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. e du/thir dc ir c uit_2001/220Filed September 26, 2001

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

No. 00-3366

AMERISTEEL CORPORATION

v.

INTERNATIONAL BROTHERHOOD OF TEAMSTERS, CHAUFFEURS, WAREHOUSEMEN

AND HELPERS OF AMERICA, AFL-CIO,

ARBITRATION ASSOCIATION

International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, AFL-CIO, Teamsters Local 430, Appellant

On Appeal from the United States District Court for the Middle District of Pennsylvania (D.C. Civil No. 99-cv-02131) District Judge: Honorable William W. Caldwell

Argued November 30, 2000

Before: BECKER, Chief Judge, RENDELL, and MAGILL,* Circuit Judges

(Opinion Filed September 26, 2001)

___________________________________________________ ______________ * Honorable Frank J. Magill, Senior Judge of the Un ited States Court of Appeals for the Eighth Circuit, sitting by designat ion.Ira H. Weinstock, Esq. [ARGUED]

Joseph P. Milcoff, Esq. Ira H. Weinstock, P.C. 800 North Second Street, Suite 100 Harrisburg, PA 17102 Counsel for Appellant

John G. Creech, Esq. [ARGUED] D. Rangle Moody, II, Esq. Haynsworth, Baldwin, Johnson &

Greaves 918 South Pleasantburg Drive Greenville, SC 29607

-and- Mark J. Manta, Esq. Klett, Rooney, Lieber & Schorling

810 Bear Tavern Road Mountain View Office Park,

Suite 302 West Trenton, NJ 08628 Counsel for Appellee

OPINION OF THE COURT

RENDELL, Circuit Judge.

I. Introduction

This appeal presents the question whether a success or employer who has expressly refused to be bound by i ts predecessor's collective bargaining agreement may nonetheless be forced to arbitrate grievances perta ining to the agreement. Because an unconsenting successor ca nnot be bound by the substantive provisions of its prede cessor's agreement, we hold that the successor in this case, appellee AmeriSteel Corporation, cannot be forced to arbitra te the extent of its obligations under the agreement. Amer iSteel, quite simply, has no obligations under the agreemen t-- and thus no arbitration award for the appellant, Te amsters

2Local 430, could possibly receive judicial sanction . In such

circumstances, the arbitration forum designated in the collective bargaining agreement is an inappropriate vehicle by which to settle the parties' dispute. Therefore, we will affirm the District Court's order which enjoins the Union

and the American Arbitration Association from inclu ding AmeriSteel as a party in pending arbitration procee dings, or any other arbitration proceedings involving the col lective bargaining agreement.

Our resolution of this case avoids creating the incongruous situation in which a successor employer may be forced to arbitrate the extent of its obligation s under its predecessor's agreement, and yet the arbitrator is powerless to enforce these obligations because they are not b inding on the successor employer. While we recognize the v ital importance of arbitration as a means of settling la bor disputes, we think it clear that arbitration should not proceed when ultimately it can serve no purpose. Furthermore, our decision recognizes the sound prin ciple

that arbitration cannot be used as a means to accom plish illegitimate ends. More specifically, given that Am eriSteel has no obligations under the collective bargaining agreement, any arbitration award to the appellant U nion would necessarily reach beyond the agreement itself and

into the realm of the arbitrator's own notion of in dustrial justice, a practice expressly forbidden by the Unit ed States Supreme Court.

II. Facts and Procedural Background

Appellee AmeriSteel is a Florida corporation engage d in the manufacture and sale of steel products. On Apri l 29, 1999, AmeriSteel purchased various assets of Brocke r Rebar, including a manufacturing facility in York, Pennsylvania, and AmeriSteel commenced operations a t the York facility on May 3, 1999. Appellant Teamsters L ocal 430 ("Local 430" or "Union") represents certain emp loyees at the facility, namely truck drivers, warehousemen

, material handlers, and other helpers. A collective bargaining agreement ("CBA") existed between Local 430 and Brocker Rebar, effective from December 1, 1996 to November 30, 1999. The purchase agreement between

3AmeriSteel and Brocker Rebar included various provi sions

expressly stating that AmeriSteel was not to be bou nd by the terms of the CBA. In its dealings with the Unio n, AmeriSteel has consistently and repeatedly maintain ed that it is not bound by the terms of the CBA, and theref ore that it is not bound to arbitrate under the agreement.

AmeriSteel hired roughly 50 employees to work in th e York facility, and all but six members of Local 430 who had worked for Brocker Rebar were hired by AmeriSteel. In addition, AmeriSteel retained four Brocker Rebar executives. Because it had hired a majority of the Local 430 members who had worked for Brocker Rebar, AmeriStee l was obligated to bargain with the Union. Bargaining with the Union broke down, however, on May 10, 1999, whe n AmeriSteel withdrew recognition of the Union based on a petition purportedly signed by a majority of the Un ion employees, in which they supposedly stated that the y no longer wanted to be represented by Local 430. The U nion then initiated an unfair labor practices action aga inst AmeriSteel before the NLRB, but that action is not before us on appeal.

Local 430 filed a grievance on behalf of all its me mbers against Brocker Rebar and AmeriSteel on April 22, 1 999, challenging unilateral changes that would occur in working conditions at the York facility when the AmeriSteel purchase agreement was consummated. Closing under t he purchase agreement occurred on April 29, 1999. In M ay 1999, after the parties were unable to resolve the grievance, the Union requested arbitration pursuant to the arb itration clause in the CBA. AmeriSteel filed a Complaint and motion for injunctive relief in the United States District Court for the Middle District of Pennsylvania on December 9, 1999, seeking to enjoin Local 430 and the American Arbitr ation Association from proceeding to arbitration with Ame riSteel as a party. On March 17, 2000, the District Court g ranted AmeriSteel a preliminary injunction, reasoning that

AmeriSteel could not be bound to arbitrate under th e preexisting CBA because AmeriSteel was not the "alter ego" of Brocker Rebar, nor had AmeriSteel agreed to abide b y the CBA. App. at 256-57.

4Local 430 complains on appeal that the District Cou rt

should not have granted the preliminary injunction in the first place, and that the court compounded its erro r by, in effect, granting a permanent injunction without ana lyzing the applicable standard for granting a permanent injunction. Unfortunately, the District Court might have caused some unnecessary confusion by not explicitly stating that it was, in fact, granting a permanent injunction, and not merely a preliminary one. We ha ve in the past admonished district courts to avoid this t ype of oversight. E.g., CIBA-GEIGY Corp. v. Bolar Pharm. C o., 747 F.2d 844, 847 (3d Cir. 1985) (observing that althou gh the Third Circuit could convert the district court's op inion into a permanent injunction, "we would much prefer that the district court recast its own opinion in the langua ge of the standard it is applying. This would eliminate the p ossibility

of confusion as to what the district court intended and would, in the long run, promote judicial economy").

Nonetheless, it is apparent that the District Court implicitly granted a permanent injunction, and we f ind no reversible error in the court's procedure. In its o pinion, the District Court announced a legal standard under whi ch Local 430 could prevail only if it could prove that AmeriSteel was the "alter ego" of Brocker Rebar, or that AmeriSteel had agreed to abide by the CBA. It is undisputed that AmeriSteel is not the "alter ego"1 of Brocker Rebar and that AmeriSteel has expressly rej ected the CBA. Thus, there were no triable issues of fact and no need for a trial on the merits. In other words, Ame riSteel

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1. Under the "alter ego" doctrine, a successor empl oyer "is subject to all the legal and contractual obligations of the predec essor" when the successor is a mere "alter ego" of the predecessor, or nothing more than "a disguised continuance of the old employer." NLRB v. Omnitest Inspection Servs., 937 F.2d 112, 118 (3d Cir. 1991) . An "alter ego" relationship exists "when there is a mere technical change in the structure or identity of the old employing entity, frequently to avoid the effect of the labor laws, without any substantial c hange in its ownership or management." Id. As the District Court observed, AmeriSteel's purchase of Brocker Rebar was a transaction involvi ng two unrelated parties, and there "has been no suggestion that Ame riSteel is a sham or alter ego of Brocker Rebar." App. at 255.

5had already prevailed on the merits, and therefore the

District Court's order, in effect, grants AmeriStee l a permanent injunction. Any further proceedings in th e District Court would have served no purpose. Consequently, we are squarely presented with the qu estion

of whether AmeriSteel can be bound to arbitrate und er the

CBA.

III. Jurisdiction and Standard of Review

The District Court had jurisdiction over this actio n pursuant to 28 U.S.C. S 1331 and 29 U.S.C.S 185. Be cause the District Court's order, in effect, grants a per manent injunction, we have appellate jurisdiction pursuant to 28 U.S.C. S 1291, which provides for appeals of all fi nal

decisions of the federal district courts.

We review a district court's decision to grant or d eny a permanent injunction under an abuse of discretion standard. E.g., ACLU v. Black Horse Pike Reg'l Bd. of Educ., 84 F.3d 1471, 1476 (3d Cir. 1996). However, because an abuse of discretion exists where the district court 's decision "rests upon a clearly erroneous finding of fact, an errant conclusion of law, or an improper application of la w to fact," id., we apply plenary review to the District Court's legal conclusions.

IV. Discussion

This case requires us to navigate the treacherous w aters of the Supreme Court's labor law successorship doct rine, which has, at times, imposed extra-contractual duti es upon successor employers. Appellant Local 430 argues tha t AmeriSteel, as a successor employer to Brocker Reba r, must arbitrate grievances brought by the Union unde r the collective bargaining agreement between the Union a nd

Brocker Rebar. AmeriSteel counters that it was neve r a party to the CBA, expressly rejected it during its asset purchase negotiations with Brocker Rebar, and has consistently maintained in its dealings with the Un ion that it is not bound by the terms of the CBA, including its arbitration clause. Accordingly, AmeriSteel argues that it cannot be compelled to submit to arbitration.

