DC DC-OAG-1999-08-31-Opinion-July-2014-Collective-Bargaining- 1999-08-31

When DC General Hospital was reorganized into the Public Benefit Corporation in 1997, did an arbitration award issued to nurses days before the transition transfer to the PBC, or stay with the disappearing hospital?

Short answer: It transferred. Section 207(a)(4) of the 1996 Public Benefit Corporation Act transferred all 'functions, assets, property, records and obligations' from DCGH to the PBC. 'Obligations' includes contractual liabilities like the April 1, 1997 arbitration award. The same Act required the PBC to assume all existing collective bargaining agreements, and the arbitration award arose from collective bargaining impasse procedures under the CMPA. Section 219's tort-claim transfer carve-out did not apply because this was a contractual claim, not a tort claim.

Disclaimer: This is an official DC Attorney General opinion. AG opinions are persuasive authority but not binding precedent. This summary is for informational purposes only and is not legal advice. Consult a licensed DC attorney for advice on your specific situation.

Plain-English summary

DC General Hospital and the DC Nurses Association reached a collective-bargaining impasse during fiscal years 1994–1997. Under § 1113 of the DC Comprehensive Merit Personnel Act (CMPA), the dispute went to interest arbitration, and the arbitrator issued an award on April 1, 1997 requiring the hospital to pay the nurses additional compensation for those four years.

Eight days later, on April 9, 1997, DC General Hospital ceased to exist as a stand-alone DC agency. The Public Benefit Corporation Act of 1996 (D.C. Law 11-212) transferred everything to a new public-benefit corporation. The PBC took the position that the April 1 arbitration award did not transfer with the hospital, and refused to pay.

The Corporation Counsel disagreed, on three grounds.

First, § 207(a)(4) of the PBC Act transferred all "functions, assets, property, records and obligations" from DCGH to the PBC. The Act did not define "obligations," but ordinary dictionary meaning ("a duty arising by contract; a legal liability"; Black's "any certain written promise to pay money or do a specific thing") clearly includes a binding arbitration award. The opinion also invoked common sense and District practice: in the District, contractual liabilities have always followed the agency that received the goods or services in dispute, because anything else would disrupt service continuity, contrary to the Council's expressed intent in § 32-261.1(d).

Second, § 208(h) of the PBC Act expressly required the PBC to "assume and be bound by all existing collective bargaining agreements" until new agreements were negotiated. The April 1 award arose from collective-bargaining impasse procedures under § 1113 of the CMPA, and so fell within the spirit (and arguably the letter) of § 208(h).

Third, the Council clearly knew how to exempt liabilities from transfer when it wanted to. Section 219 of the PBC Act explicitly carved out tort settlements and judgments for two years (the District kept paying tort liabilities for the first two years; after that, the PBC took over). No similar carve-out exists for contractual liabilities. Under expressio unius doctrine, the absence of a contract-claim carve-out confirms that contract claims, including arbitration awards, transferred immediately.

Because Reorganization Order No. 50 makes a formal Corporation Counsel opinion the unified DC government legal position, the PBC was directed to withdraw any contrary position and conform.

Currency note

This opinion was issued in 1999. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here. The DC Health and Hospitals Public Benefit Corporation itself was dissolved by D.C. Law 13-313 (2001) following financial collapse, and the District's hospital functions were privatized through the Howard University Hospital and later Greater Southeast / United Medical Center deals. The PBC successor-liability puzzle this opinion solved has since become moot for new claims.

Historical context

DC General Hospital was the District's public hospital from the 19th century until its 2001 closure. By the mid-1990s the hospital was financially distressed. The 1996 Public Benefit Corporation Act was the rescue plan: spin the hospital out of the District government into a public-benefit corporation that could operate with more financial flexibility. The transition closed on April 9, 1997.

The DC Nurses Association's long-running compensation dispute predated the transition. The CMPA impasse procedure produced an award on April 1, 1997 covering work performed during fiscal years 1994 through 1997. The PBC refused to honor the award, taking the position that the obligation died when the hospital was dissolved into the PBC.

The dispute mattered for two reasons beyond the immediate payroll. It tested how the PBC Act handled transition liabilities, which had implications for vendor contracts, debt service, and other ongoing hospital obligations. And it foreshadowed the broader fiscal pressures that would later destabilize the PBC and lead to the 2001 dissolution.

What this meant at the time for nurses owed compensation

The award was payable. The PBC could not avoid it by pointing at the dissolved DCGH.

What this meant for the PBC

The transition swept in contractual liabilities, not just assets. The PBC had to budget for arbitration awards, vendor contract claims, and other contractual obligations alongside its operating finances.

