🗞️ Federal Judge Orders Reinstatement of Ten Physicians, Finding Optum-Affiliated Employers Violated Labor Law

A federal labor judge has ruled that two medical groups operating under UnitedHealth Group's Optum subsidiary violated the National Labor Relations Act when they laid off ten physicians shortly after those doctors voted to unionize, and again when they withdrew union recognition less than two years later without the evidence the law requires.

The April 20, 2026, decision by Administrative Law Judge Eleanor Laws orders the reinstatement of all ten physicians, full back pay with interest, and the restoration of union recognition at the two employer entities.

At the center of the case are Centers for Family Medicine, GP and Healthcare Partners Medical Group, P.C., two Southern California entities that together provide hospitalist services at facilities in Orange County. Both operate within the Optum structure, which is in turn part of UnitedHealth Group. For years, Optum had been moving both entities toward a managed care model and away from the fee-for-service arrangements that had historically driven much of their business, a shift that the company described as necessary to improve patient care quality and reduce costs, and that involved the elimination of over 1,200 positions across its western operations beginning as early as 2021.

The Union of American Physicians and Dentists secured certification in August 2023 to represent roughly 45 hospitalist physicians across five hospitals. By September of that year, company planners had finalized a business case to eliminate ten positions and outsource the remaining fee-for-service patient care to outside contractors. The target notification date was set internally for October 26, 2023. The union was not informed.

When that morning arrived, the union's organizer learned of the terminations not from management but from a physician who called her at 7:45 a.m. to say he had just received notice of his termination. A company email to the union had been sent roughly nineteen minutes earlier, transmitted from Brewster, New York, by the employers' senior labor relations representative. Each of the ten affected physicians received an identical notice informing them they were relieved of clinical duties effective immediately, with final employment termination set for January 25, 2024.

Judge Laws found that sequence of events to be a violation of federal labor law. The National Labor Relations Act requires employers to notify a union and provide a genuine opportunity to bargain before making changes that affect the terms and conditions of employment. Presenting a decision as an already-executed fact, the judge found, deprives the union of any meaningful ability to negotiate. The employers had also conducted what they called a "stacking" process to rank and select which physicians to terminate, a procedure completed entirely without union input or knowledge. Under settled Board precedent reinforced by the NLRB's 2023 decision in Wendt Corporation, which significantly narrowed employer latitude to make unilateral changes during first-contract negotiations, the employers had not met their bargaining obligation before proceeding.

The employers argued that their decision to shift away from fee-for-service care represented a fundamental change in business strategy, the kind of core entrepreneurial choice that courts have sometimes shielded from mandatory bargaining requirements under the Supreme Court's 1981 ruling in First National Maintenance Corp. v. NLRB. The judge rejected that framing, finding the case more closely governed by Fibreboard Paper Products Corp. v. NLRB, the 1964 Supreme Court decision establishing bargaining obligations when employers replace their own workers with outside contractors to perform the same work. Because Optum's employed physicians had cared for fee-for-service patients and outside contractors continued to do so after the layoffs, the judge concluded the fundamental nature of the business had not changed in a way that would relieve the employers of their bargaining duty.

A separate legal dispute arose in early 2025. Two physicians filed a decertification petition with the NLRB in March of that year, and within weeks the employers announced they were withdrawing recognition of the union. Their stated basis was an email from the attorney representing the decertification petitioners, who asserted he held signed declarations from 70 percent of the bargaining unit. The employers' senior labor relations representative acknowledged at trial that he had never personally reviewed any of the declarations and had relied entirely on what that attorney communicated to him.

Judge Laws found that reliance legally insufficient. Under the Board's standard established in Levitz Furniture Co. (2001), an employer that withdraws recognition unilaterally must demonstrate the union has actually lost majority support, a standard requiring verified, authenticated evidence. Secondhand representations from a third-party attorney do not satisfy it. The judge also found, as an independent ground, that the prior unlawful termination of more than 20 percent of the bargaining unit had a lasting and causal effect on employee support for the union, making the reliability of any subsequent expressions of disaffection difficult to assess. Union members had expressed fear of retaliation following the layoffs, some of those terminated had served on the bargaining team, and recruitment of replacements for those roles had become difficult.

The ruling lands amid a broader surge in physician unionization. A 2025 study published in JAMA found that filings for physician bargaining units with the NLRB have risen sharply since 2020, with corporate owners including Optum and private-equity-backed companies accounting for 13 percent of petitions filed between 2000 and 2024. Physicians who once practiced independently have increasingly found themselves employed by large health systems and insurers, making them newly eligible for union representation under federal labor law.

Key Points

• Optum-affiliated employers terminated 10 of roughly 45 unionized hospitalist physicians without advance notice to their union, just months after certification and before a first contract was negotiated.
• The judge rejected the employers' argument that the layoffs were exempt from bargaining as a "core entrepreneurial" decision, finding the work continued via outside contractors.
• The employers conducted a secret "stacking" process to rank and select which physicians to terminate, excluding the union entirely from that process.
• The union was notified of the terminations the same morning employees received notices, which the judge found legally insufficient as it presented the decision as a fait accompli.
• The employers' subsequent offers to discuss the layoffs after implementation were found to be inadequate; the law requires bargaining to occur before changes are made, not after.
• The March 2025 withdrawal of union recognition was found unlawful because the employers relied on unverified, secondhand declarations rather than authenticated signatures from confirmed bargaining unit members.
• The unlawful mass terminations were found to have tainted the decertification drive, undermining the reliability of any claimed loss of majority support.
• The case is part of a broader trend in physician unionization, with petitions filed against corporate owners like Optum representing 13 percent of NLRB physician union filings between 2000 and 2024.

Primary Source Author: Eleanor Laws, U.S. Administrative Law Judge

Primary Source: Centers for Family Medicine, GP and Healthcare Partners Medical Group, P.C., JD(SF)–06–26 (NLRB Div. of Judges, Apr. 20, 2026)

Primary Source Link: NLRB Case 21-CA-333729

Supplemental Links

• NLRB case docket, 21-CA-333729
• NLRB news release on Wendt Corporation and Tecnocap LLC, Aug. 2023
• Jackson Lewis analysis of Wendt Corporation
• Weinberg, Roger and Rosenfeld summary of Wendt and the Katz rule
• JAMA study: Unionization Efforts by Physicians Between 2000 and 2024
• PMC: Striking a Balance, Physician Collective Bargaining Rights and Patient Protections
• Union of American Physicians and Dentists