6As an initial matter, we note that labeling AmeriSt eel a

"successor employer" to Brocker Rebar does little t o help resolve the issue in this case. As the Supreme Cour t has explained, a new employer, like AmeriSteel, "may be a successor for some purposes and not for others," an d the question whether AmeriSteel is a successor to Brock er Rebar "is simply not meaningful in the abstract." H oward Johnson Co. v. Hotel and Restaurant Employees, 417 U.S. 249, 262 n.9 (1974). Accordingly, the question we m ust ask is: what are the legal obligations of AmeriSteel to the employees of Brocker Rebar? Id. Or more specificall y: does AmeriSteel have a duty to arbitrate with the Union under the CBA? As the District Court correctly noted, the resolution of that latter question depends, in larg e part, on the proper interpretation of three decisions of the U.S. Supreme Court: John Wiley & Sons v. Livingston , 37 6 U.S. 543 (1964), NLRB v. Burns International Security Se rvices, Inc., 406 U.S. 272 (1972), and Howard Johnson Co. v . Hotel and Restaurant Employees, 417 U.S. 249 (1974).

While other courts have tried to make sense of thes e three opinions, we find no analysis that charts a p erfect course that we can readily follow. Accordingly, we will make our own way through the progression of the Supreme Court's reasoning. As the dissent points out, it is unfortunate that the law in this area is unsettled, and ultimately, only the Supreme Court can silence the conflict that exists in the troubled trilogy of Wiley, Burns , and

Howard Johnson. Given the tension that exists in th is trilogy, no approach to reconciling these cases wil l be completely satisfying. Nevertheless, we think it si gnificant that, as discussed below, our ultimate result (and the logic that underpins it) is supported by the majority of courts

that have articulated the contours of labor law successorship.

In Wiley, the Court introduced the idea that a succ essor employer could be bound by an arbitration clause in a collective bargaining agreement between the predece ssor employer and its unionized employees. The predecess or employer, Interscience, had merged with John Wiley & Sons, and ceased to do business as a separate entit y. The Union then brought suit against Wiley to compel arb itration

7under the collective bargaining agreement. Wiley , 376 U.S.

at 544-45. The Court posed the legal issue as follo ws: "whether Wiley, which did not itself sign the colle ctive bargaining agreement on which the Union's claim to arbitration depends, is bound at all by the agreeme nt's arbitration provision." Id. at 547. The Court answe red this question in the affirmative. Id. at 550-51.

The Court acknowledged that "the principles of law governing ordinary contracts would not bind to a co ntract an unconsenting successor to a contracting party," but distinguished the case at hand by explaining that"a collective bargaining agreement is not an ordinary contract." Id. at 550. The Court grounded this extr acontractual duty in federal law -- specifically,"th e policy of our national labor laws," id. at 548, which recogni zed both the "central role of arbitration" and the importanc e of "protect[ing] . . . employees from a sudden change in the employment relationship," id. at 549. Thus, the Cou rt explained, "the impressive policy considerations fa voring arbitration are not wholly overborne by the fact th at Wiley did not sign the contract being construed." Id. at 550.

The Court's holding is actually quite limited:

We hold that the disappearance by merger of a corporate employer which has entered into a collective bargaining agreement with a union does not automatically terminate all rights of the em ployees covered by the agreement, and that, in appro priate circumstances, present here, the successor e mployer may be required to arbitrate with the union under the agreement.

376 U.S. at 548.

The Court then went on to note that "[w]e do not ho ld that in every case in which the ownership or corpor ate structure of an enterprise is changed the duty to a rbitrate survives." Id. at 551. Rather, factors such as lack of "substantial continuity of identity in the business enterprise" before and after the change could alter the result; so could the parties' conduct, if, for inst ance, the

union fails to continue to make its claims known. I d. Without continuity, the duty to arbitrate would be

8"something imposed from without, not reasonably to be

found in the particular bargaining agreement and th e acts of the parties involved." Id. Thus, the"substantial continuity" concept -- first alluded to by the Cour t after it announced its holding -- should properly be viewed as a necessary but not a sufficient condition for the im position of arbitration on an unconsenting successor.

The Court also observed that "[o]f course, the Unio n may not use arbitration to acquire new rights against W iley" that were not grounded in the collective bargaining agre ement

itself. Id. at 555. Whether the Union's demands had merit was for the arbitrator to decide in light of the fa cts, yet arbitration would be inappropriate if "it can be se en in advance that no award to the Union could receive ju dicial sanction." Id. Such was not the case in Wiley -- be cause the Union's demands were not "plainly unreasonable" -- and therefore the Court permitted the demands to pr oceed

to arbitration. Id.

Although the Wiley holding, strictly speaking, addr esses only the duty to arbitrate, we have in the past not ed that a necessary implication of Wiley's holding is that Wiley, the successor employer, could possibly be bound by the substantive terms of the CBA. E.g., Local Union No. 249 v. Bill's Trucking, Inc., 493 F.2d 956, 960 (3d Cir. 1 974). This conclusion "is manifest from the fact that the very question upon which the successor must, under Wiley, submit to arbitration, is the extent to which the other terms of the predecessor's contract are binding on the successor ." Id. at 960 n.20. If Wiley could not possibly be bound by t he substantive terms of the CBA, arbitration would be a wholly pointless exercise. Moreover, if the terms could no t possibly be enforced against Wiley, then no arbitration awar d to the Union "could receive judicial sanction," and thus t he Wiley Court would not have permitted the case to proceed to arbitration in the first place. Wiley, 376 U.S. at 555.

In Burns, the Supreme Court took a very different approach to the issue of whether a successor employ er could be bound by the substantive terms of its predecessor's CBA. The predecessor employer, the Wackenhut Corporation, had provided plant protectio n services at a Lockheed Aircraft Service plant for s everal

9years before the successor, Burns International Sec urity

Services, took over this task after outbidding Wack enhut for the security contract. Burns, 406 U.S. at 274-7 5. A majority of the employees hired by Burns had been employed by Wackenhut, but Burns refused to honor t he existing CBA between Wackenhut and these employees. The Union then filed an unfair labor practice charge wi th the NLRB, and the Board ordered Burns to comply with th e CBA executed by Wackenhut. Id. at 275-77.

In reversing the NLRB, the Supreme Court endorsed t he Board's earlier, consistently-held interpretation t hat successor employers could not be bound against thei r will by the substantive terms of existing CBAs. Id. at 285-91. Specifically, the Burns Court noted that:

These considerations, evident from the expli cit language and legislative history of the labo r laws, underlay the Board's prior decisions, which until now have consistently held that, although succes sor employers may be bound to recognize and barg ain with the union, they are not bound by the substan tive provisions of a collective-bargaining contra ct negotiated by their predecessors but not agreed to or a ssumed by

them.

Id. at 284 (emphasis added).

In reaching its decision, the Burns Court stated th at the federal labor policy of preventing industrial strif e did not outweigh "the bargaining freedom of employers and unions." Id. at 287. Therefore Burns, which had "in no way agreed" to the existing CBA, could not be compelled to accept contract provisions against its will. Id. a t 282, 287. Moreover, the Court reasoned, forcing either a unio n or a successor employer to be bound by the substantive t erms of an old CBA "may result in serious inequities." I d. at 287. For example, saddling successor employers with the terms and conditions contained in old CBAs "may discourag e and inhibit the transfer of capital" because many poten tial employers will be willing to rescue moribund busine sses only if they can negotiate their own CBAs. Id. at 287-88. Additionally, a union may have made concessions to a small or economically-troubled predecessor employer that it

10would not be willing to make to a large or economic ally

powerful successor. Id. at 288. In sum, the balance of bargaining advantage between employers and labor sh ould "be set by economic power realities," and the feder al labor policy of avoiding industrial strife would be ill-s erved by binding either employers or employees to contract t erms that "do not correspond to the relative economic st rength of the parties." Id.

Wiley and Burns, therefore, appear to be in direct conflict. On the one hand, the holding in Wiley ne cessarily implies that unconsenting successor employers may b e bound by the substantive terms of pre-existing CBAs . But on the other hand, Burns endorses the idea that unw illing successors cannot be bound by such terms. As the principal means of distinguishing these two cases, the Burns Court offered the somewhat unsatisfying disti nction that Wiley arose in the context of a suit to compel arbitration, whereas Burns involved an unfair labor practice proceeding in front of the NLRB.2Id. at 285-86. Not

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2. The Burns Court also suggested that Wiley and Bu rns could be distinguished on the basis that Wiley involved a me rger, which triggered the general state law rule "that in merger situatio ns the surviving corporation is liable for the obligations of the di sappearing corporation." Burns, 406 U.S. at 286. In Wiley, the Court had not ed that the union's argument -- which may well have influenced its spec ific holding -- was based on principles of corporate consolidation. Wil ey, 376 U.S. at 547-48 ("The Union relies on S 90 of the N.Y. Stock Corpor ation Law, . . . which provides, among other things, that no `claim or dem and for any cause' against a constituent corporation shall be extingui shed by a consolidation."). In Howard Johnson, the Court agai n noted this distinction with approval, Howard Johnson, 417 U.S. at 257, yet the Court has since downplayed this distinction as dete rminative of a successor's labor law obligations, e.g., Fall River Dyeing & Finishing Corp. v. NLRB, 482 U.S. 27, 44 n.10 (1987) (noting that " the way in which a successor obtains the predecessor's assets is gener ally not determinative" of the successor's labor law obligat ions); see also Golden State Bottling Co. v. NLRB, 414 U.S. 168, 182 n.5 ( 1973) (observing that "[t]he perimeters of the labor-law doctrine of succ essorship" are not confined by the boundaries of state corporation law , and that "[t]he refusal to adopt a mode of analysis requiring the B oard to distinguish among mergers, consolidations, and purchases of ass ets" is due to the fact that as long as there is "continuity in the em ploying industry, the

11surprisingly, in the aftermath of Burns, courts str uggled to

reconcile Burns with Wiley, and could do little mor e than repeat the Supreme Court's emphasis on the procedur al distinction between the two cases. E.g., Bill's Tru cking, 493 F.2d at 961 (noting that "it was specifically empha sized in Burns that Wiley arose in the context of a . . . su it to compel arbitration, not in the context of an unfair labor practice proceeding," and that "Burns, then, cannot be read to foreclose absolutely the imposition upon a succe ssor employer of the contract obligations entered into b y its predecessor").

