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Interest of Amicus Curiae

The ���������� Association (AHA) is a national not-for-profit association that represents the interests of more than 5,000 hospitals, health care systems, and other health care organizations, as well as 43,000 individual members. It is the largest organization representing the interests of the Nation’s hospitals. AHA members are committed to improving the health of the communities they serve. The AHA educates its members on health care issues and advocates on their behalf in legislative, regulatory, and judicial fora to ensure that their perspectives are considered in formulating policy.

Hospitals and health systems often rely on outside contractors to perform a variety of functions, including nursing, environmental services, dietary and food services, security, and maintenance. And as the AHA explained to the National Labor Relations Board (NLRB), labor costs are a major cause of increased financial strain on the AHA’s members. As such, the AHA’s member-hospitals, most of which are subject to the National Labor Relations Act (NLRA), have a strong interest in ensuring that the NLRA is not misinterpreted in ways that inhibit their ability to rely on contract workers to meet critical staffing needs, further increase their labor costs, and divert limited resources from patient care.

The AHA agrees with Plaintiffs that the Final Rule at issue here violates the Administrative Procedure Act (APA) and submits this brief to explain why it is arbitrary and capricious in the unique context of the hospital and health care industry.

Introduction

The National Labor Relations Board has adopted a sweeping test for “joint employer” status that no one had understood to be the law under the National Labor Relations Act in the 90 years since it was enacted. When the Board first proposed its novel test, the ���������� Association submitted a comment letter explaining how the Board’s interpretation of the NLRA would inflict severe harm on hospitals by reclassifying many outside contract workers as hospital “employees.” In the wake of the Covid-19 pandemic, the AHA wrote, hospitals face a dual crisis of financial hardship and workforce shortages, requiring them to rely on staffing agencies to fill many roles that are critical for patient care with the very outside contract workers that will be deemed “joint employees” under the Board’s newfangled test.

Giving short shrift to the AHA’s comments, the Final Rule makes these financial and workforce problems even worse. It deems hospitals to be “joint employers” of contract workers if hospitals have even minimal unexercised, indirect control over their “working conditions” related to health and safety. Because hospitals have both a legal and professional duty to control health and safety conditions for everyone working in the hospital environment, the Final Rule could result in virtually every outside contract worker being classified as part of a “joint employment” relationship with the hospital.

By expanding the definition of joint employment in such a far-reaching fashion, the Final Rule will penalize hospitals for adopting responsible workplace policies. It will throw a wrench into the complex federal funding schemes that currently pay for patient care. And it will disrupt hospitals’ staffing arrangements, forcing hospitals and contractors into impractical, unnecessary, and costly bargaining. In imposing these burdens, the Final Rule departs from the Board’s and the Supreme Court’s longstanding recognition of the unique labor issues that hospitals face, which require tailored regulatory solutions instead of the Final Rule’s one-size-fits-all approach.

As Plaintiffs’ brief points out, these hospital-specific concerns were called to the Board’s attention during the rulemaking process. See Dkt. 10, at 14, 37. But instead of addressing these concerns in any meaningful fashion, the Board largely sidestepped them. If it wasn’t brushing off commenters’ reasonable concerns with conclusory responses, the Board was wrongly insisting that its hands were tied. According to the Board, the NLRA does not allow any alternative approaches to the “joint employer” inquiry that would accommodate the AHA’s legitimate concerns. The Board used this erroneous legal position as an excuse for failing to address and respond to the serious problems that the AHA identified in its comment letter.

This Court should not allow the Board to hide behind flawed legal reasoning and conclusory answers to the reasonable concerns of the AHA and other commenters. It is implausible to suggest that the NLRA requires the novel and sweeping “joint employer” test that the Board has recently devised, which nobody ever understood the NLRA to require for the first nine decades of the statute’s existence. And even if the Board’s novel rewriting of the law were somehow permissible under the NLRA, there is no serious question that the Board had discretion to adopt a less sweeping standard. For one thing, the Board could have adopted the approach reflected in its own previous rule in 2020, which was consistent with the statute and the common-law understanding of joint employment. Or, at the very least, the Board had discretion to tailor the Final Rule to ameliorate the harms on the hospital field. Indeed, the Board has long recognized that hospital labor relations present unique issues that require unique solutions. But by failing to reasonably consider that option in light of the AHA’s comments, the Board engaged in arbitrary and capricious action in violation of the Administrative Procedure Act.

Read the full amicus brief.