Bankruptcy Court Ruling Preserves Medical Residency Positions for Philly Region

A Delaware-based federal bankruptcy judge has approved the sale of 570 medical residency positions by the parent company of Philadelphia’s insolvent Hahnemann University Hospital to a consortium of six local healthcare providers.

The $55 million transaction would ensure that the Medicare-funded physician-training slots would remain within the Philadelphia region, according to an Inquirer report.
The Centers for Medicare and Medicaid Services, a branch of the U.S. Department of Health and Human Services that administers the Medicare program, opposed the ruling and has been given seven calendar days to appeal. The federal program was reimbursing Hahnemann about $100,000 annually for each residency position, according to the Inquirer.

“Besides the risk of the region, a health-care hub, losing hundreds of highly sought doctors-in-training paid for by Medicare, a ruling in favor of CMS would force Hahnemann’s parent company to look for other ways to raise the money needed to begin paying off creditors,” the Inquirer reported.

Early last month, city-based Einstein Healthcare Network, Jefferson Health, and Temple University Health System joined the suburban Main Line Health, Camden’s Cooper University Health Care, and Wilmington’s Christiana Care Health System, to bid $55 million at auction to acquire the residency positions, according to WHYY.

During a Chapter 11 hearing on September 4, an attorney for CMS argued that the residency slots are not transferrable by Hahnemann’s parent company, Philadelphia Academic Health System. The 570 medical residents were among more than 2,500 people employed at Hahnemann, including about 800 registered nurses and 700 other unionized employees, prior to its July bankruptcy filing, the Inquirer reported.

This week, a Hahnemann official told the court that the hospital still employs about 80 people and is helping patients to find needed medical care elsewhere. A Jefferson executive told the court that consortium members have already hired 265 of Hahnemann’s former residents and more than 400 staff, “with 200 more in various stages of employment,” WHYY reported.

PAHS also operates St. Christopher’s Hospital for Children in the city. That facility is due to be sold at another bankruptcy auction on September 18. On September 5, staff members there held a public rally “to let the public know how being sold to an unsatisfactory owner could impact care,” KYW reported.

Auto Workers Authorize Strike as Big 3 Labor Contract Deadlines Loom

By an overwhelming majority, more than 150,000 members of the United Auto Workers have authorized their union leadership to launch a strike of the nation’s Big 3 auto manufacturers as current labor contracts at all three companies are due to expire on September 14.

In addition, the union has announced its intention to proceed with General Motors in contract negotiations with the expectation that those talks will set the tone for later bargaining with Ford and Fiat Chrysler.

“It also means that if the union decides to go on strike, it will be against GM,” the Associated Press reported.

The UAW disclosed that 96.4% of members employed by GM voted in favor of strike authorization, while 96% did so at Fiat Chrysler and at Ford. Voting was conducted at the local level, then tallied by employer. Members also elected representatives for their national bargaining teams.

“The vote does not mean there will or will not be a strike,” the union stated in a news release. “It gives authority to the UAW international president and international executive board to call for a strike.”

UAW President Gary Jones noted that “the UAW stood up for (the companies) in a very dark time. Now that they are profitable it is time for them to stand up for all of us.”

In a separate release, Jones referred to the “changing industry” and stated, “We are prepared and we are all ready to stand up for our members, our communities and our manufacturing future.”

The UAW and GM formally opened contract talks on a new national agreement in July. In response to the union’s latest announcements, GM released the following corporate statement: “We look forward to having constructive discussions with the UAW on reaching an agreement that builds a strong future for our employees and our business.”

NLRB Eases Liability on Companies That Misclassify Employees as Contractors

In a partisan majority decision, the National Labor Relations Board has determined that employers do not violate the National Labor Relations Act solely by misclassifying employees as independent contractors, although companies may be subject to enforcement for taking illegal actions against misclassified workers who attempt to assert employee rights.

The decision in the so-called Velox Express case means that, in the board’s majority opinion, employers do not break the law merely by telling workers that they are considered independent contractors, and not considered employees. Previously, an administrative law judge had agreed with workers in the case who asserted that the company violated the law and harmed them by wrongly labeling them as contractors.
“An ALJ found that doing so violated the Act because independent contractors inherently fear reprisal for asserting protected rights reserved for employees,” the law firm Proskauer Rose stated in its Labor Relations Update blog.

However, three of the four sitting NLRB members – all Republican appointees – rejected the administrative law judge’s ruling. The lone Democrat on the board dissented with the majority. There is one vacancy on the board, a position traditionally reserved for a minority party appointee. The Trump administration has declined to nominate anyone to fill that seat.

HRDive.com reported that, “This ruling ‘is a good win for employers,’ according to Todd Lyon, partner at Fisher Phillips. The decision makes it so ‘employers do not have to worry about getting hit with a double whammy.’”

The same website noted that, “Employers may still run into legal trouble with the Fair Labor Standards Act, worker compensation, taxation issues and unemployment if they misclassify employees as independent contractors. … Employers will still need to consider how they will deal with independent contractors who try to organize. The NLRA does not protect independent contractors, but an employer could land itself in hot water if it disciplines employees who have been misclassified as independent contractors for trying to unionize.”