It is against this backdrop that, just two years af ter Burns, the Supreme Court took up the issue of labor law successorship in Howard Johnson. The Court began by acknowledging the conflicting reasoning of Wiley a nd Burns, but rejected the idea that the cases could b e distinguished on the basis of their procedural cont ext, because distinguishing the cases in this manner wou ld inappropriately "permit the rights enjoyed by the n ew employer in a successorship context to depend upon the forum in which the union presses its claims." Howar d Johnson, 417 U.S. at 256. With this distinction rep udiated, the Howard Johnson Court appeared to be squarely fa ced with an irreconcilable conflict between Wiley and Burns: either the substantive terms of an existing CBA cou ld be imposed against an unconsenting successor, as is im plicit in Wiley, or they could not, as stated by Burns.

The Howard Johnson Court, however, chose not to dea l with this conflict, and instead walked a very narro w path. Rather than deciding "whether there is any irreconc ilable conflict between Wiley and Burns," the Court decide d the case on the ground that "even on its own terms, Wil ey does not support the decision of the courts below," whic h had compelled the successor employer, Howard Johnson, t o

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public policies underlying the doctrine will be ser ved by its broad application"). We have ourselves implicitly indicat ed that no special significance should be attached to the fact that Wi ley involved a merger. E.g., Bill's Trucking, 493 F.2d at 957-61 (applying Wiley in the context

of a sale of capital stock).

12submit to arbitration pursuant to a CBA between its

unionized employees and the predecessor employer, t he Grissoms. Id. at 256. In other words, even on its o wn terms, Wiley did not compel the conclusion that How ard Johnson must proceed to arbitration against its wil l, and likewise could not justify imposing the substantive terms of the CBA against Howard Johnson.

The Howard Johnson Court contrasted the facts of it s case with Wiley, noting that the most important dis tinction is that in Wiley, "the surviving corporation hired all the employees of the disappearing corporation," whereas in Howard Johnson the successor "hired only nine of th e 53 former Grissom employees and none of the Grissom supervisors." Id. at 258, 260. The Court emphasized that,

because Howard Johnson had hired so few of the Gris som employees, there was no "substantial continuity in the identity of the work force across the change in own ership," which placed the case outside the realm of Wiley . Id. at 262-63. Wiley had stated that the lack of "substan tial continuity" would remove the situation from the amb it of its holding, and the lack of substantial continuity thu s dictated the result.

It is important, for the purposes of this appeal, t o appreciate the limited scope of the Court's decisio n in Howard Johnson. As explained above, the Court did n ot reconcile the conflict between Wiley and Burns. The Howard Johnson Court simply pointed out that, consi stent with Wiley, and on Wiley's own terms, the lack of substantial continuity meant that the Court needed to look no further. Accordingly, Howard Johnson does not br idge the gap between Wiley and Burns, nor does it establ ish broadly applicable guiding principles that should b e implemented when analyzing labor law successorship problems.3

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3. Our main point of disagreement with our dissenti ng colleague is in our

view that Howard Johnson's focus on substantial con tinuity does not make it the sole basis for finding a continuing dut y to arbitrate or making agreements binding, but, rather, as one sine qua non. There is

a difference: while the existence of substantial co ntinuity is a necessary ingredient, its presence does not necessarily rende r the new entity

13Still, Howard Johnson does give some indication as to the

Court's thinking on the conflict between Wiley and Burns. Throughout the opinion, the Court downplays the significance of Wiley, describing its holding as a "guarded, almost tentative statement," id. at 256, and focusi ng on the limited factual context in which Wiley arose, id. a t 256-64. In contrast, the Court takes an expansive view of B urns, repeatedly extolling its reasoning. Stating at the outset that "[c]learly the reasoning of Burns must be taken int o account here," id. at 256, the Howard Johnson Court goes on to observe that "[w]hat the Union seeks here is completely at odds with the basic principles this C ourt elaborated in Burns," id. at 261, and that the reas oning in Burns "established that Howard Johnson had the righ t not to hire any of the former Grissom employees, if it so desired," id. at 262. In short, the best reading of Howard

Johnson is that it does not resolve the conflict be tween Wiley and Burns, but it does much to strengthen and reaffirm the reasoning of Burns, and certainly does nothing to call into question Burns' assertion that success or employers "are not bound by the substantive provisi ons of a collective-bargaining contract negotiated by thei r predecessors but not agreed to or assumed by them." Burns, 406 U.S. at 284.

Nevertheless, one might argue (at least in theory) that Burns has somehow been modified by Howard Johnson, based on the reasoning that Howard Johnson's emphas is on "substantial continuity in the identity of the w ork force"

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bound. (If one is not 35 years of age, one cannot b e President of the United States; this is a sine qua non. However, if one is 35 years of age, he or she does not necessarily qualify. Being a nat ive-born citizen is another sine qua non, in fact.) The difficulty, hav ing explored the three "guiding" cases, is that we must determine what are all the sine qua

nons. We cannot subscribe to the dissent's view tha t these cases equate substantial continuity with successorship or "manda tes" such a finding here. Clearly, as Wiley itself indicates, other fac tors must also be considered. See Wiley, 376 U.S. at 551. Burns says that contractual understandings are important, but the dissent discr edits that concept. While we concede that the scope of the directive of Burns may not be crystal-clear, we suggest that the directives of Wi ley and Howard Johnson are clearly narrower than the dissent's vie w would allow.

14necessarily implies that if such "substantial conti nuity"

does exist, then arbitration under the existing CBA would be appropriate. And if such arbitration were to go forward,

it follows that the substantive terms of the CBA co uld be enforced, and thus Burns cannot survive intact.4

In our view, however, this reading of Howard Johnso n would stretch its carefully circumscribed holding b eyond recognition. As explained above, the holding in How ard Johnson does nothing more than simply point out tha t on the facts of the case, not even Wiley (and certainl y not Burns) could justify forcing Howard Johnson to subm it to arbitration against its will. In other words, becau se the

Court was able to base its result on the lack of"su bstantial continuity," it simply did not reach the issue of w hether, had there been "substantial continuity," the succes sor employer would have been forced to arbitrate and necessarily could have been bound by the substantiv e terms of the CBA. Indeed, nothing in the Howard Joh nson opinion calls into question either the reasoning or the holding of Burns -- as explained above, there is mu ch in the opinion that reaffirms Burns -- and thus we can not accept any interpretation of Howard Johnson that ei ther explicitly or implicitly modifies Burns' conclusion that a successor employer cannot be bound against its will by the substantive provisions of its predecessor's CBA. He re, the parties specifically agreed that the CBA would not be binding, and Burns teaches that we must respect tha t agreement.

Our reading of Burns and Howard Johnson is confirm ed by the Supreme Court's observations in Fall River D yeing & Finishing Corp. v. NLRB, 482 U.S. 27 (1987). In rev iewing the principles of labor law successorship, the Cour t

reiterated Burns' assertion that "the successor . . . is not bound by the substantive provisions of the predeces sor's

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4. While the dissent does not frame its argument in precisely these terms, nonetheless this reasoning is implicit in th e dissent's conclusion that "there is sufficient `substantial continuity o f identity in the

business enterprise,' between Brocker Rebar and AmeriSteel t o justify holding that AmeriSteel is bound to the arbitration provision (a nd possibly to the substantive provisions) of Brocker Rebar's CBA with Local 430." Dissenting Op. at 37.

15collective-bargaining agreement."5 Fall River, 482 U.S. at 40

(citing Burns, 406 U.S. at 284). Significantly, in the very next sentence, the Court cited Howard Johnson , so it cannot be argued that the Fall River Court somehow overlooked Howard Johnson when reaffirming Burns. Rather, the only conclusion that can be drawn is th at after Howard Johnson, Burns rests on solid ground.

This conclusion, however, serves to illuminate the perplexing issue presented by this appeal -- namely , that while the validity of Burns cannot be doubted, Burn s nonetheless conflicts with the implications of Wile y. The most we can say with assurance regarding this confl ict is that while the contours of Wiley are narrow, and it s status not entirely clear, Burns' language and logic have been reinforced in later cases. Accordingly, we believe the clear mandate of Burns -- that an unconsenting successor employer cannot be bound by the substantive terms o f a CBA negotiated by its predecessor -- provides more persuasive guidance than the limited holding in Wil ey. That being the case, AmeriSteel cannot be bound by the substantive terms of the CBA at issue here, which w as negotiated between Brocker Rebar and the Union and which AmeriSteel's purchase agreement specifically stated would not be binding on it. And because AmeriSteel cannot be bound by the substantive terms of the CBA, no arbitration award to the Union -- which, of course, would

be based on the substantive terms of the CBA -- cou ld receive judicial sanction, and therefore AmeriSteel cannot be compelled to submit to arbitration.6 Wiley, 376 U.S. at

555.

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5. The dissent attempts to downplay the significanc e of this statement by characterizing it as a "cryptic piece of dicta." Di ssenting Op. at 36 n.2. While it is arguably dicta, there certainly is noth ing "cryptic" about it. This is a simple, straightforward statement that ma kes a general observation about successors, taken almost word-for -word from Burns.

