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Subject: 90-97 -- OPINION, AMERICAN HOSPITAL ASSN. v. NLRB




NOTICE: This opinion is subject to formal revision before publication in
the preliminary print of the United States Reports.  Readers are requested
to notify the Reporter of Decisions, Supreme Court of the United States,
Washington, D. C. 20543, of any typographical or other formal errors, in
order that corrections may be made before the preliminary print goes to
press.
SUPREME COURT OF THE UNITED STATES


No. 90-97



AMERICAN HOSPITAL ASSOCIATION, PETITIONER v. NATIONAL LABOR RELATIONS BOARD
et al.

on writ of certiorari to the united states court of appeals for the seventh
circuit

[April 23, 1991]



    Justice Stevens delivered the opinion of the Court.
    For the first time since the National Labor Relations Board was
established in 1935, the Board has promulgated a substantive rule defining
the employee units appropriate for collective bargaining in a particular
line of commerce.  The rule is applicable to acute care hospitals and
provides, with three exceptions, that eight and only eight units shall be
appropriate in any such hospital.  The three exceptions are for cases that
present extraordinary circumstances, cases in which nonconforming units
already exist, and cases in which labor organizations seek to combine two
or more of the eight specified units.  The extraordinary circumstances
exception applies automatically to hospitals in which the eight unit rule
will produce a unit of five or fewer employees.  See 29 CFR MDRV 103.30
(1990).
    Petitioner, American Hospital Association, brought this action
challenging the facial validity of the rule on three grounds: First,
petitioner argues that MDRV 9(b) of the National Labor Relations Act
requires the Board to make a separate bargaining unit determination "in
each case" and therefore prohibits the Board from using general rules to
define bargaining units; second, petitioner contends that the rule that the
Board has formulated violates a congressional admonition to the Board to
avoid the undue proliferation of bargaining units in the health care
industry; and, finally, petitioner maintains that the rule is arbitrary and
capricious.
    The United States District Court for the Northern District of Illinois
agreed with petitioner's second argument and enjoined enforcement of the
rule.  718 F. Supp. 704 (1989).  The Court of Appeals found no merit in any
of the three arguments and reversed.  899 F. 2d 651 (CA7 1990).  Because of
the importance of the case, we granted certiorari, 498 U. S. --- (1990).
We now affirm.

I
    Petitioner's first argument is a general challenge to the Board's
rulemaking authority in connection with bargaining unit determinations
based on the terms of the National Labor Relations Act (NLRA), 49 Stat.
449, 29 U. S. C. MDRV 151 et seq., as originally enacted in 1935.  In MDRV
1 of the NLRA Congress made the legislative finding that the "inequality of
bargaining power" between unorganized employees and corporate employers had
adversely affected commerce and declared it to be the policy of the United
States to mitigate or eliminate those adverse effects "by encouraging the
practice and procedure of collective bargaining and by protecting the
exercise by workers of full freedom of association, self-organization, and
designation of representatives of their own choosing, for the purpose of
negotiating the terms and conditions of their employment or other mutual
aid or protection."  29 U. S. C. MDRV 151.  The central purpose of the Act
was to protect and facilitate employees' opportunity to organize unions to
represent them in collective-bargaining negotiations.
    Sections 3, 4, and 5 of the Act created the Board and generally
described its powers.  15 153-155.  Section 6 granted the Board the
"authority from time to time to make, amend, and rescind . . . such rules
and regulations as may be necessary to carry out the provisions" of the
Act.  MDRV 156.  This grant was unquestionably sufficient to authorize the
rule at issue in this case unless limited by some other provision in the
Act.
    Petitioner argues that MDRV 9(b) provides such a limitation because
this section requires the Board to determine the appropriate bargaining
unit "in each case."  MDRV 159(b).  We are not persuaded.  Petitioner would
have us put more weight on these three words than they can reasonably
carry.
    Section 9(a) of the Act provides that the representative "designated or
selected for the purposes of collective bargaining by the majority of the
employees in a unit appropriate for such purposes" shall be the exclusive
bargaining representative for all the employees in that unit.  MDRV 159(a).
This section, read in light of the policy of the Act, implies that the
initiative in selecting an appropriate unit resides with the employees.
Moreover, the language suggests that employees may seek to organize "a
unit" that is "appropriate" -- not necessarily the single most appropriate
unit.  See, e. g., Trustees of Masonic Hall and Asylum Fund v. NLRB, 699 F.
2d 626, 634 (CA2 1983); State Farm Mutual Automobile Ins. Co. v. NLRB, 411
F. 2d 356, 358 (CA7) (en banc), cert. denied, 396 U. S. 832 (1969);
Friendly Ice Cream Corp. v. NLRB, 705 F. 2d 570, 574 (CA1 1983); Local 627,
Int'l Union of Operating Engineers v. NLRB, 194 U. S. App. D.C. 37, 41, 595
F. 2d 844, 848 (1979); NLRB v. Western & Southern Life Ins. Co., 391 F. 2d
119, 123 (CA3), cert. denied, 393 U. S. 978 (1968).  Thus, one union might
seek to represent all of the employees in a particular plant, those in a
particular craft, or perhaps just a portion thereof.
    Given the obvious potential for disagreement concerning the
appropriateness of the unit selected by the union seeking recognition by
the employer -- disagreements that might involve rival unions claiming
jurisdiction over contested segments of the work force as well as
disagreements between management and labor -- MDRV 9(b) authorizes the
Board to decide whether the designated unit is appropriate.  See Hearings
on S. 1958 before the Senate Committee on Education and Labor, pt. 1, p. 82
(1935) (hereinafter Hearings), 1 Legislative History of the National Labor
Relations Act 1935, p. 1458 (hereinafter Legislative History) (testimony of
Francis Biddle, Chairman of National Relations Board); H. R. Rep No. 972,
74th Cong., 1st Sess., 20 (1935), 2 Legislative History 2976.  Section 9(b)
provides:


