State v. Local 1115 Joint Board, Nursing Home & Hospital Employees Division , 56 A.D.2d 310 ( 1977 )

Hopkins, Acting P. J.

The Special Term granted a preliminary injunction, upon application of the Attorney-General on behalf of the State of New York, enjoining the defendants from engaging in a strike and related activities against the members of the Nassau County Health Facilities Association (Nassau) and other designated nursing homes, and, at the same time, it denied the defendants’ cross motion to vacate a temporary restraining order and to dismiss the complaint. The defendant Local is a labor union and bargaining agent for the employees of the operators of nursing homes and health facilities which are members of Nassau.¹ The Local and Nassau have entered into a labor agreement governing employment conditions for the employees of the members of Nassau.

Nassau was threatened by the Local with a strike of the employees, engendered by the refusal of the members of Nassau to pay a cost of living adjustment and an increase in wages and contributions to the welfare fund, stipulated by the agreement. Acting under instructions from the State Commissioner of Health, the Attorney-General instituted this action to prevent the strike and, simultaneously, moved for a preliminary injunction for the same relief. The Local cross-moved, inter alia, to dismiss the complaint.

The Special Term granted the preliminary injunction and denied the cross motion. The Local appeals from the order, contending (1) that State courts are pre-empted by Federal law from exercising any jurisdiction in the field of labor relations within health care facilities and (2) that, in any event, the Special Term should not have interfered with the relations between the parties.

We affirm the order of Special Term. The State courts are not pre-empted from granting equitable relief to prevent the strike, since a demonstrable hazard to a significant number of the community existed, under the circumstances shown by this record.

I.

Nassau is the collective bargaining agent for its members, which are operators of nursing homes in Nassau and Suffolk Counties. Together with the individual nursing homes described in the order appealed from, these operators serve more than 3,000 patients within their facilities. The Local is the collective bargaining agent for the employees of the members of Nassau and the individual nursing homes.

The Local and Nassau executed a bargaining agreement dated January 9, 1975, to be effective for four years beginning January 1, 1975. The agreement contained a broad, arbitration clause, stating that "[a]ll complaints, disputes or grievances whatsoever of whatever kind or nature arising between the Union and the Employer concerning any provision of the contract, or with respect to any other acts, conduct or relations or terms or conditions of employment of whatsoever nature or otherwise, between the parties, directly or indirectly, shall be submitted for arbitration”. Moreover, the agreement prescribed that "[djuring the term of this agreement, the Union shall not call or authorize any strike against the Employer at the establishment covered by this Agreement and the Employer shall not effect any lockouts.”

The agreement provided for a wage increase of $9 per week, as of January 1, 1976, and for an increase in the monthly contribution by Nassau to the Local’s welfare fund, which provides benefits to the employees, including specified health insurance. In the event of the failure of Nassau to make the contribution to the welfare fund required under the agreement, it was provided that the Local should have the right to strike.

On or about December 16, 1975 Nassau wrote to the Local that its members had voted not to pay the wage increase or the increase in the contribution to the welfare fund. That decision, Nassau said, was "prompted by the freeze in the Medicaid rate which makes it impossible for the homes and health related facilities covered by the Agreement to pay the wage increases and other benefits provided in the collective bargaining agreement.” Although this is not entirely clear from the record before us, Nassau’s conclusion that Medicaid rates could not be raised was apparently based upon amendments to the rules and regulations promulgated by the State Commissioner of Health prohibiting rate revisions arising from labor negotiations after November, 1975.

The response of the Local to the refusal by Nassau to pay the increase was to call a strike of the employees to begin January 21, 1976. In addition the Local filed charges of unfair labor practices against Nassau with the regional office of the National Labor Relations Board pursuant to the 1974 amendments to the National Labor Relations Act (US Code, tit 29, § 158, subds [d], [g]). At the time the order under review was issued, no disposition of these charges had been made.

