Friendly, Pierce, and Pratt, Circuit Judges.
Petition to enforce an order of the National Labor Relations Board. Enforcement denied.
The issue before us is whether an employer committed an unfair labor practice by establishing certain qualifications for the union's auditor who was to examine the employer's financial records to verify its claimed inability to pay a wage increase when 1) the qualifications were apparently reasonably related to the problem of the audit, 2) the employer indicated its willingness to discuss the qualifications, and 3) the union refused to negotiate the qualifications and raised no specific objection to any of them.
For the reasons below, we conclude that the employer did not engage in an unfair labor practice, and deny enforcement of the NLRB order.
There is no dispute over the facts. St. Joseph's is a voluntary not-for-profit hospital located in Elmira, New York. Under the New York State reimbursement system and cost containment regulations for hospitals, 100% of its income is controlled by the state.
As the representative since 1972 for approximately 200 of St. Joseph's nurses, the New York State Nurses Association (the "union") had entered into several collective bargaining agreements with the hospital. With an agreement due to expire on December 31, 1982, the parties commenced negotiations for a successor agreement on November 2, 1982. During the second negotiating session, on November 12, the hospital asserted that new revenue caps imposed by New York State on its reimbursement funds, combined with other financial developments, had rendered the hospital unable to offer registered nurses any pay increase. The hospital offered, however, to permit a "mutually acceptable qualified CPA" to review its financial records to verify the claim.
The following day the hospital sent a letter to the union confirming its willingness to allow an auditor who was a certified public accountant (CPA) to review the financial records, but elaborated that
the following criteria must be met for the selected CPA to be acceptable to the hospital:
1. Must be a member of AICPA.
2. Must be a member of the New York State Society of CPA's.
3. Must be a participating CPA in New York State with the ...