    "The Board shall decide in each case whether, in order to insure to
employees the full benefit of their right to self-organization and to
collective bargaining, and otherwise to effectuate the policies of this
Act, the unit appropriate for the purposes of collective bargaining shall
be the employer unit, craft unit, plant unit, or subdivision thereof."
(Emphasis added.)


    Petitioner reads the emphasized phrase as a limitation on the Board's
rulemaking powers.  Although the contours of the restriction that
petitioner ascribes to the phrase are murky, petitioner's reading of the
language would prevent the Board from imposing any industry-wide rule
delineating the appropriate bargaining units.  We believe petitioner's
reading is inconsistent with the natural meaning of the language read in
the context of the statute as a whole.
    The more natural reading of these three words is simply to indicate
that whenever there is a disagreement about the appropriateness of a unit,
the Board shall resolve the dispute.  Under this reading, the words "in
each case" are synonymous with "whenever necessary" or "in any case in
which there is a dispute."  Congress chose not to enact a general rule that
would require plant unions, craft unions or industry-wide unions for every
employer in every line of commerce, but also chose not to leave the
decision up to employees or employers alone.  Instead, the decision "in
each case" in which a dispute arises is to be made by the Board.
    In resolving such a dispute, the Board's decision is presumably to be
guided not simply by the basic policy of the Act but also by the rules that
the Board develops to circumscribe and to guide its discretion either in
the process of case-by-case adjudication or by the exercise of its
rulemaking authority.  The requirement that the Board exercise its
discretion in every disputed case cannot fairly or logically be read to
command the Board to exercise standardless discretion in each case.  As a
noted scholar on administrative law has observed: "[T]he mandate to decide
`in each case' does not prevent the Board from supplanting the original
discretionary chaos with some degree of order, and the principal
instruments for regularizing the system of deciding `in each case' are
classifications, rules, principles, and precedents.  Sensible men could not
refuse to use such instruments and a sensible Congress would not expect
them to."  K. Davis, Administrative Law Text 145 (3d ed. 1972).
    This reading of the "in each case" requirement comports with our past
interpretations of similar provisions in other regulatory statutes.  See
United States v. Storer Broadcasting Co., 351 U. S. 192, 205 (1956); FPC v.
Texaco, Inc., 377 U. S. 33, 41-44 (1964); Heckler v. Campbell, 461 U. S.
458, 467 (1983).  These decisions confirm that, even if a statutory scheme
requires individualized determinations, the decisionmaker has the authority
to rely on rulemaking to resolve certain issues of general applicability
unless Congress clearly expresses an intent to withhold that authority.
    Even petitioner acknowledges that "the Board could adopt rules
establishing general principles to guide the required case-by-case
bargaining unit determinations."  Brief for Petitioner 19.  Petitioner
further acknowledges that the Board has created many such rules in the
half-century during which it has adjudicated bargaining unit disputes.
Reply Brief for Petitioner 8-11.  Petitioner contends, however, that a rule
delineating the appropriate bargaining unit for an entire industry is
qualitatively different from these prior rules, which at most established
rebuttable presumptions that certain units would be considered appropriate
in certain circumstances.
    We simply cannot find in the three words "in each case" any basis for
the fine distinction that petitioner would have us draw.  Contrary to
petitioner's contention, the Board's rule is not an irrebuttable
presumption; instead, it contains an exception for "extraordinary
circumstances."  Even if the rule did establish an irrebuttable
presumption, it would not differ significantly from the prior rules adopted
by the Board.  As with its prior rules, the Board must still apply the rule
"in each case."  For example, the Board must decide in each case, among a
host of other issues, whether a given facility is properly classified as an
acute care hospital and whether particular employees are properly placed in
particular units.
    Our understanding that the ordinary meaning of the statutory language
cannot support petitioner's construction is reinforced by the structure and
the policy of the NLRA.  As a matter of statutory drafting, if Congress had