No request for arbitration of the dispute was made by either Nassau or the Local. Before the date set for the strike, the State Commissioner of Health served an order directing the Local not to engage in a strike against Nassau on the grounds that more than 3,000 patients were receiving care within the health facilities; that many of them were "sickly and gravely ill and in need of constant attention”; that there were not sufficient facilities to which the patients might be transferred; that there were no other persons sufficient in number, other than the members of the Local, to care for the patients; and that the safety and lives of the patients would, accordingly, be adversely affected. The State Commissioner also requested the Attorney-General to apply for injunctive relief pursuant to subdivision 5 of section 12 of the Public Health Law, stating that compliance by the Local with the order was not expected and that such an application was necessary in order "to prevent immediate and irreparable injury to patients in the event of non-compliance.”

The Attorney-General then instituted this action for an injunction against the strike and, at the same time, moved for a preliminary injunction at Special Term. The Local resisted the application and cross-moved, inter alia, to dismiss the complaint. In its opposing papers it recited the breach of the bargaining agreement by Nassau and it contended that the State was pre-empted from acting in the labor dispute by the provisions of the National Labor Relations Act.

The Special Term granted the application for a preliminary injunction against the strike, though it denied any restraint on peaceful picketing, and denied the Local’s cross motion to dismiss the complaint. Finding that the State Constitution (NY Const, art XVII, § 3) mandated that the protection of the health of its inhabitants was a matter of public concern, and that the Attorney-General was authorized to bring the action, Special Term held that a denial of the relief sought "would cause tremendous suffering to the thousands of residents of the nursing homes and would disrupt the entire system.”

II.

On this appeal the Local urges that Special Term was without jurisdiction, under the doctrine of pre-emption, and that the order granting the preliminary injunction was improvidently issued, since no enjoinable labor dispute existed.

The Attorney-General, in reply, argues that Special Term properly restrained the Local from striking, because of the circumstances under which the health and safety of the elderly and chronically ill were gravely threatened. In effect, the Attorney-General urges that the State is not pre-empted by the provisions of the National Labor Relations Act where the lives and health of the patients in the health facilities are in immediate danger.

Ill

The doctrine of pre-emption stems from the supremacy clause in the Federal Constitution (US Const, art VI). The States may concurrently regulate areas affected by Federal law under the commerce clause, if the State regulation is not incompatible with the Federal regulation (see, e.g., Automobile Workers v Wisconsin Bd., 336 US 245, 254; United Workers v Laburnum Corp., 347 US 656; Taggart v Weinacker’s, Inc., 397 US 223, 227). Under this analysis, the question relates to the manner in which Congress has acted and whether the action of Congress necessarily precludes the States from a form of regulation (Northern States Power Co. v Minnesota, 447 F2d 1143, 1146, affd 405 US 1035).

Hence, we must address the Federal legislation to which the Local points as the basis of pre-emption against State action. Not until 1967 did the National Labor Relations Board (Board) take jurisdiction over profit-making health care institutions (Butte Med. Props., 168 NLRB 266; University Nursing Home, 168 NLRB 263). That assumption of jursidiction was predicated upon the general power of the Board over businesses having a material effect on interstate commerce.

In 1974 Congress legislated directly in the field of labor disputes within the health care industry by enlarging the definition of health care institutions and by regulating the notice to be given by a labor union prior to a strike and the notice of a labor dispute to be given to the Federal Mediation and Conciliation Service (US Code, tit 29, § 158, subds [d], [g]). Following the enactment of the legislation, the Board adopted the position that a State law prohibiting strikes against a voluntary hospital was pre-empted by the Federal amendments (Matter of Minnesota, 219 NLRB 1095).

New York requires compulsory arbitration of labor disputes arising in nonprofit health institutions (Labor Law, §§ 715, 716, subd 3, par [b]; see Park Ave. Clinical Hosp. v Kramer, 48 Misc 2d 826, mod on other grounds 26 AD2d 613, affd 19 NY2d 958). Profit-making health institutions, on the other hand, are not so regulated. New York, nevertheless, has enacted legislation limiting the power of courts to issue injunctions against strikes, following the Norris-LaGuardia Act, in order to meet the general criticism mounted against the unrestricted strike injunction (Labor Law, § 807). But it cannot be said that incompatible statutory provisions in the same context are present in the labor relations field between the New York State statutes and the Federal statutes. However, since the test of Federal power is whether the activity concerned is "arguably” subject to the Federal statutes (San Diego Unions v Garmon, 359 US 236, 245), we consider the issue before us in light of the Federal law and the constraints of federalism.

