Sutter Central Valley Hospitals, d/b/a Sutter Tracy Community Hospital

National Labor Relations Board - Board Decisions

Aug 27, 2015

362 NLRB No. 199 (N.L.R.B. 2015)

362 NLRB No. 199
NOTICE: This opinion is subject to formal revision before publication in the
bound volumes of NLRB decisions. Readers are requested to notify the Ex-
ecutive Secretary, National Labor Relations Board, Washington, D.C.
20570, of any typographical or other formal errors so that corrections can
be included in the bound volumes.
Sutter Health Central Valley Region, d/b/a Sutter
Tracy Community Hospital and California
Nurses Association/National Nurses United,
CNA/NNU. Case 32–CA–098549
August 27, 2015
DECISION AND ORDER
BY MEMBERS HIROZAWA, JOHNSON, AND MCFERRAN
On March 13, 2014, Administrative Law Judge Dickie
Montemayor issued the attached decision. The Respond-
ent filed exceptions and a supporting brief, and the Gen-
eral Counsel and the Union filed answering briefs. The
Respondent also filed a reply brief.
The National Labor Relations Board has delegated its
authority in this proceeding to a three-member panel.
The Board has considered the decision and the record
in light of the exceptions and briefs, and has decided to
affirm the judge’s rulings, findings, and conclusions only
to the extent consistent with this Decision and Order.
The judge found that the Respondent violated Section
8(a)(5) and (1) of the Act by implementing its proposed
changes to the unit employees’ 2013 healthcare and
wellness programs, without affording the Union reasona-
ble notice and a meaningful opportunity to bargain. As
explained below, we reverse this finding.
Facts
The Respondent is a health care institution operating
an acute care hospital in Tracy, California. On March
23, 2012,1 the Union was certified as the exclusive col-
lective-bargaining representative of a unit of over 150
nonmanagement registered nurses. Thereafter, the par-
ties agreed upon negotiation ground rules, including that
all information requests be made in writing. In May, the
Union submitted an information request for the Re-
spondent’s healthcare and wellness programs. On June
12, the Respondent provided the requested information
and its first set of noneconomic and benefits proposals to
the Union.
The Respondent had provided healthcare coverage to
its employees through Sutter Select, an umbrella of self-
funded healthcare plans. In early August, the Respond-
ent provided the Union with cost information for its
healthcare programs (health, dental, and vision plans)
from 2010 to 2012, including premium rates for both the
Respondent and the employees. Anticipating an increase
in rates, the Respondent, at some point in 2012, decided

1 All dates are in 2012 unless otherwise indicated.
to switch to the Sutter Health Central Valley Regional
Plan (SHCVH) to increase the risk pool and lower costs.
On August 29, the 2013 premium rates for the SHCVH
healthcare plans were finalized. The provider network
for these plans was not finalized, however, until Septem-
ber 20.
By separate letters on September 19 and 21, the Re-
spondent notified the Union of its proposed changes, to
be effective January 1, 2013, to its wellness and
healthcare programs. Detailed comparisons of the 2012
wellness and healthcare programs and the 2013 proposed
changes were enclosed. For the first time, the Respond-
ent informed the Union that it had an annual practice of
reviewing and modifying its healthcare and wellness
programs. The parties stipulated that this annual practice
had been in place since at least 2008. The parties also
stipulated that the Respondent conducted this review in
late summer or early fall; provided information to em-
ployees about anticipated changes in September or Octo-
ber; and held and completed open enrollment in October
or November “to allow employees to make benefit selec-
tions and plan administrators to make any changes and
send out employee enrollment cards in time for the new
plan year on January 1.”2 The Respondent’s letters stat-
ed that it could hold off on providing the enrollment ma-
terials to allow time for bargaining over the Respond-
ent’s proposed changes if the Union wished. The Re-
spondent also asked the Union if it would like to have
additional meetings (beyond the parties’ already sched-
uled bargaining sessions) to discuss the proposed chang-
es in advance of the commencement of open enrollment
in November.
On September 20, the Union, by letter, notified the Re-
spondent that it intended to bargain over the Respond-
ent’s proposed changes but that it found “no need to have
any discussions apart from main table bargaining at this
time.” It cautioned the Respondent “not to implement
any changes to benefit plans affecting bargaining unit
Registered Nurses until a ratified collective bargaining
agreement [was] in effect.”3 The Union also requested
information about the wellness plan by October 15. Alt-
hough the Respondent had asked whether the Union

2 The Respondent proposed to offer a different no-cost option for the
2013 plan year. The 2012 no-cost option, in which many employees
were enrolled, was still available but would no longer be offered at no
cost. Thus, employees would be faced during open enrollment with a
major decision—whether to retain their current plan at cost or to opt for
the 2013 no-cost plan.
3 Although the Union did not make a second, written request to bar-
gain in response to the Respondent’s September 21 letter, the parties
understood that, based on the Union’s September 20 letter, the Union
had requested bargaining over proposed changes to both the wellness
and healthcare programs.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD2
wanted additional meetings to discuss the proposed
changes, the Union made no such requests.
On October 2, the parties met for a scheduled bar-
gained session. They briefly discussed the proposed
changes to the healthcare and wellness programs, and the
Union accepted the Respondent’s offer to have its bene-
fits experts attend the next scheduled bargaining session
to provide more information. That same day, the Union
sent a flyer to its members advising them of the proposed
changes to the wellness program. The flyer noted that
“by law Sutter Tracy must continue to offer all benefits
without change until we have reached agreement for
changes.”
On October 5, the Respondent’s human resources di-
rector, Melanie Wallace sent a memo to all the unit nurs-
es advising them that benefits experts would participate
in the parties’ next bargaining session, and noting that
they should have already received summaries of the pro-
posed changes to the healthcare program. The memo
also stated that, contrary to information provided by the
Union (presumably referring to the Union’s October 2
flyer), the Respondent evaluates and makes changes to
benefits for all employees on an annual basis and that it
was legally permitted to address benefits for next year on
a separate track from overall first contract negotiations.
Significantly, the memo stated that 2013 benefits for unit
nurses would be finalized only after the Union had been
given a full opportunity to bargain over the Respondent’s
proposals.4 On October 9, the Union responded by letter
objecting to this communication and demanding that the
Respondent “immediately cease and desist all direct
communication” with unit nurses about the proposed
changes to the healthcare and wellness programs until
“agreement or impasse on the issue.”
At the parties’ October 10 bargaining session, the Re-
spondent presented three representatives to provide in-
formation and answer questions regarding the proposed
changes to the healthcare and wellness programs. During
this session, the Union verbally requested additional in-
formation about the wellness program, which the Re-
spondent provided 2 days later.
At the October 19 bargaining session, the parties pri-
marily discussed nonhealthcare issues, although the Re-
spondent asked if the healthcare plans could be dis-
cussed. The Union responded that it was still soliciting
input from its members and had not yet formulated any
counterproposal. During this session, the Union for the
first time requested the summary plan descriptions for
the 2013 proposed healthcare plans, which the Respond-
ent provided 5 days later. After the session, the Union

