Labor Day showdown: Deep-pockets N.J. hospital chain vs. strong nurses union

By last Friday, all of the striking nurses at Robert Wood Johnson University Hospital in New Brunswick, New Jersey, were scheduled to lose their employer health care coverage. No new talks are scheduled.

“As of Sept. 1, RWJUH nurses must pay for their health benefits through COBRA,” said RWJ spokeswoman Wendy Gottsegen. “This hardship, in addition to the loss of wages throughout the strike, is very unfortunate. We hope the union considers the impact a prolonged strike is having on our nurses and their families.”

This painful standoff has some of the state’s wealthiest and most politically connected power brokers up against the United Steelworkers Nurses Local 4-200, which represents close to 1,700 nurses who weathered a once-in-a-century mass death event that around the country killed thousands of health care workers and disabled many more.

Our health care system in New Jersey and across the nation did not hold up well during COVID. The U.S. has 4% of the world’s population, but at least 12% of its COVID deaths. Multiple peer-reviewed studies have documented the lack of N-95 masks and proper staffing in our health care system helped drive the infection and death rate, particularly in underserved communities of color. 

In a reality that residents of New Jersey and New York know all too well, congregant care facilities where the most vulnerable are housed, became vectors for the disease.

Holding the American health care system accountable for its failure means being prepared to take on some of our nation’s most entrenched interests that have cultivated both major political parties. President Biden’s recent comment that “health care is a right” is a sign that we might see some attention to the health care affordability and access crisis that still grips our nation.

Even before the pandemic that killed 1.1 million Americans and disabled millions more, our health care system, largely based on nonprofits like RWJBarnabas that pay Wall Street wages for leadership, was ranked as the most expensive among peer OECD nations with the worst health care outcomes.

In the big picture, U.S. life expectancy continues to decline as costs go up. Our nation is likely to drop further in that ranking as the corporatization of health care accelerates.

In 2018, CNN reported the U.S. would “take the biggest drop in ranking of all high-income countries, falling from 43rd in 2016 to 64th by 2040, with an average life expectancy of 79.8. The U.S. will be overtaken by China, which rises 29 places to 39th in the table.”

That was before the pandemic.

The RWJBarnabas system is a not-for-profit health care giant with a dozen acute care hospitals and a partnership with Rutgers University. The system has 38,000 employees and $6.6 billion in revenue. It relies on hundreds of millions of dollars in tax-exempt state issued bonds for capital construction.

Yes, it sounds like a public, almost quasi-governmental entity with a vital and noble mission, which, along with its workforce, is executed 24/7 in some of New Jersey’s poorest and most underserved communities.

Yet it also generates vast fortunes for some people on top of the health care pyramid.

The system’s recently-retired CEO and president, Barry Ostrowsky, earned $16 million in the second year of the pandemic, making him the highest paid hospital executive in the New York area, according to Crain’s New York.

He’s now on the board of directors of PSE&G, New Jersey’s largest utility. 

According to RWJBarnabas’ latest available 990 IRS form from fiscal year 2020, Ostrowsky made $5.59 million three years ago. More than a dozen other top executives listed were in the $1 million or more category.

The hospital system’s filing includes links to dozens of “related organizations taxable as partnerships,” identified with nondescript names like Medmerge LLC or Jersey ASC Ventures LLC. There’s a C-corporation called Major Investigations Inc., which is listed as “security” at the same address in West Orange, New Jersey, as the RWJBarnabas Health Foundation.

Any entity that operates on the scale of the RWJBarnabas system needs to have cash on hand and investments that can help it sustain its charitable mission. It’s all a matter of degrees and transparency.

Under Schedule F in the RWJBarnabas IRS filings, which catalogues its financial “activities outside the United States,” listed are “program services” in Central America and the Caribbean described as a “financial vehicle” worth $41.2 million.   

For its PR strategy, the nonprofit’s management is relying on MWW, the powerhouse firm founded by Michael Kempner, who has been described by Politico as a “major Democratic fundraiser who bundled millions of dollars for Barack Obama’s campaigns.”

