Fall River Dyeing & Finishing Corp. v. NLRB

Supreme Court of the United States · 1987 · Labor Law

Labor LawSuccessor employer bargaining obligationUnion majority presumptionNLRAsuccessorshipduty to bargainmajority presumptionsubstantial continuity

Facts

Sterlingwale had long operated a textile dyeing and finishing plant whose production and maintenance employees were represented by the Union, but it laid off all production employees in February 1982 and later ceased business. Fall River was then formed by a former Sterlingwale officer and another businessman to operate out of Sterlingwale's former facilities, using most of Sterlingwale's assets and intending to take advantage of Sterlingwale's work force, though it limited itself to commission dyeing. The new company hired many former Sterlingwale supervisors and employees, operated with the same production process, machines, job classifications, and largely the same customers, and by mid-January 1983 had reached one full shift of 55 workers, 36 of whom were former Sterlingwale employees. The Union had demanded recognition in October 1982, Fall River refused, and the Board later concluded that Fall River became obligated to bargain once it reached a substantial and representative complement of employees.

Issue

Whether a successor employer's duty to bargain under Burns applies when the union is supported only by a rebuttable presumption of majority status rather than a recent certification. Whether the Board reasonably found Fall River to be Sterlingwale's successor, reasonably used the substantial and representative complement rule to determine when the duty to bargain arose, and reasonably treated the Union's premature bargaining demand as continuing until that date.

Rule

A successor employer must bargain with the predecessor's union not only when the union was recently certified, but also when the union is entitled to a rebuttable presumption of majority status, so long as the new employer is in fact a successor and a majority of its employees were employed by the predecessor. Successorship turns on substantial continuity between the enterprises, viewed under the totality of the circumstances and with emphasis on whether retained employees would understand their jobs as essentially unaltered. In gradual start-up situations, the bargaining obligation is determined when the successor has hired a substantial and representative complement of employees, and a premature union bargaining demand may continue in effect until that point.

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Lakeview Metal Works in Cleveland had long recognized a union for its machinists, but the union had not been recently certified. After Lakeview shut down, Harbor Forge LLC bought most of the plant equipment, reopened in the same facility, hired many former supervisors and machinists, and ran the same metal-forming process for many of the same customers. Once Harbor reached a representative operating workforce, more than half its machinists were former Lakeview employees, and the union demanded bargaining.

Is Harbor most likely obligated to bargain with the union?

Explanation. The majority held that Burns is not limited to recently certified unions. A union's rebuttable presumption of majority status survives a change in employers if the new employer is in fact a successor and a majority of its employees were employed by the predecessor. Here, the same facility, equipment, process, supervisors, and customers indicate substantial continuity, and the majority of the relevant workforce came from the predecessor.