4 The October 5 memo is not alleged to be an unfair labor practice.
sent a flyer to its members advising them of the proposed
changes to the healthcare plans and asking for their in-
put.5
At the October 25 bargaining session, the Union pre-
sented and summarized a counterproposal. The Union’s
written proposal stated that it was “[e]ffective upon rati-
fication or January 1, 2013 whichever comes later,”
made no counterproposals to the Respondent’s proposed
changes to the wellness program; and accepted the Re-
spondent’s healthcare plan options but proposed lower
premium rates for the employees. The Respondent did
not ask any questions, and the parties proceeded to dis-
cuss other matters. After a break, the Respondent pro-
vided, at the Union’s verbal request, a chart showing the
employer costs of the 2013 proposed changes. The Re-
spondent stated that, with open enrollment coming up in
November, it needed to make a decision. The Union
responded that it would look over the new information
provided and asked what the Respondent’s thoughts were
about moving ahead. The Respondent replied that it did
not consider the Union’s proposal to be a better proposal,
but that even if it moved forward with changes to its
plans, it would continue to bargain over healthcare and
an initial contract.
The Union responded that it was willing to bargain
separately over the healthcare issue and suggested that
the Respondent continue the same healthcare coverage
for unit employees for the following year. The Respond-
ent indicated that rollover would not be acceptable be-
cause of increased costs. The Union replied that in-
creased costs did not relieve the Respondent of its duty to
bargain and asked if the Respondent was going to submit
a counteroffer to the Union’s proposal. The Respondent
responded that it would not. After the meeting ended,
the Respondent told the Union that it was going forward
with implementation.
In an October 26 letter, the Respondent formally ad-
vised the Union that it was implementing its proposed
changes to its 2013 healthcare and wellness programs.
On November 1, the Respondent commenced open en-
rollment for the new plans. In a November 12 letter, the
Union advised the Respondent that its unilateral imple-
mentation of its proposed changes to the healthcare and
wellness programs was potentially unlawful. The letter
stated that the Union was willing to reach an agreement
over these benefits absent overall agreement, but only on
terms lasting for the duration of the parties’ initial con-
tract; alternatively, the Union would “accept the current

5 This was the first written solicitation of input. However, the Union
asserts that it had talked to unit nurses after prior bargaining sessions
about the proposed changes.
SUTTER TRACY COMMUNITY HOSPITAL 3
benefits rolling over for another year.” The Union also
requested that the Respondent “cease and desist from the
implementation path” to continue “the health and welfare
negotiations that had just begun.” The Respondent con-
tinued open enrollment as scheduled until November 30,
and the employees’ health insurance became effective
January 1, 2013.
At the time of the hearing on November 18 and 19,
2013, the parties had engaged in over 40 bargaining ses-
sions and were continuing to negotiate for a first con-
tract.
Analysis
Applying Stone Container Corp., 313 NLRB 336
(1993), and Brannan Sand & Gravel Co., 314 NLRB 282
(1994), the judge found that the Respondent did not af-
ford the Union a reasonable opportunity to bargain be-
cause it presented its proposed healthcare and wellness
program changes as a fait accompli. In each of those
cases, which dealt with first contract situations, the
Board recognized an exception to the general rule that an
employer cannot make unilateral changes to terms and
conditions of employment absent an overall impasse in
negotiations. In Stone Container, the Board held that an
employer’s unilateral change to terms and conditions of
employment was not unlawful where the employer estab-
lished that the change was made pursuant to a past prac-
tice involving a discrete recurring event (an annual
wage review), and that it had provided the union with
notice of the proposed change and an opportunity to
bargain. In Brannan Sand, which involved an employ-
er’s annual review of its health plans, the Board, citing
Stone Container, reaffirmed this discrete recurring event
exception, but found that the employer did not satisfy its
bargaining obligation because it presented its proposed
changes to the union as a fait accompli.
We find that the judge properly applied Stone Con-
tainer and Brannan Sand as the governing law here—
i.e., the parties were engaged in first contract negotia-
tions and they stipulated to the Respondent’s past prac-
tice of annually reviewing and modifying its healthcare
and wellness programs. However, we find merit in the
Respondent’s exceptions arguing that the judge’s fait
accompli finding is neither supported by current Board
law nor the relevant facts.
The Board finds that an employer has presented its
proposed changes as a fait accompli when the an-
nouncement or notification is presented as a final deci-
sion or the union was not afforded an opportunity to bar-
gain.6 Here, the Respondent did not present its proposed