intended to curtail in a particular area the broad rulemaking authority
granted in MDRV 6, we would have expected it to do so in language expressly
describing an exception from that section or at least referring
specifically to the section.  And, in regard to the Act's underlying
policy, the goal of facilitating the organization and recognition of unions
is certainly served by rules that define in advance the portions of the
work force in which organizing efforts may properly be conducted.
    The sparse legislative history of the provision affords petitioner no
assistance.  That history reveals that the phrase was one of a group of
"small amendments" suggested by the Secretary of Labor "for the sake of
clarity."  See Senate Committee on Education and Labor, Memorandum
Comparing S. 2926 and S. 1958, 74th Cong., 1st Sess., 9 (Comm. Print 1935),
1 Legislative History 1332, Hearings, pt. 1, 1442, 1445; Hearings on H. R.
6288 before the House Committee on Labor, 74th Cong., 1st Sess., 283-284
(1935), 2 Legislative History 2757-2758.  If this amendment had been
intended to place the important limitation on the scope of the Board's
rulemaking powers that petitioner suggests, we would expect to find some
expression of that intent in the legislative history.  Cf. Harrison v. PPG
Industries, Inc., 446 U. S. 578, 600-601 (1980) (Rehnquist, J.,
dissenting).
    The only other relevant legislative history adds nothing to the meaning
conveyed by the text that was enacted.  Petitioner relies on a comment in
the House Committee on Labor Report that the matter of the appropriate unit
"is obviously one for determination in each individual case, and the only
possible workable arrangement is to authorize the impartial government
agency, the Board, to make that determination."  H. R. Rep. No. 972, 74th
Cong., 1st Sess., 20 (1935) reprinted in 2 Legislative History 2976.  This
comment, however, simply restates our reading of the statute as requiring
that the Board decide the appropriate unit in every case in which there is
a dispute.  The Report nowhere suggests that the Board cannot adopt
generally applicable rules to guide its "determination in each individual
case."
    In sum, we believe that the meaning of MDRV 9(b)'s mandate that the
Board decide the appropriate bargaining unit "in each case" is clear and
contrary to the meaning advanced by petitioner.  Even if we could find any
ambiguity in MDRV 9(b) after employing the traditional tools of statutory
construction, we would still defer to the Board's reasonable interpretation
of the statutory text.  Chevron USA Inc. v. Natural Resources Defense
Council, Inc., 467 U. S. 837, 842-843 (1984).  We thus conclude that MDRV
9(b) does not limit the Board's rulemaking authority under MDRV 6.

II
    Consideration of petitioner's second argument requires a brief
historical review of the application of federal labor law to acute care
hospitals.  Hospitals were "employers" under the terms of the NLRA as
enacted in 1935, but in 1947 Congress excepted not-for-profit hospitals
from the coverage of the Act.  See 29 U. S. C. MDRV 152(2) (1970)
(repealed, 1974).  In 1960, the Board decided that proprietary hospitals
should also be excepted, see Flatbush General Hospital, 126 N. L. R. B.
144, 145, but this position was reversed in 1967, see Butte Medical
Properties, 168 N. L. R. B. 266, 268.
    In 1973, Congress addressed the issue and considered bills that would
have extended the Act's coverage to all private health care institutions,
including not-for-profit hospitals.  The proposed legislation was highly
controversial, largely because of the concern that labor unrest in the
health care industry might be especially harmful to the public.  Moreover,
the fact that so many specialists are employed in the industry created the
potential for a large number of bargaining units, in each of which separate
union representation might multiply management's burden in negotiation and
might also increase the risk of strikes.  Motivated by these concerns,
Senator Taft introduced a bill that would have repealed the exemption for
hospitals, but also would have placed a limit of five on the number of
bargaining units in nonprofit health care institutions.  S. 2292, 93d
Cong., 1st Sess. (1973).  Senator Taft's bill did not pass.
    In the second session of the same Congress, however, the National Labor
Relations Act Amendments of 1974 were enacted.  See 88 Stat. 395.  These
amendments subjected all acute care hospitals to the coverage of the Act
but made no change in the Board's authority to determine the appropriate
bargaining unit in each case.  See ibid.  Both the House and the Senate
Committee Reports on the legislation contained this statement:


"EFFECT ON EXISTING LAW


Bargaining Units


Due consideration should be given by the Board to preventing proliferation
of bargaining units in the health care industry.  In this connection, the
Committee notes with approval the recent Board decisions in Four Seasons
Nursing Center, 208 NLRB No. 50, 85 LRRM 1093 (1974), and Woodland Park
Hospital, 205 NLRB No. 144, 84 LRRM 1075 (1973), as well as the trend
toward broader units enunciated in Extendicare of West Virginia, 203 NLRB
No. 170, 83 LRRM 1242 (1973).*"

    "*By our reference to Extendicare, we do not necessarily approve all of
the holdings of that decision."

See S. Rep. No. 93-766, p. 5 (1974); H. R. Rep. No. 931051, pp. 6-7
(1974).


    Petitioner does not -- and obviously could not -- contend that this
statement in the Committee Reports has the force of law, for the
Constitution is quite explicit about the procedure that Congress must
follow in legislating.  Nor, in view of the fact that Congress refused to
enact the Taft bill that would have placed a limit of five on the number of
hospital bargaining units, does petitioner argue that eight units
necessarily constitute proliferation.  Rather, petitioner's primary
argument is that the admonition, when coupled with the rejection of a
general rule imposing a five-unit limit, evinces Congress' intent to
emphasize the importance of the "in each case" requirement in MDRV 9(b).
    We find this argument no more persuasive than petitioner's reliance on
MDRV 9(b) itself.  Assuming that the admonition was designed to emphasize
the requirement that the Board determine the appropriate bargaining unit in
each case, we have already explained that the Board's rule does not
contravene this mandate.  See Part I, supra.
    Petitioner also suggests that the admonition "is an authoritative
statement of what Congress intended when it extended the Act's coverage to
include nonproprietary hospitals."  Brief for Petitioner 30.  Even if we
accepted this suggestion, we read the admonition as an expression by the
Committees of their desire that the Board give "due consideration" to the
special problems that "proliferation" might create in acute care hospitals.
Examining the record of the Board's rulemaking proceeding, we find that it
gave extensive consideration to this very issue.  See App. 20, 78-84, 114,
122, 131, 140, 158-159, 191-194, 246-254. {1}
    In any event, we think that the admonition in the Committee Reports is
best understood as a form of notice to the Board that if it did not give
appropriate consideration to the problem of proliferation in this industry,
Congress might respond with a legislative remedy.  So read, the remedy for
noncompliance with the admonition is in the hands of the body that issued
it.  Cf. Public Employees Retirement System of Ohio v. Betts, 492 U. S.
158, 168 (1989) (legislative history that cannot be tied to the enactment
of specific statutory language ordinarily carries little weight in judicial
interpretation of the statute).  If Congress believes that the Board has
not given "due consideration" to the issue, Congress may fashion an
appropriate response.