IV.

The doctrine of pre-emption does not foreclose State jurisdiction over labor disputes altogether. Thus, in San Diego Unions v Garmon (supra, p 245), although the Supreme Court declared that State authority in labor relations was subordinate to the Federal statutory regulation, it also recognized (p 244) that State jurisdiction had not been displaced over matters peripheral to the regulation of labor relations or "deeply rooted in local feeling and responsibility”. Accordingly, State courts may enjoin picketing using violent means (Youngdahl v Rainfair, Inc., 355 US 131, 138; Railroad Trainmen v Terminal Co., 394 US 369, 386). As Professor Cox has stated (Cox, Labor Law Preemption Revisited, 85 Harv L Rev 1337, 1355): "It is obviously too loose to assert that federal law excludes any state law that affects the balance of interests among management, union, employees, and public in union organization and collective bargaining. Jailing strikers for dynamiting a mine tipple or assaulting nonstrikers, indicting a union for a price-

fixing conspiracy, regulating insurance funds, and outlawing discrimination in employment may affect the outcome of a labor dispute or influence collective bargaining. Words privileged under NLRA section 8 (c) may give union leaders a cause of action for defamation. Such incidents ought not to be beyond state control merely because they occur in the course of an organizational campaign or labor dispute, or are covered by a collective bargaining agreement.”

Moreover, in a larger sense, the demands of federalism impose a requirement that the States retain residual power under the Tenth Amendment to the United States Constitution to deal with local problems for the purpose of maintaining their sovereignty. Recently, in National League of Cities v Usery (426 US 833, 845) the Supreme Court said: "We have repeatedly recognized that there are attributes of sovereignty attaching to every state government which may not be impaired by Congress, not because Congress may lack an affirmative grant of legislative authority to reach the matter, but because the Constitution prohibits it from exercising the authority in that manner.” Further, the court said (p 851):

"We do not believe particularized assessments of actual impact are crucial to resolution of the issue presented, however. For even if we accept appellee’s assessments concerning the impact of the amendments, their application will nonetheless significantly alter or displace the States’ abilities to structure employer-employee relationships in such areas as fire prevention, police protection, sanitation, public health, and parks and recreation. These activities are typical of those performed by state and local governments in discharging their dual functions of administering the public law and furnishing public services. Indeed, it is functions such as these which governments are created to provide, services such as these which the States have traditionally afforded their citizens. If Congress may withdraw from the States the authority to make those fundamental employment decisions upon which their systems for performance of these functions must rest, we think there would be little left of the States’ ' "separate and independent existence” ’ Coyle, supra. "(Emphasis supplied.)

The need to accommodate legitimate State interests in labor relations is further illustrated by the holding that both State and Federal courts have jurisdiction over actions arising out of breaches of labor contracts (Arnold Co. v Carpenters, 417 US 12, 18-20: Dowd Box Co. v Courtney, 368 US 502, 511),

even to the extent of enjoining a strike (Boys Markets v Clerks Union, 398 US 235, overruling Sinclair Refining Co. v Atkinson, 370 US 195). That jurisdiction has been effectuated by our courts (see, e.g., Anchor Motor Freight v Local Union No. 445, 5 AD2d 869; Stewart Stamping Corp. v Uprichard, 284 App Div 902; Thaddeus Suski Prods, v Vola, 47 Misc 2d 773, affd 24 AD2d 559). The jurisdiction so exercised is not subject to the requirements of the Norris-LaGuardia Act (Textile Workers v Lincoln Mills, 353 US 448, 458).²

These considerations lead to a discussion of the interests asserted by the Attorney-General in the field in which this litigation arose.