The dissent would re-write the statement as referri ng to only "Burns-type successors," but we see no reason to believe that t he Fall River Court meant anything other than what it said.

6. In reaching this conclusion, we are not, as the dissent appears to indicate, overstepping our authority as a lower fed eral court by "emasculat[ing] Wiley." Dissenting Op. at 28. Rathe r, when faced with a

16While there is no directly controlling authority in our

Circuit, nonetheless we think the result that we re ach here flows logically from our existing Circuit precedent . For example, in Stardyne, Inc. v. NLRB, 41 F.3d 141 (3d Cir. 1994), we observed that a successor has an obligati on to recognize and bargain with the union that represent ed its predecessor's employees, but that a successor is"no t bound by its predecessor's collective bargaining ag reement." Id. at 145 n.3. Similarly, in Pick-Mt. Laurel Corp. v. NLRB, 625 F.2d 476 (3d Cir. 1980), we noted that when ana lyzing labor law successorship, the Supreme Court has held "that

a successor does not stand in the same shoes as its predecessor because it will not be bound to the pre viously bargained for terms, [and] the Court construed the relevant policies to prevent imposing on the successor an ob ligation to be bound by past events and arrangements." Id. a t 484. And, as explained above, if AmeriSteel cannot be bo und by these "past events and arrangements" in the form of Brocker Rebar's CBA, then it necessarily follows th at arbitration under the CBA is inappropriate because no award for the Union "could receive judicial sanctio n."7 Wiley, 376 U.S. at 555.

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body of Supreme Court precedent that is, as the dis sent points out, "discordant in [ ] overall tone and approach," id. at 24, we are simply choosing what we believe to be the best interpretat ion. And in so doing, we are performing our appropriate role as a federal appellate tribunal in the most basic sense. (The dissenting opinion argua bly emasculates Burns in similar fashion when it urges that the sal es agent expressly repudiating the CBA is "irrelevant to the analysis. " Dissenting Op. at 32.)

Moreover, we do not agree that our result in this c ase necessarily emasculates Wiley, or relegates it "to the dustbin of history," Dissenting Op. at 30, although we do decline to give Wiley as broad a reading as does Chief Judge Becker. We suggest that one who re ads Wiley on its own, start to finish, would be struck by its carefu l and restrictive analysis, which leads to its equally narrow holding , which we quoted above, that collective bargaining agreement provisi ons do not automatically go by the wayside when a corporate co nsolidation occurs. Wiley, 376 U.S. at 548.

7. Several other cases in our Circuit have addresse d the labor law successorship doctrine, but we find these decisions of limited utility.

For

17Moreover, we find it significant that our resolutio n of this

case is supported by the decisions of our sister ci rcuit courts of appeals. Indeed, in the time since Fall R iver, every

one of our sister circuits that has addressed the i ssue has concluded that an unconsenting successor employer c annot be bound by the substantive terms of an existing CB A.8

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example, in Local Union No. 249 v. Bill's Trucking, Inc., 493 F.2d 956 (3d Cir. 1974), we addressed Wiley and Burns , but we d istinguished the two cases based on their procedural distinction. Id. a t 961. As explained above, the Court has since rejected this means of d istinguishing the cases. Supra p. 13. In American Bell Inc. v. Federa tion of Telephone Workers, 736 F.2d 879 (3d Cir. 1984), we touched up on the successorship doctrine, but ultimately did not reac h the issue because we concluded that the doctrine did not apply. Id. a t 888. And in Teamsters Local Union No. 430 v. Cement Express, In c., 841 F.2d 66 (3d Cir. 1988), we construed Burns somewhat narrowly, b ut we think it unwise to place any particular emphasis on this cas e. As a case primarily concerned with the imposition of Rule 11 sanctions, Cement Express did not give labor law successorship a thor ough treatment, as evidenced by the fact that in our discussion, we di d not mention Howard Johnson or Fall River. Id. at 69. Moreover, in dist inguishing Wiley and Burns, we relied on the procedural distinction betw een the two cases that the Court has repudiated. Id.

In concluding that AmeriSteel had no duty to arbitr ate, the District Court appeared principally to rely upon our decisio n in NLRB v. Phoenix Pipe & Tube, 955 F.2d 852 (3d Cir. 1991), which the District Court characterized as standing for the proposition that" by retaining the workforce of a prior employer, a subsequent employe r becomes obligated to bargain with a union, but not to abide by the co llective bargaining agreement." App. at 257. This is a puzzling stateme nt, however, because Phoenix Pipe does not support this proposition, and the District Court included no supporting citation to the case. Given that Phoenix Pipe says nothing regarding a successor's obligations under i ts predecessor's CBA,

we conclude that the case is not relevant to the is sues presented by this appeal. Accordingly, while we agree with the Distri ct Court's ultimate conclusion that AmeriSteel cannot be compelled to a rbitrate, we disagree with the reasoning that the District Court employed to arrive at that

result.

8. The dissent states that the case law from other courts of appeals "cuts in both directions," Dissenting Op. at 38, but, we cannot agree. It references only two appellate cases that supposedly cut in its favor, id. at 38 n.4, but neither case is particularly relevan t. Boeing Co. v.

18E.g., Local 7-517 v. Uno-Ven Co., 170 F.3d 779, 781 (7th

Cir. 1999) (stating that when a successor purchases a predecessor's business, the successor "would not be bound by the collective bargaining contract"); NLRB v. Ho sp. San Rafael, Inc., 42 F.3d 45, 50 (1st Cir. 1994) (obser ving that "[w]here, for example, a unionized business is acqu ired by a new owner unaffiliated with the old one, the new employer may not be bound by a collective bargainin g agreement with the old one"); Southward v. S. Cent. Ready Mix Supply Corp., 7 F.3d 487, 495 (6th Cir. 1993) ( asserting that the Supreme Court has "repeatedly recognized t hat a successor corporation may be bound by the substanti ve terms of its predecessor's CBA only if the successo r is the alter ego of the predecessor or the successor has e xpressly or impliedly assumed the obligations of its predece ssor's contract"); Sullivan Indus. v. NLRB, 957 F.2d 890, 895 (D.C. Cir. 1992) (noting that "[w]hile a successor has a duty to bargain with an incumbent union, it is not bound by the substantive terms of the previously negotiated coll ectivebargaining agreement"); New England Mech., Inc. v. Local Union 294, 909 F.2d 1339, 1342 (9th Cir. 1990) (exp laining that a successor employer "is not bound by its predecessor's collective bargaining agreement," and that "the Supreme Court has continually indicated that a successor employer is only bound to bargain with a union which had a CBA with the predecessor"). District co urts in our Circuit have come to the same conclusion. E.g.,

___________________________________________________ ______________

International Association of Machinists and Aerospa ce Workers, 504 F.2d 307 (5th Cir. 1974), predates Fall River, and there fore is of limited utility.

And in Stotter Division of Graduate Plastics Co. v. District 65, 991 F.2d 997 (2d Cir. 1993), the court based its determinati on that Stotter was a successor employer not only on continuity, but also on the fact that the obligations at issue arose before the transfer, and the fact that Stotter had "entered into an agreement with the Union which adopted (with immaterial exceptions) the provisions of the [CBA]. " Id. at 1002. Thus, Stotter is not persuasive on this issue. The dissen t can cite no post-Fall

River case in our sister circuits that has bound an unconsenting successor employer to the substantive provisions of an existing CBA. We submit there are none. Indeed, were the dissent's i nterpretation to prevail, it would place us squarely at odds with ev ery court of appeals to consider this issue, as noted above.

19Philadelphia Joint Bd. v. After Six, Inc., No. 92-4 294, 1992

WL 202166, at *2 (E.D. Pa. Aug. 6, 1992) (maintaini ng that "if an employer takes over another business, the em ployer is not bound by its predecessor's collective bargai ning agreements. At most, the employer will be required to bargain with any unions that the predecessor employ er had recognized."); Local Union No. 4 v. Owens-Illinois, Inc., 758 F.Supp. 962, 973 (D.N.J. 1991) (observing that "[u] nder Wiley and Burns, although [the successor] had an obligation to recognize and bargain with the Union .. . [the successor] could not be required to assume [the predecessor's] labor contract"). Additionally, many commentators are in accord. E.g., Burton F. Boltuch

, Workplace Closures and Company Reorganizations: Enforcing NLRB, Contract and Noncontract Claims and Obligations, 7 Lab. Law. 53, 78 (1991) (explaining that "[c]ourts and arbitrators since Burns do not hold t he `unconsenting' successor to the CBA"); Claiborne Ba rksdale, Successor Liability Under the National Labor Relati ons Act and Title VII, 54 Tex. L. Rev. 707, 711 (1976) (arg uing that a "successor will not be bound . . . by the substan tive terms of the predecessor's contract with the employ ees unless it either explicitly or impliedly ratifies t he agreement"); Wilson McLeod, Rekindling Labor Law Successorship in an Era of Decline, 11 Hofstra Lab. L.J. 271, 308-09 (1974) (explaining that "courts are fir mly opposed" to enforcing the substantive terms of a predecessor's CBA against a successor, and that if the Burns holding rests on solid footing, then "there i s no principled reason why successors should be forced t o arbitrate at all").

Given the prevailing case law supporting our view, and given the teachings of Wiley and Burns that expose the futility and inappropriateness of arbitration when the substantive terms of the bargaining agreement canno t be binding on the new entity, we are curious as to wha t purpose is to be served by arbitration? How can we hold, as the dissent would, that such a pointless exercise i s mandated, especially given the fact that the specif ic contractual provisions between the parties did in fact not merely "shed" the prior agreement containing the

20arbitration provisions, but specifically contracted them

away?