6 See Brannan Sand and Gravel, above at 282 (fait accompli found
where employer had already announced the changes to its healthcare
changes in such a final manner. As described above, the
Respondent notified the Union about the proposed
changes in the latter part of September. It did so imme-
diately upon finalization of the details of those changes,
including the choice of a network provider and consistent
with its past practice timeline for giving first notice to
employees. It also told the Union that it would delay
providing employees with the enrollment materials in
order to allow time for bargaining, and it asked the Un-
ion’s representatives if they wanted to meet beyond the
parties’ already-scheduled first contract bargaining ses-
sions to discuss the proposed changes. Furthermore, the
Respondent’s October 5 memo to unit employees stated
that the Respondent would finalize 2013 benefits for unit
employees only after giving the Union “a full opportuni-
ty to bargain over our proposals.” Thus, unlike in Bran-
nan, above, the Respondent did not announce a final de-
cision to the employees nor communicate anything to the
Union that could lead to a conclusion that bargaining
would have been “fruitless.” Cf. Bell Atlantic Corp., 336
NLRB 1076, 1087 (2001) (affirming judge’s finding that
employer did not announce decision as fait accompli
where employer “made no statements at the time of the
announcement that would lead a reasonable person to
conclude that the decision was irrevocable”). The Re-
spondent informed the Union of the specific details of
the proposed changes 6 weeks before the planned com-
mencement of enrollment and over 3 months before
planned implementation. The Respondent afforded the
Union, at multiple times and in multiple ways, reasona-
ble opportunities to negotiate before the annual changes
needed to take effect and negotiations did, in fact, take
place. Further, even when the Respondent informed the
Union that it would proceed with enrollment and imple-
mentation of the proposed changes in accord with the
past practice timeline, it made clear that it would contin-
ue to bargain over healthcare and wellness programs and
an initial contract. In these circumstances, we find that
the record supports a finding that the Respondent met its
duty to provide the Union with timely notice and a mean-
ingful opportunity to bargain.

plans to the employees and advised the union that any discussion would
have been “fruitless” because it had no intention of doing anything
other than what it had planned to do); see also Pontiac Osteopathic
Hospital, 336 NLRB 1021, 1023-1024 (2001) (fait accompli found
where employer presented changes to its paid time-off policy as final
decisions to be implemented and ignored the union’s request to bar-
gain).
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD4
ORDER
The complaint is dismissed.
Dated, Washington, D.C. August 27, 2015
Harry I. Johnson, III, Member
Lauren McFerran, Member
(SEAL) NATIONAL LABOR RELATIONS BOARD
MEMBER HIROZAWA, concurring.
While I think this is a very close case on the facts, I
view the conclusion that a violation has not been estab-
lished as defensible under the Board’s controlling author-
ity, Stone Container Corp. and Brannan Sand & Gravel
Co. Accordingly, I join my colleagues in dismissing the
complaint. From the standpoint of the policy of the Act
to “encourag[e] the practice and procedure of collective
bargaining,” 29 U.S.C. § 151, and the basic rules estab-
lished by the Board to implement that policy, however,
this result is hard to justify. Among those basic rules are
the prohibition of unilateral changes in terms and condi-
tions of employment without notice to and bargaining
with the union, and the requirement that the parties have
exhausted the possibilities of agreement as to all manda-
tory subjects of bargaining before a change in any of
those subjects may be made unilaterally. There are many
reasons for the latter, overall impasse rule. One is that it
is necessary in order for bargaining to function produc-
tively. Judge Posner explained:
A negotiation is more likely to be successful when
there are several issues to be resolved (“integrative bar-
gaining”) rather than just one, because it is easier in the
former case to strike a deal that will make both parties
feel they are getting more from peace than from war.
Howard Raiffa, The Art and Science of Negotiation 97-
103, 131–32 (1982). If the only thing at issue in a labor
negotiation is wages, that is, money, the parties are
playing a zero-sum game: a dollar more in wages is a
dollar gained by the union but a dollar lost by the em-
ployer. But suppose a dues checkoff is also at issue.
Since it probably is worth more to the union not to have
to dun the workers for their union dues than it costs the
employer to deduct the dues from the worker’s
paycheck and remit them to the union, the union may
be willing to give a little in bargaining over wages in
order to get the dues checkoff. Similarly, the employer
may be willing to “pay” for a no-strike clause by agree-
ing to a grievance procedure jointly administered by the
union and the employer, and that may be a concession
that the union very much wants in order to give the
workers a sense that the union is protecting them from
arbitrary discipline by the employer. With both parties
eager for this trade, it may be easier for them to com-
promise on other issues. The particular trade creates
value that can be used to fund, as it were, other conces-
sions by both sides, bringing the parties nearer to the
state in which both feel better off with an agreement
than with a strike.
Duffy Tool & Stamping, LLC v. NLRB, 233 F.3d 995,
998 (7th Cir. 2000). If one item is excepted from the
bundle of mandatory subjects, the exception both crip-
ples the bargaining process as to that item and impairs
the bargaining as to the rest, more or less seriously de-
pending on the relative importance of the excepted item.
In my view, the Board in Stone Container failed to justi-
fy, in terms of policy and broader legal principles, ex-
cluding the employer’s annual wage increase because it
was a discrete event that had been recurring since before
the union’s certification as the employees’ representative.
The exclusion is even more destructive, and difficult to
justify, when applied to health insurance, changes in
which usually impose increased costs and reduced bene-
fits on employees. I think that the Board needs to reex-
amine its rulings in this area in light of the policies and
purposes of the Act.
Dated, Washington, D.C. August 27, 2015
Kent Y. Hirozawa, Member
NATIONAL LABOR RELATIONS BOARD
Jennifer Kaufman and Catherine L. Ventola, Esqs., for the
General Counsel.
David J. Reis and Julia M. Levy, Esqs., for the Respondent.
Micah Berul, Esq., for the Charging Party.
DECISION
STATEMENT OF THE CASE
DICKIE MONTEMAYOR, Administrative Law Judge. Pursuant
to notice this case was tried in Oakland, California, on Novem-
ber 18, 19, 2013. The California Nurses Association/National
Nurses United (the Union), filed the charge on February 15,
2013, and the General Counsel issued the complaint on August
27, 2013, alleging violations by Sutter Health Central Valley
Region, d/b/a Sutter Tracy Community Hospital (the Respond-
SUTTER TRACY COMMUNITY HOSPITAL 5
ent) of Section 8(a)(5) and (1) of the National Labor Relations
Act (the Act). Respondent filed a timely answer denying that it
violated the Act as alleged.
The parties were afforded a full opportunity to be heard, to
call, examine, and cross-examine witnesses, and to introduce
relevant evidence. Since the close of the hearing, briefs were
received from counsel for the General Counsel (the General
Counsel), the Respondent, and the Charging Party. Upon the
entire record,1 and based upon my observation of the demeanor
of the witnesses and consideration of the briefs filed by the
parties, I make the following
FINDINGS OF FACT
I. JURISDICTION
The Respondent, is a corporation engaged in business as a
health care institution operating an acute care hospital in Tracy,
California, where it annually derives gross revenues in excess
of $250,000 and purchases and receives goods valued in excess
of $5000 directly from points outside the State of California.
The Respondent admits, and I find, that it is an employer en-
gaged in commerce within the meaning of Section 2(2), (6),
and (7) of the Act and that the Union is a labor organization
within the meaning of Section 2(5) of the Act.
II. ALLEGED UNFAIR LABOR PRACTICES
The principal issue in this matter is whether the Respondent
violated Section 8(a)(5) and (1) of the Act by unilaterally im-
plementing changes to employee healthcare and wellness pro-
gram benefits for 2013. The issue was more specifically de-
fined by the parties by stipulation.
At trial, the parties stipulated as follows:
Since at least 2008, the Employer in this case had an
annual practice of reviewing its self-funded medical and
wellness programs and other benefit plans and making
modifications at approximately the same time each year.
Under this practice, the Employer would review its health
benefits programs and wellness plans in the late summer
or early fall, provide information to employees about an-
ticipated changes in September or October, and then hold
benefits open enrollment in October or November to allow
employees to make benefit selections and plan administra-
tors to make any changes and send out employee enroll-
ment cards in time for the new plan year on January 1.
For the purposes of this case only, the General Counsel
agrees that the Employer has no burden of establishing
that the changes to the health benefit programs and the
wellness plans that the Employer proposed to the Union in
September of 2012, which are the subject of this proceed-
ing, are consistent with the Employer’s preexisting annual
practice of reviewing and changing its health benefit and
wellness plans.
The General Counsel is not alleging that the Employer
was obligated to refrain from implementing its proposed