Worker misclassification in Pennsylvania is costing the state and federal governments about $300 million a year in lost tax revenues, according to two state House members who held a September 4 news conference in Bucks County to tout two pending bills that would address the problem.

The Courier Times reported that House Bill 716 would establish a joint agency task force on employee misclassifications, while HB 715 would narrow the definition of what constitutes an independent contractor within the construction industry in the Commonwealth.

PA House Committee Examines Safety of One-Person Freight Train Crews

A Pennsylvania House committee became the latest venue for a years-old national debate over one-person freight train crews when members of the House Transportation Committee met in Altoona to hear testimony about a bipartisan bill that would mandate multi-person crews.

The dialogue focused on the public safety ramifications of single-operator trains and referenced the growing use of other autonomous vehicles in the Commonwealth, including automobiles.

According to the Mirror, Norfolk Southern Vice President Rudy Husband testified, “It’s mystifying to me that Pennsylvania is thinking of mandating the number of people in the cab (of freight trains), while it’s a leader in the development of autonomous vehicles.”

Husband stated that Amtrak and urban passenger trains already operate with single-person cab crews, and that freight trains already have automatic shut-off systems that activate within seconds if the engineer fails to respond to a repetitive alert.

Committee members from both sides of the aisle expressed concern about what might happen if a lone crew member suffered a medical emergency such as a heart attack. Other members stated that more research should be done nationally to gauge the safety of one-person crews.

Similar legislation was introduced in the PA House during the 2015-2016 and 2017-2018 sessions but the Transportation Committee declined to take action on either bill. The Mirror reported that earlier this year, the Federal Railroad Administration withdrew a proposal to mandate multi-person crews nationally. In public comments to the FRA, more than 1,500 individuals wrote to say they favor multi-person crews. Most of the commenters were current or former train crew members.

Just 39 commenters wrote in support of single-person crews. The American Association of Railroads joined those in opposition to the proposed two-person rule. A notice published in the Federal Register after the FRA withdrew the proposed rule asserted that “no regulation of train crew staffing is necessary or appropriate at this time and (the FRA) intends for the withdrawal to preempt all state laws attempting to regulate train crew staffing in any manner.”

Several states including Washington, Illinois, and Nevada have filed a lawsuit to challenge the FRA decision, according to the industry magazine Railway Track & Structures. Nine states already have minimum crew size laws, while others continue to advance legislation on the subject, according to Safety&Health, a publication of the National Safety Council. Days after the PA House committee hearing, the governor of Illinois signed a similar bill into law. It’s due to take effect on January 1.

August 2019 National Jobs Update

The seasonally adjusted national unemployment remained at 3.7% in August 2019, the same as it was the previous two months. Over the month, unemployment rolls fell slightly by 19,000 individuals, lowering total unemployment to 6.044 million. National unemployment statistics for the month are as follows:

• Total Unemployment – 6,044,000
• Change Over Month –  DOWN  19,000
• Change Over Year –  DOWN  153,000
• Change Over Trump Term –  DOWN   1,521,000
• Rate Change Over Month – no change 
• Rate Change Over Year –  DOWN   0.1%
• Rate Change Over Trump Term –  DOWN   1.0%
• Rate Change Over Obama 2nd Term –  DOWN   3.3%

As indicated above, total unemployment’s rounded percentage of the labor force, or unemployment rate, saw no change over the month (rate = unemployment / labor force). The labor force is the total number of employed individuals combined with the total number of unemployed individuals actively searching for work. Growth in the labor force can be a sign of a strengthening economy from more people working and/or more individuals searching for jobs. Marking a fourth consecutive monthly increase, the national labor force grew by 571,000 individuals from July to August 2019, a combination of total employment* rising by 590,000 individuals and total unemployment down by 19,000 individuals as noted above, pushing its total to a new record high of 163,922,000.

Since President Trump took office, the national labor force has grown by 4.229 million individuals (unemployment -1.521 million & employment +5.750 million), continuing progress made over President Obama’s second term when the national labor force grew by 3.930 million individuals (unemployment -4.906 million & employment +8.836 million). National labor force statistics for the month are as follows:

• Total Labor Force – 163,922,000
• Change Over Month –  UP  571,000
• Change Over Year –  UP  2,120,000
• Change Over Trump Term –  UP   4,229,000
• Change Over Obama 2nd Term –  UP   3,930,000

Non-farm* jobs grew by 130,000 over the month in August 2019, below economists’ projections, as overall growth for the year remains down. Year-to-date, percentage non-farm job growth stands at its lowest level (Jan. to August) since 2010. Additionally, average monthly non-farm job gains through President Trump’s term thus far (189,000) remain below average monthly growth seen over President Obama’s second term (217,000). National non-farm employment statistics for the month are as follows:

• Total Non-Farm Employment – 151,541,000
• Change Over Month –  UP  130,000
• Change Over Year –  UP  2,074,000
• Change Over Trump Term –  UP   5,846,000
• Change Over Obama 2nd Term –  UP  10,412,000

*Total employment for labor force provided by U.S. Census Household survey. The separate BLS Establishment survey measures non-farm jobs only.

July 2019 PA County Unemployment Ranking

Statewide rate: 3.9%
Source: Department of Labor & Industry