What this meant for the DC Nurses Association

The collective bargaining process under the CMPA continued at the PBC, with negotiations to begin within 180 days of the PBC Board's first meeting under D.C. Code § 32-262.8(h). The existing agreement and the April 1 award traveled into that new framework.

What this meant for similar District government reorganizations

The opinion stands for the proposition that contractual liabilities transfer with the function, absent express statutory exemption. That principle has shaped subsequent DC-government reorganization legislation (e.g., the post-Revitalization Act allocation of responsibilities) and is the default reading for ambiguous transition statutes.

Common questions

Q: What is interest arbitration under § 1113 of the CMPA?
A: When the District government and a public-employee union reach impasse in collective bargaining, the dispute goes to a neutral arbitrator who issues a binding award setting the new contract terms (compensation, benefits, work rules). The award has the legal force of an agreement reached at the table.

Q: Why did Section 219 carve out tort claims for two years?
A: To give the new PBC time to set up its own settlement-and-judgment fund. During those two years the District continued to pay tort settlements and judgments arising from PBC operations, with the PBC taking over after.

Q: Did this opinion bind the PBC even though the PBC was an independent corporation?
A: Yes, under Reorganization Order No. 50. A formal Corporation Counsel opinion stated the unified position of the District government, including its agencies, on the meaning of a District statute. The PBC, as a District-related entity, was bound to conform.

Q: What if the dispute had been about a tort claim arising from a hospital injury before April 9, 1997?
A: Different answer. Section 219 expressly kept tort liability with the District for the first two years, with PBC assumption thereafter.

Citations

Statutes
- Health and Hospitals Public Benefit Corporation Act of 1996, D.C. Law 11-212
- PBC Act §§ 207(a)(4), 208(h), 219
- D.C. Code §§ 32-261.1(d), 32-262.7(a), 32-262.8(h), 32-262.19
- DC Comprehensive Merit Personnel Act of 1978 § 1113, D.C. Code § 1-618.17
- D.C. Code § 1-1211 et seq.
- Reorganization Order No. 50, Office of the Corporation Counsel (June 26, 1953)

Source

License

This opinion is published by the Office of the Attorney General for the
District of Columbia. Per the DC.gov terms of use, content is licensed
under Creative Commons Attribution 3.0,
which permits commercial use, redistribution, and modification with
attribution.

Original opinion text

~uutmment of Ute Iltstrtd of atulumbtu
OFFICE OF THE CORPORATION COUNSEL
.JUDICIARY SQUARE
"'"

FOURTH ST •• N.W.

WASHINGTON. D. C.

20001

IN REPLY REFER TO:

> t")~~~ ~u). ~b·. ~,~
August 31, 1999

~... ~c\"~\ "\

OPINION OF THE CORPORATION COUNSEL
SUBJECf: Whether the Obligation to Comply with an Arbitrator's Award Under a
Collective Bargaining Agreement with the District of Columbia Nurses
Association Was Transferred from D.C. General Hospital to the
District of Columbia Health and Hospitals Public Benefit Corporation by
the Health and Hospitals Public Benefit Corporation Act of 1996
John Fairman
Executive Director
D.C. Health and Hospitals
Public Benefit Corporation
1900 Massachusetts Avenue, SE
Washington, D.C. 20003

Dear Mr. Fairman:

On April 1, 1997, an arbitrator issued an award to the D.C. Nurses Association requiring
the payment of additional compensation to nurses for work performed at D.C. General
Hospital eDCGH") during fiscal years 1994 through 1997. The arbitrator was appointed
pursuant to section 1113 of the District of Columbia Government Comprehensive Merit
Personnel Act of 1978 ("CMPA',), effective March 3, 1979, D.C. Law 2-139, D.C. Code
§ 1-618.17 (1999 Repl.), after the parties reached an impasse in negotiating a new
collective bargaining agreement. The award was made eight days prior to the creation of
the PBC, and I understand that the PBC contends that the obligation to pay this award
was not transferred to the PBC under the Health and Hospitals Public Benefit
Corporation Act of 1996 ("PBC Act"), effective April 9, 1997, D.C. Law 11-212, D.C.
Code § 32-261.1 et seq. (1999 Repl.).' However, I conclude that the obligation to the pay
thje;- ?ward was transferred to the PRC for three reasons.

The PBC was created upon the effective date of the PBC Act, which was April 9, 1997.