Finally, we think it is important to note that our decision in this case does not overlook the vital importance of arbitration as a means of settling labor disputes. We have in the past observed that federal labor law elevate s labor arbitrators "to an exalted status," Ludwig Honold M fg. Co. v. Fletcher, 405 F.2d 1123, 1126 (3d Cir. 1969), an d that "courts play an extremely limited role in resolving labor disputes," News Am. Publ'n, Inc. v. Newark Typograp hical Union, Local 103, 918 F.2d 21, 24 (3d Cir. 1990). M oreover, an arbitration award must be enforced "[a]s long as the arbitrator has arguably construed or applied the co ntract," News Am., 918 F.2d at 24 (emphasis in original), wh ich is in accord with the Supreme Court's instruction that an arbitration award is legitimate as long as it "draw s its essence from the collective bargaining agreement," United Paperworkers Int'l Union v. Misco, Inc., 484 U.S. 2 9, 36 (1987).

What distinguishes this case, however, is that beca use AmeriSteel cannot be bound by the substantive terms of the CBA between Brocker Rebar and the Union, there simply is no contract for the arbitrator to constru e. While we must respect the vital role that arbitration pla ys in settling labor disputes (and the correspondingly br oad authority granted to arbitrators), we think it goes without saying that courts should not compel parties to sub mit to arbitration when there is nothing to arbitrate. To hold otherwise would create the paradoxical situation in which

AmeriSteel would be forced to arbitrate the extent of its obligations under the CBA, and yet, because it has no such obligations, the arbitrator would be powerless to e nforce these obligations.

One might argue that even though AmeriSteel has no obligations under the CBA, this case should still p roceed to arbitration on the theory that an arbitrator could conceivably grant an award to the Union based on so me general sense of equity or fairness. Even granting this possibility, such an award would be illegitimate be cause it would "simply reflect the arbitrator's own notions of industrial justice" and would not "draw its essence from the

21contract" itself. Misco, 484 U.S. at 38. As Chief J udge

Becker has highlighted, an arbitrator's authority i s quite broad, but it is not unlimited, because courts cann ot "permit[ ] the arbitrator to transform the contract ual arbitration into an equitable dispensation of his o wn brand of industrial justice, an endeavor expressly forbid den by the Supreme Court's decision in United Paperworkers Int 'l Union v. Misco, Inc., 484 U.S. 29 (1987)." News Am. Publ'n, Inc. v. Newark Typographical Union, Local 103, 921 F.2d 40, 41 (3d Cir. 1990) (Becker, J., dissenting from deni al of rehearing en banc).

Our decision here recognizes the sound principle th at arbitration, while critically important to settling labor disputes, nonetheless cannot be used as a means to achieve illegitimate ends. Were we to permit this c ase to proceed to arbitration, we would be guilty of "wav[ ing] a wand" over the arbitration proceedings by engaging in the fiction that an arbitrator could legitimately grant an award for the Union. Id. at 42. But when arbitration is p laced within its proper limits, there is no escaping the conclusion that AmeriSteel, which is not bound by the substant ive terms of the CBA, cannot be compelled to submit to

arbitration because no arbitration award to the Uni on could receive judicial sanction.

Accordingly, the March 17, 2000 order of the Distri ct

Court will be AFFIRMED.

22BECKER, Chief Judge, dissenting.

It is surprising that thirty-seven years after John Wiley & Sons v. Livingston, 376 U.S. 543 (1964), in which t he Supreme Court first tackled the issue of successors hip liability in labor cases, the law in this area is s till unsettled. Wiley established that the notion of "substantial c ontinuity in the identity of the business enterprise" is the principal criterion for determining successorship liability, and held that, in appropriate circumstances, successor emplo yers can be required to arbitrate with their employees' union under the terms of the collective bargaining agreem ent (CBA) that the union had with the predecessor emplo yer. Id. at 548, 551.

In NLRB v. Burns International Security Services, I nc., 406 U.S. 272 (1972), and Howard Johnson Co. v. Hotel an d Restaurant Employees, 417 U.S. 249 (1974), the Cour t considered how the Wiley doctrine applied in differ ent factual contexts. In American Bell, Inc. v. Federat ion of Telephone Workers of Pennsylvania, 736 F.2d 879, 88 8 (3d Cir. 1984), this Court used Wiley and Howard Johnso n as the basis for developing a six-factored test for de termining whether substantial continuity in the identity of t he business enterprise is present: (i) continuity of w ork force, (ii) continuity of business operations, (iii) conti nuity of supervisory personnel, (iv) continuity of physical plant and location, (v) continuity in the nature of the produ ct or services, and (vi) continuity in the methods of pro duction, sales, or inventorying.

As counsel for AmeriSteel had to concede at oral argument, the record in this case is crystal clear that in the transition of ownership of the York plant from Broc ker Rebar to AmeriSteel, there has been not only substa ntial continuity but utterly no change in any of the Amer ican Bell factors except possibly for the methods of sales, w hich AmeriSteel's counsel represented had changed (altho ugh he was unclear as to how and to what degree). In other words, after closure for a three-day weekend, a new busine ss appeared at 1700 Seventh Avenue in York that was th e exact same enterprise as the one that had been ther e four days before in virtually all respects. Despite thes e uncontroverted facts and their close similarity to those in

23Wiley, the majority holds that the successor corpor ation,

AmeriSteel, is not bound by the arbitration provisi on of its predecessor's CBA.

Judge Rendell's thoughtful opinion makes clear that resolving this case requires an analysis of Wiley, Burns, and Howard Johnson, the Supreme Court's cases addressing when a successor can be bound to the ter ms of a predecessor's CBA. Her opinion also demonstrates the difficulty of reconciling those cases and, implicit ly at least, underscores the problems with choosing one path of reconciliation over another. I cannot join the majo rity's opinion because I believe that the case before us i s controlled by the Supreme Court's decision in Wiley , which involved a fact pattern that is similar in all rele vant aspects to the facts in the case at bar, just as the other key cases involved quite different facts. While I do not sugg est that AmeriSteel is duty-bound to accept the CBA that Bro cker Rebar signed with Teamsters Local 430 (the union representing Brocker's employees), I do believe tha t Wiley

mandates that we hold that AmeriSteel is bound to

arbitrate with the union as to whether it is bound by any of the CBA's provisions.

In other circumstances, the foregoing might well su ffice for a dissenting opinion. But Wiley, Burns, and How ard

Johnson are difficult to harmonize if not discordan t in their overall tone and approach, and I disagree with the majority's attempt to fit these opinions together. I believe that the Supreme Court would do well to revisit thi s area which remains unclear twenty-seven years after Howa rd Johnson, the latest of the trilogy. Under these circumstances, I think it useful to explain my disa greement with the majority in some detail.

I.

In Wiley, a publishing firm, Interscience, entered into a CBA with a union that represented its employees. Interscience then merged with another publishing fi rm, John Wiley & Sons, and ceased to do business as a separate entity. The union and Wiley were unable to agree what effect the merger had on the CBA, so the union

24brought an action to compel arbitration under the C BA in

order to determine the effect. Wiley pointed out th at it did not sign the CBA, and argued that it therefore shou ld not be bound by the CBA's arbitration clause. The Court

, however, ultimately held that "in appropriate circumstances, present here, the successor employer may be required to arbitrate with the union under the agreement." Wiley, 376 U.S. at 548. As the majority rightly points out, Wiley also states that to send the case to arbitration (as it did), the union's demands under the substantive terms of the CBA must not be "so plainl y unreasonable that . . . it can be seen in advance t hat no award to the Union could receive judicial sanction. " Id. at 555. Wiley nonetheless holds that "in appropriate circumstances," a successor employer can be held bo und to the arbitration clause of its predecessor's CBA, an d possibly can be held bound to the substantive terms of the CBA as well--despite the fact that (like AmeriSteel ) the successor never agreed to be so bound and was not t he alter ego of the predecessor.

The key question for our purposes is what are these "appropriate circumstances" in which a CBA can be enforced against a successor employer. Wiley is bri ef in its description of these circumstances, but it does sta te that there must be "relevant similarity and continuity o f operation across the change in ownership" so that t here is "substantial continuity of identity in the business enterprise before and after [such] a change." Id. a t 551. In Wiley, this continuity of identity and operation of the business enterprise was "adequately evidenced by th e wholesale transfer of Interscience employees to the Wiley plant, apparently without difficulty." Id.

The Court did not address the notion of "substantia l continuity of identity in the business enterprise," in the next case in the trilogy, Burns, because it was cle ar in that case that there was absolutely no continuity betwee n the predecessor and the successor. See Burns, 406 U.S. at 286 ("Here there was no merger or sale of assets, and t here were no dealings whatsoever between Wackenhut and Burns. "). In Howard Johnson, however, the Court elaborated on that concept. In that case, the Grissom family ran a How ard

25Johnson's restaurant and motor lodge and entered in to a

CBA with the union representing their employees. Th e Grissoms thereafter sold to the Howard Johnson Comp any all of the personal property that they had been usi ng to run the restaurant and lodge. By the terms of the sale agreement, Howard Johnson assumed four specific contracts relating to the operation of the restaura nt and lodge but specifically declined to assume the CBA. Howard

Johnson then hired its own workforce to staff the restaurant and lodge; it hired forty-five employees , only nine of whom had previously been working for the Grissoms at the restaurant (the Grissoms had had fi ftythree employees), but hired none of the Grissoms' supervisory employees. See Howard Johnson, 417 U.S. at

250-52.

