Mackinac Center Calls State Report on NMH Strike "Deeply Flawed and Inflammatory"

For Immediate Release

Blue-ribbon panel mishandles labor issues, threatens one-sided state action

MIDLAND — Gov. Jennifer Granholm’s blue-ribbon panel investigating a 10-month long strike by nurses at Northern Michigan Hospital (NMH) in Petoskey yesterday issued a deeply flawed and inflammatory final report, according to Paul Kersey, labor research associate for the Mackinac Center for Public Policy in Midland.

"To the extent that the panel’s report addresses issues of labor law and practice it is very poorly reasoned and written. We are concerned that this report may serve as the pretext for an ill-considered and one-sided state intervention," Kersey said.

The International Brotherhood of Teamsters Local 406 won the right to represent the nurses by a narrow margin in February of 2002. After contract negotiations reached an impasse the union called for a strike the following November. Since then, NMH nurses have been evenly divided, with roughly half going on strike and half continuing to work. The governor appointed a three-member, blue-ribbon panel on June 25, 2003 to investigate the effect of the strike on health care in Petoskey and the surrounding region.

The panel’s final report concluded that the labor dispute has been prolonged by "the intransigent and ideological position of the NMH Board," leading to "serious and deleterious effects on NMH and the community." The report calls for the state to take numerous actions against Northern Michigan Hospital, including examinations of records, an audit of the costs of hiring temporary nursing staff, and a review of patient testimony that could lead to a "state licensure and federal certification survey." The report recommends that the parties resume negotiations with the assistance of state and federal mediators, and calls for the parties to submit the dispute to binding arbitration if negotiations fail. The report makes no suggestion of actions that the state may take with regard to the Teamsters or Local 406, which represents the striking nurses.

Kersey criticized the final report for failing to describe or analyze the actual bargaining positions of the parties, or to say precisely which hospital bargaining positions the panel considered unreasonable. "Both parties have a duty to bargain in good faith and they share a responsibility to provide quality health care to the people of Petoskey. For the panel to characterize the hospital’s entire bargaining position as ‘intransigent’ without giving any guidance as to what concessions it thinks the hospital should make, is not at all helpful. This segment of the report is much more likely to increase animosity between the parties than lead them back to constructive negotiations," Kersey said. He also noted that the National Labor Relations Board has investigated numerous charges filed by the Teamsters against NMH management, but to this point has not found the hospital’s management to have committed any unfair labor practices.

"Instead of giving us an informed opinion of the parties’ positions," said Kersey, "the final report makes broad, largely unsubstantiated accusations against the leadership of Northern Michigan Hospital and ignores numerous investigations by federal agencies that have exonerated hospital officials."

The panel lists three issues that have led to an impasse in negotiations. The first is the union’s demand for an agency fee clause, which would force all nurses to join the union or pay an agency fee roughly equivalent to union dues. The other two issues are compensation and management rights.

On the agency fee issue, the hospital administration is actually on solid ground, according to Kersey. "Twenty-two states prohibit agency fees under right-to-work laws, and just last year a survey showed that 62 percent of likely voters in Michigan supported the passage of such a law in Michigan. The hospital’s position is unusual for employers in Michigan, but by no means extreme," he said.

The report provides some evidence of declining quality of care at the 243-bed facility, and outlines the increased costs borne by the hospital as a result of its decision to hire temporary nurses to replace those who have gone on strike. These health care and financial concerns led the panel to call for state intervention designed to bring about a prompt settlement of the strike.

But the panel’s mishandling of labor law issues calls the entire report into question, according to Kersey. "The people of the Petoskey area have been ill-served by the governor’s blue-ribbon panel. The State of Michigan has every reason to investigate the effects of this strike on public health, and probably should continue to do so, but the superficial and unbalanced depiction of the negotiations completely undermines the credibility of this report," he said.

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