1 On December 19, 2013, the parties filed a joint motion to supple-
ment the record with what was marked as Jt. Exh. 4(a). The motion
was granted and Jt. Exh. 4(a) was admitted into the record.
changes to its self-funded health benefits program and
wellness plans until an impasse was reached in bargaining
for a collective-bargaining agreement as a whole.
The issues in this case are:
(1) Did the Employer provide the Union adequate no-
tice of the proposed changes to its self-funded health bene-
fit programs and wellness plans and a meaningful oppor-
tunity to bargain before implementing the changes;
(2) Assuming the employer had afforded the Union
with adequate notice and a meaningful opportunity to bar-
gain, was the employer required to bargain to impasse
over the proposed changes to its self-funded benefit pro-
grams and wellness plans before implementing them? And
if so, did the Employer bargain to impasse over the pro-
posed changes before implementation?
A. Background
Many of the underlying facts surrounding the allegations are
not in dispute. Sutter Tracy Community Hospital is a hospital
owned and operated by Respondent Sutter Central Valley Hos-
pitals which is a private, not-for-profit corporation affiliated
with Sutter Health. The Union represents a bargaining unit of
over 150 nonmanagement registered nurses at the hospital. The
Union was certified as the exclusive collective-bargaining unit
representative of the unit employees on March 23, 2012.2 In
June 2012, the parties began negotiations toward the adoption
of an initial collective-bargaining agreement. At the time of the
hearing, November 18 and 19, 2013, the parties had engaged in
over 40 bargaining sessions. Nevertheless, no final agreement
has been reached and the parties are still engaged in negotia-
tions.
The parties were represented in these negotiations by Mike
Brannan and Christopher Scanlan. Brannan is the labor repre-
sentative and acted as Bargaining Lead for the Union. Scanlan
is an attorney and legal counsel to Respondent and acted as the
chief bargaining table spokesperson for Respondent. Both have
been present during all relevant bargaining sessions.
B. The Health Plans
In the years prior, Respondent provided health coverage
through Sutter Select an umbrella of self-funded health plans
that service Sutter Health employees. Sutter Select establishes
and markets health plans for Sutter Health. Rates are set for the
plans at the beginning of the calendar year. Sutter Health plans

