Many employers offer voluntary flu immunizations to their employees. However, a Seattle-based acute-care hospital ran into trouble after announcing that flu shots would become mandatory.

What happened. In an effort to minimize the likelihood that elderly and immune-compromised patients would contract influenza, Virginia Mason Hospital had long recommended that its employees be vaccinated annually. In 1998, it started a voluntary flu immunization program in which hospital staff was given free flu shots.

By 2004, however, only 55 percent of the staff received immunizations. So, in September of that year, Virginia Mason decided to make flu shots mandatory and announced that flu vaccination would become a "'fitness for duty' requirement." Only those with a religious objection, a documented vaccine allergy, or who agreed to take flu prophylaxis medication (at the employee's expense) would not have to be vaccinated. Anyone who could not show proof of vaccination by January 1, 2005, would "face termination," the hospital announced.

Due to a vaccine shortage, implementation of the new policy was postponed until the 2005-06 flu season. Meanwhile, the Washington State Nurses Association (WSNA), which represented Virginia Mason's nurses, filed a grievance under the collective bargaining agreement (CBA). An arbitrator had to decide whether the hospital had the right to mandate flu shots without bargaining over that change with the union.

In an August 8, 2005, decision, the arbitrator ordered the hospital to rescind the mandatory requirement and amend its fitness for duty policy accordingly. The arbitrator said the flu vaccine requirement did not fall within the CBA's management rights clause, and that the hospital was required to bargain collectively with representatives of WSNA over all terms and conditions of employment.

Virginia Mason took the case to district court, which granted summary judgment to WSNA, but did not grant the union's request for an award of attorney's fees. Virginia Mason appealed the ruling, and WSNA cross-appealed, to the U.S. Court of Appeals for the 9th Circuit, which covers Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, and Washington.

What the court said. The appeals court affirmed the lower court's decision. Although Virginia Mason argued that three provisions in the CBA allowed it to mandate flu vaccinations without first bargaining with WSNA, the appeals court said the arbitrator considered those provisions in his decision and did not ignore the plain language of those clauses, and his interpretation of the contract was "not implausible."

The hospital also maintained "that the arbitrator exceeded his authority by reading into the CBA's preamble and union recognition clause a duty to bargain over terms and conditions of employment that is not explicitly stated in either of those provisions," the court said. However, the court noted that the arbitrator acted within his authority when he relied on "industrial common law" in reaching his decision.

The court disagreed with Virginia Mason's contention that the arbitrator's award was contrary to public policy favoring effective infection control in hospitals, and it noted that another public policy comes into play in this case, "a clearly established public policy requiring employers to bargain with their union-represented employees over conditions of employment ... This policy favoring bargaining is at least as well defined and explicit as the policies regarding infection control."

WSNA was not entitled to an award of attorney's fees, according to the court, because Virginia Mason's "arguments were not frivolous and were not made for vexatious or oppressive reasons." (Virginia Mason Hospital v. Washington State Nurses Association, Nos. 06-35073/35130, U.S. Court of Appeals, 9th Cir., 12/21/07).