V.

The State Constitution (art XVII, § 3) provides that “[t]he protection and promotion of the health of the inhabitants of the state are matters of public concern and provision therefor shall be made by the state and by such of its subdivisions and in such manner, and by such means as the legislature shall from time to time determine.” The Legislature has directed the State Commissioner of Health to “take cognizance of the interests of health and life of the people of the state, and of all matters pertaining thereto” (Public Health Law, §206, subd 1, par [a]), and to order the discontinuance by any person causing or engaging in "a condition or activity which in his [the Commissioner’s] opinion constitutes danger to the health of the people” (Public Health Law, § 16).

In 1965 the Legislature declared that “[h]ospital and related services including health-related service of the highest quality, efficiently provided and properly utilized at a reasonable cost, are of vital concern to the public health” (L 1965, ch 795; Public Health Law, § 2800). In 1970 the Legislature made a similar declaration concerning nursing homes (L 1970, ch 569; Public Health Law, § 2895), and provided for the licensing of nursing home administrators (Public Health Law, § 2896). In 1975 the Legislature extended the power of the State Commissioner over nursing homes (L 1975, ch 653; Public Health Law, § 2801, subd 3), and granted certain rights of action to patients in nursing homes (L 1975, chs 658, 649, 648; Public Health Law, §§ 2801-d, 2803-c). Moreover, the commissioner was charged with the responsibility to promulgate regulations relating to rates for patients in a nursing home, consistent with Federal standards, and to certify such rates to the State Budget Director in accordance with certain criteria (Public Health Law, § 2808). In short, the State Commissioner was empowered by legislative enactment to supervise and regulate fully and comprehensively the operation and management of nursing homes, to the end that the health of the patients might be completely promoted and protected.

Specifically, it is the duty of the Attorney-General, on request of the State commissioner, "to bring an action for an injunction against any person who violates, disobeys or disregards * * * any lawful notice, order or regulation” (Public Health Law, § 12, subd 5). Beyond that particular direction, however, the Attorney-General enjoys common-law authority (Matter of Bennett v Merritt, 173 Misc 355, 359-360, affd 261 App Div 824, affd 286 NY 647; People v Miner, 2 Lans 396), as well as statutory powers (Executive Law, § 63). Justices Frankfurter and Harlan, in their concurring opinion in United Steelworkers v United States (361 US 39, 61), held that public nuisances might be enjoined at the suit of the Attorney General at common law (citing, e.g., Attorney-General v Forbes, 2 M & C, 123, 133; Georgetown v Alexandria Canal Co., 12 Pet [37 US] 91; Attorney General v Tudor Ice Co., 104 Mass 239), and that a public nuisance included a strike imperilling health or safety.

The legitimate interests of the government in the maintenance of the health and safety of the people were, in fact, enforced by the issuance of an injunction against a strike in United Steelworkers v United States, supra). Though Mr. Justice Douglas alone dissented, his dissent was based upon the absence of factual grounds for the injunction; he did not disagree with the eight other members of the court that the District Court possessed the equitable jurisdiction to issue an injunction (p 73). The eight other members of the court, on the other hand, found that section 208 of the Labor Management Relations Act (US Code, tit 29, § 178) permitted the issuance of an injunction against a strike when the national health or safety was shown to be endangered (p 40).

In summary, we believe that the Attorney-General, acting under proper instructions from the State Commissioner, may, in a case in which it is demonstrated that the State interests in promoting and protecting the health of its inhabitants are seriously threatened by a strike, seek an injunction and that, on such a showing, the Supreme Court may grant an injunction against the strike.

VI.

