Nursing Home Must Pay $400K for Walking Back COVID Bonuses Without Negotiations; Cutting Hazard Pay is Hazardous: Third Circuit Admonishes Nursing Home for Stopping COVID-19 Bonuses, and other C-Virus related stories

Nursing home must pay $400K for walking back COVID bonuses without negotiations:

A nursing home that instituted COVID bonus pay and then reduced it without negotiating with workers violated federal labor rules, an appeals court ruled last week.

The decision means Alaris Health will have to pay close to $400,000 to comply with a 2022 National Labor Relations Board ruling that found the revoked COVID raises amounted to “unlawful unilateral changes.”

“In sum, the Board’s factual findings that the COVID-19 bonuses were tied to employment-related factors and represented a form of hazard pay such that they were properly considered wages or other terms and conditions of employment were supported by substantial evidence,” a three-judge panel of the Third Circuit Court of Appeals ruled last Monday. “The bonuses were therefore subject to the mandatory duty to bargain under the Act.”

Alaris doubled hourly wages for staff at its Boulevard East location starting in April 2020 to recognize “the challenge of navigating the ongoing COVID-19 pandemic,” applying that bonus to all hours worked. It did so without the input of the union, whose officials were barred from facilities during a national lockdown.

Alaris then began to scale back those bonuses in May, limiting them to “direct nursing providers” and reducing the amounts. By July 20, it had cut back extra pay to $1.50 per hour worked.

Though 1199 SEIU United Healthcare Workers East emailed the company to object to the reductions and remind leaders about requirements to provide the union with advanced notice and an opportunity to bargain, the court found Alaris never responded. —>READ MORE HERE

Cutting Hazard Pay is Hazardous: Third Circuit Admonishes Nursing Home for Stopping COVID-19 Bonuses:

In Alaris Health at Boulevard East v. National Labor Relations Board, Case Nos. 23-1946 and 23-1976 (3d Cir. Dec. 9, 2024), the U.S. Court of Appeals for the Third Circuit enforced the National Labor Relation Board’s decision that an employer’s stopping COVID-19 bonuses for unionized workers violated the law.

The court held that a New Jersey nursing home was legally required to bargain over its decision to end bonus pay tied to the COVID-19 pandemic. It further held that the bonus payment constituted hazard pay, which constitutes a mandatory subject of bargaining under the National Labor Relations Act (“Act”). In so holding, the court discussed whether it was required to defer to the Board’s decision despite the U.S. Supreme Court decision in Loper Bright Enterprises v. Raimondo. The Third Circuit decision in Alaris creates a potential circuit split following the Sixth Circuit’s August 29, 2024 decision in National Labor Relations Board v. Metro Man IV, LLC, which held a Michigan nursing home was not obligated to bargain over its decision to end COVID-19-related hazard pay.

Background

Alaris Health owned and operated six nursing home/rehabilitation centers including one located in Guttenberg, New Jersey. In April 2020, Alaris Health began paying bonuses to Guttenberg employees as recognition for their efforts at the beginning of the COVID-19 pandemic. Alaris distributed a memorandum announcing that it would issue a “special COVID-19 hourly rate bonus” to all staff equivalent to 25% of each employee’s current hourly rate at least through the end of April. A week later Alaris published a second memorandum increasing the bonus payment for nursing staff to 100% of their current hourly rate.

After each memorandum was distributed, the union contacted Alaris to accept the increases but also reminding the company that the union was entitled to notice and an opportunity to bargain over changes to bargaining unit employees’ compensation. Alaris did not respond to these reminders.

Beginning April 29, 2020, Alaris issued a series of communications that gradually scaled back the bonus rates. The extent of reduction varied by position. At each stage, the union contacted Alaris objecting to the reduction and demanding the opportunity to bargain. Alaris never responded to the union’s objections.

The Guttenberg center was closed in November 2020.

On August 30, 2021, the NLRB general counsel issued a complaint alleging that Alaris violated Sections 8(a)(1) and (5) of the Act by failing to first notify and provide the union with an opportunity to bargain over the COVID-19 bonus payments.

On January 26, 2022, after a three-day hearing, Administrative Law Judge Kenneth W. Chu (“ALJ”) issued a decision in favor of the company. The ALJ determined that because the bonuses were for a discrete period of time and not conditioned on any employment-related factors, they were gifts rather than wage increases, and thus were not subject to mandatory bargaining. The ALJ also found that the management rights clause in the parties’ collective bargaining agreement (“CBA”) authorized Alaris to issue such bonuses. The ALJ noted that the CBA required bargaining over “wage increase[s] and minimum rate,” but did not bar Alaris from giving merit increases, bonuses or other similar payments. —>READ MORE HERE

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