Collective Bargaining for Employed Physicians

An increasing number of family physicians are choosing a career as an employee of a hospital, health system, or physician group. Many factors are driving this shift, such as changing market conditions, evolving delivery and payment models, and the passage of the Patient Protection and Affordable Care Act (PPACA).

While employment offers certain advantages, many physicians report feeling a loss of control over compensation and other terms and conditions of their employment. Frustrated physicians cite unfair compensation, lack of responsiveness to their needs, and policies that undermine their autonomy as contributing factors.

Not surprisingly, there has been a resurgence of interest in physicians’ ability to collectively bargain the terms and conditions of their employment. While some physicians want to pursue collective bargaining and/or the formation of physician unions as a means of gaining greater leverage in such negotiations, these two approaches are problematic due to the nature of physician employment agreements and the definition of physician services under existing labor laws. 

That said, collective bargaining is a viable approach for any group of physicians (two or more) who are employees of the same entity. Employed physicians are using it to better articulate their desired terms and conditions in employment agreements and contracts.

Here are the answers to some basic questions about your rights as an employed physician.

Do employees have the right to negotiate collectively with their employer?

Yes and no. The National Labor Relations Act of 1935 (NLRA) is a law that gives private sector employees the right to negotiate collectively with their employer. Specifically, Section 7 of the NLRA states that employees have the right:

“to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection.”

The NLRA is enforced by the National Labor Relations Board, an independent federal agency. However, it is critical to understand the definition of physician and physician services, as well as the statutory exclusions for supervisors and managers, in the NLRA and corresponding labor laws, and physicians who desire to collectively bargain with their employers must meet those definitional requirements to be afforded these rights.

Are there existing unions for physicians?

Yes. Physician unions have existed for more than 40 years, and the number of physician union members has fluctuated over time. In 1974, at the peak of the physician-union movement, approximately 55,000 physicians belonged to labor unions. It is estimated that about 40,000 physicians were union members in 2012; many of these were state or federal employees. One reason for the relatively low number of physician union members is that self-employed physicians, who might have the most to gain from union membership, are prohibited by law from collective bargaining. 

Can employees who do not belong to a union participate in collective bargaining?

Yes. Under the NLRA, employees are not required to belong to a traditional labor organization in order to negotiate collectively with their employer, provided those employees satisfy the NLRA’s definition of employee and are not considered to be supervisors or managers under the NLRA. Two or more such employees may exercise their Section 7 rights by designating a representative and asking their employer to meet with the designated representative to discuss and negotiate wages and other terms and conditions of their employment. 

Is my employer subject to the NLRA?

The NLRA applies to most private sector employers, including health care facilities (e.g., hospitals, medical offices, social services organizations), that have a gross annual volume of at least $250,000.

Who is considered an employee under the NLRA?

The NLRA defines most individuals who work for an employer in the private sector as an “employee,” with certain exclusions. Independent contractors (i.e., self-employed individuals), managers, and supervisors are notable exclusions who do not have the rights of employees under this law.  This definition is typically cited as the reason why physicians are not allowed to form or join unions, or participate in collective bargaining activities.

Who is considered a supervisor under the NLRA?

A supervisor is defined as an individual who has the authority to perform certain supervisory functions in the employer’s interest and who uses independent judgment to do so. These functions — enumerated in Section 2.11 of the NLRA — include hiring, directing, promoting, disciplining, and laying employees off; or to effectively recommend such actions. A number of legal cases have provided more specific interpretations of this definition.