The union filed suit, seeking an order to compel Ho ward Johnson to arbitrate the extent of its obligations to the former Grissom employees under the terms of the CBA . The Court ruled against the union, holding that the sub stantial continuity between the predecessor and successor corporations that was present in Wiley was missing in the case before it. See id. at 264-65. In particular, t he Court noted that in Wiley the successor corporation hired all of the predecessor's employees and did not make substa ntial changes in its operation of the enterprise, as Inte rscience's former employees "continued to perform the same wor k on the same products under the same management at the same work place as before the change in the corpora te employer." Id. at 258 (quoting Interscience Encyclo pedia, Inc., 55 Lab. Arb. 210, 218 (1970) (the arbitrator' s opinion in Wiley)). In contrast, Howard Johnson selected an d hired its own independent work force to run the restauran t and lodge.

The case before us involves the same sort of "subst antial continuity of identity in the business enterprise" that was present in Wiley but missing in Howard Johnson. The predecessor corporation, Brocker Rebar, negotiated a CBA

with Local 430. Brocker Rebar then sold substantial ly all of its assets to AmeriSteel, including "the Business a s a going concern and all of the assets, properties, and righ ts of the Sellers constituting the Business or used by the Se llers

26therein, of every type and description, real and pe rsonal,

tangible and intangible, wherever located." Asset P urchase Agreement between AmeriSteel and Brocker Rebar at 3 . The assets purchased included Brocker Rebar's steel pla nt and equipment located at 1700 Seventh Avenue in York, w here Local 430's members worked, along with all of Brock er Rebar's contracts and leases, except the CBA and individual employment contracts.

Instead of selecting and training its own work forc e (as the successor did in Howard Johnson), AmeriSteel hi red all but six of Brocker Rebar's former employees to work at the same plant (50 workers are needed to run the plant) , doing the same jobs that they performed before the sale. AmeriSteel also hired Brocker Rebar's top superviso ry personnel at the plant (again in contrast to Howard Johnson, where the successor hired none of the predecessor's supervisors). The York plant is situa ted in exactly the same location where it was before and p roduces the exact same product using the same inventory, th e same equipment, the same physical set-up, and the same production methods that it did when it was Brocker Rebar's plant. In short, insofar as the plant's workers wer e concerned, virtually nothing changed at the plant w hen AmeriSteel took over except for the name on the doo r.

In my view, this almost total continuity in Brocker Rebar's and AmeriSteel's operation of the York plan t brings this case under Wiley's rule binding a successor corporation to the arbitration clause in its predec essor's CBA when there is almost total continuity of the bu siness enterprise. As was the case in Wiley, the employees in the case at bar " `continue[ ] to perform the same work on the same products under the same management at the same work place as before the change in the corporate employer.' " Howard Johnson, 417 U.S. at 258 (quoti ng Interscience Encyclopedia, Inc., 55 Lab. Arb. at 21 8). Moreover, as the majority recognizes, the Supreme C ourt has held that the one potentially relevant differen ce between this case and Wiley--in Wiley the predeces sor was merged into the successor, while here there was no merger but a purchase of assets--is irrelevant in the cont ext of successor liability. See Maj. Op. at 11 n.2; see al so Fall

27River Dyeing & Finishing Corp. v. NLRB, 482 U.S. 27 , 44

n.10 (1987); Golden State Bottling Co. v. NLRB , 41 4 U.S. 168, 182 n.5 (1973).

One implication of Wiley is that a successor that i s bound by the arbitration clause of its predecessor' s CBA may end up being bound by (at least some of) the substantive provisions of the CBA as well. The majo rity is concerned that a potential problem with such a regi me is that corporations may be hesitant to purchase the a ssets of other corporations if they thought they might be sa ddled with the other corporations' labor agreements. I sh are that concern. However, Wiley struck a balance between corporate freedom and the protection of workers, recognizing that arbitration was an important means of maintaining labor peace and that "employees who are in fact retained in `[t]he transition from one corpora te organization to another' " need to be afforded prot ection "from sudden changes in the terms and conditions of their employment." Howard Johnson, 417 U.S. at 264 (quoti ng and describing Wiley). The implication of the major ity opinion is that Wiley is virtually a dead letter co nfined to its specific facts, essentially overruled. But it is no t within our power to emasculate Wiley--only the Supreme Court c an do that. See State Oil Co. v. Khan, 522 U.S. 3, 20 (19 97) (holding that the Court of Appeals was correct to a pply a Supreme Court precedent despite the precedent's "infirmities, [and] its increasingly wobbly, moth-e aten foundations," because "it is this Court's prerogati ve alone to overrule one of its precedents") (internal quotatio n marks omitted).1

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1. The majority attempts to refine its position wit h the argument that the "substantial continuity" concept in Wiley "should properly be viewed as a necessary but not a sufficient condition for the imposition of arbitration on an unconsenting successor." Maj. Op. at 9; see also Maj. Op. at 13-14 n.3. It adds, "Clearly, as Wiley itse lf indicates, other

factors must also be considered." Maj. Op. at 14 n.3. With all respect, I believe that this reading of Wiley conflicts with Howard Jo hnson's treatment of Wiley. In Howard Johnson, the Supreme Court applied the analytical precepts of Wiley, interpreting Wiley as making "s ubstantial continuity

in the identity of the business enterprise" the center piece of the analysis

of

when a successor can be bound to arbitrate under a predecessor's CBA.

28II.

Turning to a global analysis of the majority's deci sion, it is based upon the following two premises: (1) a suc cessor corporation cannot be bound to the substantive term s of a predecessor's CBA unless it agrees to be so bound o r is an "alter ego" of the predecessor; and (2) a successor corporation that is not bound by the substantive te rms of a CBA should not be bound by an arbitration provisi on in that CBA either, because any decision by the arbitr ator enforcing the CBA could not "receive judicial sanct ion" and thus arbitration could "serve no purpose." Maj. Op. at 3, 9, 16. Because it is undisputed that AmeriSteel did no t agree to be bound by the CBA and there is no evidence tha t AmeriSteel is the alter ego of Brocker Rebar, the m ajority concludes that AmeriSteel cannot be bound by the arbitration provision in Brocker Rebar's CBA with L ocal 430. However, a simple exercise in deductive logic reveals that premises (1) and (2) lead inexorably to the co nclusion

that an arbitration clause of a CBA can never be e nforced against a successor corporation unless the successo r

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The Court held in Howard Johnson that the successor corporation was not bound to arbitrate under the predecessor's CBA because there was insufficient substantial continuity in the business enterprise, and the clear implication of the opinion is that, if there had been such substantial continuity, then the successor would ha ve been so bound. I see nothing in Howard Johnson that would lead me to the conclusion

that the Court would have held that the successor w as not bound to

arbitrate even if there had been such substantial c ontinuity, because the "other factors" present in Wiley were missing there . See Howard Johnson, 417 U.S. at 264-65 ("Since there was plain ly no substantial continuity of identity in the work force hired by H oward Johnson with that of the Grissoms, and no express or implied ass umption of the agreement to arbitrate, the courts below erred in c ompelling the Company to arbitrate the extent of its obligations to the former Grissom emloyees."); see also id. at 258 (" Even more impor tant, in Wiley the surviving corporation hired all of the employees of the disappearing corporation.") (emphasis added); id. at 263 (noting that the Court's holding "is reflected in the emphasis most of the l ower courts have placed on whether the successor employer hires a ma jority of the predecessor's employees in determining the legal ob ligations of the successor in S 301 suits under Wiley").

29agreed to be bound by the CBA or is the predecessor 's alter

ego. I cannot accept the majority's reasoning becau se its logical consequence flatly contradicts the holding of Wiley,

see supra Part I.

Although the majority denies that it has relegated Wiley to the dustbin of history, it is abundantly clear f rom its opinion that it is doing just that. In order to get around the fact that Wiley's holding is implicated in the case at bar because of the very close similarity of fact patter ns in this case and Wiley, the majority concludes that (1) Wil ey is in

"direct" and "irreconcilable conflict" with Burns b ecause "Burns endorses the idea that unwilling successors cannot be bound" by "the substantive terms of pre-existing CBAs"; (2) Howard Johnson "downplays the significance of W iley" while "tak[ing] an expansive view of Burns," thus s trongly reaffirming Burns while casting Wiley into doubt; so (3) Burns's dicta rather than Wiley's holding provides the relevant rule for this case because Burns's dicta p rovides "more persuasive guidance" than Wiley's "limited ho lding," whose "status [is] not entirely clear." Maj. Op. at 11, 12, 14, 16. I disagree with all three steps in this analysi s.

A.

First, the majority's finding of an irreconcilable conflict between Wiley and Burns depends upon its erroneous characterization of Burns as establishing"the clear mandate . . . that an unconsenting successor employ er cannot be bound by the substantive terms of a CBA negotiated by its predecessor." Maj. Op. at 16. The majority relies on the following language in Burns:

These considerations, evident from the expli cit language and legislative history of the labo r laws, underlay the Board's prior decisions, which until now have consistently held that, although succes sor employers may be bound to recognize and barg ain with the union, they are not bound by the substan tive provisions of a collective-bargaining contra ct negotiated by their predecessors but not agreed to or a ssumed by

them.

Burns, 406 U.S. at 284.

30When this passage is considered in its entirety, it

becomes clear that this is not Burns's holding and that to read it as establishing a "clear mandate" is a misinterpretation of Burns. As I read Burns, its ho lding is much more narrow, constrained by the Court's cautio n that its "[r]esolution [of the case] turns to a great ex tent on the precise facts involved here." Id. at 274. Unlike in Wiley, the Court in Burns did not recite an explicit holding; rather, the Court's actual conclusions in Burns are narrowly ta ilored to the particular facts of that case and carefully avo id any broad, sweeping statements of what the law is in th is area. The overarching focus of the Court's reasoning in B urns is to show that Wiley does not control in Burns's fact situation because of the differences in the predecessor-succe ssor relationships and in the legal claims made by the u nions. See id. at 285-87, 291 (setting out the Court's own conclusions, which center on distinguishing Wiley). In sum, Burns does not "clear[ly] mandate . . . that an unc onsenting employer cannot be bound by the substantive terms o f a CBA negotiated by its predecessor." Maj. Op. at 16.