According to Kempner’s LinkedIn profile, he is “active in progressive politics, having played roles in the presidential campaigns of Barack Obama, Hillary Clinton and most recently, Joe Biden.”

The global crisis management firm has a high-powered team that includes Steve Sandberg, a former journalist and former chief spokesperson for U.S. Sen. Bob Menendez, a New Jersey Democrat who currently chairs the Senate Foreign Relations Committee. In his role as senior vice president for public affairs “at one of the world’s leading public relations agencies,” Sandberg is playing a key role in the RWJBarnabas system’s response to a strike it has consistently asserted it wanted to avoid.

Sandberg, who has been proactive about getting management’s message gets out, did not answer a query from this reporter as to whether MWW is providing its services pro bono.

He responded by asking if I was in the employ of any unions. I responded that I was not, but that I do benefit from a SAG-AFTRA pension and Social Security so I am grateful to the union movement.

Central to the labor-management dispute in this case the question of which side represents the best interests of the hospital’s workforce and the patients, as well as the broader community they serve. 

Three years ago in its IRS filings, RWJBarnabas reported it spent $18.5 million for advertising. In the present media landscape that buys a lot of space.

In one recent release, the nonprofit heralded the success of RWJUH’s heart transplant team, which “successfully performed a transplantation on August 4 within the first 24 hours of the nurse strike implemented by its nursing union.” That patient, a 52-year-old resident of Trenton, was reportedly discharged on Aug. 14 after 10 days in the hospital’s cardiovascular ICU and in-patient unit. 

Last year, Lester J. Owens was named as chair of the RWJBarnabas Health Board of Trustees. Owens “has served as Vice Chair since 2019 and has served on its Audit, Compliance, Compensation, Nominating and Governance, as well as Racism and Social Justice Committees,” according to a press release.

Owens is also senior executive vice president and head of operations for Wells Fargo & Company, where “he oversees a team of more than 70,000 employees and is responsible for building a more unified, integrated approach to Wells Fargo’s business operations functions,” according to the press release announcing his appointment. Before joining Wells Fargo, Owens held prominent positions at BNY Mellon, JPMorgan Chase, Deutsche Bank, Citibank and Bankers Trust.

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Residents of communities like Newark and Irvington know Wells Fargo well.

Earlier this year, Fortune reported on internal documents from the beleaguered banking multinational that privately expressed “increased concern that a years-long effort to unionize the bank’s employees could soon start notching victories” and outlined “plans to spend millions addressing the ‘pain points’ that can fuel organizing efforts.” 

Fortune further reported that Wells Fargo “has seen ‘an increase in organizing activity’ by employees working with the Communications Workers of America, according to an internal PowerPoint presentation. … That comes amid what it called a broader ‘resurgence’ of U.S. union activity.”

An unnamed source in Wells Fargo management told Fortune, “Leaders at the San Francisco-based bank have worried over the trends. … The company has estimated the extra expense of having unionized workers, and drafted plans to spend hundreds of millions of dollars on staffing improvements.”

In a statement, the bank responded: “Wells Fargo believes our employees are best served by working directly with the company and its leadership – not a third-party group like a union – to address matters of concern. The company is investing in employees through training and education, is boosting minimum pay and health benefits, and now has a Diverse Segments, Representation, and Inclusion leader who reports directly to its chief executive officer.”

Fortune observed that the bank had roughly 193,000 U.S. employees at the end of 2022, none of them unionized.

RWJUH, on the other hand, has had a nurses’ union going back decades. Back in 2005, the United Steelworkers Local 4-200 took up the mantle. As one of America’s legacy unions, it has 1.2 million active and retired members including 50,000 in the health care sector representing titles as varied as physicians and EMTs from New Jersey to California. The union even scored a recent organizing coup in Wyoming.

On day one of the job action, the plumbing in the Magyar Reformed Church in New Brunswick, which the union is renting as a strike headquarters, suffered a “construction accident” that disabled its plumbing, taking out the toilets available for striking workers on the picket line. The church sits at the center of the RWJUH complex, which includes the ongoing construction of its $1 billion cancer center.

