Corporate reorganization in the health care industry: the labor law implications

Health care mergers, acquisitions, or the creation of new subsidiaries or satellite facilities have significant labor law implications. The National Labor Relations Board may disregard the independent corporate status of two related entities. Such "single employer" status may make a health care organization more susceptible to union organizing, to labor disputes, or to monetary liability for unfair labor practices. The Board may also allow employees at independent facilities of a single employer to organize and bargain as a single unit. Such a multifacility unit may result in employees of small outlying facilities being organized against their wishes. Similarly, the unit accretion theory of the Board allows employees of a newly acquired or newly created small facility to be merged into a larger, existing bargaining unit without an opportunity for an election. Finally, a health institution that acquires or merges with another facility may be obligated to assume and honor an existing union contract. Alternatively, the "successor" may be required to bargain with the union, but not to assume the union's contract. With the proper planning, however, the employer may have no obligation either to bargain or to assume the contract. The successor employer must also be concerned with its liability for unfair labor practices of the seller.