labor disputes in hospitals.