1. Is a successor under an obligation to hire the employees of its predecessor? 2. Did the...
1. Is a successor under an obligation to hire the employees of its predecessor?
2. Did the fact that there was a seven-month hiatus between the shutdown of Sterlingwale and the start-up of Fall River demonstrate that Fall River was not a successor?
3. At what point in time does the Board determine whether a new employer’s workforce is made up of a majority of employees of the predecessor?
4. When did the dissenting Justices believe the majority status should have been determined?
[For more than 30 years, Sterlingwale, which was owned by the Ansin family, operated a textile dyeing and finishing plant at Fall River, Massachusetts. In early 1982, Sterlingwale ran out of cash and, as a result, began to liquidate the company. It laid off employees and sold part of its inventory. In July 1982, the firm's remaining assets were sold by a professional liquidator, and Arthur Friedman, the president of Fall River Dyeing, acquired Sterlingwale's equipment and real property through another Friedman company. On September 20, 1982, Fall River began hiring employees at the former Sterlingwale premises. On October 19, the union demanded recognition from the new employer. At that time, 18 of the 21 individuals employed by Fall River Dyeing were former Sterlingwale employees. By January 15, 1983, the first shift at Fall River was in full operation, with 36 of the 55 employees hired being former Sterlingwale employees. By April 15, 1983, the workforce had expanded to 107 employees, with 52 being former Sterlingwale employees. The Board held that as of January 15, 1983, the company employed a substantial and representative complement of employees and that Fall River was a successor employer to Sterlingwale.
It held that Fall River had violated Sections 8(a)(5) and (1) of the NLRA by refusing to recognize and bargain with the union once its successoral obligation arose. The Court of Appeals for the First Circuit enforced the Board's order, and the Supreme Court granted certiorari.]
Fifteen years ago in NLRB v. Burns International Security Services, Inc., 406 U.S. 272 (1972), this Court first dealt with the issue of a successor employer's obligation to bargain with a union that had represented the employees of its predecessor. In Burns, about four months before the employer transition, the security guard employees of Wackenhut Corp. had chosen a particular union as their bargaining representative and that union had negotiated a collective bargaining agreement with Wackenhut. Wackenhut, however, lost its service contract on certain airport property to Burns. Burns proceeded to hire 27 of the Wackenhut guards for its 42-guard operation at the airport. Burns told its guards that, as a condition of their employment, they must join the union with which Burns already had collective bargaining agreements at other locations. When the union that had represented the Wackenhut employees brought unfair labor practice charges against Burns, this Court agreed with the Board's determination that Burns had an obligation to bargain with this union….
… We cited with approval, Board and Court of Appeals decisions where it "ha[d] been consistently held that a mere change of employers or of ownership in the employing industry is not such an 'unusual circumstance' as to affect the force of the Board's certification within the normal operative period if a majority of employees after the change of ownership or management were employed by the preceding employer." Id., at 279….
In addition to recognizing the traditional presumptions of union majority status, however, the Court in Burns was careful to safeguard "'the rightful prerogative of owners independently to rearrange their business.'" Golden State Bottling Co. v. NLRB, 414 U.S. 168, 182 (1973), quoting John Wiley & Sons, Inc. v. Livingston, 376 U.S. 543, 549 (1964). We observed in Burns that, although the successor has an obligation to bargain with the union, it "is ordinarily free to set initial terms on which it will hire the employees of a predecessor," 406 U.S., at 294, and it is not bound by the substantive provisions of the predecessor's collective bargaining agreement. Id., at 284. We further explained that the successor is under no obligation to hire the employees of its predecessor, subject, of course, to the restriction that it not discriminate against union employees in its hiring.
Id., at 280, and n. 5; see also Howard Johnson Co. v. Hotel Employees, 417 U.S. 249, 262, and n. 8 (1974). Thus, to a substantial extent the applicability of Burns rests in the hands of the successor. If the new employer makes a conscious decision to maintain generally the same business and to hire a majority of its employees from the predecessor, then the bargaining obligation of § 8(a)(5) is activated. This makes sense when one considers that the employer intends to take advantage of the trained workforce of its predecessor.
Accordingly, in Burns we acknowledged the interest of the successor in its freedom to structure its business and the interest of the employees in continued representation by the union. We now hold that a successor’s obligation to bargain is not limited to a situation where the union in question has been recently certified. Where, as here, the union has a rebuttable presumption of majority status, this status continues despite the change in employers. And the new employer has an obligation to bargain with that union so long as the new employer is in fact a successor of the old employer and the majority of its employees were employed by its predecessor….
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