10 November 2015

The NLRB Limits Confidentiality Interests in the Peer Review Process

In August, the National Labor Relations Board issued a ruling that affects (1) whether an employee may have a union representative present at a peer review meeting, and (2) the information a health care facility must disclose to a union during the peer review process. This article summarizes the Board’s holding and Michigan’s peer review statute and analyzes what this decision could mean for your peer review process.

The facts of the case are relatively straightforward. Menorah Medical Center sent letters to two nurses and notified them that the hospital’s peer review committee had reviewed cases in which the nurses may have “exhibited unprofessional conduct.” The letters further explained that the Nursing Peer Review Committee had preliminarily determined the nurses’ conduct amounted to “grounds for disciplinary action” that mandated disclosure to the Kansas Board of Nursing. The letters notified the nurses of the date and time when the Committee would discuss their cases and informed them of their opportunity to speak before the Committee.

Before the meeting, one nurse contacted the hospital’s risk manager and asked if her union representative could accompany her to the meeting. The risk manager denied the request and told the nurse the meeting was closed to all individuals except the nurse and the Committee members. The second nurse made a request for her union representative at the Committee meeting. The hospital also denied that request.

The union filed an unfair labor practice on behalf of the nurses, and an administrative law judge ruled against the hospital.

Union representation at the peer review meeting
On appeal before the NLRB, the hospital argued that the nurses were not entitled to a union representative at the Nursing Peer Review Committee meeting since the nurses could not reasonably expect to be disciplined based on the outcome of the meeting. Under the hospital’s theory, only the state licensing agency, and not the hospital, could discipline the nurses. However, the Board rejected the hospital’s argument and ruled that the nurses could reasonably expect the meeting to result in their discipline, regardless of the “source” of the discipline. Consequently, the nurses were entitled to have their union representative present at the peer review meeting.

The Board also ruled that the nurses were entitled to a union representative at the peer review meeting even if the hospital informed the nurses that only the state licensing bureau could impose discipline. That is, the nurses were entitled to a union representative at the peer review meeting even if they knew they could not be disciplined as a direct result of the meeting. According to the Board, the nurses would reasonably understand that the peer review committee’s obligation to refer the matter to the Kansas Board of Nursing could lead to suspension or revocation of their nurse’s licenses. And, because the hospital could not employ nurses who lacked the requisite license, the hospital would have to suspend or discharge a nurse who lost her license. “Consequently,” said the Board, “it is clear that employees in these circumstances would reasonably understand that their appearance before the committee could possibly lead to their suspension or discharge.”

The union’s request for peer review documents
The Board also found the hospital wrongly denied the union’s request for information regarding the Nursing Peer Review Committee. Prior to the peer review committee meeting, the union requested information from the hospital, including: 

  • copies of the discipline issued by the Peer Review Diversion Committee and all documents related to the hospital’s allegations;
  • a complete description of the Peer Review Diversion Committee; and
  • a copy or record of where the Peer Review Diversion Committee discipline was placed (i.e. personnel record).

The hospital denied the union’s information request because “all business conducted in the committee is confidential between the hospital and the State.” Under Kansas law,

[T]he reports, statements, memoranda, proceedings, findings and other records submitted to or generated by peer review committees or officers shall be privileged and shall not be subject to discovery, subpoena or other means of legal compulsion for their release to any person or entity or be admissible in evidence in any judicial or administrative proceeding.

The hospital argued that the requested information was protected by the Kansas statutory privilege.

Despite the broad language of the statutory privilege, the Board determined that Kansas courts interpreted the law to only shield the committee’s internal deliberative process. Consequently, the Board ruled that the information requested by the Union that related to the structure and function of the Committee and its members “does not touch on the Committee’s deliberations” and was not protected by Kansas law.

However, “[t]he Union’s request for the copies of employee discipline issued by the Committee presents a closer issue.” Although those documents were generated by the Committee as part of the peer review process (and thus were protected from disclosure by Kansas law), the Board ruled that the hospital did not carry its burden of proving that its confidentiality interest in the information outweighed the union’s need for the information. Disclosure of the letters issued to the nurses “runs little risk of interfering with the state’s interest in promoting the kind of frank discussion of patient care that is necessary to maintain the integrity of the Committee’s deliberations.”