2 The certified unit consists of:
all full-time, regular part-time, and per diem Registered Nurses em-
ployed by Respondent at its facility located at 1420 North Tracy
Boulevard, Tracy, California, including Case Manager II, Staff Nurs-
es, and Wound Care Nurses; excluding Employee Health Coordinator,
Infection Control Coordinator, Policy & Procedure Coordinator, Qual-
ity Management-Infection Control and all other employees, all other
professional employees, confidential employees, employees provided
by temporary employment and placement agencies, managerial em-
ployees, guards, Clinical Nurse Leads, Charge Nurses (“permanent”
Charge Nurses), Nurse Managers, Nursing Coordinator, Patient Care
Shift Supervisors (House Supervisors), Wound Ostomy Continence
Nurse Coordinator, and all other Supervisors as defined in the Act.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD6
are subject to IRS rules governing cafeteria plans. The IRS
rules require that an open enrollment occur prior to the com-
mencement of the plan year on January 1. Because the plans
are offered to employees on a pretax basis, the failure to com-
ply with IRS rules could result in employees losing the tax
benefits of the arrangement. In order to remain in compliance
with the IRS rules, Respondent has in place a practice of con-
ducting an annual open enrollment. This open enrollment is
typically held in the fall usually between mid-October and mid-
November. The open enrollment process is held during this
timeframe to account for the complex logistics involved in
implementing the changes associated with the open enrollment
process. Practically speaking, in order to account for all of the
steps in the process, the entire open enrollment process must be
completed by late November each year. This is because em-
ployees need to be given sufficient time to make their elections,
information must be entered into the healthcare elections com-
puter system, plan administrators need time to test the system,
the vendors need time to process files, the insurance vendors
require enrollment eligibility in December and ID enrollment
cards have to be printed and provided to employees prior to the
new year.
C. Bargaining
In May 2012, the Union, consistent with established and
agreed upon negotiation ground rules, submitted a request for
information regarding Respondent’s then existing health bene-
fits. On June 12, 2012, Respondent provided information to the
Union which included copies of the health, dental, and medical
benefit plans. Similarly on June 12, 2012, Respondent present-
ed the Union with its first set of noneconomic and benefits
proposals. Respondent proposed to maintain the status quo and
provide identical benefits to both unit employees and non-
represented employees. On August 8, 2012, Respondent pro-
vided the Union with plan rate information for all of Respond-
ent’s health plans.
In 2012, Respondent offered two tiers of health benefit op-
tions to its employees through Sutter Select: (1) a no-cost op-
tion for employees, called the EPO Plus Option, which gave
access to all Sutter Health Facilities; and a PPO option at an
additional cost. Because the costs for the EPO Plus Option and
the PPO option were set to increase, Respondent looked to
other alternatives. Respondent determined that it could best
address the issues by aligning its benefits with that of the other
Sutter Health Hospitals in the Central Valley Region in an at-
tempt to increase the risk pool and lower the costs of benefits.
Respondent determined that switching to the Sutter Health
Central Valley Region Plan (SHCVH) would present the best
option. On August 29, 2012, Sutter affiliates made the final
recommendation for the 2013 premium rates for the health
plans. Regional Hospital leadership then worked with Re-
spondent facility leadership and Sutter Select officials to final-
ize the plans for the switch to the SHCVH plan.
On September 19, 2012, during a bargaining session,
Scanlan presented Brannan a letter addressed to Brannan and
signed by Melanie Wallace the human resources director. The
letter provided that it was, “notification that consistent with our
practice we intend to make certain changes to the wellness
program for the next calendar year.” (Jt. Exh. 5, p. 1.) The
letter explained the intended changes and further noted that “we
are prepared to hold off on providing enrollment materials to
bargaining unit RN’s through the end of October, to ensure
adequate time for bargaining if you wish to bargain these pro-
posed changes with us. (Id. at p. 2.) The following day Marti
Smith, a union labor representative responded to the letter from
Wallace. In the letter, Smith notified Wallace of the Union’s
intent to “exercise our right to bargain this along with all other
terms and conditions of employment for Registered Nurses at
Sutter Tracy. We see no need to have any discussions apart
from main table bargaining at this time. You are therefore
cautioned not to implement any changes to benefit plans affect-
ing bargaining unit Registered Nurses until a ratified collective
bargaining agreement is in effect.” (Jt. Exh. 6, p. 1.) Smith
also noted that in order to, “embark upon main table bargain-
ing” they would need information related to the plan and re-
quested that Respondent provide the information by October
15, 2012. (Id.)
On September 21, 2012, Wallace wrote Brannan to notify
him of Respondent’s “plan to adopt, effective January 1, 2013,
certain changes to health, dental, vision and wellness benefits.”
(Jt. Exh. 7, p.1.) The letter, which briefly outlined the planned
changes and stated, “because 2013 benefits will need to be the
subject of open enrollment in November, please let us know
immediately if you would like to meet to discuss any of the
above changes.” (Jt. Exh. 7, p. 2.) Wallace also noted that they
would “delay releasing any materials to STCH RNs until we
have had an opportunity to hear from you about the issue. If
we do not hear from you within one week of this letter we will
assume that you do not object to the implementation of the
proposed changes for STCH RNs. If you do wish to meet with
us, we can discuss with you at our next scheduled bargaining
session (October 2nd).” (Id.)
On October 2, 2012, the parties met again and the wellness
program benefits and health care changes were briefly dis-
cussed. Respondent offered to have its benefits experts attend
the next scheduled bargaining session to provide information
regarding the planned changes. The Union sent out a flyer to
its members advising of the proposed changes to the wellness
plan and in its flyer noted that “by law Sutter Tracy must con-
tinue to offer all benefits without change until we have reached
agreement for changes.” (R. Exh. 5.)
By October 5, 2012, summaries of plan changes were pro-
vided to employees by Respondent. On October 5, 2012,
Melanie Wallace the human resources director referencing
these summaries sent a memo to all Sutter Tracy Community
Hospital (STCH) registered nurses. In the memo, Wallace
stated,
[T]here has been some confusion about whether a contract
with the union must be in place in order for STCH to imple-
ment these benefit changes. Contrary to information provided
by the union, a contract does not need to be in place in order
for these changes to be implemented. STCH evaluates and
makes changes to our benefits for all of our employees every
year. Since no union contract has ever been in place, STCH is
legally permitted to address benefits for next year on a sepa-
SUTTER TRACY COMMUNITY HOSPITAL 7
rate track from our overall contract negotiations. However,
we will finalize RN benefits for 2013 only after the C.N.A.
has been given a full opportunity to bargain over our pro-
posals. It is our preference and strong desire for RNs to partic-
ipate in the same 2013 open enrollment process as the rest of
the STCH employees.” (Jt. Exh. 8.)
On October 9, 2012, Marti Smith sent a letter, on behalf of
the Union, objecting to Wallace’s October 5, 2102 memoran-
dum and demanded that Respondent cease and desist all direct
communication with the registered nurses regarding the pro-
posed changes, “until the parties have bargained and reached
agreement or impasse on the issue.” (Jt. Exh. 9.)
On October 10, 2012, the next bargaining session was held
and Respondent made available three representatives to provide
information and answer questions regarding the planned chang-
es. The parties met again on October 19, 2012. The discus-
sions focused on non-health benefits issues because the Union
was still soliciting input from its members and it had not yet
formulated any counterproposal. The Union however did re-
quest the Summary Plan Descriptions (SPD) at this meeting.
After the October 19, 2012 meeting, the Union sent out a flyer
to its members asking that they “weigh in on Sutter’s proposed
changes to our benefits and wellness program.” (R. Exh. 7.)
On October 24, 2012, at 2:31 p.m. Scanlan via email provid-
ed the Union with the SPDs which included a chart that refer-
enced copays, deductibles, and out of pocket expenses for the
new plan. The next bargaining session took place the next day
on October 25, 2012. At that session, the Union presented its
“counter-proposal” to Respondent’s proposal on health benefits
(medical, dental and vision). (Jt. Exh. 12.) Brannan, while
handing out the proposal, referenced the difficulty the Union
faced with coming up with a counterproposal given the “time
constraints.” (GC Exh. 2e.) Brannan thereafter summarized
the Union’s proposal. Respondent didn’t ask any questions
about the union proposal and the parties proceeded to discuss
other matters. (R. Exh. 9(e).)
After the Union presented its counterproposal, and after the
parties returned from a break in the meeting, Respondent pro-
vided the Union with a document that outlined total 2013
healthcare plan costs. This information had not been provided
to the Union prior to their formulation of the “counter offer.”
Upon presentation of the information, Scanlan indicated that
with open enrollment coming up in November “we need to
figure out what we are going to do,” intimating that a final de-
cision needed to be made regarding the plan. Brannan respond-
ed that they would look over the information provided and
asked what Scanlan’s thoughts were about moving ahead.
Scanlan replied the he didn’t think that the Union had persuad-
ed him that it had the better proposal. (GC Exh. 2(e).) Scanlan
also indicated that if they did move forward with the plan they
would continue to bargain over health care and a contract.
Brannan responded by indicating that the Union was willing to
bargain separately over the heath care issue and also suggested
that the Unit continue with its current coverage and roll it into
the next year. Scanlan indicated that roll over wouldn’t be
acceptable because of increased costs. Brannan responded that
increased costs didn’t relieve the employer of its duty to bar-
gain. Brannan asked if Respondent would submit a counterof-
fer to their proposal. Scanlan responded that they would not.
After the meeting ended, Scanlan informed Brannan that Re-
spondent was going forward with the implementation of its
healthcare proposal. The next day, on October 26, 2012,
Scanlan sent a letter to Brannan advising that the hospital-wide
2013 benefit plan first described in the letters of September 19
and 21, 2012, would be implemented. (Jt. Exh. 14.) Four days
later, on November 1, 2012, Respondent commenced open
enrollment for the new plan.
By letter dated November 12, 2012, the Union reiterated its
position that Respondent’s unilateral implementation of its
healthcare benefits changes was potentially unlawful and that it
was willing to reach an agreement over healthcare benefits
absent overall agreement. (Jt. Exh. 16.) Respondent replied to
the letter on November 14, 2012, with a proposal that would
give Respondent the right to change healthcare benefits for all
of its employees “without need for negotiations.” (Jt. Exh. 17.)
The language in the proposal related to healthcare mirrored that
of Respondent’s original proposal submitted on June 12, 2012.
(Jt. Exh. 4(a).)
D. Discussion and Analysis
Section 8(a)(5) requires that an employer, “bargain collec-
tively with the representatives of his employees.” Section 8(d)
defines that obligation to include, “the mutual obligation of the
employer and the representative of the employees to meet at
reasonable times and confer in good faith with respect to wag-
es, hours and other terms and conditions of employment. . . .”
In NLRB v. Katz, 369 U.S. 736 (1962), the Supreme Court
made clear that an employer violates Section 8(a)(5) and (1) of
the Act if it changes terms and conditions that are mandatory
subjects without providing the union representing its employees
with prior notice and the opportunity to bargain about such
subjects. It is also well settled that an employer that acts precip-
itously and presents unilateral changes as a fait accompli fails
to meet the requirement set forth above in Katz. See also UAW-
Daimler Chrysler National Training Center, 341 NLRB 431,
433 (2004).
In Stone Container Corp., 313 NLRB 336 (1993), the Board
recognized an exception to the general rule that an employer
must refrain from making unilateral changes during contract
negotiations.3 Stone Container involved an annual wage re-
view which occurred during the time the parties were involved
in negotiations for an overall agreement. The Board held that
because it was a “discrete event,” the employer, after giving
notice and providing an opportunity to bargain, was privileged
to implement changes without waiting until an overall impasse
if, when given the opportunity to bargain, the Union did not
submit any counterproposal or raise the issue during negotia-

