Before Swygert, Sprecher and Bauer, Circuit Judges.
Woodlawn Hospital brings this appeal to challenge the November 23, 1977 order of the National Labor Relations Board ordering the hospital to grant preferential reinstatement rights to 59 individuals who had been employed by the hospital preceding a 1972 strike. The question presented for review is whether these strikers are "employees" within the meaning of section 2(3) of the National Labor Relations Act, 29 U.S.C. § 152(3), thereby entitling them to reinstatement.
In December of 1971 Woodlawn Hospital entered into an interim recognition agreement with the Hospital Employees Labor Program as representative of the hospital's nurses' aides as well as dietary and housekeeping employees. At this time, the National Labor Relations Act did not apply to health care institutions and thus did not impose any bargaining obligations on Woodlawn. Contract negotiations were unsuccessful and on June 14, 1972 eight nurses' aides and an elevator operator walked off the job several hours before the end of their shift. A strike ensued in which 74 of the 117 employees in the bargaining unit participated.
Shortly after the strike began, in the summer months of 1972, Woodlawn Hospital began hiring employees to replace the strikers. The employees hired were assured that they were being hired for permanent positions. By fall, the hospital had 95 employees working in the bargaining unit not including the strikers.
On August 4, 1972, the hospital sent letters to between 34 and 50 strikers. The letter informed them that
Inasmuch as you have resigned your employment in accordance with established personnel policies of Woodlawn Hospital, the hospital has found it necessary to permanently replace you.
The letter also requested that the strikers report to the hospital to remove the contents from their lockers.
In accordance with the interim recognition agreement, the hospital and the union engaged in nonbinding factfinding. Most of the strikers attended the hearings held on August 1 and 2 and September 15, 1972. At the hearing, Woodlawn stated its position that the majority of the strikers were assumed to have resigned in accordance with the hospital policy set out in its personnel manual.*fn1
The fact finder concluded that the hospital had engaged in conduct which undermined the union and conditioned a climate which caused the union to strike in contravention of a no-strike commitment in the interim recognition agreement. The fact finder recommended reinstatement of the strikers. Woodlawn rejected the recommendation.
On November 8, 1972, Woodlawn sent letters to 46 strikers offering them reinstatement. On the same date, it also sent letters to 19 strikers informing them that they were ineligible for reinstatement, stating:
The purpose of this letter is to advise you that based upon facts within our knowledge you are not eligible for reinstatement to the job you formerly held.
If you wish to know the basis of this decision not to offer you reinstatement you may make an early appointment with Miss Heisse . . . to discuss with her the specific reasons. If you believe that the grounds for this decision are unjust you will be provided an opportunity to present your reasons in writing to the Employee-Management Committee, for their review and recommendation to me (the Administrator).
Only three strikers accepted the offer of reinstatement. The hospital reinstated them with existing benefits, but with seniority reduced by the amount of time they were on strike.
The union and the hospital continued settlement negotiations through August 1, 1974. Throughout that period reinstatement was a central issue in the continuing dispute. In June of 1974 the Chairman of Woodlawn's Board of Directors gave tentative approval to a settlement agreement providing for immediate reinstatement of 29 strikers, submission of the rights of nine strikers to arbitration, and giving the balance of the strikers preferential rights as vacancies opened. The Board of Directors rejected the settlement, however, and on August 1, 1974 the union was notified that Woodlawn did not intend to continue the negotiations.
After settlement negotiations terminated, the union wrote the Federal Mediation and Conciliation Service on August 6, 1974 to advise them that a strike was in progress. The attorney for the union reported:
The issues relate to the hospital's refusal to reinstate approximately 76 employees who were unfairly terminated because they aided, supported or otherwise assisted the Hospital Employees' Labor Program. It appears likely that the strike will continue because the hospital refuses to re-employ said employees. . . .
On August 19, 1974, the union wrote the hospital advising it that the strike would end at 12:01 a. m., August 25, 1974 the date that the Health Care Amendments to the National Labor Relations Act became effective. The letter informed the hospital that the strikers would seek employment on August 25, but that if the hospital refused "any individual among them employment" the strike would resume September 5, 1974. The hospital responded to the union by letter of August 22, 1974, advising the union that the strikers' former positions had been filled but that they would accept applications for employment to be considered when positions became available.
Picketing and handbilling continued until August 23, 1974. On August 25, 1974, the Union wrote Respondent as follows:
This is to advise you that an unconditional offer to return to work, effective immediately, is hereby made by and on behalf of the following-named employees of the Woodlawn Hospital.
A list of 64 strikers was attached to this letter, which was hand-delivered to a security guard on duty at the hospital at 12:07 a. m., August 26. A copy was also sent to the hospital administrator and was received on August 27.
On August 26, 1974, 41 strikers appeared at the hospital to request reinstatement. They were all treated as new employees and required to fill out full applications. Of those who completed applications, six were hired, but three failed the physical exam. By the date of the hearing Woodlawn had hired 22 new employees never previously employed by the hospital.
On July 13, 1976, the General Counsel issued a complaint against Woodlawn for violating section 8(a)(1) and (3) of the Act by denying preferential reinstatement rights to the strikers. A violation was also cited for reemploying three of the strikers without according them all accrued benefits. The administrative law judge found that Woodlawn had violated the National Labor Relations Act by these actions and ordered the preferential reinstatement of 59 strikers as well as the adjustment of benefits for the strikers already reemployed. The decision was premised on alternative grounds. First, the judge concluded that strikers terminated for union activity before the effective date of the Health Care amendments were still "employees" under the Act and therefore entitled to strikers' reinstatement rights. Alternatively, she concluded that the employee status was retained because the strikers had not been effectively discharged or their discharges ...