“We’re nurses, we are resourceful, we do what we have to do, so we rented portable toilets,” Judy Danella, president of United Steelworkers Nurses Local 4-200, said. The union has filed several claims of unfair labor practices against the hospital system.

The union says its top priority is to improve nurse-to-patient ratios and to establish an enforcement mechanism to hold hospital management accountable when it falls short of that standard. The hospital counters by saying that it tried to prevent a strike and painting the union as an erratic and unreliable bargaining partner.

“RWJUH did everything it could to avoid a strike. The hospital agreed to and signed a memorandum of agreement (MOA) on July 13, which included the union’s core staffing proposal and compensation settlement,” according to the hospital. “The union leaders signed it and agreed to recommend the MOA to its membership but did not. It was voted down by the nurses and a notice to strike was presented to the hospital.”

Two days before the strike, the hospital narrative continued, RWJUH “submitted a proposal to the union that went even further than what was in the MOA, and the union never presented that proposal to its membership before they went out on strike.”

RWJUH further asserts that it “offered to enter binding arbitration or participate in a federal mediation and conciliation board of inquiry” and asked the union to “rescind its strike notice and return to the table to continue good faith negotiations,” and that the union refused those offers. The hospital chain also alleges that “during the 10-day window prior to the strike, the hospital made another counteroffer to attempt to avert the strike. The union did not respond to the offer until after the strike. Since the strike, mediation has not been productive; counteroffers from the union have far exceeded all previous asks, including those the union agreed to in the MOA.”

The union has a different narrative, of course. Danella told hundreds of her members on the picket line on Aug. 28 that the hospital was not coming to the table, and that the union had “never refused to bargain” with management. She said the failure to make progress “was not for the lack of the union trying.”

Danella told members she hoped that “somebody would push” New Jersey Gov. Phil Murphy, a Democrat, to become engaged in the almost month-long strike at one of the state’s Level 1 trauma centers. Unlike in a recent strike at Rutgers University, Murphy has stayed on the sidelines so far. He has committed to use the tragic lessons of the pandemic to improve New Jersey’s health care system. That’s no small task. A lot of powerful folks have made a killing from the way New Jersey handles health care. 

“Hospitals have been downsizing their staffs over the years to try and save money at the same time that some of the hospitals are full — so safe staffing is something that nurses not just in New Jersey but all over the country are looking at,” New Jersey AFL-CIO president Charlie Wowkanech told Insider NJ earlier this month. “The issue isn’t just about the nurses, it’s about you and me and our families. Someone gets sick and goes to the hospital and they’ve got one nurse for eight or nine patients, particularly in some of these wards with infants, or in intensive care units where people need pretty much constant attention. That’s really what the fight is all about.”

Local 4-200 nurse and activist Renee Bacany said, “We need to make sure that we can take care of our patients to the best of our ability, and that would mean less patients than we are taking on now on a daily basis. Better staffing reduces infection, reduces patient mortality — that’s what study after study shows.”

Christi Peace, a spokesperson for Gov. Murphy, said that the governor “remains a strong proponent of organized labor and believes employees deserve a seat at the table when negotiating labor matters. The administration encourages both parties to maintain an open dialogue and will continue to remain engaged with them as they work towards a fair and acceptable resolution to these negotiations.”

Last Monday, the striking nurses got a pep talk from state Assembly Speaker Craig Coughlin, a Democrat. He discussed his own daughter-in-law’s experience as a nurse during the COVID pandemic.

“To thank you requires more than a speech, it requires some action,” Coughlin said. “I know what this is about — fundamental fairness. This is about people getting paid what they ought to be paid, being able to provide the care that their patients need each and every day…. This is about patient care and fundamental fairness and that’s why it’s so important that you stand up for yourself today.”

He went on, “It’s time to stand up together and to get a contract. It’s time for all of you to be back inside doing what you love to do, what you care about doing and making the difference that you make each and every day.”

Last weekend, Sen. Cory Booker, D-N.J., also offered support for the striking nurses. “We hailed them as heroes during the pandemic, but when it comes to their compensation, the nursing ratios, we’ve got to make sure they are being treated like heroes, not just in words but in the kind of contract and living circumstances they have,” he said.