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United Nurses of Children's Hospital v. Rady Children's Hospital—San Diego

United States District Court, S.D. California

May 9, 2014

UNITED NURSES OF CHILDREN'S HOSPITAL, Petitioner,
v.
RADY CHILDREN'S HOSPITAL—SAN DIEGO, Respondent.

ORDER ON DEFENDANT'S MOTION TO DISMISS

LARRY ALAN BURNS, District Judge.

This is a labor case concerning a hospital's duty to arbitrate a discipline dispute with an employee. Under a collective bargaining agreement between the hospital and the employee's union, discipline disputes that aren't resolved informally must go to arbitration, and the parties must agree on the issue or issues to be arbitrated. The core question this case presents is whether the refusal to agree on an issue is, itself, the failure to arbitrate. In some cases it might be. In this case it isn't.

As the Court will explain below, the alleged refusal to arbitrate in this case was simply the hospital's refusal to surrender certain factual and legal arguments on the front end of arbitration. Even if those arguments are wrong, they're arguments the hospital has every right to preserve and make.

I. Factual Background

The real plaintiff in this case is Mary Bradley, formerly a respiratory therapist at Rady Children's Hospital assigned to its Neonatal Emergency Transport team. This team is tasked with getting babies to the hospital, or from one hospital to another, who require advanced and immediate care.

On August 21, 2012, Rady issued a final written warning to Bradley for multiple instances of misconduct. First, on July 22, 2012, she swore and used foul language during an air transport, and she also violated a "sterile cockpit" rule. Second, during a separate air transport she swore at crewmembers who were moving an isolette. Third, she threatened to file a HIPAA complaint against colleagues who reported that she wasn't fit for her job. Bradley was placed on a 180-day performance improvement plan, and she was also removed from the Neonatal Emergency Transport team and offered a clinical position as "RT III." (Pet., Ex. B.) It's not clear to the Court what RT III entails, but Bradley paints the move from the team to RT III as a demotion. At a minimum, it came with a loss in pay. (Pet. ¶ 9-10.)

At the time of the warning, Bradley was a member of the "Technical Division Bargaining Unit" at Rady, and as such, she is represented by United Nurses of Children's Hospital, the nominal plaintiff in this case. Rady and the Union are parties to a collective bargaining agreement for the Bargaining Unit, and there is no dispute here that the agreement covers Bradley's discipline. The collective bargaining agreement requires that any "discipline or discharge" of employees by supported by "just cause, " and it also requires that discipline be "progressive" unless the circumstances "warrant more severe action." (CBA §§ 501-02.) It also lays out a grievance process for employees to contest any discipline they receive. (CBA Art. VI.) And finally, it provides for arbitration if grievances can't be resolved informally, for example through mediation. (CBA Art. VI.) If the case involves "demotion or disciplinary transfer, " as it would seem this case does, the arbitrator is empowered to "determine whether [Rady] had just cause to discipline the employee and, if so, what the appropriate remedy should be." (CBA § 607.) At the same time, the arbitrator "shall have jurisdiction and authority only to interpret, apply, or determine compliance with the express language of this Agreement and the agreed upon issue(s) submitted to him/her." These are the essentials of the collective bargaining agreement as far as this case is concerned.

On August 29, 2012, about one week after Bradley received her final warning, the Union filed a grievance on her behalf with Rady. The grievance challenged everything-Bradley's removal from the Neonatal Emergency Transport team, her corresponding loss of income, her written warning, and her performance improvement plan. It alleged violations of the CBA's requirement that discipline be supported by just cause and that it be progressive. It sought her reinstatement, the recovery of lost income, and the retraction of the final written warning and performance improvement plan. (Pet., Ex. C.) The Union's grievance worked its way through the process laid out in the collective bargaining agreement, and it was denied at every stage. (Pet., Exs. D-F.)

Next came arbitration. The Union submitted its demand for arbitration on October 30, 2012, and the parties agreed on an arbitration date of September 4 and 5, 2013. (Pet., Ex. G; Pet. ¶ 17.) The question then became what issue, precisely, to arbitrate. This is where the parties are at odds. Skipping over some back-and-forth between them ( See Pet., Exs. H-L), going into arbitration Rady was satisfied with the following statements of the issues:

(1) Did the Employer have just cause to discipline the Grievant when it issued the Grievant a Final Written Warning on August 21, 2012?
(2) Was the Employer's removal of the Grievant from the NICU CHET team a "demotion" or "disciplinary transfer" as those terms are used in the CBA?

