Mercy Hospital of Buffalo

Catholic Health System owned five hospitals in New York, including Mercy Hospital of Buffalo (Mercy) (defendant) and Our Lady of Victoria Hospital (Victoria). A labor union (the union) (plaintiff) had a collective-bargaining agreement with Mercy. At one point in time, all magnetic-resonance imaging (MRI) ordered by doctors at Mercy took place at a certain medical park, and the union represented the MRI technologists who worked at the medical park. In 1997, Mercy, Victoria, and Abbott Radiology (Abbott) discussed the formation of a joint venture to purchase a new, technologically advanced MRI machine. Following the discussions, two new companies were formed: MRI Associates, LLC (owned 25 percent, 25 percent, and 50 percent, respectively, by Mercy, Victoria, and Abbott) and Southtowns (owned 50/50 by Mercy and Victoria). Mercy leased land to MRI Associates, which constructed a building. MRI Associates purchased and installed the new MRI machine in the building. Southtowns leased the building and the new machine from MRI Associates. Abbott, through its wholly owned subsidiary Orchard Park, managed and operated the new MRI machine at the Southtowns facility. The MRI employees at Southtowns were employed by Orchard Park. Thereafter, Mercy began scheduling all its MRI scans at Southtowns and discontinued MRI at the medical park. Two full-time MRI-technologist positions were eliminated at the medical park. The union filed a grievance against Mercy with the National Labor Relations Board (the board), complaining of Mercy’s failure to apply their collective-bargaining agreement to the employees providing MRI services at Southtowns. An administrative law judge found that Mercy and Southtowns were a single employer with no separate corporate identity. The board reviewed the matter.