The majority further concludes that if a predecesso r and successor explicitly agree that the predecessor's C BA will not be binding on the successor, "Burns teaches tha t we must respect that agreement." Maj. Op. at 15. I do not understand Burns to support this conclusion, and in fact this reading of Burns conflicts with the majority's own characterization of the law in this area. As the ma jority itself observes, Wiley recognized that "an unconsen ting successor" can owe an "extra-contractual duty," gro unded in " `the policy of our national labor laws,' " to arbitrate with a union under the predecessor's CBA. Maj. Op. at 8 (quoting Wiley, 376 U.S. at 548). It is clear that this duty, if implicated, is owed by the successor to the unio n, since the duty requires the successor to arbitrate with t he union

and the union can sue the successor to enforce the duty. However, the majority seems to believe that the suc cessor's extra-contractual duty to the union can be abrogate d by an express contractual provision in an agreement betwe en the successor and its predecessor, with which the union was in no way involved. See Maj. Op. at 17, 20 ("[T]he spe cific contractual provisions between [AmeriSteel and Broc ker Rebar] did in fact not merely `shed' the prior agre ement

31containing the arbitration provisions, but contract ed them

away[.]"). I find no support in either Supreme Cour t precedent or legal reasoning for the position that an extracontractual duty owed to an entity can be nullified by a contract to which that entity is not a party. There fore, I believe that the provision in the AmeriSteel-Brocke r Rebar sales agreement expressly repudiating the CBA is ir relevant to the analysis.

B.

The majority's treatment of Howard Johnson is simil arly

flawed because it is based on the view that Howard Johnson "downplays the significance of Wiley," and "takes an expansive view of Burns." Maj. Op. at 14. On thi s basis, the majority implicitly holds that Burns effectivel y overruled Wiley. See Maj Op. at 16 ("[W]hile the validity of Burns cannot be doubted, Burns nonetheless conflicts with the implications of Wiley. . . . Accordingly, we believ e the clear mandate of Burns -- that an unconsenting successor employer cannot be bound by the substantive terms o f a CBA negotiated by its predecessor -- provides more persuasive guidance than the limited holding in Wil ey."). I cannot agree with this reasoning.

The majority concedes that the centerpiece of Howar d Johnson's analysis involved applying the precepts o f Wiley to the facts before the Court. See Maj. Op. at 13. I note that this is hardly consistent with the view that Howard Johnson "downplays the significance of Wiley." Furthermore, if Burns effectively overruled Wiley, then why would Howard Johnson (decided after Burns) use Wile y's analytical structure to reach its decision? If the majority's analysis is correct, then surely the Howard Johnson Court would have simply stated that Burns overruled Wiley and then based its decision on Burns's "holding" that unconsenting successor employers (who are not an al ter ego of the predecessor) are never bound by the subs tantive terms of a predecessor's CBA. The Supreme Court has not

been reluctant to overrule its own decisions when s atisfied that they were wrong or based on outdated or anachr onistic reasoning. See, e.g., State Oil Co. v. Khan, 522 U. S. 3, 20 (1997). Tellingly, however, Howard Johnson did not do this,

32but instead rested its decision upon Wiley's analyt ical

structure. The clear implication of this, I believe , is that the

Howard Johnson Court did not understand Burns to ha ve overruled Wiley. I thus cannot understand how the m ajority now purports to hold implicitly that Wiley is overr uled.

Moreover, Howard Johnson's description of Wiley's holding as a "guarded, almost tentative statement," see Maj. Op. at 14 (quoting Howard Johnson, 417 U.S. at 256) is not made in the context of downplaying the Wiley 's significance, but instead is actually a laudatory c omment praising Wiley's careful reasoning. This descriptio n of Wiley's holding is made in the course of the Court' s observation that, in every case in this area (inclu ding Burns and Howard Johnson itself), "we must necessarily pr oceed cautiously, in the traditional case-by-case approac h of the common law. . . . [E]mphasis on the facts of each c ase as it arises is especially appropriate." Howard Johnso n, 417

U.S. at 256. Howard Johnson then reaffirms Burns's statement that Burns's decision " `turn[ed] to a gr eat extent on the precise facts involved here' " (hardly an "e xpansive view" of Burns), and concludes that this sentiment applies equally well to all cases in this area of the law. Id. (quoting Burns, 406 U.S. at 274) Howard Johnson interprets W iley's "guarded, almost tentative statement of its holding " as demonstrating that the Wiley Court was properly awa re of the need for the Court to constrain its holding to the particular facts of the case. Id. In short, Howard Johnson does not bury Wiley, but praises it.

Finally, Howard Johnson specifically notes that its interpretation of Wiley (based on the notion of "su bstantial continuity of identity in the business enterprise," see supra Part I) preserved for Wiley a substantial role in t he protection of union members' rights:

This interpretation of Wiley is consistent a lso with the Court's concern with affording protection to those employees who are in fact retained in "[t]he transition from one corporate organization to another" from sudden changes in the terms and conditions o f their employment, and with its belief that industr ial strife would be avoided if these employees' claims were

33resolved by arbitration rather than by "the relative

strength . . . of the contending forces."

Id. at 264 (quoting Wiley, 376 U.S. at 549). I thin k the above passage clearly communicates the Court's inte ntion in Howard Johnson that Wiley should continue to pro tect employees from "sudden changes in the terms and conditions of their employment" in situations like the one before us--where there is a change in corporate own ership but the employees and the running of the business r emain overwhelmingly the same. Again, this is just not co nsistent with an interpretation of Howard Johnson as"downpla y[ing] the significance of Wiley." Maj. Op. at 14.

III.

I think that a much better reconciliation of the tr ilogy can be developed from a passage in Howard Johnson disc ussing the concept of successorship that the majority quot es early in its opinion but then promptly ignores. See Maj. Op. at 7. In this passage, Howard Johnson states that the low er court's division of issues into (1) whether Howard Johnson was a successor employer, and (2) whether a success or is required to arbitrate under its predecessor's CBA, was artificial and unhelpful, because "successor" is no t a monolithic concept.

The question whether Howard Johnson is a "su ccessor" is simply not meaningful in the abstract. Ho ward Johnson is of course a successor employer in the sense that it succeeded to operation of a restaura nt and motor lodge formerly operated by the Grissom s. But the real question in each of these "successo rship" cases is, on the particular facts, what are the legal obligations of the new employer to the emplo yees of the former owner or their representative? The an swer to this inquiry requires analysis of the intere sts of the new employer and the employees and of the po licies of the labor laws in light of the facts of each case and the particular legal obligation which is at issu e, whether it be the duty to recognize and bargain with th e union, the duty to remedy unfair labor practices, t he duty to arbitrate, etc. There is, and can be, no sin gle definition

34of "successor" which is applicable in every legal context.

A new employer, in other words, may be a suc cessor for some purposes and not for others.

Howard Johnson, 417 U.S. at 262 n.9 (emphasis added ). In my view, this passage, along with Burns's admonitio n that its decision "turns to a great extent on the precis e facts involved here," 406 U.S. at 274, serves as a clear warning to lower courts not to read these opinions as provi ding expansive rules about successors in general; instea d, the rules of these cases should always be understood in the context of the facts of the particular case. The ma jority appears to recognize this point when it quotes from the above passage and states that "labeling AmeriSteel a `successor employer' to Brocker Rebar does little t o help resolve the issue in this case." Maj. Op. at 7. But the majority then ignores its own direction when it int erprets Burns as making a general pronouncement that succes sors are never bound by the substantive terms of their predecessors' CBAs, thus treating all successorship situations as legally identical.

I think the best reconciliation of the Wiley-Burns- Howard Johnson trilogy is that the cases set out a"sliding scale" for what types of burdens can be imposed on what types of successors. That is, the successorship relationship s in these three cases were very different, and the burd ens imposed on the successors varied with the correspon ding strength of the successor relationship, thus provid ing an outline for deciding future cases. In Burns, there was a very weak relationship of succession between the corpora tions-- as the Court noted, "there was no merger or sale of assets, and there were no dealings whatsoever between Wacke nhut [the predecessor] and Burns [the successor]," Burns , 406 U.S. at 286; the successor merely took over the sec urity job that the predecessor had performed and hired a port ion of guards who had been employed by the predecessor. In a situation with such a weak succession relationship, the Court held that the successor corporation only had the duty to bargain with the union representing the emp loyees, and was not bound by the substantive terms of the predecessor's CBA.

35In Wiley, there was a very strong relationship of

succession between the corporations--the predecesso r merged into the successor--so the Court held that t he successor was bound by the arbitration provision of the predecessor's CBA, and, as the majority recognizes, implicitly recognized that the successor corporatio n could be bound by the substantive terms of the predecesso r's CBA as well (if the arbitrator were to so decide). The relationship of succession in Howard Johnson was no t as strong as in Wiley--while there was a sale of asset s by the predecessor to the successor, there was not nearly as much continuity of business operations as there was in W iley (or

here)--so the Court held that the successor was not bound to arbitrate under the predecessor's CBA.2

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2. This approach to interpreting the trilogy has th e added benefit of clarifying a cryptic piece of dicta on the successo rship issue in Fall

River Dyeing & Finishing Corp. v. NLRB, 482 U.S. 27 (1987 ). Fall River addressed the question whether Burns's holding that a successor corporation has a duty to bargain with the union th at represents the predecessor's employees extended to a situation in which the union had been certified by the employees long before the tra nsition in ownership. In discussing the background of the successorship d octrine, the Court said the following about Burns:

We observed in Burns that, although the succ essor has an obligation to bargain with the union, it "is ordinarily free to set initial terms on which it will hire the empl oyees of a predecessor," and it is not bound by the substantive provi sions of the predecessor's collective-bargaining agreemen t.