III
    Petitioner's final argument is that the rule is arbitrary and
capricious because "it ignores critical differences among the more than
4,000 acute-care hospitals in the United States, including differences in
size, location, operations, and work force organization."  Brief for
Petitioner 39.  Petitioner supports this argument by noting that in at
least one earlier unit determination, the Board had commented that the
diverse character of the health care industry precluded generalizations
about the appropriateness of any particular bargaining unit.  See St.
Francis Hospital, 271 N. L. R. B. 948, 953, n. 39 (1984), remanded sub nom.
Electrical Workers v. NLRB, 259 U. S. App. D.C. 168, 814 F. 2d 697 (1987).
    The Board responds to this argument by relying on the extensive record
developed during the rulemaking proceedings, as well as its experience in
the adjudication of health care cases during the 13-year period between the
enactment of the health care amendments and its notice of proposed
rulemaking.  Based on that experience, the Board formed the "considered
judgment" that "acute care hospitals do not differ in substantial,
significant ways relating to the appropriateness of units."  App. 188-189.
Moreover, the Board argues, the exception for "extraordinary circumstances"
is adequate to take care of the unusual case in which a particular
application of the rule might be arbitrary.
    We do not believe that the challenged rule is inconsistent with the
Board's earlier comment on diversity in the health care industry.  The
comment related to the entire industry whereas the rule does not apply to
many facilities, such as nursing homes, blood banks, and outpatient
clinics.  See St. Francis, 271 N. L. R. B., at 953, n. 39.  Moreover, the
Board's earlier discussion "anticipate[d] that after records have been
developed and a number of cases decided from these records, certain
recurring factual patterns will emerge and illustrate which units are
typically appropriate." See ibid.
    Given the extensive notice and comment rulemaking conducted by the
Board, its careful analysis of the comments that it received, and its
well-reasoned justification for the new rule, we would not be troubled even
if there were inconsistencies between the current rule and prior NLRB
pronouncements.  The statutory authorization "from time to time to make,
amend, and rescind" rules and regulations expressly contemplates the
possibility that the Board will reshape its policies on the basis of more
information and experience in the administration of the Act.  See 29 U. S.
C. MDRV 156.  The question whether the Board has changed its view about
certain issues or certain industries does not undermine the validity of a
rule that is based on substantial evidence and supported by a "reasoned
analysis."  See Motor Vehicle Mfrs. Assn. v. State Farm Mutual Automobile
Ins. Co., 463 U. S. 29, 42, 57 (1983).
    The Board's conclusion that, absent extraordinary circumstances, "acute
care hospitals do not differ in substantial, significant ways relating to
the appropriateness of units,"  App. 189, was based on a "reasoned
analysis" of an extensive record.  See 463 U. S., at 57.  The Board
explained that diversity among hospitals had not previously affected the
results of bargaining unit determinations and that diversification did not
make rulemaking inappropriate.  See App. 55-59.  The Board justified its
selection of the individual bargaining units by detailing the factors that
supported generalizations as to the appropriateness of those units.  See,
e. g., id., at 93-94, 97, 98, 101, 118-120, 123-129, 133-140.
    The fact that petitioner can point to a hypothetical case in which the
rule might lead to an arbitrary result does not render the rule "arbitrary
or capricious."  This case is a challenge to the validity of the entire
rule in all its applications.  We consider it likely that presented with
the case of an acute care hospital to which its application would be
arbitrary, the Board would conclude that "extraordinary circumstances"
justified a departure from the rule.  See 29 CFR MDRV 103.30(a), (b)
(1990).  Even assuming, however, that the Board might decline to do so, we
cannot conclude the the entire rule is invalid on its face.  See Illinois
Commerce Commission v. Interstate Commerce Commission, 249 U. S. App. D.C.
389, 393-394, 776 F. 2d 355, 359-360 (1985) (Scalia, J.); Aberdeen &
Rockfish R. Co. v. United States, 682 F. 2d 1092, 1105 (CA5 1982); Cf. FDIC
v. Mallen, 486 U. S. 230, 247 (1988) ("A statute such as this is not to be
held unconstitutional simply because it may be applied in an arbitrary or
unfair way in some hypothetical case not before the Court").
    In this opinion, we have deliberately avoided any extended comment on
the wisdom of the rule, the propriety of the specific unit determinations,
or the importance of avoiding work stoppages in acute care hospitals.  We
have pretermitted such discussion not because these matters are unimportant
but because they primarily concern the Board's exercise of its authority
rather than the limited scope of our review of the legal arguments
presented by petitioner.  Because we find no merit in any of these legal
arguments, the judgment of the Court of Appeals is affirmed.

It is so ordered.







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1
    We further note that the Board's rule is fully consistent with the two
NLRB case holdings expressly approved by the admonition.  In one of those
cases, the Board refused to approve a bargaining unit composed of only
x-ray technicians and instead ruled that all technical workers should be
grouped together.  See Woodland Park Hospital, Inc., 205 N. L. R. B.,
888-889 (1973).  In the other case, the Board refused to permit a unit of
only two employees.  See Four Seasons Nursing Center of Joliet, 208 N. L.
R. B. 403 (1974).  The current rule authorizes a single unit for all
technical workers and prohibits units of fewer than five em ployees.  See
29 CFR MDRV 103.30(a) (1990).