3 I concur with the General Counsel that the exigency exception re-
lied upon by the Board in RBE Electronics of S.D., Inc., 320 NLRB 80,
82 (1995), is inapplicable to this case as Respondent failed to demon-
strate that the exigency was caused by external events, was beyond the
employer's control, and/or was not reasonably foreseeable.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD8
tions.4
The Board reaffirmed its holding in Stone Container in a
number of cases directly related to health care benefits.5 In
Brannan Sand & Gravel, 314 NLRB 282 (1994), the Board
reaffirmed that an employer is not required to refrain from im-
plementing the changes [involving a discrete annually recurring
event] until an impasse has been reached in bargaining for a
collective-bargaining agreement as a whole. But the Board
distinguished the case from Stone Container holding that unlike
the facts presented in Stone Container, the respondent in Bran-
nan failed to satisfy its obligation to provide the union with
timely notice and a meaningful opportunity to bargain over the
changes in employment conditions. The Board reasoned that
Respondent presented the health plan changes as a fait accom-
pli and therefore violated Section 8(a)(5) and (1) by unilaterally
implementing the health plan changes.
I find that in this case, as in Brannan Sand and Gravel, Re-
spondent did not afford the Union a reasonable opportunity to
bargain and presented the health care plan and wellness pro-
gram benefit changes as a fait accompli.
E. The Denial of a Meaningful Opportunity to Bargain
Good-faith bargaining requires timely notice and “meaning-
ful opportunity to bargain” regarding the employer's proposed
changes, as no genuine bargaining can be conducted where the
decision has already been made and implemented. See Pontiac
Osteopath Hospital, 336 NLRB 1021, 1023–1024 (2001), Cas-
tle Hill Health Care Center, 355 NLRB 1156, 1189 (2010), and
S & I Transportation, 311 NLRB 1388 (1993).
I find there is sufficient objective evidence in the record to
support the finding that Respondent made up its mind regarding
its health care plan and wellness benefit proposals early on in
the process and never seriously intended to bargain with the
Union over the matters. The record includes a clear expression
of Respondent’s intentions at the outset of bargaining as well as
after the announced implementation of the health care plan and
wellness program benefit changes. Respondent unequivocally
asserted that its position was to offer the same health benefits it
was offering to nonrepresented employees and reserve exclu-
sively to itself the right to add, increase, reduce or eliminate
any given benefit without the need for negotiations (emphasis
added). (Jt. Exh. 17.)
Other objective evidence of the Respondent’s intent is found
in the timing of the notice to the Union.6 It is undisputed that
Respondent knew about the intended changes well in advance
of its notification to the Union and was behind the scenes plan-
ning changes. It is also undisputed that Respondent had in