First, under section 207(a)(4) of the PBC Ac~ the "functions, assets, property, recOrds
and obligations" of the DCGH were transferred to the PBC. 2 (Emphasis added). The
term "obligations" is not defined in the PBC Act or in the legislative history, but the
dictionary definition of the term includes "a duty arising by contract: a legal liability".
Webster's Third New International Dictionary. In addition, Black's Law Dictionary
includes in its definition of the term the following: "[a]s legal term word originally
meant a sealed bond, but it now extends to any certain written promise to pay money or
do a specific thing."
Further, common sense and uniformly applied past practice support the view that the
Council of the District of Columbia intended to transfer to the PBC, not only DCOH's
assets, but also its obligations, including contractual liabilities. In the District
government, liability for contract settlements and judgments, detenninations by the
Contract Appeals Board and the Public Employee Relations Board, and arbitration
awards in contract matters have always been the responsibility of the agencl' receiving
the goods or services which are the subject of the contractual legal dispute. If the term
"obligations" does not include contractual liabilities, then obligations imposed, for
example, by contracts entered into by DCGH would not have been transferred to the
PBC. With no entity responsible for honoring the contracts, health care services could be
disrupted, contrary to the Co\lllcil's intent. See D.C. Code § 32-261.1(d)("It is the intent
of the Council that this transfer be carried out without any deleterious effect on the
continuity and adequacy of health care services provided to the patients being served.")
Thus, I conclude that the term "obligations" includes such legal liabilities as an
arbitration award.
Second, the Council specifically required the PBC to "assume and be bound by all
existing collective bargaining agreements" until new agreements have been negotiated by
the PBC." See section 208(h) of the PBC Act. This provision evinces the intent for the
PBC to inherit the obligations imposed by CQllective bargaining agreements entered into
by DCGH. Although the compensation package arose from an arbitration award, and not
from an agreement between the parties, the award was issued as a result of the collective

2 The Mayor was required to make this transfer "[als expeditiously as possible but no

later than 6 months from the date of the first meeting of the Board held pursuant to § 32262.4(h)", D.C. Code § 32-262.7(a), and "[a]fter Council approval". D.C. Code § 32262.7(a)(4). In addition, nothing in this section required the Mayor to list specifically
each and every function, asset, property, record or obligation that would be transferred to
thePBC.
3 This is distinguished from tort settlements and judgments, the payment of which is

s~!"arately ftmded in a settlement and judgment fund supervised by the Office of the
Corporation Counsel.

.. Negotiations between the PBC and certified labor organizations were required to begin
not later than 180 days after the first meeting of the PBC Board. D.C. Code § 32262.8(h)(1999 Rep.).

bargaining process. See section 1113 of the CMPA, D.C. Code § 1-618.17. Thus, I
conclude that section 208(h) of the PBC Act requires the PBC to "assume and be bound
by" the award. S
Third, the Council knew how to exempt the transfer of liabilities to the PBC when it
wished to do so, and it did not exempt arbitration awards. For example, § 219 of the PBC
Act, D.C. Code § 32-262.19, specifically provides:
(a) The officer and employees of the Corporation shall be considered to be
District government employees for purposes of subchapter II of Chapter 12 of
Title 1, except that beginning 2 years from the date of the Board's first meeting
under § 32-262.4(h) all settlements and judgments shall be payable out of the
monies of the Corporation.
(b) The District shall assume the responsibility for all settlements and judgements
that result from acts or occurrences which transpired prior to the date upon which
the Corporation assumes responsibility for settlements and judgements under
subsection (a) of this section.
It is clear that section 219 is limited to tort claims because (1) it references D.C. Code
§ 1-1211 et ~ which concerns tort actions against the District government, and not
claims arising from labor relations; and (2) the legislative history explains that section
219 provides that "all tort claims judgments and settlements would be payable out of the
monies of the PBC except for the first 2 years", see Committee Report on Bill 11-604, the
"District of Columbia Health and Hospitals Public Benefit Corporation Act of 1996",
dated May 16, 1996, p. 9. Thus, this section does not exempt the transfer of the
arbitration award to the PBC because the award is a contractual, and not a tort, liability.

Consequently, for the foregoing reasons, I conclude that the obligation to comply with
the arbitration award issued on April 1, 1997 was transferred to the PBC under the PBC
Act. To the extent that the PBC may have taken a contrary legal position in any
proceeding, it must now withdraw that position and conform its position on the law to
that announced herein as the unified position of the District of Columbia government, and
all its agencies, as to the meaning of a District of Columbia statute. See Reorganization

Assuming that section 208(h) does not apply specifically.to an arbitrator's award, this
section at a minimum supports the view that the Council intended the PBC to assume
labor-related obligations and that, consequently, the term "obligations" in section
207(aX4) includes an arbitration award.

•

Order No. 50, Office of the Corporation Counsel, dated June 26, 1953, as amended, Part
IIA.(a).

<&nUmlment nf Ute District nf C!tnlumbiu
OFFICE OF THE CORPORATION COUNSEL
JUDICIARY SQUARE
...U FOURTH ST.. N.W.

WASHINGTON. D. C.