The hospital’s confidentiality rule
Finally, the Board affirmed the administrative law judge’s holding that the hospital committed an unfair labor practice by enforcing a confidentiality rule that limited discussion of the issues pending before the peer review committee. The board held that employees would reasonably understand the hospital’s prohibition on disclosure of “reportable incidents” to include “not only what transpires at their committee meetings” but also “discussions about the events underlying the peer review investigation.” According to the Board, the hospital did not establish any legitimate basis for prohibiting discussions of those matters.

Lesson learned from Menorah Medical Center
There are three takeaways from the Board’s decision in Menorah Medical Center. First, unionized employees have a right to a union representative at a peer review meeting that could-either directly or indirectly-lead to their discipline or discharge. Second, even if a state law protects from disclosure documents related to the peer review process, the Board may order production of those documents if the health care facility cannot show that its confidentiality interests outweigh the union’s need for the information. And third, a health care institution may not prohibit employees from talking about the peer review process or events related to the peer review process.

This third point about confidentiality rules applies to both union and non-union employers. In recent years, the NLRB has taken a hard stance against employer work rules (in both union and non-union settings) that could, even in the slightest way, chill an employee’s ability to participate in protected concerted activity. The Board has actively struck down work rules that prohibit employees from discussing among themselves issues related to employment or the terms and conditions of employment.

Although peer review laws vary from state to state, Michigan’s law is similar to the Kansas law considered by the Board. Under Michigan law, the record of a peer review proceeding and the reports, findings, conclusions, and data collected by or for a review entity are confidential, are not public records, are not discoverable, and shall not be used as evidence in a civil action or administrative proceeding.

The Board considered the Michigan Peer Review Statute in 2004. In that matter, a hospital discharged a nurse after she gave the wrong medication to a patient and then attempted to hide her error by failing to file an incident report (her supervisor filed an incident report instead). The nurse grieved the discharge. In preparing for arbitration, the union requested the hospital’s incident reports concerning other medication errors. The hospital refused to supply this information and argued it was confidential and protected from disclosure by state law.

In reviewing the case, the Board acknowledged that the Michigan Peer Review Statute protects from disclosure a health care facility’s peer-review documentation, and that the hospital established a legitimate confidentiality interest in the incident reports. One might think the story ended there – the state law said the reports were confidential, the hospital demonstrated its interest in confidentiality, so the hospital wins. Right?

Wrong. The Board ruled that “[w]hen an employer demonstrates a substantial confidentiality interest, it cannot simply ignore the Union’s request for information. It must still seek an accommodation of its concerns and the Union’s need for the requested information.” The Board reached this conclusion despite the fact that the requested information was privileged under the Michigan Peer Review Statute. Additionally, the Board ruled that the burden of formulating a reasonable accommodation falls on the employer, not the union. The Board concluded the hospital violated the National Labor Relations Act because it failed to offer a reasonable accommodation to the union.

In both Menorah and the Michigan case, the health care facility in question attempted to use the privileges created by a state law to avoid disclosure of peer review documents. Yet, in both cases, the Board determined that the unions’ need for information trumped the states’ laws. The Menorah case highlights the Board’s likelihood to side with the employee if a hospital employer relies on peer review confidentiality, whether under Kansas or Michigan peer review statutes.

Under the Board’s ruling in Menorah Medical Center, an employer has three options after an employee requests the presence of a union representative at a peer review interview: 1) grant the request; 2) cease or not conduct the interview; or 3) offer the nurse a choice of either conducting the interview unaccompanied by a union representative or forgoing the interview. However, all deliberations and any discussions related to the peer review committee’s decision-making process should be held outside the presence of anyone who is not a member of the peer review committee to maintain confidentiality and privilege.

Further, employers should review their work rules to ensure that confidentiality policies are not so broad that they will be interpreted to prohibit or discourage employees from engaging in protected concerted activity.

Health care providers should seek legal advice before engaging in the peer review process, especially when a union is involved. Legal counsel can assist the employer in navigating issues like the peer review privilege and patient privacy concerns while simultaneously dealing with union demands for information and representation. If you have questions about these issues, please contact the author or a member of Miller Johnson’s Employment-Health Care practice group.