Id. at 40 (citations omitted).

The first thing to note about this passage is that it clearly plays no part in Fall River's holding; it is simply a descri ption of Burns

contained in a general discussion of the development of succe ssorship law, so it must be understood in that context. Although the ma jority contends that the statement it relies on from Fall River is only "arguably" dicta, Maj. Op. at 16, n.5, the majority fails to explain how t his statement from Fall River was necessary to the decision in that case an d therefore fails to offer any argument that it is not dicta.

Some courts have interpreted this passage as standi ng for the proposition that a successor may never be held boun d to the substantive terms of a predecessor's CBAs unless the successor consents or is the alter ego of the predecessor, see, e.g., Southward v. South Cent. Ready

36The question before us, then, is which type of succ essor,

Wiley, Burns, or Howard Johnson , is AmeriSteel mos t like? As I argued in Part I, I believe that AmeriSteel is much more like a Wiley successor than a Howard Johnson successor. In other words, in my view there is suff icient "substantial continuity of identity in the business enterprise," between Brocker Rebar and AmeriSteel t o justify holding that AmeriSteel is bound to the arb itration provision (and possibly to the substantive provisio ns) of Brocker Rebar's CBA with Local 430. Howard Johnson, 417 U.S. at 259 (quoting Wiley, 376 U.S. at 551).

Unfortunately, we derive no assistance from our own jurisprudence in resolving this dispute. The cases from within this circuit that interpret the Supreme Cour t case law can best be described as "dueling dicta": as I describe in the margin, no Third Circuit case has issued a s quare holding on this issue, although several have espous ed one view or the other in passing.3

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Mix Supply Corp., 7 F.3d 487, 493 (6th Cir. 1993), and in fact the majority cites to this passage as support for its v iew. See Maj. Op. at 15-16. I think it preferable to read the passage as making an observation about Burns-type successors particularly (i.e., the se types of successors are not bound to the substantive terms of their pre decessors' CBAs), rather than a point about all successors generally, because such a reading more closely fits with the carefully circum scribed reasoning and overall approach of the Wiley-Burns-Howard Johnson trilogy. Given that the Court was so careful to limit the holdings of e ach case in the trilogy to "the precise facts involved here," Howard Johnso n, 417 U.S. at 256 (quoting Burns, 406 U.S. at 274), it would seem inc ongruous to read Fall River as effecting, via dicta, an expansion of the holding of one of the trilogy beyond its "precise facts" into a general r ule that covers all successors in the abstract--despite Howard Johnson' s clear admonition that the concept of "a `successor' is simply not me aningful in the abstract." Id. at 262 n.9. Interpreting Fall River as effecting such an expansion would do violence to the principles and a pproach that underlie the Wiley-Burns-Howard Johnson trilogy.

3. Compare Shaffer v. Mitchell Transp., Inc. , 635 F.2d 261, 266 (3d Cir. 1980) ("The successorship doctrine simply allows th e court to imply certain contractual duties from the predecessor's c ollective bargaining agreement and impose them on the successor."), Loca l Union No. 249 v. Bill's Trucking, Inc., 493 F.2d 956, 960 (3d Cir. 1 974) ("Analysis of the

37I thus agree with the majority's conclusion that no

previous Third Circuit case controls our decision i n this case, see Maj. Op. at 17, and that our decision mus t be based on an in-depth interpretation of the Supreme Court trilogy rather on an earlier panel's off-the-cuff m using on this issue. And because our cases are contradictory on the issue of a successor's liabilities on a predecessor 's CBA, I cannot agree with the majority that its decision"fl ows logically from our existing Circuit precedent." Maj . Op. at 17. The case law cuts both ways, so a decision on t his issue must stand solely on the substance of the ana lysis of the Wiley-Burns-Howard Johnson trilogy.

The case law from other courts of appeals also cuts in both directions, likewise noted in the margin.4 Non e of the

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Burns opinion convinces us, however, that its signi ficance is largely limited to the particular facts of that case. . . . That there is no

absolute bar to the enforcement of labor agreements against` successor' employers in section 301 actions, such as this, is amply illu strated by the decision in John Wiley and Sons, Inc. v. Livingston."), and Teamsters Local Union No. 430 v. Cement Express, Inc., 841 F.2d 66, 69 (3 d Cir. 1988) ("Burns did not deal with the question of when successorshi p doctrine may bind a transferee of assets to the procedural duty to su bmit to arbitration the question of whether the successor has somehow assum ed any of the obligations of the old bargaining agreement."), wit h Stardyne, Inc. v. NLRB, 41 F.3d 141, 145 n.3 (3d Cir. 1994) (stating that a "successor [is] not bound by its predecessor's collective bargainin g agreement"), NLRB v. Rockwood Energy and Mineral Corp., 942 F.2d 169, 17 4 (3d Cir. 1991) ("[A] successor is not bound by the substantive ter ms of its predecessor's labor agreement."), and United Steelworkers of Am. v. New Jersey Zinc Co., 828 F.2d 1001, 1010 (3d Cir. 1987) ("[A] succe ssor employer is not automatically required to adopt its predecessor's c ollectively bargained agreements, see NLRB v. Burns.").

4. Compare Stotter Div. of Graduate Plastics Co. v. District 65, 991 F.2d 997, 1001 (2nd Cir. 1993) (holding that a successor corporation had a duty to arbitrate the extent of its obligations und er its predecessor's

CBA because there was substantial continuity in the bus iness enterprise), and Boeing Co. v. Int'l Ass'n of Machinists and Aer ospace Workers, 504 F.2d 307, 314-16 (5th Cir. 1974) (stating that "[w] e are confident, however, that even at the most Burns has not overru led the principles of Wiley," which give broad protection to employees "a gainst sudden changes in the employment relationship" by enforcin g against successors

38cases from other circuits that the majority cites i n support

of its decision engages in the detailed, in-depth a nalysis of the troubled trilogy that this case calls for. Addi tionally, none of the cases from other Circuits recognizes, a s the majority does, that Wiley's holding necessarily mea ns that,

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the duty to arbitrate under a predecessor's CBA), w ith Southward v. South Cent. Ready Mix Supply Corp., 7 F.3d 487, 493 (6th Cir. 1993) (stating that Burns and Fall River support the view that a successor is not bound to the substantive terms of its predecess or's CBA).

Although the majority seeks to distinguish Stotter by the fact that the successor employer "entered into an agreement with the Union which adopted (with immaterial exceptions) the provisions of the [CBA]," Maj. Op. at 19 n.8, it is the prior CBA (coupled with su ccessorship status), not the new CBA, that informs the ratio decidendi:

[The successor employer] asserts that it cou ld not be made a party to the arbitration because it was not a part y to the contract with

the Union until May 29, 1990. . . . This argumen t essentially merges with the broader question whether the arbitr ator correctly

determined that GPC was a "successor" to Sto tter.

In Wiley, the Supreme Court held that the s urviving corporation of a merger was obliged to arbitrate dispute d issues under a collective bargaining agreement between the merged (and no longer existing) corporation and the union that rep resented the merged corporation's employees, even though the sur viving corporation had not signed the contract and the contract did not contain an express provision binding successors.

Stotter, 991 F.2d at 1001. Stotter then undertook a n extensive "substantial continuity of identity in the business enterprise" analysis, and based its decision on its finding that "such co ntinuity clearly

exists" between the predecessor and the successor. See id.; see also Chartier v. 3205 Grand Concourse Corp., 100 F. Supp. 2d 210, 21 3 (S.D.N.Y. 2000) ("[T]he Supreme Court has made it clear that one wh o succeeds to the business of an employer that was a party to a CBA, in appropriate circumstances, may be held to have succeeded also t o its obligation to arbitrate under a CBA irrespective of any intention to do so.").

The majority also argues that Boeing is"of limited utility" because it predates Fall River. Maj. Op. at 19, n.8. As I argu e supra note 2, the language from Fall River that the majority relies o n is not only dicta,

but ambiguous dicta. Therefore, in this case I believe that it is Fall River

that is of limited utility.39in the right circumstances, some substantive terms of a

predecessor's CBA may be imposed on an unconsenting

, non-alter-ego successor corporation. I add only tha t, whatever the viability of the preceding proposition , this case involves only arbitrating the applicability of the CBA, and in the thirty-seven years since Wiley, one area of doc trine that has grown stronger in that period is the Supreme Co urt's recognition of the importance of arbitration in a n umber of fields, including labor.

IV.

It is manifest from my dispute with the majority th at, in its current state, the federal common law on this i ssue--in particular the Wiley-Burns-Howard Johnson trilogy-- does not provide a clear answer in certain cases. If Wil ey has been implicitly overturned by later Supreme Court c ases, the Court should say so; but if, as I believe, it s till plays a viable role in protecting the rights of "those empl oyees who are in fact retained in `[t]he transition from one corporate organization to another' from sudden changes in the terms and conditions of their employment," Howard Johnson , 417 U.S. at 264 (quoting Wiley, 376 U.S. at 549), the C ourt should reaffirm that fact. I hope that the Supreme Court will clarify the law in this area. In the meantime, I believe that the better interpretation of Supreme Court pre cedent is that the rule of Wiley is still in force and that r ule should be applied to the case at bar to enforce the arbitr ation provision of the CBA against AmeriSteel. Indeed, if Wiley has continuing viability, its rule would apply here if it applied anywhere. I would reverse the judgment of t he

District Court and remand with directions to order this matter to proceed to arbitration. For the foregoing reasons, I respectfully dissent.

A True Copy:

Teste:

Clerk of the United States Court of Appeals

for the Third Circuit

40