20001

IN REPLY REFER TO:

> ~~~"C'-~~
August 31, 1999

L~~·. ~~\6
~.. ~(."\~ '-\
.'.

OPINION OF THE CORPORATION COUNSEL

SUBJECT: Whether the Obligation to Comply with an Arbitrator's Award Under a
Collective Bargaining Agreement with the District of Colwnbia Nurses
Association Was Transferred from D.C. General Hospital to the
District of Columbia Health and Hospitals Public Benefit Corporation by
the Health and Hospitals Public Benefit Corporation Act of 1996
John Fainnan
Executive Director
D.C. Health and Hospitals
Public Benefit Corporation
1900 Massachusetts Avenue, SE
Washington, D.C. 20003

Dear Mr. Fairman:
On April 1, 1997, an arbitrator issued an award to the D.C. Nurses Association requiring
the payment of additional compensation to nurses for work performed at D.C. General
Hospital ("DCGH") during fiscal years 1994 through 1997. The arbitrator was appointed
pursuant to section 1113 of the District of Columbia Government Comprehensive Merit
Personnel Act of 1978 ("CMP A"), effective March 3, 1979, D.C. Law 2-139, D.C. Code
§ 1-618.17 (1999 Repl.), after the parties reached an impasse in negotiating a new
collective bargaining agreement. The award was made eight days prior to the creation of
the PBC, and I understand that the PBC contends that the obligation to pay this award
was not transferred to the PBC under the Health and Hospitals Public Benefit
Corporation Act of 1996 ("PBC Act"), effective April 9, 1997, D.C. Law 11-212, D.C.
Code § 32-261.1 et ~ (1999 Repl.): However, I conclude that the obligation to the pay
this award was transferred to the PBC for three reasons.

The PBC was created upon the effective date of the PBC Act, which was April 9, 1997.

First, under section 207(a)(4) of the PBC Act, the "functions, assets, property, records
and obligations" of the DCGH were transferred to the PBC. 2 (Emphasis added). The
tenn "obligations" is not defined in the PBC Act or in the legislative history, but the
dictionary definition of the tenn includes "a duty arising by contract: a legal liability".
Webster's Third New International Dictionary. In addition, Black's Law Dictionary
includes in its definition of the tenn the following: "[a]s legal tenn word originally
meant a sealed bond, but it now extends to any certain written promise to pay money or
do a specific thing."
Further, common sense and uniformly applied past practice support the view that the
Council of the District of Columbia intended to transfer to the PBC, not only DCGH's
assets, but also its obligations, including contractual liabilities. In the District
government, liability for contract settlements and judgments, determinations by the
Contract Appeals Board and the Public Employee Relations Board, and arbitration
awards in contract matters have always been the responsibility of the agencl receiving
the goods or services which are the subject of the contractual legal dispute. If the term
"obligations" does not include contractual liabilities, then obligations imposed, for
example, by contracts entered into by DCGH would not have been transferred to the
PBC. With no entity responsible for honoring the contracts, health care services could be
disrupted, contrary to the Co\lIlcil's intent. See D.C. Code § 32-261. I (d)("It is the intent
of the Council that this transfer be carried out without any deleterious effect on the
continuity and adequacy of health care services provided to the patients being served.")
Thus, I conclude that the term "obligations" includes such legal liabilities as an
arbitration award.
Second, the Council specifically required the PBC to "assume and be bound by all
existing collective bargaining agreements" until new agreements have been negotiated by
the PBC.4 See section 208(h) of the PBC Act. This provision evinces the intent for the
PBC to inherit the obligations imposed by collective bargaining agreements entered into
by DCGH. Although the compensation package arose from an arbitration award, and not
from an agreement between the parties, the award was issued as a result of the collective
2 The Mayor was required to make this transfer "[a]s expeditiously as possible but no

later than 6 months from the date of the first meeting of the Board held pursuant to § 32262.4(h)", D.C. Code § 32-262.7(a), and "[a]fter Council approval". D.C. Code § 32262.7(a)(4). In addition, nothing in this section required the Mayor to list specifically
each and every function, asset, property, record or obligation that would be transferred to
the PBC.
3 This is distinguished from tort settlements and judgments, the payment of which is

separately funded in a settlement and judgment fund supervised by the Office of the
Corporation Counsel.
Negotiations between the PBC and certified labor organizations were required to begin
not later than 180 days after the first meeting of the PBC Board. D.C. Code § 32262.8(h)(1999 Rep.).

S Assuming that section 208(h) does not apply specifically.to an arbitrator's award, this
section at a minimum supports the view that the Council intended the PBC to assume
labor-related obligations and that, consequently, the term "obligations" in section
207(a)(4) includes an arbitration award.

Order No. 50, Office of the Corporation Counsel, dated June 26, 1953, as amended, Part
IIA.(a).