It also agreed to stipulate that if the arbitrator found no just cause, he or she could determine the appropriate remedy if the parties couldn't agree on one within 10 days. The Union, for its part, wanted the statements to read this way:

(1) Did the Employer have just cause to discipline the Grievant when it issued the Grievant a Final Written Warning and removed her from her CHET assignment on August 21, 2012?
(2) Was the Employer's removal of the Grievant from the NICU CHET team a "demotion" or "disciplinary transfer" as those terms are used in the CBA?

The Union was also fine with the stipulation that gave the arbitrator jurisdiction to determine a remedy only if the parties couldn't agree on one amongst themselves. Obviously the only difference between these statements is the Union's insistence that the arbitrator determine whether Bradley's removal from the Neonatal Emergency Transport-plainly disciplinary in her eyes, but not in Rady's-was supported by just cause. That was the core disagreement going into the arbitration, and it's the core disagreement still.

Arbitration never got going. Rady and the Union tried to agree on the issue to be arbitrated, and the arbitrator tried to help, but in the end they couldn't. This deprived the arbitrator of jurisdiction over their dispute. Naturally, in their respective briefs now before the Court, each party tries to paint the other as obstinate and blameworthy. They do this with excerpts from what must have been an exhausting back-and-forth before the arbitrator, although, to be frank, the excerpts are too long, and too transparently self-serving, to be very helpful. The Court has read the entire transcript and summarizes it as follows.

At the outset, the Union suggested the arbitrator determine whether Rady had good cause to discipline her-and it wanted "discipline" to subsume the final written warning, the transfer, and the performance improvement plan. (Tr. at 9:21-10:4.) Rady wanted the arbitrator to determine whether there was just cause solely to issue the final written warning, which it maintained was the only discipline at issue. (Tr. at 11:5-9; 16:12-21; 19:25-20:3.) There's no doubt that Rady lost this opening round. The arbitrator repeatedly pressed Rady that the transfer, too, was disciplinary, and that Bradley was entitled to a finding that there was or wasn't just cause for it-even if there was just cause for the final written warning itself. (Tr. at 11:15-12:10; 13:1-4; 14:25-15:5; 15:23-16:1; 16:22-17:4; 18:6-12.)

Rady then offered another statement, purporting to put Bradley's transfer before the arbitrator: "Did the employer have just cause to discipline the grievant when it issued the grievant a final written warning and transferred the grievant off of the CHET team on or about August 21, 2012?" (Tr. at 22:4-7.) This advanced the ball some, but it still didn't address the Union's concern, validated by the arbitrator, that the final written warning and the transfer were distinct disciplinary actions and that the arbitrator be commissioned to make an independent finding with respect to each. (Tr. at 23:14-23; 25:13-27:4.)

At this point, trying to move forward, the arbitrator suggested that the parties stipulate to Rady's statement and put on their respective cases, understanding that the arbitrator saw the transfer as disciplinary but leaving this disagreement to be hashed out in post-hearing briefs. (Tr. at 27:17-28:19.) The Union questioned the benefit of this, considering the parties were still sharply divided on whether the arbitrator even had jurisdiction to look at the transfer as an independent disciplinary action taken against Bradley. (Tr. at 29:7-13.) The arbitrator's proposed accommodation was to relocate the parties' disagreement about his treatment of the transfer from the issue statement into the arbitration itself. He suggested that he determine if Rady violated the CBA when it issued the final written warning and transferred Bradley. (Tr. at 31:2-21.) This would at least be enough to get the arbitration going, and it would give the parties some ruling to challenge in court, if necessary. Less controversially, the arbitrator offered that the second issue would be the proper remedy, remanded to the parties for ten days to work out amongst themselves. (Tr. at 32:4-7; 33:12-15; 34:1-5.)

Even though the arbitrator was clear that, in his eyes, the transfer was disciplinary (Tr. at 33:11; 34:24-25; 37:5-6), Rady seemed to be okay with an analysis that simply asked whether it violated the CBA. (Tr. at 31:18-25.) This is because framed as a matter of contract interpretation, it allowed for Rady to at least argue that the transfer wasn't categorically disciplinary. The only thing Rady wouldn't do was agree to an issue statement that assumed just that, and insulated the question from any kind of factual or legal argument. (Tr. at 35:14-19; 37:21-25; 39:19-25; 40:15-18; 41:4-11.) So, the arbitrator was exactly right. By framing the issue in terms of the collective bargaining agreement being violated, all the parties were doing was "moving the possible argument down the way." (Tr. at 35:20-21.) Rady could make the argument that the transfer wasn't disciplinary in nature (or that just cause supported it), the Union could argue the opposite, and the arbitrator could determine who is right. (Tr. at 40:11-15; 49:5-14; ...


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