4 It is undisputed, and I find, that in this case, the Union did not
waive its right to bargain and in fact took active steps to exercise its
right.
5 See, Nabors Alaska Drilling, Inc., 341 NLRB 610 (2004), Saint-
Gobain Abrasives, 343 NLRB 542 (2004), and St. Mary’s Hospital of
Blue Springs, 346 NLRB 776 (2006).
6 Respondent argues that the Union engaged in “bad faith” bargain-
ing on account of its delay in submitting its counterproposal and
“squandered” its opportunity to bargain. Respondent cannot be heard
to complain about the timing of the Union’s counterproposal when it
had no real intention of considering it.
mind a November launch for the open enrollment which would
require that the plan be in place and ready to go. Nevertheless,
Respondent purposely delayed informing the Union about both
its annual practice and/or the planned changes that were under-
way. This is true despite the fact that Respondent was regularly
meeting with the Union regarding other issues. Respondent
instead chose to inform the Union only after all the plan fea-
tures and changes had been finalized.
Other evidence of Respondent’s intent is found in the direct
communication with represented employees of the summaries
of its planned changes. This communication took place even
before the Union was afforded the opportunity to present its
counterproposal. (Jt. Exh. 8.) A reasonable inference to be
drawn from this evidence is that the summaries were final and
Respondent had no intention of altering them. If Respondent
had a genuine interest in bargaining it would not have sent the
proposals to the employees without providing the Union an
opportunity for input regarding them. When the Union present-
ed its counterproposal not a single question was asked of them.
Nor was the Union given the opportunity to consider or study
the newly presented plan cost information. The undisputed
evidence of record is that the Union’s counter proposal was
flatly rejected.
I find that a reasonable inference to be drawn from the totali-
ty of all of this evidence is that Respondent never really intend-
ed to bargain with the Union and the notice of proposed chang-
es provided to the Union was simply a means to inform it of a
fait accompli. Applying the reasoning and rationale set forth
above in Brannan Sand & Gravel, I find that Respondent vio-
lated Section 8(a)(5) and (1) of the Act.
In view of my findings above, I need not reach the issue of
whether bargaining to impasse was required or other subsidiary
issues related to impasse.
CONCLUSIONS OF LAW
1. The Respondent is an employer engaged in commerce
within the meaning of Section 2(2), (6), and (7) of the Act.
2. The Union is a labor organization within the meaning of
Section 2(5) of the Act.
3. The Respondent violated Section 8(a)(5) and (1) of the
Act by implementing its health care plan and wellness program
changes unilaterally changing terms and conditions of employ-
ment without providing reasonable notice and an meaningful
opportunity to bargain about such changes.
4. The unfair labor practices found above affect commerce
within the meaning of Section 2(6) and (7) of the Act.
REMEDY
Having found that the Respondent has engaged in certain un-
fair labor practices, I shall order it to cease and desist therefrom
and to take certain affirmative action designed to effectuate the
policies of the Act.
Respondent was at liberty to make changes applicable to un-
represented employees. However for those represented em-
ployees, Respondent shall be required to make the unit employ-
ees whole in all respects for all losses whatsoever resulting
from the changes in benefits beginning on January 1, 2013,
through the present, and shall return all unit members to the
SUTTER TRACY COMMUNITY HOSPITAL 9
status quo ante health care plan and wellness program, until
such time as the Union expressly agrees to those changes in the
health plan, or a collective-bargaining agreement or an impasse
in negotiations is reached as provided in Ogle Protection Ser-
vice, 183 NLRB 682 (1970), enfd. 444 F.2d 502 (6th Cir.
1971), with interest to be computed as provided for in New
Horizons, 283 NLRB 1173 (1987), compounded daily as pre-
scribed in Kentucky River Medical Center, 356 NLRB No. 8
(2010). This includes reimbursing unit employees for any ex-
penses resulting from Respondent's unlawful changes to their
contractual benefits, as set forth in Kraft Plumbing & Heating,
252 NLRB 891 fn. 2 (1980), affd. 661 F.2d 940 (9th Cir. 1981),
with interest as set forth in New Horizons, supra.
On these findings of fact and conclusions of law and on the
entire record, I issue the following recommended7
ORDER
The Respondent, Sutter Health Central Valley Region,d/b/a
Sutter Tracy Community Hospital, Tracy, California, its offic-
ers, agents, successors, and assigns, shall
1. Cease and desist from
(a) Refusing to bargain collectively and in good faith with
California Nurses Association/National Nurses United as the
exclusive collective-bargaining representative under Section
9(a) of the Act for the following appropriate unit of employees:
All full-time, regular part-time, and per diem Registered
Nurses employed by Respondent at its facility located at 1420
North Tracy Boulevard, Tracy, California, including Case
Manager II, Staff Nurses, and Wound Care Nurses; excluding
Employee Health Coordinator, Infection Control Coordinator,
Policy & Procedure Coordinator, Quality Management-
Infection Control and all other employees, all other profes-
sional employees, confidential employees, employees provid-
ed by temporary employment and placement agencies, mana-
gerial employees, guards, Clinical Nurse Leads, Charge Nurs-
es (“permanent” Charge Nurses), Nurse Managers, Nursing
Coordinator, Patient Care Shift Supervisors (House Supervi-
sors), Wound Ostomy Continence Nurse Coordinator, and all
other Supervisors as defined in the Act.
(b) Unilaterally changing its health care plan and wellness
program benefits and employee contributions for such benefits
insofar as such changes are applicable to employees in the
above unit, without giving the Union reasonable notice and a
meaningful opportunity to bargain.
(c) In any like or related manner interfering with, restrain-
ing, or coercing employees in the exercise of rights guaranteed
them by Section 7 of the Act.
2. The Respondent shall take the following affirmative ac-
tion necessary to effectuate the policies of the Act.
(a) Upon request of the Union, rescind all changes to health
care plan and wellness program benefits applicable to unit
members and return all unit members to the health plans that

