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National Union of Healthcare Workers v. Kaiser Foundation Health Plan, Inc.

United States District Court, Ninth Circuit

June 12, 2013

NATIONAL UNION OF HEALTHCARE WORKERS, SONIA ASKEW; ROBIN BLAKE; LISA ENGLES; DANIELLE ESTRADA; ANGELA GLASPER; ROBERT HERNANDEZ; DAVID MALLON; TURUSEW WILSON and GEORGE WONG, Plaintiffs,
v.
KAISER FOUNDATION HEALTH PLAN, INC.; KAISER FOUNDATION HOSPITALS; THE PERMANENTE MEDICAL GROUP, INC.; SOUTHERN CALIFORNIA PERMANENTE MEDICAL GROUP, Defendants.

ORDER GRANTING PLAINTIFFS' MOTION TO AMEND COMPLAINT

WILLIAM ALSUP, District Judge.

INTRODUCTION

In this action alleging violation of Section 302 of the Labor Management Relations Act, plaintiffs seek leave to file an amended complaint. For the reasons stated below, the motion to amend is GRANTED.

STATEMENT

The main question is whether the proposed pleading adequately alleges a payment of money to the union in violation of Section 302. Here are the facts alleged. Defendants Kaiser Foundation Health Plan, Inc., Kaiser Foundation Hospitals, The Permanente Medical Group, Inc., and Southern California Permanente Medical Group (all "Kaiser") were parties to a collective bargaining agreement with Service Employees International Union-United Healthcare Workers ("SEIU-UHW"). That agreement required Kaiser to provide wages and/or benefits for "lost-timers." Lost-timers are regular Kaiser employees who become paid staff members of the union after requesting up to a one-year unpaid leave of absence from Kaiser to "conduct union business" (Dkt. No. 60 at 7). Pursuant to the collective bargaining agreement, Kaiser continued to provide these lost-timers' benefits and accrued leave (but not salary) during time spent working full-time for the union.

While the lost-timer provision did not define "union business, " examples from the contractual agreement between Kaiser and SEIU-UHW reflected traditional contract administration and joint labor-management activities. From 2005 to 2009 the scope of duties was limited to contract enforcement and traditional representation work ( ibid ). No lost-timer engaged in campaigning for SEIU-UHW until Kaiser released employees to campaign for SEIU-UHW during SEIU-UHW's campaign against NUHW. When a few employees were released to work on the 2008 United States presidential campaign, Kaiser did not pay for these employees' benefits while they were on leave ( id. at 7). So by custom and usage the scope of the lost-timers provision was not meant to be expansive and the number on such leave would be few in number. This conformed to the original intention of the parties when the provision was first negotiated ( ibid. ).

In 2009, a group of former officers of SEIU-UHW formed a rival union, National Union of Healthcare Workers ("NUHW"). In 2010, the National Labor Relations Board ordered a union representation election. Following several objections filed by NUHW, the Board set aside the election results and set a re-run election between SEIU-UHW and NUHW to commence in May 2013 ( id. at 8-10).

"During SEIU-UHW's representation campaigns against NUHW, which includes but is not limited to June 29, 2010, to the present, SEIU-UHW used hundreds of employees on lost-time from Kaiser to campaign against NUHW, which was a sudden, noticeable, and dramatic increase in the number of Lost-Timers prior to that date" ( id. at 18). Kaiser knowingly released lost-timers to SEIU-UHW to campaign against NUHW and paid them benefits and other things of value to campaign against NUHW ( ibid. ).

Plaintiffs commenced this action in August 2010, alleging that Kaiser violated Section 302(a) of the LMRA by paying the benefits of SEIU-UHW union members to campaign against NUHW in anticipation of NLRB elections that would determine which union would represent Kaiser's employees. This action was stayed by order dated November 19, 2010. After the stay was lifted, defendants moved to dismiss. The motion was granted with respect to two categories of workers: shop stewards and contract specialists. Plaintiffs timely filed this motion for leave to amend. For the reasons stated below, the motion is GRANTED.

ANALYSIS

1. WHETHER THE DISPUTE IS MOOT.

Defendants argue this action has become moot because the Board has certified the April 2013 election results (SEIU-UHW won) and Board orders in certification proceedings under Section 9(c) are not reviewable by a federal court (Dkt. No. 61 at 3). Section 9(c) of the National Labor Relations Act reads, in pertinent part (29 U.S.C. 159 (2006)):

Whenever a petition shall have been filed... by a group of employees or... a labor organization acting on their behalf alleging that a substantial number of employees wish to be represented for collective bargaining and that their employer declines to recognize their representative... the Board shall investigate such petition and if it has reasonable cause to believe that a question of representation affecting commerce exists shall provide for an appropriate hearing upon due notice... If the Board finds upon the record of such hearing that such a question of representation exists, it shall direct an election by secret ballot and shall certify the results thereof.

While the Board has certified the April 2013 election, our November 2010 order that stayed this action noted that this lawsuit is part of a larger ongoing dispute between NUHW, SEIU-UHW, and Kaiser (Dkt. No. 23 at 3-4). Since plaintiffs commenced this action in 2010, plaintiffs have challenged Kaiser's payments to lost-timers in relation to two separate representation elections. The collective bargaining agreement between Kaiser and SEIU-UHW has been extended without change through September 30, 2016, and defendants admit ...


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