The National Labor Relations Board has filed a motion asking a federal judge to hold the operator of five Connecticut nursing homes in contempt for failing to comply with a Dec. 11, 2012, ruling.
In response, HealthBridge Management L.L.C., which runs nursing homes in Danbury, Milford, Newington, Stamford and Westport, accused the labor board of “overreaching” and said a subsequent ruling by a federal bankruptcy court should take precedence over the Dec. 11 decision.
The exchange comes three months after the five nursing homes managed by HealthBridge restored the jobs of more than 600 employees who had been on strike since July 2012.
The NLRB, however, says that is not enough.
The employees, who are represented by the Service Employees International Union (SEIU) District 1199, walked off the job July 3 after HealthBridge and the five homes imposed their “last, best and final” contract offer following 18 months of negotiations that failed to yield a new collective bargaining agreement.
The offer would have eliminated the workers”™ defined-benefit pension and replaced it with a 401(k) plan, shifted health care premium costs to the workers and raised wages by 2.2 percent.
The Dec. 11 ruling by Judge Robert Chatigny of the U.S. District Court for Connecticut required HealthBridge to reinstate the striking employees at the wages, benefits and other terms and conditions of employment that were in place as of June 16, 2012. HealthBridge petitioned the U.S. Supreme Court to hear its appeal, but the high court declined to hear arguments in the case.
The five homes then filed for Chapter 11 bankruptcy protection Feb. 24, citing unsustainable labor costs. On March 4, Judge Donald Steckroth of the U.S. Bankruptcy Court for New Jersey ruled that the workers”™ benefits could be temporarily reduced while the homes sought to line up financing that would allow them to remain open.
At the time of the bankruptcy filing, HealthBridge said that if the striking employees were reinstated at their previous contracts it would result in losses of about $1.3 million a month for the homes.
HealthBridge said in a May 30 statement that the five nursing homes were in compliance with Chatigny”™s Dec. 11 ruling, and that they “lawfully exercised their legal rights to seek protection from the bankruptcy court in order to save their businesses from having to close, and to obtain interim relief from the bankruptcy court allowing them to modify the contract terms that have been reinstated.”
Additionally, HealthBridge argued that because it is not party to any of the expired union contracts and that it is not the employer of any of the nursing homes”™ employees, it should not be held in contempt of court.
As of press deadline, a conference call was set by the court for June 6 during which Chatigny is scheduled to speak with attorneys for both the NLRB and HealthBridge, which is based in Parsippany, N.J.
The Business Journal spoke with several attorneys who are not connected to the case but who suggested that HealthBridge likely would not be held in contempt due to the fact that the bankruptcy court ruling came after the district court decision.
They said that bankruptcy affords companies various protections, including, in most cases, the ability to restructure union contracts.
The NLRB is seeking fines against HealthBridge and compensatory damages for costs incurred during its investigation and prosecution of the contempt order, in addition to the enforcement of Chatigny”™s Dec. 11 ruling.
