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In what has been described by some lawyers as shocking and troubling, the Eighth Circuit has ruled that an Iowa hospital was not incorrect in freezing nurses' raises after their collective bargaining agreement expired.
If the ruling remains on the books, it stands to fundamentally change the tenor and validity of CBAs around the country -- especially those within middle America.
Iowa's Finley Hospital is an acute care facility. A local union was certified to act as the collective bargaining agreement (CBA) representative for nurses. Within the agreement, a provision was included that addressed employee pay raises. After the current CBA pay had expired but before a new agreement could be hammered out, Finley Hospital froze nurses' pay. This suit followed.
The NLRB found in favor of the plaintiffs and Finley appealed this ruling, challenging the finding that it had violated sections 8(a)(5) and (1) of the NLRA through its refusals to pay out agreed to pay-raises.
The Circuit Balks
Under review, the circuit disagreed with the Board's assessment of the law and concluded that it had erred in its holding. The one year collective bargaining agreement that the union had established did not create a "status quo" of continued annual and compounded raises that would survive even the CBA's expiration.
As a result, the plain language of the CBA controlled. Under the circuit's reading, this called for a single pay increase on a particular day during the annual contract -- not regular three percent pay increases. The court granted the hospital's request for a set-aside of the Board's order with regards to the pay raises, finding that it was not in violation of the NLRA.