The emphasis shifts then from a question of naked power to the question of discretion properly exercised by the court. The precise question in this case is whether the Attorney-General established grounds for the equitable intervention of the court. The Attorney-General’s role was not as a representative of one of the protagonists in the dispute; his was the wider role of a representative of the State Commissioner of Health, who had discerned a peril to a significant number of patients residing in nursing homes which had leagued together as a bargaining unit to negotiate and deal with their employees joined in a labor union. There is thus present here a more pervasive danger affecting a substantial segment of an industry than would exist in the case of a single employer involved in a labor dispute with a single union. Hence, the circumstances trigger a greater impetus for the exercise of equitable powers by the court. As the Supreme Court of the United States stated in Virginian Ry. v Federation (300 US 515, 552): "More is involved than the settlement of a private controversy without appreciable consequences to the public. The peaceable settlement of labor controversies, especially where they may seriously impair the ability of an interstate rail carrier to perform its service to the public, is a matter of public concern. That is testified to by the history of the legislation now before us, the reports of committees of Congress having the proposed legislation in charge, and by our common knowledge. Courts of equity may, and frequently do, go much farther both to give and withhold relief in furtherance of the public interest than they are accustomed to go when only private interests are involved. Pennsylvania v. Williams, 294 U.S. 176, 185; Central Kentucky Gas Co. v. Bailroad Commisision, 290 U.S. 264, 270-273; Harrisonville v. W.S. Dickey Clay Co., 289 U.S. 334, 338; Beasley v. Texas & Pacific Ry. Co., 191 U.S. 492, 497; Joy v. St. Louis, supra, 47; Texas & Pacific Ry. Co. v. Marshall, 136 U.S. 393, 405-406; Conger v. New York, W. S. & B. R. Co., 120 N.Y. 29, 32, 33; 23 N. E. 983.”

The State Commissioner had strong reason to seek injunctive relief, knowing the large number of patients involved, their own incapacity to care for themselves, the lack of suitable facilities to accommodate their transfer and the imminent deadline for the beginning of the strike. Nor was this the usual case where the parties sought the preferred remedy of arbitration—a remedy provided for in their contract. Though the contract, literally read, did not prohibit a strike when Nassau refused to pay the increase due the welfare fund, neither did the contract exclude arbitration of the dispute under the broad terms defining the subjects of arbitration, and the Local did not invoke the peaceful intervention of court process by suing Nassau for damages arising out of a breach of contract.

It is not an answer that the Local filed an unfair labor charge with the regional office of the National Labor Relations Board and so invoked the jurisdiction of the Federal law. As we have seen, both State and Federal courts have initial jurisdiction in this field.³ Besides this, the fact is that this record shows that the regional office, except for asking for a reply from Nassau, took no action in the dispute after the filing of the charges on or about December 19, 1975. The State Commissioner was thus in the untenable position of observing the dispute ripen into a strike without the intercession of either arbitration or conciliation or other governmental agency process.⁴

The Federal statutes do not afford to the State an adequate avenue to obtain relief, and this factor is significant in the resolution of the question of pre-emption (see, note, Municipal Bankrupcy, the Tenth Amendment and the New Federalism, 89 Harv L Rev 1871). It seems clear that the process incorporated in the National Labor Relations Act would not have provided a quick and positive remedy to the situation facing the patients in the nursing homes.

There is a hint in the papers before Special Term that both Nassau and the Local were aware of the failure of the State Commissioner to increase rates in response to contractual rights arising after November, 1975, and that the failure reflected the worsening fiscal condition of the City of New York, other municipalities in the State and the State itself. The record does not delineate the nature of the financial crisis which a raise in the rates would portend, or, indeed, whether Nassau and the Local regarded the strike as a weapon to force a raise. In the absence of a clear record we draw no inference in these respects.

For these reasons we think the Special Term properly granted a preliminary injunction against a strike. We note, too, that Special Term properly denied an injunction against picketing, as there was no proof in this record of violent or coercive conduct.

Accordingly, we affirm the order insofar as it is appealed from, without costs or disbursements.

1 . In addition to the members represented by Nassau, there are individual nursing home employers which are bound by separate labor agreements with the Local. Since those agreements are similar in content and tenor to the agreement between Nassau and the Local, we treat the individual employers in the same light as Nassau.

2 . A recent law review note suggests that the doctrine of pre-emption should not bar the exercise of power by the States which they must use to carry out their functions as autonomous units within the Federal system (Municipal Bankruptcy, the Tenth Amendment and the New Federalism, 89 Harv L Rev 1871).

