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?

Plain-English summary

DC General Hospital and the DC Nurses Association reached a collective-bargaining impasse. Under § 1113 of the District of Columbia Government Comprehensive Merit Personnel Act of 1978 (CMPA), an arbitrator issued an award on April 1, 1997 requiring additional compensation for nurses' work during fiscal years 1994 through 1997.

The Public Benefit Corporation (PBC) was created eight days later, on April 9, 1997. The Corporation Counsel understood the PBC to contend that the award had not transferred to it. The opinion does not report whether any payment had been made.

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 statute did not define "obligations," but the opinion quoted dictionary definitions including "a duty arising by contract: a legal liability" and "any certain written promise to pay money or do a specific thing." The Corporation Counsel also pointed to District practice of assigning contractual liabilities to the agency that received the disputed goods or services. Leaving DCGH's contracts without an entity to honor them could disrupt health care, contrary to the Council's stated 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 award arose from collective-bargaining impasse procedures under § 1113 of the CMPA. The opinion concluded that § 208(h) required the PBC to assume it, while footnote 5 explained that even if § 208(h) did not apply specifically to an arbitration award, it supported reading "obligations" in § 207(a)(4) to include this award.

Third, the Council exempted some liabilities from transfer but did not exempt arbitration awards. Section 219 addressed tort settlements and judgments. Under § 219(b), the District assumed responsibility for settlements and judgments arising from acts before the PBC began assuming that responsibility; § 219(a) set that change at two years after the PBC board's first meeting. The opinion said this tort provision did not exempt the contractual arbitration award.

The Corporation Counsel directed the PBC to withdraw any contrary legal position in a proceeding and conform to the opinion's interpretation, citing Reorganization Order No. 50.

Currency note

This opinion was issued in 1999 and interprets the PBC Act as it applied to an April 1997 arbitration award. Verify the governing law and the facts of any later claim before relying on it.

Historical context

The opinion concerns the transfer of DC General Hospital's obligations to the PBC created on April 9, 1997. Section 207(a)(4) listed the hospital's "functions, assets, property, records and obligations" for transfer.

The CMPA impasse procedure produced an award on April 1, 1997 covering work performed during fiscal years 1994 through 1997. The Corporation Counsel understood the PBC to dispute whether the duty to pay had transferred.

The opinion explained that excluding contractual liabilities from "obligations" could leave contracts entered into by DC General Hospital with no entity responsible for honoring them, contrary to the Council's stated goal of continuity in health care services.

What this meant at the time for nurses owed compensation

The opinion placed the duty to comply with the award on the PBC. It did not decide a payment schedule or report whether the award had been paid.

What this meant for the PBC

The transfer included contractual liabilities. The Corporation Counsel specifically concluded that the PBC inherited the April 1 arbitration award.

What this meant for the DC Nurses Association

The opinion says § 208(h) required the PBC to assume existing collective bargaining agreements until new agreements were negotiated. Its footnote 4 says negotiations with certified labor organizations had to begin within 180 days of the board's first meeting.

What this meant for similar District government reorganizations

The opinion interpreted the particular transfer and collective bargaining provisions of the PBC Act. For another reorganization, examine that statute's wording before drawing a conclusion about transferred liabilities.

Common questions

Q: What is interest arbitration under § 1113 of the CMPA? A: In this case, an arbitrator appointed under § 1113 after a bargaining impasse awarded additional compensation. The opinion does not describe every subject that can be arbitrated or equate every award with a negotiated agreement.

Q: Why did Section 219 carve out tort claims for two years? A: The opinion does not give the Council's reason. It quotes § 219(a), which makes PBC funds responsible for settlements and judgments beginning two years after the board's first meeting, and § 219(b), which keeps responsibility with the District for settlements and judgments from acts before that change. The opinion identifies this provision as concerning tort claims.

Q: Did this opinion bind the PBC even though the PBC was an independent corporation? A: The Corporation Counsel said the PBC must withdraw any contrary legal position taken in a proceeding and conform to the opinion as the unified District government position on the statute, citing Reorganization Order No. 50.

Q: What if the dispute had been about a tort claim arising from a hospital injury before April 9, 1997? A: Section 219(b) assigns the District responsibility for settlements and judgments arising from acts before the PBC assumed responsibility under § 219(a). That change occurred two years after the PBC board's first meeting. The opinion calls § 219 a tort-claims provision but does not decide a particular injury claim.

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
• District of Columbia Government 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

• Index page: https://oag.dc.gov/about-oag/our-structure-divisions/legal-counsel-division/opinions-attorney-general
• Original PDF: https://oag.dc.gov/sites/default/files/2018-02/Opinion-July-2014-Collective-Bargaining-Agreement.pdf

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

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~uutmment of Ute Iltstrtd of atulumbtu
OFFICE OF THE CORPORATION COUNSEL
.JUDICIARY SQUARE
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FOURTH ST •• N.W.

WASHINGTON. D. C.

20001

IN REPLY REFER TO:

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August 31, 1999

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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.

I

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.).

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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.

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

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<&nUmlment nf Ute District nf C!tnlumbiu
OFFICE OF THE CORPORATION COUNSEL
JUDICIARY SQUARE
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WASHINGTON. D. C.

20001

IN REPLY REFER TO:

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August 31, 1999

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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.

I

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

l

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.).

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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

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.

3

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

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