7 If no exceptions are filed as provided by Sec. 102.46 of the Board’s
Rules and Regulations, the findings, conclusions, and recommended
Order shall, as provided in Sec. 102.48 of the Rules, be adopted by the
Board and all objections to them shall be deemed waived for all pur-
poses.
were in place prior to the changes including vision and dental
benefits. In doing so, Respondent shall ensure that such restora-
tion is done in a manner that is effectuated without any lapse of
health care plan or wellness program coverage for any affected
unit member.
(b) Make whole all employees in the above unit for any
monetary losses occasioned by the health care plan or wellness
program changes including but not limited to any and all out of
pocket expenses or changes to copays that would not have oc-
curred but for Respondent’s unilateral changes to its health care
plan and wellness program benefits and employee contributions
for health plan coverage in the manner set forth in the remedy
section of the decision.
(c) On request, bargain with the Union as the exclusive rep-
resentative of the employees in the recognized and appropriate
unit concerning terms and conditions of employment, and if an
understanding is reached, embody the understanding in a signed
agreement.
(d) Within 14 days after service by the Region, post at its
facility in Tracy, California, copies of the attached notice
marked “Appendix.”8 Copies of the notice, on forms provided
by the Regional Director for Region 32, after being signed by
the Respondent’s authorized representative, shall be posted by
the Respondent and maintained for 60 consecutive days in con-
spicuous places including all places where notices to employees
are customarily posted. In addition to physical posting of paper
notices, the notices shall be distributed electronically, such as
by email, posting on an intranet or an internet site, and/or other
electronic means, if the Respondent customarily communicates
with its employees by such means. Reasonable steps shall be
taken by the Respondent to ensure that the notices are not al-
tered, defaced, or covered by any other material.
(e) Within 21 days after service by the Region, file with the
Regional Director a sworn certification of a responsible official
on a form provided by the Region attesting to the steps that the
Respondent has taken to comply.
Dated, Washington, D.C. March 13, 2014
APPENDIX
NOTICE TO EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
After a hearing before an administrative law judge, the
National Labor Relations Board has found that we vio-
lated Federal labor law and has ordered us to post and
obey this notice.
FEDERAL LAW GIVES YOU THE RIGHT TO
Form, join, or assist a union

8 If this Order is enforced by a judgment of a United States court of
appeals, the words in the notice reading “Posted by Order of the Na-
tional Labor Relations Board” shall read “Posted Pursuant to a Judg-
ment of the United States Court of Appeals Enforcing an Order of the
National Labor Relations Board.”
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD10
Choose representatives to bargain with us on your be-
half
Act together with other employees for your benefit and
protection
Choose not to engage in any of these protected activi-
ties.
WE WILL NOT refuse to bargain collectively and in good faith
with the California Nurses Association/National Nurses United
as the exclusive representative under Section 9(a) of the Act for
the following appropriate unit of employees:
All full-time, regular part-time, and per diem Registered
Nurses employed by Respondent at its facility located at 1420
North Tracy Boulevard, Tracy, California, including Case
Manager II, Staff Nurses, and Wound Care Nurses; excluding
Employee Health Coordinator, Infection Control Coordinator,
Policy & Procedure Coordinator, Quality Management-
Infection Control and all other employees, all other profes-
sional employees, confidential employees, employees provid-
ed by temporary employment and placement agencies, mana-
gerial employees, guards, Clinical Nurse Leads, Charge Nurs-
es (“permanent” Charge Nurses), Nurse Managers, Nursing
Coordinator, Patient Care Shift Supervisors (House Supervi-
sors), Wound Ostomy Continence Nurse Coordinator, and all
other Supervisors as defined in the Act.
WE WILL NOT unilaterally change our health care plan or
wellness program benefits and employee contributions for
health care plan coverage insofar as such changes are applica-
ble to employees in the above unit, without first timely notify-
ing the Union and providing them with a meaningful opportuni-
ty to bargain.
WE WILL NOT in any like or related manner interfere with, re-
strain, or coerce employees in the exercise of the rights guaran-
teed them by Section 7 of the Act.
WE WILL, on request, bargain with the Union and put in writ-
ing and sign any agreement reached on terms and conditions of
employment for our employees in the above bargaining unit.
WE WILL make employees whole and reimburse employees
in the above unit for any losses incurred as a result of Respond-
ent’s January 1, 2013, unlawful unilateral changes to its health
care plan and wellness program, with interest.
WE WILL, upon request of the Union, rescind the unilateral
changes to the health care plan and wellness program and re-
store all affected unit employees to the plans that were in effect
prior to the unilateral implementation.
SUTTER HEALTH CENTRAL VALLEY REGION D/B/A
SUTTER TRACY COMMUNITY HOSPITAL