On the question of the authority and jurisdiction of a State court to issue an injunction pendente lite despite a claim of pre-emption, see Barclay’s Ice Cream Co. v Local 757 (41 NY2d 269, 270), in which the Court of Appeals, in affirming an order granting an injunction pendente lite, held: “We reject the proposition that under the doctrine of pre-emption our State courts must defer in this case to the exclusive competence of the National Labor Relations Board and thus are powerless to protect against the unlawful coercive activity designed by this union to erect an embargo on the flow of out-of-State goods into New York.”

3 . The Local removed this action to the District Court for the Eastern District of New York. Upon motion of the Attorney-General, the action was remanded to the State Supreme Court by the District Court (State of New York v Local 1115 Joint Bd, 412 F Supp 720, 724), saying: "Whether the Union’s preemption contention is correct should be decided as a matter of defense in the State courts in the first instance, see Application of State of New York, supra, 362 F. Supp. [922] at 928; Beacon Moving and Storage, Inc. v. Local 814 IBT, 362 F. Supp. 442, 445 (S. D. N. Y. 1972); City of Galveston v. International Organization of Masters, Mates & Pilots, 338 F. Supp. 907, 909 (S. D. Tex. 1972), with ultimate recourse to the Supreme Court. State courts are obliged under the Supremacy Clause to follow federal law where applicable and there is no reason to believe that they are unwilling or incapable of so doing, see, e.g., Pennsylvania v. Nelson, 377 Pa. 58, 104 A. 2d 133 (1954), affd. 350 U.S. 497, 76 S. Ct. 477, 100 L. Ed. 640 (1956); State ex rel. Rogers v. Kirtley, 372 S. W. 2d 86 (Sup. Ct. Mo. 1963); John Hancock Mutual Life Insurance Co. v. Commissioner of Insurance, 349 Mass. 390, 208 N.E. 2d 516 (1965). See also De Canas v Bica, 40 Cal. App. 3d 976, 115 Cal. Rptr. 444 (2d Dist. 1974), revd. 424 U.S. 351, 96 S. Ct. 933, 47 L. Ed. 2d 43 (1976).” (See, also, Barclay’s Ice Cream Co. v Local 757(41 NY2d 269, supra.)

4 . The chronology was that the charge was filed on or about December 19, 1975; the reply of Nassau to the charge was requested by the regional office on December 30, 1975; the Attorney-General moved for injunctive relief at Special Term on January 21, 1976, returnable on January 28, 1976; the court decided the motion on February 5, 1976; and the order of the court was not made until May 21, 1976. Special Term was required to and could only act upon the facts and exigencies which had been presented to it at that time. Our review of Special Term’s determination must be in the context in which it was made, as shown in and limited by the record on appeal. The principal exigency, of course, was that more than 3,000 patients, many of them "sickly and gravely ill and in need of constant attention”, faced immediate eviction from the facilities in which they were being cared for; that there were not sufficient facilities to which they might be transferred; and that neither the employers nor the union nor the National Labor Relations Board had sought court protection for the patients facing displacement in a health and life-endangering situation. It was into this hiatus that the State Attorney-General moved and Special Term acted. As for Federal pre-emption, we note that appellants’ main brief states that the Federal unfair labor practice charges were tried before an Administrative Law Judge on June 22 and 23, 1976. It further appears, in a letter from appellants’ counsel to this court, dated January 31, 1977, that at the time of the argument of this appeal, October 19, 1976, the Federal Administrative Law Judge had not yet rendered a decision; in fact, the decision was not rendered until November 18, 1976 and it was not until January 28, 1977 that the board adopted his decision, finding the employers guilty of unfair labor practices and directing them to cease and desist and to take specified affirmative action.

Insofar as it appears from the record and briefs, during the protracted period in which the unfair labor practice charges were pending before the board, the latter did not move to oppose or to vacate the temporary injunction issued by the State court which would indicate that the board was content to let the temporary injunction stand.